Households where one partner is in part-time paid employment and the other is receiving social-welfare payments will benefit from new measures due to come into effect from April.
Under the measures announced in the Budget, the partner in paid employment will be able to earn more while the partner on social welfare will still retain the full qualified adult allowance.
In addition the range of income over which part of this allowance will remain available will be extended.
And the income level at which the full child dependant allowances are applicable will be increased.
Described as "employment-friendly measures" which would make a very positive impact on low-income families especially those with children, the Minister for Social, Community and Family Affairs, Mr Dermot Ahern, said they reflected the Government's determination to remove the disincentives to work. The new measures follow concerns expressed by SIPTU and by the contract cleaning industry about persisting disincentives to work for spouses of certain social-welfare recipients.
These disincentives arise because social welfare payments to partners of an employed person are reduced where the income of the employed partner increases.
An unemployed cohabiting partner of a person in part-time employment can claim Qualified Adult Allowance in respect of their employed partner. The current maximum allowance of £43.20 (€54.85) will rise to £47 from April.
Currently the qualified adult allowance is reduced where the partner in paid employment earns £60 per week or more. This allowance is progressively reduced by £4.50 for every additional £5 the employed partner earns over £60. It ceases when the partners weekly income reaches £105.
From April a spouse will be able to earn up to £70 per week before their partner's Qualified Adult Allowance will be reduced. The rate at which the allowance will be cut back will be eased with reductions of £2.50 per additional £5 earned between £70 and £90 and £3.50 per additional £5 earned between £90 and £135. This means that the income range over which the allowance is reduced will be extended from the current £60 to £105 and from £70 to £135.
Couples with children will benefit particularly from the new arrangements for the Child Dependant Allowance.
Currently this allowance - paid to the social welfare recipient - is halved once the income of the claimant's spouse exceeds £60 per week.
From April the spouse will be able to earn up to £135 per week while the claimant partner will be able to retain the full allowance.
The impact of the new measures on household income can be seen from the following example: a part-time worker with two children whose spouse is claiming Unemployment Assistance gets an increase in weekly pay from £50 to £70.
Under the current rules the total household income (earnings plus Unemployment Assistance) would fall by £9.70 per week. But the new measures will mean an increase of £18.80 per week in household income.
In the case of someone who is married with two children and is a low-paid employee working 18 hours per week, earning £74.50 and married to a recipient of long-term Unemployment Assistance, the current Unemployment Assistance payment to the spouse is £109.10.
From April the payment will rise to £141.10 reflecting the changes in the allowances.
