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WELFARE PAYMENTS FOR middle-income families? What’s this nonsense? Sure, welfare is only for those out of work, or the poor, you might be thinking.
You would be forgiven for thinking we have lost the run of ourselves. But bear with us for a bit. The truth of the matter is that welfare payments for families in this country are so generous that when child benefit and tax provisions are taken into account, a family with two children, on the average wage, is a net beneficiary of the system.
And don’t take our word for it. That is the view of the international think tank, the Organisation for Economic Cooperation and Development (OECD).
The Paris-based organisation points out that child benefit is generous in Ireland. For two children you get €280 in child benefit in 2017. “Taking into account child-related benefits and tax provisions, the employee net tax burden for an average married worker with two children in Ireland was reduced to 0.2pc in 2014, which is the lowest in the OECD, and compares with a reduction to 14.8pc for the OECD average,” said the OECD in a recent tax trends report.
In other words, a family with two children gets back roughly what it pays into the system. But don’t think of it as welfare. Think of it as making a claim to the Department of Social Protection for the pay related social insurance (PRSI) everyone in work has to pay.
Where the problem lies
The OECD argument is that an average married worker with two children in Ireland had take-home pay, after tax and family benefits, of 99.8% of their gross wage compared to the OECD average of 85.2%.
However, it is worth pointing out the dangers of like-for-like comparisons with other countries. It’s also worth noting that couples in Ireland face high childcare costs that are subsidised in other countries. The OECD data includes PRSI contributions, but does not take account of other taxes faced by families, including property tax and other charges.
Given all that, it is worth spelling out that welfare for families comes not just in the guise of child benefit. Families on low incomes benefit from the Family Income Supplement, and all families, where there is a stay-at-home parent, are entitled to the home carer’s tax credit.
How to fix it
Make sure you get every payment your family is entitled to receive. Between child benefit, a medical card, the home carer’s tax credit and family income supplement, the direct payments from the State to families are generous in this country.
The savings explained
Child benefit (previously known as children’s allowance) is payable to the parents or guardians of children under 16 years of age, or under 18 years of age if the child is in full-time education, Youthreach training or has a disability. Once the child reaches 18 years of age it is no longer paid.
Let’s assume most families that are entitled to child benefit are getting the payment. But a large number of families are entitled to a key tax credit aimed at families, but are not claiming it, namely the home carer’s tax credit.
The home carer tax credit is not just for those caring for other people’s children, the elderly or disabled people. Many people don’t realise that it can be claimed where any housewife or househusband works in the home, caring for their own children.
Strictly speaking, it is not a welfare payment, but we have included it as it is a significant benefit for families. The tax credit is worth €1,100 in 2017.
A tax credit is basically an amount of tax that you do not have to pay. The home-carer’s tax credit is available to any jointly assessed couple with one or more child, where the spouse has income of less than €7,200. However, if you work part-time and earn more than this you may still qualify for some of the tax credit.
Maternity and paternity benefit
Maternity benefit is another social welfare payment which women are entitled to for paying PRSI. It is paid by the Department of Social Protection for 26 weeks, two of which are before the baby’s birth. The rate in 2017 is €235 a week. A generous employer can pay you your full salary. In that case you are likely to have to refund the employer the benefit.
Income tax is charged on maternity benefit payments, but not the universal social charge (USC) or PRSI. However, if maternity benefit is your sole income you will not have to pay tax on it. You need to apply at welfare.ie for the benefit between two and 16 weeks before the delivery date.
Paternity benefit is a payment for employed and self-employed people on paternity leave from work, and who are covered by PRSI social insurance. It is paid for just two weeks and is available for any child born or adopted on or after 1 September 2016. You can start paternity leave at any time within the first six months following the birth or adoption placement.
You should apply for the payment four weeks before you intend to go on paternity leave (12 weeks if you are self-employed). If you are already on certain social welfare payments, you may get half-rate paternity benefit. The weekly rate from March 2017 is €235. One-parent family payment is a means-tested benefit payable to those caring alone for children under seven, and earning less than €425 a week, including any maintenance payments. The rate is €193 per week plus €29.80 for the child.
