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FactCheck: Did the last government cut payments to lone parents?

FactCheck looks into a a controversial claim made by Social Protection Minister Leo Varadkar on Morning Ireland yesterday.

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Updated: 8.25 pm

AS FOCUS TURNS to next month’s Budget, Social Protection Minister Leo Varadkar appeared on Morning Ireland yesterday to discuss what might be in store.

And during the course of the interview, he claimed that “The One-Parent Family Payment wasn’t cut by the last government”.

A group called Spark (Single Parents Acting for the Rights of Kids) contacted us on Twitter, firmly disputing Varadkar’s claim.

So was the Minister right?

(Remember, if you hear a big claim on past policies and records, email factcheck@thejournal.ie or tweet @TJ_FactCheck).

Claim: The last government did not cut the One-Parent Family Payment
Verdict: Mostly FALSE

  • The nominal basic weekly rate of the OFP was not changed by the previous government
  • However, changes made to eligibility and income thresholds had the direct and necessary effect of cutting or ending payments to some OFP recipients

What was said:

During the interview, which you can listen to in full here, Varadkar had this exchange with host Gavin Jennings. It’s worth reproducing it at length:

GJ: Your last government, and one of your predecessors in the role, Joan Burton, the thinking of that government – of which you were a part – was that cutting the one-parent allowance, for example, would encourage parents back to work.
Now, it hasn’t worked, because the Scandinavian-level childcare that was promised to go along with it, wasn’t delivered. Are you going to reverse that cut?
LV: First of all, the one-parent family payment wasn’t cut by the last government. It was cut by Fianna Fáil. They cut it by €16 a week before they left office. What Joan Burton did was change the conditionality around it. The actual weekly rate was not cut.
The conditionality was changed around it, whereby once your youngest child was seven or older, there was an expectation that you would become involved in education and training.

The Facts

The One-Parent Family Payment (OFP) is for anyone aged under 66 who is raising a child or children on their own, earns under €425 a week (gross), and meets certain other conditions.

At present, it is €188, with an additional €29.80 payable for each eligible child.

Based on annual budget reports, the following have been the basic weekly rates of the OFP, including the additional allowance for one eligible child, since 2006:

Source: For a full-size version of this chart, click here

As you can see, Leo Varadkar was right to say that the last Fianna Fáil-led government cut the OFP rate, although he didn’t mention that they had also increased it in three successive budgets.

He was also right to say that “the actual weekly rate was not cut” by the previous Fine Gael-Labour government.

In response to our query, Varadkar’s spokesperson provided figures consistent with these.

Effect of other changes

Age limits

While the basic nominal rate of the OFP stayed the same during the tenure of the last government, other changes relating to the OFP had the effect of decreasing the amount payable to many OFP recipients, entirely ending OFP eligibility for some, and had no effect on OFP eligibility or payment levels, for others.

In 2012, then Social Protection Minister Joan Burton introduced the Social Welfare and Pensions Act, which included a number of significant changes.

At the time, OFP was payable for any child up to age 18, or up 22 for those in full-time education. After the changes, OFP was no longer payable, in most cases, once the parent’s youngest child reached 12.

And that age ceiling was progressively lowered – to 10 years by 2013, and seven years, by 2015.

This means that, due to changes effected by the previous government, there are parents receiving less from the OFP than they previously did, and would still be receiving, had those changes not been made.

Income limits

Source: Laura Hutton/RollingNews.ie

The more money you earn from working, the less you are entitled to from the OFP.

If you earn more than €425 a week (gross), you are not entitled to anything from the OFP.

This income ceiling had been increased from €293 to €375 in 2006, from €375 to €400 in 2007, and from €400 to €425 in 2008.

Before 2012, there was a transitional payment (half the OFP rate) for certain individuals who earned over €425 a week.

The previous government ended that in 2012.

Whatever you earn under €90 is not counted when your OFP rate is being calculated. This is known as the “earnings disregard”.

The previous government changed this limit on three occasions:

  • In 2012, the earnings disregard was lowered from €146.50 to €130 per week
  • In 2013, it was lowered from €130 to €110 per week
  • In 2014, it was lowered again, from €110 to €90 per week.

Whatever you earn above the earnings disregard is divided in half, and then factored into the Department of Social Protection’s calculation of your means.

So if you earn €100 a week, only €5 is assessed as earnings (€100-90 = €10, divided by two = €5).

The OFP you receive is then lowered on the basis of a formula you can find here.

To illustrate how these changes, enacted by the previous government, had the effect of lowering the OFP received by many lone parents, let’s take the example of someone working part-time, earning €200 a week, with two children, all other things being equal.

Screen Shot 2016-09-27 at 1.00.29 PM

This loss is a direct and necessary result of changes brought about by the previous government.

Conclusion

In his Morning Ireland interview, Leo Varadkar stated specifically “The actual weekly rate was not cut”. This is accurate in and of itself.

But the basic weekly rate of €188 (plus €29.80 for each eligible child) is nominal – only a starting point in figuring out what each OFP recipient will actually be paid.

Varadkar also claimed, more broadly, “The one-parent family payment wasn’t cut”. This is not true, in the case of many OFP recipients.

While the nominal basic weekly rate remained the same, changes made to age eligibility, and especially to the income disregarded in calculating the OFP received by working lone parents, had the effect of cutting the payments actually paid to many OFP recipients, ending OFP payments for some, while having no effect on the payments received by some others.

And these effects were not secondary or mediated (i.e. the loss of payment was not the combined result of some simultaneous change to another benefit or rule).

The cut in OFP received by many was a direct, necessary and foreseeable effect of the changes implemented by the previous government, notwithstanding the retention of the same basic nominal weekly rate.

And while Varadkar did accept that “the conditionality was changed around it”, he did not accept, as Gavin Jennings rightly pointed out, that these changes amounted to a cut.

It is not possible to shrink the eligibility for a benefit (i.e. the age limits), and widen a crucial basis for deductions to that benefit (i.e. the earnings disregard), without, in effect, cutting payments.

Bearing in mind the Minister’s specific statement about the basic weekly rate, his broader claim about the OFP, and the net effect of actions taken by the previous government as regards the OFP, we rate this claim Mostly FALSE.

Send your FactCheck requests to factcheck@thejournal.ie

Correction: This article previously stated that Leo Varadkar was interviewed on Morning Ireland by Cathal Mac Coille. It was, in fact, Gavin Jennings who conducted the interview. 

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About the author:

Dan MacGuill

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