A Mother’s Story | Losing the One Parent Family Tax Credit

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Dearbhla * wrote to One Family about the Budget 2014 announcement of the abolition of the One Parent Family Tax Credit.

Dearbhla (39) is a separated wife whose marriage broke down in 2005 after twelve years. She and her husband (49) agreed to separate on good terms and always put their son (now aged 13) first, and continue to do so. Dearbhla’s ex-husband has always voluntarily paid maintenance to support his son and they still have a mortgage on the family home.

In her own words:

“My ex-husband has a full time job and he works hard. I work part-time. I felt sick to the pit of my stomach when I listened to the budget and realised what the removal of the One Parent Family Tax Credit would do to us. My ex-husband is ill and is suffering from stress from work/financial pressure. He has said several times recently that he believes we would be better off financially if he was no longer here. His father died at sixty years of age due to a stroke, and the doctor has warned him he is heading the same way if he does not stop worrying and get his stress under control. I am genuinely concerned this will push him over the edge.

After maintenance he has to pay for rent, electricity, gas, food, etc. I have the mortgage, electricity, gas, food, school costs etc. At the moment he has no TV licence as he can’t get the money together to pay for it. He dresses himself from charity shops. This is a man who is working a full week’s work to end up with so little.

I am not in arrears in my mortgage as the one thing I fear more than anything is losing the home I have made for myself and my son. I will go without food etc. to ensure my son is fed and well looked after, and my bills are paid.   We do not drink or smoke, and as for socialising, I cannot remember the last time I went out. The last holiday I had was in 2004.

We have nothing left to give.

When I say nothing, I mean nothing. I am pleading with the government to not let this huge cut to our family go through and to try to understand the extra costs a separated couple endures. We are simply honest, decent people who have always tried to do the right thing.”

One Family is extremely concerned by the Budget 2014 announcement of the replacement of the One Parent Family Tax Credit with a Single Person Child Carer Tax Credit. To read more and to download a pro-forma letter that you can adapt to send to your TDs about this issue, please click here.

The group Irish Parents for Equality are calling for signatures to a petition which can be found here.

* No details have been changed apart from the name of the mother

Abolition of the One Parent Family Tax Credit

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One Family is extremely concerned by the Budget 2014 announcement of the replacement of the One Parent Family Tax Credit with a Single Person Child Carer Tax Credit as it causes a significant number of problems and possibly unintended outcomes.

The financial impact of abolition of the One Parent Tax Credit for the non-resident parent, as verified by Revenue, is:

Annual wage Difference in tax take per week
€13,500 (minimum wage x 30 hours) No change
€20,000 €13
€30,000 €10
€40,000 €48
€60,000 €47

The Revenue Commissioners estimates that for 2013, 76,800 income earners utilise some or all of the One-Parent Family Tax Credit. The gender breakdown is estimated as follows:

Female    51,224

Male       25,573

Total:    76,797

One Family has written to all Ministers, TDs and Senators to voice these concerns and urges everyone to write to their Representatives as soon as possible to do the same.

A proforma letter with suggested text that individuals can change as required is available to download here: One Parent Family Tax Credit_Letter to Representatives

A list of TDs and Senators including their contact details is available here.

One Family representatives have also participated in a number of press, radio and television interviews on the issue. You can read the press releases issued by One Family below:

17.10.2013 | Attack on Parents Sharing Parenting After Separation is Unjust, Unfair and Underhand

15.10.2013 | Budget 2014 is Anti-family and Anti-parent

Attack on Parents Sharing Parenting After Separation is Unjust, Unfair and Underhand

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Press Release

Attack on Parents Sharing Parenting After Separation

 is Unjust, Unfair and Underhand

(Dublin, Thursday 17 October 2013) One Family, Ireland’s leading organisation for one-parent families, is deeply concerned by the removal of the One Parent Family tax credit and tax free allowance announced on Tuesday as part of Budget 2014 which will have disastrous and far-reaching consequences for separated Fathers and Mothers who share parenting of their children.

Stuart Duffin, Director of Policy and Programmes at One Family states: “Claimants of the One Parent Family tax credit are working Mums and Dads who are committed, responsible parents participating in a successful arrangement with their child’s other parent for the well-being of their child. This is an in-work support and the kind of mechanism that needs to be in place to deliver Pathways to Work, a cornerstone initiative of the Government’s recovery programme. Ultimately it is children who will be impacted with less money to go round in already hard hit families.”

