Publication - Review of the Back to School Clothing and Footwear Allowance Scheme


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Executive Summary

Chapter 1: Introduction

The Back to School Clothing and Footwear Allowance is a payment made to certain families to assist with the cost incurred when children are returning to school. Under the scheme, a payment of €80 may be made in respect of an eligible child aged eleven years or less, while a payment of €150 may be made in respect of an eligible child aged twelve years or more. Eligibility is subject to a means test and certain other conditions. The payment is not intended to meet the full cost of a child's clothing and footwear but only to provide assistance towards these costs.

This is a review of the scheme from first principles, under the Expenditure Review Programme. The details of the Working Group membership, Terms of Reference, methodology and the consultation process are set out in Chapter 1. The consultation process included 52 organisations being requested to make submissions, 584 Superintendent Community Welfare Officers/Community Welfare Officers being canvassed for their views and a detailed survey being sent to 860 schools

Chapter 2: Background & Scheme Profile

The Back to School Clothing and Footwear Allowance ( BSCFA) Scheme was introduced in 1990 to provide assistance towards the cost of school clothing and footwear (uniform) for children attending primary and post-primary school. It is a non-statutory scheme operated by the Health Boards on an annual basis during the period June to September on behalf of the Department of Social and Family Affairs. The Scheme provided assistance of €17.7m to 75,202 families in respect of 172,123 children in 2003 with administration costs of approximately €800,000. Total expenditure on the BSCFA scheme in 2003 was the equivalent of less than 1% of Child Income Support payments.

Footwear payments were originally made under the Public Assistance Footwear Scheme which was introduced in 1944. They were subsequently incorporated into the Exceptional Needs Payments ( EPNs) of the Supplementary Welfare Allowance Scheme arrangements in 1977. Clothing payments were also paid as EPNs at that time. The current scheme, introduced in 1990, superseded these two categories of EPN payments. In 1996 the allowance was first linked to school attendance for under 18 year olds, prior to that it was payable to children under 2 years and in some cases, mainly in the ERHA Boards, from birth.

The number of children benefiting from the scheme has fluctuated over the years from 184,672 in 1990 peaking in 1995 with 268,000 children benefiting. This had dropped to 143,029 by 2001 rising to 155,811 in 2002 and 172,123 in 2003. The Group considered the increase in the numbers benefiting in 2002 and 2003 was attributable to a number of factors:

  • the relaxation in the means test in 2002,
  • an overall increase in the live register from 2002, and
  • an increase in the numbers of one parent family payment recipients.

In 1999, 23% of families claiming the allowance were receiving Unemployment Assistance; this figure had reduced to less than 15% in the 2003 scheme. During the same period the number of one parent families who received a BSCFA saw an increase of approximately 7% from 37% to 44%. These changes are largely attributed to an overall reduction in the Live Register and an increase in one parent families since 1999.

Chapter 3: Identify Objectives and Current Relevance

The Working Group agreed that the objective of the current Back to School Clothing and Footwear scheme is to:

" assist low income families with the cost of school clothing and footwear so that they do not suffer undue financial hardship in meeting these costs"

The Working Group considered this objective and its current relevance in the context of the:

  • the Department of Social and Family Affair’s Statement of Strategy
  • the Department of Education and Science’s Statement of Strategy
  • the National Children’s Office Strategy (National Children’s Office is an agency of the Department of Health and Children)
  • National Anti-Poverty Strategy
  • Child Poverty
  • Education Policy
  • Sustaining Progress (National Partnership Agreement).

The Working Group concluded that the explicit objective of the scheme to assist low-income households with the cost of school clothing and footwear remains relevant in current circumstances and as such the allocation of resources on a current and ongoing basis is warranted from an income maintenance and education participation perspective.

