SEVERAL thousand lone parents are expected to benefit from new rules enabling them to earn up to £115 a week without losing their social welfare allowance.
The move is meant to help lone parents who wish to go out to work, according to the Minister for Social Welfare, Mr De Rossa. It will apply to parents who are unmarried, separated, deserted or divorced or who are the spouses of prisoners.
Up to now such parents could earn £24 a week, with about £40 allowed towards child minding costs and about £10 for travel to work, and keep their social welfare allowance.
The higher, simplified earnings ceiling will enable up to 3,000 extra lone parents to qualify for a social welfare allowance while working, the Department said.
"Twenty two per cent of current recipients of Lone Parents' Allowance are either working or taking part in community employment schemes," it says.
Many lone parents find themselves in an unemployment trap, said Mr De Rossa. "The introduction of the One Parent Family Allowance is an important step towards addressing this issue, but there are also tax issues which must be tackled if we are to make the welfare system truly family friendly."
Under the new scheme, earnings of up to £115 a week will have no effect on a lone parent's entitlement to a social welfare allowance. On earnings above that amount, the social welfare allowance will be reduced and will disappear at £230 a week.
For instance, a lone parent with one child and who earns £150 a week gross would lose £17.31 out of his or her allowance but would still get £67.70 a week.
The way in which savings and investments are treated in the means test for the One Parent Family payment is also being made more favourable to the recipients.
The first £2,000 of capital is disregarded, the next £20,000 is assumed to earn 7.5 per cent interest and the remainder is assumed to earn 15 per cent.
Under this method, a parent, with one child who has £7,000 in the bank would have his or her social welfare allowance reduced by £7.21 a week to £77.70.
Mr De Rossa said he intends to gradually extend the new method of calculating savings to all means tested payments.
An information help line on the new arrangements will be available to the public next week at 1800-400-400.