The One Parent Family tax credit of €1,650 was previously available to both working parents sharing parenting after separation. From 2014, it is being replaced by a Single Person’s Child Carer tax credit of €1,650 which will only be available to the parent in receipt of Child Benefit. As the principle carer is usually the child’s Mother, and she may not be working, these changes mean that in many cases neither parent will now meet the specified criteria.  Some parents may be at a loss of over €125 per month as a result of the removal of the one-parent family tax credit and the removal of the one-parent family tax rate.

Duffin continued: “One Family has a received a barrage of calls to the askonefamily helpline, plus emails and Facebook comments from worried parents who are already pushed to their limits. There is a lack of joined up thinking and policy between the Departments of Finance, Social Protection and Children & Youth Affairs as this government is penalising the good practice of shared parenting. One Family is actively calling for clarity and action to ensure that working parents don’t become welfare recipients.”

One Family warns Government that it must address implementation problems, otherwise this is going to create long-term challenges for parents.

Karen Kiernan, CEO of One Family, comments:  “We are calling on Government to reverse this decision and to reinstate the relevant tax credits to ensure that one-parent families who are still coping with the cuts of Budget 2012 are not pushed further into poverty. We are concerned that along with other government measures this will damage the objective of making work pay and more people will end up becoming customers of the Department of Social Protection as many fathers have told us they simply won’t be able to pay as much maintenance as they have been.”

Concerned parents can contact the lo-call askonefamily helpline on 1890 662 9212 and email support@onefamily.ie.

Notes for Editors:

  • 1 in 4 families with children in Ireland is a one-parent family
  • Over half a million people live in one-parent families in Ireland
  • Almost 1 in 5 children (18.3%) live in a one-parent family (Census 2011)
  • There are over 215,000 one-parent families in Ireland today (25.8% of all families with children; Census 2011)
  • 87,586 of those are currently receiving the One-Parent Family Payment
  • Those living in lone parent households continue to experience the highest rates of deprivation with almost 56% of individuals from these households experiencing one or more forms of deprivation (EU-SILC 2011)
  • Operational Challenges for Government to be addressed:
  1. If the principal carer is not working, can the allowance be claimed by the other parent?
  2. If the principal carer is not working and the allowance is claimed by the other parent, what happens when the principal carer returns to work?
  3. What about parents who share care 50/50?
  4. How will this be managed for parents who are already in dispute with each other following separation?
  5. Can clear provisions be made for flexibilities such as splitting the credit between working parents; and making it available to the working parent, usually the Father, who is often classed as ‘secondary carer’.

Available for Interview

Stuart Duffin, Director of Policy & Programmes | t: 01 662 9212 or 087 062 2023

Karen Kiernan, CEO | t: 01 662 9212 or 086 850 9191

For Case Studies, Further Information/Scheduling

Shirley Chance, Director of Communications | t: 01 662 9212 or 087 414 8511

 

Updates following Budget 2014

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One Family has summarised the announcements of Budget 2014 in relation to a number of areas of relevance to people parenting alone or sharing parenting.

Budget 2014

People parenting alone and sharing parenting

Changes to Social Welfare payments for 2014
Basic rate of payment The weekly rate of payment is staying the same in 2014 for all weekly social welfare payments for those of working age and pensioners. No change.
One Parent Family Payment There will be no change to the rate of payment in 2014.

For those in employment the new rate of income disregard of €90 a week will be introduced in 2014, reduced from €110 in 2013. This means that the first €90 of earnings will be ignored and half of the remainder of earnings will be assessed to give a new rate of One Parent Family Payment.

 No change.

 

Income Disregard reduced.
Child Benefit The rate remains at €130 and this will be for each child, as announced in December 2012. No change.
Maternity Benefit The rate of payment will be standardised at €230 for new claimants; this is a change from a maximum payment of €262 and a minimum of €217.80. The change will come into effect from January 2014. Payment standardised.
Fuel Allowance Rate of payment will remain and there is no reduction in the number of weeks. No change.

