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Changes to the lone parent payment meant working single parents lost money

A new report from the ESRI looked into the changes made to the One Parent Family Payment.

Image: Shutterstock/Barry Mountford

CHANGES MADE TO lone parent supports over a number of years reduced the amount of income working parents took home and made it slightly less attractive for those in single-parent families to work.

That’s according to a new report from the ESRI which looked into the changes made to the One Parent Family Payment between 2011 and 2018.

The changes removed the entitlement for lone parents with a child over seven to the payment and reduced the level of the “earnings disregard”, the amount a lone parent can earn before their payment is reduced.

On top of this, changes made lone parent payments for those with children above seven years of age dependent on an individual’s engagement with job search and training services.

The ESRI report found that the changes to the payment resulted in losses to income of between 1% and 2% for employed lone parents compared to the benefits previously available, which made employment slightly less attractive.

As well as this, the changes had little effect on non-employed lone parents, who took home a negligible amount more than before.

The study also looked into the impact of childcare costs on the financial benefits afforded to lone parents for working.

It found that without taking childcare costs, 2% of lone parents were financially better off not working. Taking childcare costs into account, this rose to 16%. Once the childcare subsidies are taken into account, this fell slightly to 13%.

“While childcare costs remain a significant barrier to employment for lone parents, the recently announced childcare subsidies show positive impacts on the financial incentives for lone parents to be in employment,” said Dr Claire Keane, an author of the report.

Future work should monitor closely the impact of the changes to the One Parent Family Benefit on the engagement of lone parents in employment and their poverty rates.

About the author:

Cormac Fitzgerald

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