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Back to Work Family Dividend

  • 23-12-2014 12:10pm
    #1
    kendoi
    Registered Users Posts: 10 ✭


    Back to Work Family Dividend


    In the Government’s July Statement of Priorities 2014-2016 it said “In Budget 2015, we will introduce measures to assist low-income families by improving the system of child income supports such that those moving from welfare to work will retain payments for children to ensure that people are better off in work.”

    In Budget 2015 this measure was announced as the Back to Work Family Dividend (BTWFD) and the Department of Social Protection’s Budget Factsheet noted

    “New Back to Work Family Dividend will be introduced for lone parent and long-term jobseeker families with children who find or return to work from January 2015.
    The Back to Work Family Dividend will also apply to lone parent and long-term jobseeker families with children who commence or return to self-employment.
    The Qualified Child Increase worth €29.80 per week will be paid in full for the first year in employment and half that amount will be paid weekly for the second year.
    The Back to Work Family Dividend will be additional to any entitlement the family may have under the Family Income Supplement (FIS) scheme and will not affect the level of the FIS payment.”
    The INOU has consistently called for measures to support unemployed people and particulalry unemployed people with a family in making the transition from welfare to work. The announcement in relation to the Back to Work Family Dividend is a welcome development in this regard. The Department will start to take applications for this scheme from the 5th January 2015 but no payments will be made until the legislation is produced and goes through the necessary steps to become law. This will not happen until the Spring Social Welfare bill. So, for example, an unemployed person who is currently receiving the Qualified Child Increase (QCI) for his or her child / children moves into a job in late January and applies for this scheme, he or she will not receive any payment until early Summer when legislation is enacted. At that stage the unemployed person should also receive a back payment from the time he or she started the job.

    To ensure that the unemployed people did not find themselves in an either / or scenario between the new welfare-to-work support scheme, Back to Work Family Dividend and the in-work income support scheme Family Income Supplement, unemployed people with families will be able to apply for both. However, not everyone is eligible for FIS as it is targeted at people in low paid employment. So an unemployed person with a family taking up a well-paid job after January 5th will be eligible for BTWFD but may not be eligible for FIS.

    Another welcome development with the BTWFD is that unemployed people who are seeking to return to work through the self-employment route will be able to apply for this scheme. At present anyone taking the self-employment option is not eligible for Family Income Supplement (FIS).

    In the first year of the scheme, participants will receive 100% of their Qualified Child Increase (QCI): €29.80 per child per week up to a maximum payment of €119.20 for four children. The rationale for this is that anyone with 4+ children will more than likely be eligible for FIS. Given this assumption it will be absolutely critical that unemployed people making the transition from welfare to work are fully informed of all their options. In year two the BTWFD payment will be 50% of the QCI.

    Interestingly the BTWFD does not specify how many hours participants are expected to work but one of the eligibility criteria is that the participant’s family “exits welfare”. In effect participants will have to find full-time or well-paid work or for those working part-time and in receipt of a Jobseekers payment increase their hours / income to a sustainable level. This could prove to be a not insignificant challenge given the precarious nature of a lot of the available employment.

    The precarious and piecemeal nature of the current labour market is acknowledged in the scheme’s proposed design as it allows a participant to avail of the two years duration within a three time period. So if a participant’s job comes to an end before the two years is up and he / she is back in receipt of a Jobseekers payment she / he will be able to re-start the BTWFD once she / he has finds new employment. Participants will be able to do this twice.


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