Secondary Payments
Back to School Clothing and Footwear Allowance Unchanged for all children under 18. In 2014 it will be paid for those aged 18 and over in secondary school but not for those in third level education. No longer payable to children in third level education.
Fuel Allowance It will remain at €20 a week for the 26 weeks. No change.
Rent Supplement No changes announced for single people with children but an increase in contribution for couples, from €35 to €40 weekly. No change for single people with children.
Mortgage Interest Supplement This scheme will be closed to new entrants and will be wound down over a four year period from January 2014 for existing recipients. Closed to new entrants and winding down.

One Parent Families in Work
Family Income Supplement Household income thresholds remain at 2013 levels. No change.
Income Tax, PRSI and Universal Social Charge Unchanged in 2014. No change.
One Parent Family Tax Credit This is being replaced by a Single Person’s Child Carer tax credit of the same value – €1,650 – only available to the principal carer. This tax credit of €1,650 was previously available to both working parents sharing parenting. Now only one parent – the principal carer – can avail of it.

One Family is actively clarifying a number of questions and concerns this change raises and will update in more detail as soon as possible.

Other
GP Visits Free GP care for children aged 5 and under announced. Free GP care for children aged 5 and under announced.
Medical Card Prescription charges increase from €1.50 to €2.50 for medical card holders. Prescription charge increased to €2.50.
Third Level Students The student contribution charge for third-level institutions will increase by €250 to €2,750 – increases by €250 until it reaches €3,000 in 2015. Increased.
Primary School Books A further €5m to be allocated to extend the books-to-rent in primary schools. Increased.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Budget 2014 is anti-family and anti-parent

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Press Release

More attacks on working mothers and shared parenting

Budget 2014 is anti-family and anti-parent

(Dublin, Tuesday 15 October 2013) One Family, Ireland’s leading organisation for one-parent families today responds to Budget 2014 noting the removal of the One Parent Family Tax Credit, the cutting of Maternity Benefit at the higher rate and no plans to help lone parents get into work.

Karen Kiernan, CEO of One Family, states: ‘We are extremely disappointed that working parents who share caring and financial responsibility for their children after separation are now to be penalised by the removal of the One Parent Family Tax Credit for one parent. We should be supporting both parents to cooperate and share responsibility for their children following relationship breakdown instead of penalising them. In addition, the adjusted Maternity Benefit payments, following on last year’s taxation of the Benefit, will negatively impact on thousands of working mothers.’

The One Parent Family Tax Credit has been available to both people sharing parenting of their children where they are not cohabiting and their child lives with them for part of the year. It was worth €1,650 per year in addition to the normal tax credit.

Stuart Duffin, Director of Policy and Programmes at One Family states: ‘We have been concerned for some time by incidences of social welfare inspectors investigating families because the parents after separating are sharing parenting of their children. One Family works to ensure that parents do their best for their children as they move through separation and into the often challenging landscape of shared parenting. This cut is retrograde. It ignores the reality of the collaborative approach many people can take to sharing responsibility and penalises families who have separated.’

Kiernan concludes: ‘One Family finds the ongoing negative approach to parents and families by this government to be alarming. People need support to balance their working and parenting responsibilities. It costs people more money to live apart and share parenting of their children than if they were living together and the removal of this Tax Credit will cause conflict in separated one-parent families.’

Notes for Editors:

  • 1 in 4 families with children in Ireland is a one-parent family
  • Over half a million people live in one-parent families in Ireland
  • Almost 1 in 5 children (18.3%) live in a one-parent family (Census 2011)
  • There are over 215,000 one-parent families in Ireland today (25.8% of all families with children; Census 2011)
  • 87,586 of those are currently receiving the One-Parent Family Payment
  • Those living in lone parent households continue to experience the highest rates of deprivation with almost 56% of individuals from these households experiencing one or more forms of deprivation (EU-SILC 2011)

Available for Interview

Karen Kiernan, CEO | t: 01 662 9212 or 086 850 9191

Stuart Duffin, Director of Policy & Programmes | t: 01 662 9212 or 087 062 2023

Further Information/Scheduling

Shirley Chance, Director of Communications | t: 01 662 9212 or 087 414 8511

One Family Responds to Media Reports of Social Welfare Fraud and Notion of the ‘Undeserving Lone Parent’

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Press Release

One Family Responds to Media Reports

of Social Welfare Fraud and

Notion of the ‘Undeserving Lone Parent’

(Dublin, Wednesday 9 October 2013) One Family, Ireland’s leading organisation for one-parent families, responds to recent reports of social welfare fraud and the targeting of claimants of one-parent family benefits by Department of Social Protection investigators.

