Benefit changes see working lone parents suffer income loss

Much-criticised changes to the One Parent Family Payment resulted in a fall in income of between 1% and 2% for employed lone parents compared to the previous level of benefits, making employment slightly less attractive.

A new report to be published today by the Economic and Social Research Institute (ESRI) states the changes had little impact on lone parents who were not working and who had negligible or small increases in take-home income.

In Budget 2010 the Government announced that changes to the One Parent Family Payment would mean it would row back from being paid up to the time a child turns 18 — or turns 22 if in education — to being cut off when the child turns seven.

It was 2015, however, before that was fully implemented, and the author of the ESRI report Dr Claire Keane said it was too early to see what the longer-term impact of the changes will be, such as whether more lone parents are now at work.

The Government had also planned on lowering the income disregard for the payment from its initial level of €145 to €60, but it currently stands at €130.

According to the report, childcare costs are a huge factor in the financial well-being of lone parents. Without taking childcare costs into account, just 2% of lone parents are financially better off not working, but once childcare costs are taken into account that rises to 16%. Adding in the new Affordable Childcare Scheme subsidies brings that figure down to 13%.

Dr Keane said: “The provision of supports for Lone Parents is the really important part. The Affordable Childcare subsidy will certainly go some way to helping with that.”

Meanwhile, the Living Wage for the country has increased 20 cents to €11.90 per hour with the body responsible for setting the figure claiming it reflects the increased cost of living in Ireland.

The Living Wage Technical Group said the increased level had been driven by changes in the cost of living and changes in the taxation system, with the housing crisis and rises in rent levels the main factors.

The Republic of Ireland Living Wage was first established in 2014 and follows the example of other countries where full-time wages are intended to support a decent standard of living.

Unite trade union’s Jackie Pollock said: “[The] Living Wage increase again highlights the need to narrow the unsustainable gap between wages and costs.”

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