Chapter 4: Efficiency

Chapter 4 of this report outlines in detail the Working Group’s findings in relation to efficiency. Efficiency can be defined as the relationship between input and output of an activity and the extent to which it is possible to maximise output from the input available or to minimise the levels of input for the given level of output. When examining the area of efficiency the Group identified the following indicators:

  1. administration costs of the scheme as a percentage of the overall cost of scheme
  2. the administration cost per claim
  3. the level of duplication in overall administrative arrangements
  4. payments being made in a timely manner
  5. appeals and outcomes from appeals

Having considered these indicators the Group concluded that:

  • the administration costs as a percentage of scheme expenditure have improved since the C&AG report in 1998.
  • there has been an improvement the administration costs per claim from the position outlined by the C&AG in his 1998 report
  • it was not possible to directly compare the administration costs of this Department and those associated with the BSCFA scheme. The Departments administration costs include the costs of the Planning and Policy side of the Department, the ongoing cost of weekly/monthly payments and their reconciliation (payments to An Post / Stationery / PPO production), the costs associated with revised decisions, the cost of the ongoing control of schemes and all non pay expenditure including capital projects. The BSCFA costs outlined are the additional staffing costs incurred each year to administer the scheme.
  • as the scheme is rules based and does not require any element of discretion greater efficiencies could be achieved by delivery of the scheme through a mainstream clerical operation or by the automation of the decision and payment process.
  • there were duplications in the administrative arrangements in the areas of the means test and the application process that if resolved would lead to administrative savings. The Group concurred with the view of the C&AG that any merger of means tests would be best achieved in the context of the transfer of scheme administration to the Department of Social & Family Affairs.
  • payments were delivered in a timely manner which was an efficient outcome.
  • the low number of successful appeals was an indication of efficiency.
  • despite the improved efficiencies in the current delivery of the scheme that there were still opportunities for greater efficiencies to be gained by examining alternative methods of delivery. These are considered in detail in Chapter 6.
Chapter 5: Effectiveness

This chapter deals with effectiveness of the scheme and the continued validity of the objectives. Effectiveness is concerned with outcomes or results and the relationship between these and the objective the organisation is trying to achieve. In evaluating the effectiveness of the scheme the following indicators are relevant:

(a) identification of the target group
(b) the level of take up of the scheme by eligible claimants
(c) the adequacy of the payment in relation to the average costs incurred in clothing and footwear
(d) the continued appropriateness of eligibility criteria, including income limits, qualifying payments and tapered payments.
(e) the impact of the scheme in removing possible barriers to education for children
(f) the extent to which children’s school clothing needs are met by other means outside this scheme (e.g. EPNs).

(a) Identification of the Target Group
In order to qualify for a BSCFA payment the applicant must be in receipt of a qualifying payment, have household income below a certain limit and be receiving a Child Dependant Increase ( CDI). In the context of the scheme this determines the target group.

The Group concluded that the target group, as identified under the current BSCFA scheme, was consistent with the objectives of targeting low-income families.

(b) The level of take up by eligible clients
The Group concluded that some children in need may not be receiving the allowance. In order to address this issue the group considered that in the short term, the scheme could be more effective with better advertising. This would help those not currently availing of the scheme to receive their entitlements. In the longer term, the Group recommends alternative delivery mechanisms should be considered with a view to eliminating the duplication in administration arrangement in relation to both the means test and the application procedures as identified in Chapter 4. Alternative delivery mechanisms are examined in Chapter 6.

(c) Adequacy of the payment
The group found that according to the Consumer Price Index ( CPI) the cost of Clothing and Footwear has dropped by over 24% since 1990 while the value of the BSCFA has increased by 152% for children under 12 years and by 194% for children over 12 years. During this same period the group found that the general CPI (all components) increased by some 46.22% while the value of social welfare payments to an unemployed family with one child increased by over 104% and in the case of a One Parent Family payments the increase was over 94%.

The 1999/2000 School Survey showed the average cost of uniforms in 1999 was €156.28 for children under 12 year while the BSCF payment was €54.60 requiring a parental contribution of €101.68. In 2003, because of an increase in the amount of assistance from the Department and a reduction in the cost of children’s clothing the parental contribution has been reduced to €55.55.

