Joe McHugh (Donegal North East, Fine Gael)
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Question 311: To ask the Minister for Social and Family Affairs if she will address with measured incentives the ever increasing anomaly regarding incentives to work in comparison to the incentive to claim social welfare; and if she will make a statement on the matter. [20978/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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General social welfare programmes aim to be responsive to the needs of those who depend on income maintenance support while providing incentives to assist people to become more independent financially, particularly through employment. In addition, Family income supplement (FIS) provides cash support for employees, on low earnings, with families or those seeking to make the transition from welfare to work. This preserves the incentive to remain in employment in circumstances where the employee might only be marginally better off than if he or she were unemployed and claiming other social welfare payments. Take-up of the scheme has increased significantly in recent years with almost 43,000 new and renewal FIS claims in 2008, compared to almost 37,900 in 2007.

A number of progressive measures have also been introduced in recent years aimed at removing disincentives for people wishing to take employment and to assist in the transition from welfare to work. These measures include the introduction of a tapered withdrawal of means-tested payments for unemployed people and people with disabilities who engage in employment and a tapered withdrawal of certain earnings for people in receipt of the rent and mortgage interest supplements.

The potential for welfare rates to weaken the financial incentive to work are measured by replacement rate values, which compare the ratio between net income when unemployed to income when employed. When social welfare rates are being set a number of factors are taken into consideration, including replacement rates. The levels of social welfare payments are kept under review in light of the changing economic circumstances. Any change to the Social Welfare rates would be for Government to consider in a budgetary context.