Family income supplement (FIS) is a weekly tax-free payment available to married or unmarried employees with children. It gives extra financial support to people on low pay. You must have at least one child who normally lives with you or is financially supported by you. Your child must be under 18 years of age or between 18 and 22 years of age and in full-time education.
To qualify for FIS, your net average weekly family income must be below a certain amount for your family size. The FIS you receive is 60% of the difference between your net family income and the income limit which applies to your family. If you are getting FIS you may also be entitled to the Smokeless Fuel Allowance and the Back-to-School Clothing and Footwear Allowance.
No matter how little you may qualify for, you will still get a minimum of €20 each week.
Time
It will take just a few hours to claim child benefit from the Department of Social Protection, the same for the home-carer’s tax credit from the Revenue Commissioners, and the same again when it comes to making an application for family income supplement from the Department of Social Protection.
Difficulties
Claiming these benefits, and the tax credit, is not difficult. Contact your local Citizens Information Board office if you are unsure what to do, or need forms to fill out.
Some things to watch out for
Once you qualify for family income supplement, it will be paid for 52 weeks while you are employed. At the end of the 52 weeks you can re-apply for it if you continue to be eligible.
If your wages go up or your spouse starts work, your family income supplement will not be reduced until the end of the 52 weeks.
Useful websites
A good place to start is citizensinformation.ie, which is far easier to follow than the websites of Revenue (revenue.ie) or the Department of Social Protection (welfare.ie).
This Book Is Worth €25,000 is the best-selling book from Ireland’s top personal finance minds, Charlie Weston and Karl Deeter. The book is published by Gill Book, priced €12.99.
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I’m young, full time self employed and have no kids. I’m entitled to squat yet paying huge taxes every week – PAYE, PRSI, USC, VAT, LPT, CT, Rates, etc. As a self employed person. Ill be entitled to much less social services if I lose my job. The system is set up to punish the self employed and to reward the work shy.
There’s an active campaign running by a little-known ‘political party’ to try to undermine the governments efforts into finding suitable training and employment for the long term unemployed. This kind of thing absolutely infuriates me:
@Tweety McTweeter: what happened to FAS or Solas or whatever it’s called now?
@Tweety McTweeter: You pay 4% prsi if you want Benefit would you be willing to pay the 15% rate
@Tweety McTweeter: It’s very easy to look at it from the outside & think you know what’s going on, but the simple fact is the entire seetec system is a farce. It’s a private profit based company that manipulates the unemployed, provides very little training in a lot of cases & takes money from the gov/tax payer without living up to it’s commitments. It is only one of several options for training & employment. The CE scheme for example is being drained of potential workers by seetec’s scams & draining communities & charities of much needed help. But hey don’t let pesky little things like facts get it the way of the anti-welfare rhetoric! Also it is ridiculous the way self-employed are treated!
@Tweety McTweeter: Strange that you would praise one of the disingenuous companies that benefit from the extortionate taxes you’re paying to be employed. Seetec is just another corporate vulture in the Republic of Opportunists, a private company that offers nothing but threat & fraud at the expense of people like you so they can profit from the misery of the unemployed. You’re right about your own exploitation but supporting companies that specialize in the exploitation of others won’t help anyone.
@Tweety McTweeter: The lying, bullying, harrassment, and theft by Seetec and the state on people to force them into signing contracts that takes away their rights and illegally witholds their money, is what should be exercising your ire.
What’s going on in the country re Seetec and not being reported by the media is a criminal disgrace.
@Tweety McTweeter: If people opened the link you posted they would see the efforts being made to expose this private for profit company and the government for the lying underhand way they are forcing people to forgo their rights as citizens so the governmant can manipulate the unemployment figures.
Hpw this company Seetec got its contract is also another question that needs answering.
@Tweety McTweeter: wrong we pay to go to work on farms ,and also to have full time employment elsewhere
@Tweety McTweeter: Do your research. JobPath is bollox. So too are all the ‘initiatives’ mentioned on that site. They’re corrosive nothings to keep people in administrative ‘jobs’. Why don’t you get angry about that?
@Ronan Emmett: they were both jokes, run by the same organisations, bored presenters, bored adherents. Little or no long term job prospects but constant income for the administrators. A cynical Lack of respect for the adherents, some of the stories are unbelievable but true. The stuff of situation comedy at times. A big waste of Public money.