Karen Kiernan, CEO of One Family, states: “We find it abhorrent that there are some two-parent families masquerading as lone parents in order to receive more social welfare than they are entitled to. Whilst the social welfare system needs an overhaul to ensure that resources are put most where they are needed, i.e. with poor children in poor families, fraud is not the answer as it hurts lone parents and their children, and others reliant on state support.”

Stuart Duffin, One Family’s Director of Policy, comments:  “The dismantling and restructuring of social protection programmes have impacted disproportionately on women, especially lone parents, and shifted public discourse and images to welfare as fraud, thereby linking poverty, welfare and crime. Consequently, genuine lone parents can be demonised as welfare cheats. This almost criminalisation of poverty raises questions related to regulation, control, and the relationship between them, and it would behove the government to be extremely careful about their representation of fraud.”

There are three possible causes of irregular payments in the welfare system, fraud (dishonest intent), customer and/or third-party error and departmental error. An analysis by One Family which is available on www.onefamily.ie, has found that ‘Control Savings’– the internal performance indicator on the effectiveness of the Department of Social Protection’s (DSP) control measures, which has become a publicly quoted figure when the DSP wishes to report its efforts to reduce suspected fraud and error – is a poorly generated estimate. There is enough evidence to be concerned that the Department’s guidelines are not applied consistently across regions and that the predetermined multipliers used to generate estimated future savings do not accurately reflect return rates to welfare schemes.

According to an audit carried out by the Comptroller and Auditor General (C&AG), fraud and error in the Irish welfare system was estimated to be between 2.4% and 4.4% in 2010 (C&AG, 2011).  This would seem to place it in a comparable position with the UK (2.7%), New Zealand (2.7%) and Canada (3-5%).

Ms Kiernan concluded: “It is time the media and policy makers stop perpetuating notions of the deserving and undeserving poor. Social welfare and other state supports should be based on evidence of need and from a perspective of equality and fairness, not from who is politically expedient to target.”

Notes for Editors:

  • 1 in 4 families with children in Ireland is a one-parent family
  • Over half a million people live in one-parent families in Ireland
  • Almost 1 in 5 children (18.3%) live in a one-parent family (Census 2011)
  • There are over 215,000 one-parent families in Ireland today (25.8% of all families with children; Census 2011)
  • 87,586 of those are currently receiving the One-Parent Family Payment
  • Those living in lone parent households continue to experience the highest rates of deprivation with almost 56% of individuals from these households experiencing one or more forms of deprivation (EU-SILC 2011)
  • The document ‘One Family Analysis: DSP Control Savings Research’ is available to read and download here.

About One Family

One Family was founded in 1972 and is Ireland’s leading organisation for one-parent families offering support, information and services to all members of all one-parent families, to those experiencing an unplanned pregnancy and to those working with one-parent families. Children are at the centre of One Family’s work and the organisation helps all the adults in their lives, including mums, dads, grandparents, step-parents, new partners and other siblings, offering a holistic model of specialist family support services. These services include the lo-call askonefamily national helpline on 1890 622 212, counselling, and provision of training courses for parents and for professionals. One Family also promotes Family Day, an annual celebration of the diversity of families in Ireland today, with 10,000 people attending events this year on 19 May (www.familyday.ie). For further information, visit www.onefamily.ie.

Available for Interview

Karen Kiernan, CEO | t: 01 662 9212 or 086 850 9191

Stuart Duffin, Director of Policy & Programmes | t: 01 662 9212 or 087 062 2023

Further Information/Scheduling

Shirley Chance, Director of Communications | t: 01 662 9212 or 087 414 8511

Analysis of Department of Social Protection’s Reporting of Control Savings

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In April 2013, One Family carried out an analysis of the Department of Social Protection’s (DSP) Reporting of  ‘Control Savings’. Control Savings is the internal performance indicator on the effectiveness of the Department of Social Protection’s (DSP) control measures. We found that there is enough evidence to be concerned that the Department’s guidelines are not applied consistently across regions and that the predetermined multipliers used to generate estimated future savings do not accurately reflect return rates to welfare schemes.