In the case of children over 12 years the cost of a school uniform was on average €224.95 in 1999 while the BSCF payment was €73.64 requiring a parental contribution of €151.31. In 2003, because of an increase in the amount of assistance from the Department and a reduction in the cost of children’s clothing the parental contribution has been reduced to €44.91

In each case the parental contribution is less than half of one month’s Child Benefit payment. The Group concluded that the payment rates do not warrant adjustment in the context of the current scheme.

(d) Appropriateness of the Eligibility Criteria
In considering the eligibility for the scheme the Group concentrated on the issues of:

  • income limits
  • tapered payments and
  • qualifying payments

Income Limits
The income limits for the scheme are based on the maximum rates of specified Social Welfare payments with an additional income disregard. The group concluded that there was no need to increase the income limits at this time.

Tapered Payments
The Group concluded that the need for a tapered payment, as originally set out has been reduced because of the increase in the income disregard for the scheme. The Group did acknowledge that while the relaxation of the means test in recent years has relocated the need for a tapered payment further up the income scale where the affected households can more easily absorb it, the lack of a tapered payment can still be problematic for some households resulting in poverty traps.

The Group noted that applicants who fail to qualify for a BSCF payment on the grounds of means may still qualify for an Exceptional Needs Payment from the CWO thus reducing the impact of any poverty trap.

Qualifying Payments
Having considered this issue fully the group concluded that simply not allowing an Orphans payment as a qualifying payment for BSCFA would appear to be at variance with the explicit objective of BSCFA, which is to assist low-income families with the cost of school clothing and footwear. The group recommends that Orphans payments from the Department of Social & Family Affairs should be regarded as a qualifying payment for the BSCFA scheme, subject to the same household means test that applies to other families benefiting from the scheme.

(e) Impact of Scheme in Removing Possible Barriers to Education
Having regard to the direct evidence from the School Survey carried out as part of the consultation process, the SVP survey "Learning to make do won’t do", the CPA study "Against All Odds – Family Life on Low Income 2002" together with the increase in the mandatory school leaving age to 16 years and the increase in participation in education which add to the financial burden of those on low incomes, the Group concluded the BSCFA scheme has a positive impact in removing possible barriers to education.

(f) Payment of Exceptional Needs Payments ( EPNs) for School Clothing and Footwear
The total cost of all EPNs in respect of children’s clothing in 2001 was over €1.7m, €1.9m in 2002 and €1.1m in 2003. Some €0.51m was spent on EPNs for clothing and footwear between July and the end of October 2001, the period of the BSCFA scheme, €0.48m in 2002 and €0.60m in 2003.

It is not possible to say what percentage of these payments were in respect of failed Back to School Clothing and Footwear claims. However the Group considered that the relative stability in the amount of EPNs being made during the period of the BSCFA scheme was an indication of the effectiveness of the scheme.

Validity of Objectives
In its consideration of the continued need for the scheme the Group agreed that in the event of the scheme being discontinued certain low income families with school going children would not currently be in a position to adequately meet their school clothing and footwear costs due to the once off, high impact nature of the expense.

The Group acknowledged that families in low-income households are not always able to budget to meet this expense despite large increases over the last number of years in household income. The Group considered this will still be the case even after the NAPS income targets are achieved. A lump sum payment will still be required for some low income families at the commencement of the school year when these families are under expenditure pressures.

Conclusion Validity of Objectives
The Group concluded that the objectives pursued through the BSCFA are valid in the current circumstances and that they warrant the allocation of resources on a current and ongoing basis from both an income maintenance and an education participation grounds.

Chapter 6: Policy and Organisation Approaches

Chapter 6 details the principles which guided the Working Group in formulating its proposals on alternative policy and organisational approaches for the delivery of supports to meet the cost of back to school clothing and footwear. It also considers the current policy context, the improvements in the area of Child Support in particular since 1997 and outlines the alternative delivery options considered by the Group and its final recommendations.