@Tweety McTweeter: They should round down social welfare payments to an even number like 188 to 180 over the next 4 years and pass on the savings to the taxpayer. They need votes, so won’t do the tough stuff and give the tax payers a break.
@Stephen murphy: It’s already €193 and going up to €198 early next year.
A lot of the issues around welfare could be sorted in this state with th introduction of a universal basic income for citizens.It could transform the lives of many working families, many unemployed people caught in a poverty trap, and open up many positions in the workforce.
@The Risen: exactly! For some families or struggling loan parents working on minimum paid jobs and long hours isn’t viable.. They’d be worse off than if they were just taking social welfare.. A lot of people hate that.. But can you blame them.. And it’s easy to say “well why don’t you just go get a third level education” etc.. For some people they just can’t for various reasons.. Like you said a universal basic income would help sort things out.. Or perhaps just lowering the cost of living.
@The Risen: a great idea in theory but the cost of living would simply sore again
@Nucky: Nope. It depends on how it’s implemented.
@The Risen: how?
Anyone on the dole for more than a few weeks is hounded by DSP into courses run by private profitable companies who have links to the Tories and FG. Landlords who have RA tenants just get switched over to a more unconditional HAP payment. Yes city and other hugely profitable companies get unconditional dole of FIS so they can only pay the minimum wage whilst robbing the Irish for groceries. Why didn’t so called socialist Joan Burton put loads of terms & conditions on well off landlords & employers getting HAP & FIS. You know the way she ensures FG approved course operaters get paid over and over again for the same people who are forced to sign up to courses or be instantly cut off. Lone parents children go hungry if someone makes false accusations to a DSP office about them as they are quilty till they have to prove themselves innocent so their can eat. So Leo and Joan who really CHEATS US ALL? The private “job” courses who get paid for people attending over and over again along with landlords and big employers and vulture funds and banks and Apple 0% tax take the piss and CHEAT US ALL but they are allowed continue without any conditions & rules unlike the unemployed.
@Jay Lane: Tesco not yes city
@Jay Lane: name them.
It would be interesting to find out how much of the billions set aside for Social Welfare ends up in the accounts of the professionals and in reality benefit the more well off in society?
Maybe do a fact check on this?
Family Income Support welfare for large firms
Rent allowance for Land lords.
Medical Card for Drs and Pharmacies and drug companies
Free Legal Aid for solicitors and barristers.
Free travel for semi state Irish rail, Luas, Bus Eireann and Dublin bus.
The truth is despite the neo liberal tendency to slash and burn public services their instinct remains to take a bigger slice of the pie for themselves!
@Jarlath Murphy: so your solution is? Alternative?
@Anto Curran: So your contribution is?
@Jarlath Murphy: how are doctors and pharmacies benefiting by people who pay next to nothing?
@A H: The Drs receive a charge from the taxpayer for each medical card holder on their books within their catchment area whether they see them or not!
The Drs will issue more prescriptions to medical card holders!
The pharmacies claim back the cost of these prescriptions from the state!
It would be interesting to see a reconciliation between the medicines disbursed to the medical card holder and those they received?
@Jarlath Murphy: was just about to say the same thing. I recently discovered that a chemist I had a repeat script with for past 2yrs continued to bill for 2 items I had removed from the original script but as they had set up the repeat directly from the medical centre they didn’t remove it but didn’t include it in my monthly delivery – only discovered when I requested it be changed to a different pharmacy and there they were when I picked it up!
@Mo: Welfare fraud affects us all! Of course that’s just a clerical oversight….
@Jarlath Murphy: what proof have you GPs give more scripts to those who have medical cards?
@Ken Curran: Ken well I’ll rephrase that,
After I have shelved out 60 euro to see the Dr and he gives me the script for pharmacy I check with the pharmacist and decline the additional items on the script which may alleviate the symptoms but after paying another 30 for the anti Bs I can’t really afford them!
The medical card holder will just collect the full script.
The Pharmacist would therefore, I suspect, rather see them than me!
As an employer had to close briskness as it was difficult to get employees that would agree to go on the books. They may have read a book like this.