Read or download the analysis here: One Family Analysis_DSP Control Savings Research_April 2013.

One Family’s findings:

  1. The multiplier used to calculate potential savings by the Department is 4 1/4 times higher than that used to calculate potential savings in Jobseekers Allowance.
  2. Consequently reported levels of OPFP fraud have been inflated.
  3. This highlights a significant error with the Department’s predetermined multipliers Office of the (Comptroller & Auditor General. (2011), op cit., pp 471-472).

One Family’s Reaction to Rental Assistance Reforms

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It has been confirmed by the Minister of State for Housing and Planning, Jan O’Sullivan TD, that the responsibility for the payment of rent allowance is to be handed over to local authorities as a pilot in seven areas around the country including Limerick Joint Authority (previously Limerick City and County Councils) and one in Dublin from January 2014.

One Family has reacted today to how the Department of Social Protection (DSP) and local authorities are placed to tackle the significant challenge of implementing the reforms to rental assistance and these changes transferring both the assessment and payments to local authorities.

Stuart Duffin, our Director of Policy & Programmes, commented:  “Working to manage the introduction of the rental assistance reforms will be the challenge, not the change in who pays. Their full impact is currently uncertain and depends on how households and the housing market react, locally as well as nationally. DSP and all local authorities have a crucial role to play in anticipating and addressing adverse consequences for claimants and the administration. Some challenges cannot perhaps be planned for: where the interaction of local authority funding constraints, the social housing stock, rental market conditions and the local economy produces extreme impacts. As issues emerge, the Department will need to be capable of a flexible response, well-coordinated with other sources of support for families.”

The Department is actively preparing for the implementation of these housing supports reforms and One Family calls on it to use available data to assess the impact of the reforms on current entitlements. We ask if these reforms will result in households receiving lower assistance, particularly in areas of high rent such as Dublin, and how will this impact on an already landlord-driven rental market?

Ten questions to be resolved are:

  1. What are the new local housing allowance restrictions and guidelines?
  2. Will this impact on all claimants immediately?
  3. Is there any additional help to support those who are hardest hit and is there a discretionary payments fund?
  4. Is this intended to help all  those who may  lose out  financially?
  5. What happens to existing  customers?
  6.  Are there changes planned  for direct payments of local rental allowance to  landlords?
  7. What is the financial impact  of this change?
  8.  How will local housing  allowances be  implemented in the future?
  9. Will direct payments to landlords be allowed in the social rented sector?
  10. How will housing costs be calculated ?

The Government must intend the reforms to improve the system. However, reforms could also lead to hardship or an increased risk of homelessness. How tenants and landlords will respond is highly uncertain at the moment and the Department must commission independent research to evaluate the impact of the reforms during and after implementation.

The Department needs to be actively working with all local authorities to identify the extent to which the reforms will increase the administrative burden on the authorities. It clearly has further ground to cover. Many people know very little about the changes, and the extent to which those affected have been informed varies according to where they live.

Private rented sector households know little or nothing about the changes that would affect them.

The Department has put in place transitional support through increased funding for discretionary housing payments. It needs to work with other departments and local authorities to monitor emerging issues and manage risks for both private and social tenants.

Ten Days for Ten Solutions

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With just ten days remaining until Budget 2014 on Tuesday 15 October, we are inviting everyone to support 10 Solutions. No Cuts. by taking one simple action on each of these ten days.

10 Solutions for Smarter Futures is our response to the harsh cuts aimed at lone parents in Budget 2012. These are changes that will benefit everyone, not just those on low incomes, as 10 Solutions for Smarter Futures is a series of ten no-nonsense, low or no-cost actions that Government can deliver to make life better for everyone.

How can you support the 10 Solutions campaign?

There are a number of things you can do.  These include:

1. Email your local TDs – use our pre-populated email facility. It takes less than two minutes on this link.
2. Join and share the ‘10 Solutions. No Cuts.’ event on Facebook. You can also change your profile pic to a 10 Solutions pic (available here).
3. Share on Twitter via @1FamilyIreland and #10Solutions.
4. Ask your colleagues and contacts, family and friends to support the campaign for 10 Solutions by taking the actions above too.

Read more about 10 Solutions here.