The Working Group identified a number of principles upon which to base its recommendations in relation to the BSCFA scheme. These are to:

  1. provide support to low income families
  2. minimise employment and poverty traps
  3. be linked to participation in education at pre-school, primary or second level;
  4. be linked to spending on clothing and footwear
  5. maximise cost efficiency, scheme effectiveness and customer service

(1) Low Income Families

Despite the increases in social welfare payments over the last few years and the commitments under NAPs strategy, further initiatives will be required to address the needs of low income families. In its recent report "An Investment in Quality: Services, Inclusion and Enterprise" (March 2003) the National Economic and Social Council ( NESC) stated that:

" the Council believes that Ireland has still not found the best package of income support for children in low-income households. The CDIs are steadily losing their value for poor households; CB is not solely focused as a instrument for tackling child poverty - while it undoubtedly relieves some of the economic pressures in poor households, the scale of resources that would need to be channelled through it for it alone to eliminate poverty is not feasible; FIS benefits only children whose parents are in employment and the same is true for child additions to tax exemption limits; there are difficulties and delays that arise as families attempt the transition from receipt of CDIs to receipt of FIS. The Council is also aware that, while parental employment has been the single most important cause of the welcome reductions in child income poverty over the last decade, the same strategy is unlikely to be as successful in rescuing the significant number of children who remain in poverty. The design of a second tier of income support for children in poor families that would be neutral with respect to the work/no-work divide, therefore, has particular merit in the light of Ireland’s new circumstances." (p331)

In its proposals on Social Welfare the report states:

Ending Child Poverty
There is mounting international evidence that a dynamic, knowledge-based society is putting a growing premium on the quality of childhood, and that a society which does not accord high priority to tackling child poverty is, by omission, perpetuating major social inequality. In the light of this evidence, the Council recommends that government should pursue with even greater vigour its goal of eliminating child poverty from Irish society.

The Council welcomes the substantial increases in Child Benefit, which provides a significant degree of horizontal equity and has a role as an anti-poverty measure that is free of disincentive effects. It recommends that the design of a second tier of income support for children in poor families be actively studied in the light of Ireland’s new circumstances. (P339)

This concept of second tier support also appears in the National Partnership Agreement "Sustaining Progress" (p34) where there is a commitment to examine child income support arrangements including, for example, merging the Child Dependant Increase ( CDI) with the Family Income supplement (FIS) into a single programme in the context of addressing child poverty.

The Group also noted that Child Income Support payments were examined by the Expert Working Group Report "Integrating tax and social welfare", June 1996. This Group believed that particular priority should be given to improving incentives facing parents, via reform of the structures of child income support. One of the models examined was "Child Benefit Supplement" it was envisaged this payment would be paid to all families whose income was below a certain threshold, regardless of whether their income came from employment or social welfare payments. This model is effectively a second tier of income support.

The Group agrees with the NESC proposal that the second tier approach to meet the income maintenance needs of low income families should be actively studied. The Group also agreed with the NESC view in relation to the second tier support that:

"once in place, such a programme should receive priority in getting extra resources as and when these became available for child income support as this would ensure a targeting of resources on low-income families and those facing the highest risk of child poverty."

It was the view of the Group that the objective of the BSCFA scheme "to assist low-income families" and those of the proposed second tier mechanism were compatible.

(2) Employment and Poverty traps
Any payment which is withdrawn as income rises can contribute to a poverty trap. In the case of the BSCFA, this is not considered a significant problem as a small increase in weekly income is sufficient to offset the value of the BSCFA which at 2003 rates is worth the equivalent of €2.88 per week at the higher rate and €1.54 per week at the lower rate. Nonetheless, given the difficulty which low income households can face in budgeting for large items of expenditure, it is possible that a household with a small amount of additional income could experience difficulty in meeting the lump sum costs associated with the back to school period.

