THE SOCIAL welfare system should be reformed to encourage unmarried parents to live together, according to the Oireachtas Committee on Social Protection.
In an unpublished report, it recommends the existing lone parents’ and “qualified adult” social welfare payments should be replaced by a single parental allowance payable to all low-income parents. This is aimed at removing disincentives to cohabitation and marriage.
“There is a small but significant minority for whom an incentive to live as a solo parent arising from lone parent supports could be important,” the report said. “This minority tends to be dependent on the social welfare system or to be in low-paid employment.”
The report was due to be published yesterday, but the launch was cancelled at the last minute. It is understood it will now take place next week.
The report, which has been seen by The Irish Times, inquired into financial disincentives to cohabitation and marriage among lone parents, and examined in detail the social welfare and taxation system in this context.
It showed that a person in receipt of the means-tested one parent family payment (OPFP) of €196 a week was also eligible for a number of other social welfare supports, including the job-seeker’s allowance, rent supplement and a medical card. But once a lone parent married or cohabited, the unit of assessment for social welfare payment is the household as a whole, the parent is no longer eligible for the OPFP, and the joint income from the two adults could push them over the limit to receive a range of benefits.
It found that families headed by lone parents were much more likely to be at risk of poverty than families headed by two parents. However, it also found that in absolute terms there were more children at risk of poverty in two-parent than in lone-parent families, as 85 per cent of parents of young children either marry or cohabit. It pointed out that not all parents are faced with a choice as to whether or not to form a family, with 35 per cent of lone-parent families arising from marriage breakdown and 8 per cent from widowhood.
It also pointed out that almost 60 per cent of lone parents cease to receive the payment after six years, and almost 80 per cent were off it after nine years, either because their work payments or maintenance from a partner put them over the means test, or because they married or started to cohabit.
The report drew on the experience of other countries to identify policies that reduced financial disincentives to family formation, and found that these included flat-rate taxation and universal benefits; individuals rather than households being the basis for social welfare benefits; and a focus on financial stability for all families, particularly low-income families, rather than just lone-parent families.
It acknowledged that some of these reforms were unlikely in current circumstances. While not regarding it as a panacea, it said that a single, time-limited parental allowance for all low-income parents, replacing the existing OPFP and “qualified adult” dependant allowance, which was already recommended by the Committee on Social Welfare Fraud, would help reduce the disincentive to form stable two-parent families.