@Tom Molloy: I find it hard to believe that this is the reason your business closed. What jobs were they and what were you paying on the books? Minimum wage?
Any chance Charlie or anyone in the Indo can write about tax write offs and giveaways to the very wealthy instead of focusing on tiny amount of next to impossible to do welfare fraud with Joans PSC cards? Any chance they could tell us how long they had the Anglo tapes? Any chance the Indo could enlighten is more on the tribunal findings against DOB?
@Jay Lane: enlighten us more on DOBs dealings and dealings and dealings and Tipp TDs dealings and dealings and dealings please Indo it’s of grave importance as your hatred of any vaguely left wing representives elected by the people against negative Indo coverage.
@Ronan Emmett: People are expected to do the best for themselves, that’s human nature. If an employee insists on being paid illegally the employer cannot employ them.
@Jay Lane: Maybe do an article on the Water Services Bill 2017 recently passed in Dail Eireann that sees “excess water use” being charged for. Not one word by any media, or RTE, save for social media once more, on this very important legislation.
Another article about the bullying, harrassment and illegal witholding of people’s money by Seetec to force them to sign a contract that takes their rights as citizens away, would further people of what is actually happening so as the government can manipulate the unemployment statistics so as to look good.
FIS is poverty paying employers welfare. HAP is landlords unconditional dole as no housing inspectors enforce standards for their uninhabitable dives as FG are allergic to council house building that even Cosgrave built 100,000 council houses in the mid 70s.
@Jay Lane: become a landlord so ! A great opportunity it seems
@Jay Lane: hap is paid by the councils which have inspections and can revoke the payment. I have seen one of their reports personally after an inspection and lots of picky points like moss on the gutters or weeds in the garden, a loose hinge on a press and an electrical report that costs €500. Landlords also have to pay tax and prtb fees and property tax and get the boiler serviced yearly and pay house insurance, also only 75% of the interest paid is deductable. Then you have tenants who don’t respect the property. Most of the landlords that I know will sell up once they are out of negative equity. If you think landlords have it easy then go and be one.
@Brian Madden: Try being a tenant if you think it’s easy with no security of tenure in a dive. RA tenants never had an inspection & are told by the council to go on HAP so the government can manage housing list figures. They are years on RA & never did any authority approve their homes for basic habitation standards in the first place for RA nevermind hapless HAP. You do realise there is only a handful of inspectors in the country so it be a cold day in hell before they even get close to finishing inspecting all the thousands of people who simply just got switched by DSP from RA to hapless HAPs.
@Jay Lane: i have been a tenant living in a kip paying very high rents and I have also seen it from it other side. There are different types of landlords, those who are accidental and those who manage many properties and it’s their main income. Accidental landlords who have mortgages to pay don’t have it easy. I cannot comment on Ra as I know nothing about it but hap has inspectors who are very picky and non compliance us punished.
@Brian Madden: : People come out with this one all the time. The PRTB reports significant increases in the number of people registering with the PRTB as new landlords. It might not be working for you or your acquaintances but this doesnt seem to be at all representative. Which is what you would expect in a rapidly rising market.
FIS is poverty paying employers welfare. HAP is landlords unconditional dole as no housing inspectors enforce standards for their uninhabitable dives as FG are allergic to council house building that even Cosgrave built 100,000 council houses in the mid 70s.
If I was to claim would I need the mandatory or compulsory ID card which has no legal basis ?
@eastsmer: I can confirm that you would definitely need either the mandatory or compulsory card before you would be entertained, although it is entirely obligatory should you wish to use them! Hope that clears it up for you!
Although you will need a passport and utilities bill before they will look at your non mandatory PSC card!
@Jarlath Murphy:
Although you will need a passport and utilities bill before they will look at your non mandatory PSC card!
what do you mean by that ? That these are needed to get the cards in the first place ?
@lavbeer: Catch 22 FGFFLab
Home carers tax allowance is not available to all families. It is only available to married couples with children or couples in a civil partnership with children. It is not available to cohabiting couples with children.
@Caroline Redmond: And not available to employed families with no children either, who seem to be last on the list for any kind of state assistance..
Gutted we didn’t get a sneak peak of Chapter 7: Quit Smoking or Chapter 37: Make your lunch.
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