The Group noted that applicants who fail to qualify for a BSCF payment on the grounds of means may still qualify for an Exceptional Needs Payment from the CWO thus reducing the impact of any poverty trap.

An employment trap arises if people are, or consider themselves to be, better off unemployed (and therefore, qualifying for BSCFA) rather than taking up, or remaining in employment. Where income from employment brings a household above the BSCFA income threshold, there may be a disincentive effect, depending on the level of earnings. As before, the relatively small size of the payment in weekly terms would indicate that this is not a significant problem.

The Family Income Supplement scheme is specifically designed to ensure that low income workers with children are financially better off in employment. At present any income received in the form of Family Income Supplement (FIS) is not assessable in the assessment of means for the BSCFA. However, income from earnings is assessed. The minimum FIS payment of €20 per week (as well as the gain from wages) more than offsets the loss of BSCFA ensuring that there is a net gain in moving from welfare to work. The further up the income distribution one moves, the less significant is the BSCFA payment.

(3) Participation in education
It is not a specific requirement of the present scheme that a child be in full-time education. It is sufficient that a Child Dependent allowance be in payment. The Group considered that in order to receive a BSCFA it should be a condition that the child attends school. This is primarily to ensure that the BSCFA promotes education participation. Paying a BSCFA in cases where the children concerned are not attending school undermines the integrity of the scheme.

(4) Spending on clothing and footwear
The Group concluded that the delivery of the BSCFA payments was best delivered in the form of an income supplement.

(5) Cost efficiency scheme effectiveness and customer service
An examination of the effectiveness and efficiency of a programme is central to the expenditure review process and in that context the Group must be satisfied that the programme continues to warrant the allocation of expenditure and that it is delivered in a cost effective manner.

Policy Context
The issues raised and conclusions reached by the Group in Chapter Four and Chapter Five were considered in the context of the present policy direction in relation to child poverty. These matters were considered under the following headings:

(I) National Anti-Poverty Strategy (NAPS)
(II) National Partnership Agreements
(III) Child Income Support
(IV) Existing Back to School Clothing and Footwear Allowance
(V) School Meals Programme

Policy & Organisational Options
In considering alternative policy and organisational approaches, the Group considered the conclusions reached in relation to the Efficiency and Effectiveness of the current scheme in Chapter 4 and Chapter 5, in the context of the present policy direction in relation to child income support payments and the strategies to address child poverty.

The Group considered seven individual options in relation to the future delivery of the back to school clothing and footwear income support need. These options have been systematically analysed under six heading and the advantages and disadvantages of each option considered under each heading. The six headings are:

  • Administration Costs (Efficiency)
  • Duplication (Efficiency)
  • Take up (Effectiveness)
  • Impact of the option in removing barriers to Education (Effectiveness)
  • Exchequer Impact
  • Impact on low-income families.

The Group considered these options on the basis that the Government’s commitments in relation to Child Benefit increases will be met in the stated time frame. It acknowledged however that progress in relation to these commitments is somewhat slower than originally anticipated and can only be met as resources permit. The Group considered that there were opportunities that the Department should consider in relation to the manner in which future CB increases are delivered i.e. increases could be delivered in the form of an additional lump sum payment that could be made available to all families to reflect the fact that the cost of rearing a child does not occur in an even manner throughout the year. The Group concluded that the lump sum payment, irrespective of how it was delivered, was essential for low-income families to address the budgeting difficulties experienced at a time when their children were returning to school.

The following options were considered by the Group in relation to the future of the BSCFA scheme.

Option 1: No change in the existing scheme or in the way in which it is administered.
This option would see the scheme continue to be administered on behalf of the Department in the health boards with no change in the qualifying criteria. This option is examined in detail in Sections 6.54 to 6.59 of this report.

