Patrick Nulty (Dublin West, Labour)
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To ask the Minister for Social Protection if she will reconsider the decision taken in the recent budget to reduce the earnings disregard for people working and getting one-parent family payment; her views on the impact that this is having on working parents with larger families in particular, coupled with the cut in children’s allowance, increase in energy prices, abolition of PRSI allowance, and the increase in food prices; and if she will make a statement on the matter. [3596/13]

Joan Burton (Dublin West, Labour)
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In 2013, just under 80,000 people will receive one-parent family payment (OFP) from my Department each week at a cost of just over €979 million. In addition over €1.9 billion will be spent on child benefit payments in respect of just under 1.17 million children.

The Comprehensive Expenditure Review, 2012 to 2014, published in December, 2011, provided for a reduction of a further €540 million in expenditure by my Department in 2013. However, the Government was able to reduce the net savings required for this year to €390 million, €150 million less than originally indicated.

This enabled the Government to ensure, for the second year in a row, that there was no reduction in primary weekly rates of payment, including OFP. In addition, there were no changes to entitlements under the family income supplement scheme which some OPF recipients in employment receive or the rate or duration of weekly fuel allowance which is also payable with OFP.

In addition, I also secured almost €30 million in spending on employment programmes, school meals, childcare places and an area based child poverty initiative, which will benefit social welfare recipients, and in particular lone parents.

However, in order to achieve the level of saving required in Budget 2013, it was necessary to introduce expenditure reduction measures including some reductions in child benefit.

OFP plays an important role in providing income support to lone parents. Changes have been made to the payment since its introduction in 1991, reflecting the changes taking place in society, the labour market and the expectations and realities of parents’ lives, and particularly of mothers, in terms of work and care.

The Social Welfare and Pensions Act 2012 reduced the amount of earnings disregarded for the purposes of the OFP means test from €146.50 per week in 2011 to €130 per week in 2012, to €110 per week in 2013, to €90 per week in 2014, to €75 per week in 2015, and to €60 per week in 2016, for new and existing claimants.

The OFP earnings disregard has been a central component of the employment support policy for lone parents who are in receipt of the OFP. Its objective is to contribute to the costs of taking up employment including childcare. Evidence suggests, however, that while the earnings disregard has played a role in facilitating lone parents to enter the workforce, it may also have had the effect of trapping lone parents in low-paid part-time employment in order to keep their earnings below the disregard.

The OFP earnings disregard was reduced to €110 per week from 1 January 2013. Earnings of less than €110 per week are excluded from the assessment of means with claimants entitled to the full rate of payment. Earnings above this limit are assessed at 50% up to a maximum of €425 per week with a reduced rate of OFP payable.

The upper earnings limit of €425 upholds the employment support objectives of the scheme by ensuring that the OFP payment is targeted at disadvantaged and low-income low parents to assist them in covering their employment-related expenses, including child care, and to enable them to more easily assess the implications of taking up education, training, and/or employment as an alternative to long-term social welfare income support dependency.

Finally, the abolition of the PRSI allowance does not affect lone parents who are on a low income as employees with weekly earnings of less than €352 are not affected.