Maintenance, means tests and the working family payment explained

I heard mention of a €95 maintenance disregard for family income supplement in the budget. What is that and how does it work?

Mr Z.T., email

Ahh, a maintenance disregard...you’ve got to love the language that bureaucrats tend to use for some of these things. Utterly accurate and entirely incomprehensible.

And just to make it even more confusing, the payment that you, and most people, have known for years as family income supplement is now called the working family payment. Again it’s accurate but if it was so obvious and so necessary, why not call it that from the outset? It’s not as though the family income supplement was wildly misleading.

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Enough of the cribbing. A disregard is precisely that – an amount that is disregarded when examining eligibility for a particular welfare payment. And a maintenance disregard is a sum that you don’t count as means related to a maintenance payment.

In this case, the money involved comes from maintenance payments made to you and which you use towards the cost of housing.

At issue is the fact that, for most welfare payments, if you are in receipt of maintenance from a former partner or spouse, housing costs up to €95.23 are disregarded from your maintenance payments when assessing your means. Of course, you have to provide proof that you are paying a rent or a mortgage in order to secure the disregard.

Once that is done, half of the remaining maintenance payment is assessed as means in the welfare means test.

Measure

This “disregard” is standard procedure for welfare payments such as jobseeker’s allowance, the non-contributory State pension, disability allowance, and the one-parent family payment among others.

But, by some quirk, there was till now no such concession under the working family payment/family income supplement. The measure in this year’s budget is simply bringing the working family payment into line with these other payments on this issue.

The working family payment is 60 per cent of the shortfall between the new weekly family income (post means test) and the relevant family threshold.

Those thresholds depend on how many children are in the family. For one child, the weekly income threshold is €521, for two, it is €622; three (€723), four (€834), five (€960), six (€1,076), seven (€1,212), and eight or more (1,308). There is no change in those thresholds between this year and next.

The issue of maintenance can lead to further confusion because it is open to a former spouse or partner to claim working family payment if they are “wholly maintaining” you and you do not have other income of more than €100. If you start cohabiting or enter a new civil partnership or marriage, then your former spouse cannot claim working family payment in relation to you and any children.

If a former partner is claiming working family payment on that basis, you are barred from doing so.

The Department of Employment and Social Affairs estimates that the change could benefit more than 5,500 families.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.