Back to Work Family Dividend
Budget 2015 announced the introduction of the Back to Work Family Dividend scheme to provide a financial incentive to jobseekers and recipients of One-Parent Family Payment who have children and who cease claiming their social welfare payment on account of that person or, where appropriate, that person’s spouse, civil partner or cohabitant, taking up employment, increasing hours of employment or taking up self-employment.
This Dividend was intended as a further incentive to work, in addition to the existing Family Income Supplement. The Dividend operates during the period of economic recovery and is available to jobseekers and lone parents who take up or increase the level of their employment at any stage, up until the end of March 2018.
A person who meets the eligibility criteria for the scheme is entitled to a weekly payment for up to 2 years following on from the ending of the claim for the jobseekers payment or One-Parent Family Payment. The rate of the Back to Work Family Dividend is based, in the first year, on the rate of Qualified Child Increase which was being paid to that person immediately before he or she ceases to claim the jobseekers payment or One-Parent Family Payment, subject to a maximum overall weekly payment of €119.20 and is half of that rate in the second year, subject to a maximum overall weekly payment of €59.60.
The Taxes Consolidation Act 1997 to provide that the Dividend is not taxable.
The 2015 Act provided for the discontinuance of the existing scheme of continued payments for qualified children. It provided for the discontinuance of the existing scheme of continued payments for qualified children. Under this scheme the payment of the increases in jobseekers payments in respect of qualified children could continue for up to 13 weeks after the person takes up full-time employment which is expected to continue for at least 4 weeks. This scheme was discontinued on the introduction of the Back to Work Family Dividend.
The 2015 Act provides for the definition of a number of terms for the purposes of the Back to Work Family Dividend scheme, including the definition of employment and self-employment to mean employment and self-employment that is insurable for social insurance purposes.
In general, a person is eligible for the Back to Work Family Dividend if he or she
- is aged under 66,
- has qualified children,
- has been in receipt of certain social welfare payments or participating in certain employment or training schemes, and
- is habitually resident in the State.
The qualifying social welfare payments Jobseeker’s Benefit, Jobseeker’s Allowance, including the Jobseeker’s Allowance transitional arrangements, and One-Parent Family Payment.
The Dividend is available to people who would had been in receipt of one of the above social welfare payments but for the fact that the person was participating in a specified education, training, supported employment or work placement scheme (e.g. Community Employment, Rural Social Scheme, Tús, Gateway etc.). These schemes are defined as ‘‘qualifying schemes’’.
In the case of recipients of Jobseeker’s Benefit or Jobseeker’s Allowance, other than the Jobseeker’s Allowance transitional arrangements, such recipients must be receiving payment for at least 12 months in total (and at least 6 months in the last year) before claiming the Back to Work Family Dividend. However, such recipients are able to combine time spent on an education, training, supported employment or work placement scheme with time spent on a jobseekers payment in order to meet the ‘‘12 month’’ eligibility requirement.
In the case of recipients of One-Parent Family Payment or the Jobseeker’s Allowance transitional arrangements who claim Back to Work Family Dividend, there is no requirement to have been in receipt of either of these payments for a minimum period of time in order to qualify for the Dividend.
In addition to the above eligibility conditions, a former recipient of One-Parent Family Payment will be eligible for the Dividend where that person no longer qualifies for One-Parent Family Payment due to the age-related reforms that have been introduced in that scheme in recent years and where that person was engaged in employment or self-employment prior to ceasing to claim the One Parent Family Payment.
A person who has qualified for the Back to Work Family Dividend will cease to be entitled to the Dividend if that person or his or her spouse, civil partner or cohabitant receives a weekly social welfare payment, participates in an education, training, supported employment or work placement scheme or ceases to be employed or self-employed.
However, a person is able to receive Illness Benefit or Injury Benefit for up to 6 weeks without the Dividend being withdrawn if he or she is temporarily incapacitated for work. Only one Back to Work Family Dividend will be paid per couple. The Dividend is paid for a maximum duration of 2 years, provided that the person remains in employment. If the person returns to claim a social welfare payment at any time during the two year period, the Dividend will cease to be paid. Payment of the Dividend may recommence for the unexpired portion of the 2 year period of entitlement if the person or his or her spouse, civil partner or cohabitant gets another job. However, the recommencement of the Back to Work Family Dividend is limited to 2 occasions per claim.
The 2015 Act provides that the Back to Work Family Dividend is to paid on a weekly basis and the rate of payment will be related to the number of children in respect of whom a qualified child increase was being paid before the Dividend is claimed. The Back to Work Family Dividend was paid at a standard weekly rate of €29.80 per child, subject to an overall ceiling of €119.20 per week in the first year (which equates to the rate of qualified child increase payable in respect of 4 children).
The rate payable in the second year is half of that payable in the first year, subject to an overall ceiling of €59.60 per week (which equates to half the rate of qualified child increase payable in respect of 4 children). Payment of the Back to Work Family Dividend is not made in respect of any child who claims a weekly social welfare payment in his or her own right or who is regarded as a qualified child or a qualified adult for the purposes of any other person who is claiming an increase in a weekly social welfare payment. In addition, payment of the Dividend is not made in respect of any child who participates in an education, training, supported employment or work placement scheme in his or her own right.
The Minister for Social Protection has power to make regulations to require employers to provide relevant information which is required for the purposes of determining eligibility for the Dividend and to prescribe additional education, training, supported employment and work placement schemes for the purposes of the definition of a qualifying scheme.
The 2015 Act amends the Taxes Consolidation Act 1997 to provide for the exemption of income received under the Back to Work Family Dividend scheme, as provided for the purposes of liability for income tax.
The Back to Work Family Dividend was due to cease to operate with effect from 1 April 2021. The 2017 Act provided for the continuation of the Back to Work Family Dividend. The existing legislation had the effect of closing the scheme to new claimants from end-March 2018 and the closure of the scheme in its entirety from 2021.
The 2021 Act S. 15 provides for periods spent in receipt Covid-19 pandemic unemployment payment to be counted towards the number of days of continuous unemployment required on a relevant payment to qualify for back to work family dividend.