Option 2: Refocus the existing BSCFA resources to provide a BSCFA payment to certain low-income families to be delivered through their existing CDI payment
This option is to administer the existing BSCFA scheme in the Department applying the existing qualifying criteria and means test. This option could be implemented in two ways. Method (a) would require the individual to apply for a BSCFA payment each year and Method (b) would require the Department to identify these individuals from its own files and make the payment automatically. This option is examined in detail in Sections 6.60 to 6.70 of this report.

Option 3: Refocus the existing BSCFA resources to part finance the payment of a BSCFA payment to all families in receipt of a CDI, using the CDI payments as the delivery mechanism.
This option would see all families in receipt of a CDI receive a BSCFA payment as part of the CDI. This option would cost an additional €23m and is examined in detail in Sections 6.71 to 6.76 of this report

Option 4: Refocus the existing BSCFA resources to provide a BSCFA payment to be delivered through a new form of "second tier" support to low-income families.
If, as discussed earlier in this Chapter, a second?tier system of income support for children is introduced, then this mechanism could include special payments in August, to help families with back to school expenses; the BSCFA would then no longer be needed as a separate payment. This option is examined in detail in Sections 6.77 to 6.83 of this report.

Option 5: Refocus the existing BSCFA resources to provide additional existing "services" to low income families, with their back to school clothing and footwear income maintenance needs being met from the increased rates of Child Benefit.
This option would see the withdrawal of a BSCFA payment and it being replaced with an increase in existing services to low-income households. With their back to school clothing and footwear income maintenance needs being met from the forthcoming committed increases in child benefit. This option is examined in detail in Sections 6.84 to 6.90 of this report.

Option 6: Refocus the existing BSCFA resources to part finance the payment of a BSCFA payment to all families in receipt of Child Benefit, using the Child Benefit scheme as the delivery mechanism.
This option would see all families in receipt of child benefit receive a BSCFA payment in addition to their child benefit payment delivered through the child benefit scheme. This option would cost an additional amount of €70m and is examined in detail in section 6.91 to 6.97 of this report.

Option 7: Abolish the existing BSCFA with the associated funding reverting back to the exchequer.
This option would see the abolition of the BSCFA scheme and the funding associated with the scheme reverting back to the exchequer. This option is examined in detail in Section 6.97 to 6.105 of this report.

Conclusion in relation to future delivery Options
When considering the future delivery options th e Group attempted to identify a mechanism which would address the efficiency and effectiveness issues raised in Chapter 4 and Chapter 5 and thereby enhance the delivery of services while conscious of the need to maintain the current level of income support to those currently targeted by the BSCFA scheme. The Group were very much influenced by the NESC description of the second tier support. In particular its view that:

"once in place, such a programme should receive priority in getting extra resources as and when these became available for child income support as this would ensure a targeting of resources on low-income families and those facing the highest risk of child poverty."

The Group considered that this principal was compatible with the objectives of the back to school clothing and footwear scheme to assist low-income families.

However, the Group decided that without more detail it was difficult to make a final recommendation on the second tier mechanism although it did conclude that on the basis that the second tier system would:

  • target resources at low-income families using a selective mechanism and
  • target those facing the highest risk of poverty

that it could recommend in principle (Option 4) that the back to school clothing and footwear payment should be delivered through the second tier mechanism and that this requirement should form part of the forthcoming study of the second tier.

The Group was satisfied that Option 4, if progressed, would ensure that targeted low-income families would receive the BSCFA payment automatically and address the effectiveness and efficiency issues raised in Chapter 4 and Chapter 5.

The Group further recommends that in the interim:

  • the scheme continue to be administered by the health boards.
  • there should be a greater emphasis on the publicity of the scheme,
  • Orphan’s payment should be regarded as a qualifying payment for the BSCFA scheme.
  • the payment rates do not warrant adjustment in the context of the current scheme, and
  • there is no need to adjust the income limits at this time.

The Group has not recommended a best fall back approach as the reason(s) for not proceeding with the Groups recommendation for the future delivery of the service would materially influence such a decision.

Last modified:30/09/2008
 

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