The importance of secondary benefits

Aoife Ní Lochlainn: Today, TASC appeared before the Oireachtas Committee on Education and Social Protection to discuss our proposals for Budget 2013.

Any savings made in current expenditure must not be made through further cuts in social transfers of through cutting services which impact on vulnerable or low income groups.

Last year’s budget introduced a range of cuts in health and in social protection which targeted vulnerable or low income groups. In particular, the focus on the cutting of so-called ‘secondary’ or ‘non-core’ social protection payments, left many families significantly worse off.

Many secondary benefits are designed to reflect the fact that there are groups of people for whom accessing work is more difficult.

The barriers to meaningful work are both visible and invisible to those who do not face them. These groups have specific needs which must be addressed through the development of appropriate policies and supports.

One such group is lone parents. Lone parents often face challenges that other people of working age may not face or understand. The general lack of proper affordable childcare facilities impacts on most parents, but the negative impact is much more acute for lone parents. The vulnerable position of these families can be seen in the fact that according to EU SILC data for Ireland, in 2010, lone parent households experienced the highest rate of depravation, at 49.8 per cent.

In a study of Budget 2011, TASC found that the category most negatively affected by the budget was the ‘single with children’ group. Budget 2012 imposed further harsh cuts through focusing on secondary benefits and the restriction of certain schemes. In a recent ESRI study on the Distributional Impact of Tax, Welfare and Public Sector Pay Policies: 2009-2012, it was found that in Budget 2012, there were “greater proportionate losses for those on low incomes . . . as against those on the highest incomes.” (ESRI 2012: 55)

It can be quite difficult to understand the impact of cuts in secondary benefits on certain groups, as many families and individuals will be in receipt of a number of payments and when these are cut, the cumulative impact on recipients can be quite severe.

In order to help show some of the possible impacts, we have compiled two tables below to show the effect of lasts year’s cuts on two types of families. As can be seen from these tables, last year’s budget brought a significant loss of income to many lone parents. TASC is therefore calling for no cuts to social welfare payments, primary OR secondary in Budget 2013.

Examples of the effects of Budget 2012 on lone parents and their families

¹This was discontinued for children aged two and three in Budget 2012

² Contribution towards rent for those on rent supplement was increased by €6 a week.

³ Contribution of €25 per week for those doing a VEC course and availing of VEC provided child care, introduced in 2012

¹Fuel allowance for smokeless fuel (€23.90 a week in 2011) was abolished in September 2011 and replace with the fuel allowance for non-smokeless fuel at €20 per week.

² Child benefit for the 3^rd child was reduced to €148 in Budget 2012

³Abolished for new claimants in 2012 and replaced with €20 top-up

⁴The payment for those on CE was abolished where they were claiming under One Parent Payment

Dr Aoife Ní Lochlainn

Aoife Ni Lochlainn was a policy analyst with TASC. She holds a doctorate in economic history from the European University Institute in Florence.