Operational Guidelines: Back to Work Family Dividend

BREXIT impacts

Ireland / United Kingdom Social Security arrangements from 1 January 2021

The European Union and the United Kingdom agreed a Trade and Cooperation Agreement which contains a Protocol on Social Security to take effect from 1 January 2021. The Protocol provides for a wide range of social security issues into the future. On the 31 December 2020, the Convention on Social Security agreed between Ireland and the United Kingdom was commenced. Together these Agreements ensure, that all existing social security arrangements for Irish and UK citizens are maintained into the future. Ireland as an EU Member State, will extend on a unilateral basis the advantages of the Convention to Union citizens, as required.

For Brexit-related information see:

• Item was unpublished or removed

For information on social welfare entitlements see:

• Brexit Information
• FAQs on DFA about Brexit

Description of scheme

The Back to Work Family Dividend (BTWFD) scheme was introduced on January 5 2015. The scheme is designed as an in-work, income support to assist families when exiting welfare. It provides financial support to jobseekers who take up or are in insurable employment or take up self-employment within four weeks of the end of their claim. Similarly, One-Parent families who take up or are in insurable employment or take up self-employment within four weeks of the end of their claim, will be entitled to BTWFD.

The payment, payable over a two-year period, will be based on the customer’s Child Support Payment entitlement on the date of their exit from welfare. For the first year an amount equal to 100% of the child support payment (up to a maximum of four children) is payable. This will reduce to 50%, or half that amount, for the second year.

It is important to note that although BTWFD rates are based on and equate to Child Support Payment for a child or children, BTWFD legislation has no link to qualified child provisions and therefore a child in respect of whom BTWFD is paid is not a qualified/dependent child in the normal sense.

Only one entitlement to BTWFD exists for each family unit, though this may be paid over a maximum of three non-consecutive periods, subject to a maximum duration of two years (104 weeks) of BTWFD being paid.

Information

Leaflet

SW 139: Back to Work Family Dividend

Back to Work Family Dividend - Information Leaflet SW 139 on gov.ie

Website

Back to Work Family Dividend on gov.ie

Legislation

Back to Work Family Dividend is a legislative scheme. The main provisions are set out in Part 7A, Section 238 of the Social Welfare Consolidation Act, 2005, as amended.

The Social Welfare Consolidation Act 2005 is amended to provide for entitlement for certain people between 66 and 70 years from January 2024. The legislation as set out in Section 238C(4)(b), provides that a person born on or after 1 January 1958, who is aged between 66 and 70 years and has not been awarded State Pension (Contributory), may be eligible for these benefits.

Back to Work Family Dividend and Income Tax

Back to Work Family Dividend is exempt from Income Tax, Universal Social Charge (USC) or PRSI and as such is not reckoned for calculation purposes in relation to Income Tax. The Taxes Consolidation Act, 1997, is amended accordingly.

Back to Work Family Dividend and Overpayments

Back to Work Family Dividend is included under the schedule of payments from which overpayments may and can be recovered.

Administration

The scheme is administered for the Department of Social Protection by staff in the department’s network of Intreo Centres and Social Welfare Branch Offices.

Operational guidelines for staff administering the Back to Work Family Dividend scheme are issued by;

Family Benefits

Under EU Regulations, the Competent Authority that deals with a Family Benefit is determined by the EU State in which the worker pays their social insurance. Accordingly, claims for BTWFD are only acceptable from workers who are paying their social insurance to the Irish State.

If an employee pays their social insurance to another EU State, it is to that State that they should make a claim for Family Benefits.

BTWFD is classified as a Family Benefit under EU rules and will form part of the basket of Irish Family Benefits under EU Regulations.

Qualification Conditions - Summary

The qualifying conditions for Back to Work Family Dividend apply to those between 66 and 70 years of age where they choose to defer drawing down their State Pension (Contributory) to remain in employment.

Customers in receipt of one of the following qualifying payments or who are on a qualifying scheme, who exit a qualifying payment or scheme and are in or take up insurable employment/self-employment within four weeks, may have an entitlement to Back to Work Family Dividend.

Qualifying payments;

• Jobseeker's Allowance
• Jobseeker's Benefit
• Jobseeker's Benefit for the Self-Employed
• One-Parent Family Payment
• Jobseeker's Transitional Payment

Qualifying schemes;

• Community Employment Programme
• Tús (community work placement initiative)
• Rural Social Scheme
• Back to Education Allowance
• Job Initiative Scheme
• Work Placement Experience Programme

Note: BTWFD legislation allows that other schemes or programmes of education, training or work experience may be approved as qualifying schemes for the purposes of BTWFD. The critical deciding factors in respect of any such scheme or programme is whether, while on the scheme or programme, the person received a payment equivalent to the payment they would have received if they had remained on a qualifying payment (If a person retains OFP while on a scheme or programme then the issue of qualifying from the scheme or programme does not arise – they would qualify directly from OFP).

Combined periods spent on any of the above qualifying payments or schemes may also be used in determining entitlement.

The customer must satisfy the Habitual Residence Condition (HRC) and be working in the State to qualify for and continue to be in receipt of BTWFD.

Detailed qualifying conditions are set out in 2.2 below.

Qualification Conditions – In detail

Qualifying from Jobseeker's Allowance, Jobseeker's Benefit or Jobseeker's Benefit for the Self-Employed

• A customer must be aged less than 66 years and have been in receipt of Child Support Payment on their Jobseeker's Allowance, Jobseeker's Benefit or Jobseeker's Benefit for the Self-Employed, in respect of at least one qualified child at the end of their Jobseeker’s claim.
• A customer must be in or have taken up insurable employment/self-employment within four weeks of the close of their jobseeker’s claim.
• At the end date of the claim the customer must have been signing on for at least 312 days of unemployment, of which 156 days of unemployment must have been in the 12 months period up to the date of closure of the claim, that is, the last day of entitlement counts for the 156/312.
• For those aged between 66 and 70 years of age, where they choose to defer the draw down of their State Pension (Contributory), they must be in receipt of Child Support Payment on a qualifying payment for the relevant amount of time in order to receive Back to Work Family Dividend
• Time spent on a qualifying scheme (see 2.1 above) where as part of the scheme or programme Child Support Payment for at least one qualified child was in payment, can be used for the purposes of counting the periods of unemployment. The time spent on the qualifying scheme can be before or after the time spent on Jobseeker’s Allowance, Jobseeker’s Benefit or Jobseeker’s Benefit (Self-Employed).
• Time spent on PUP can be combined with Jobseeker’s Allowance, Jobseeker’s Benefit, Jobseeker’s Benefit (Self-employed) or a qualifying scheme for the purposes of counting towards the period of unemployment. The order in which the claims occur does not affect qualification for BTWFD, the number of the combined days must satisfy the condition of at least 312 days of unemployment, of which 156 days must have been in the 12 months period prior to closure of the claim / exiting the scheme.
• Persons applying for and in receipt of BTWFD must satisfy the Habitual Residence Condition (HRC). HRC must be satisfied at all times and can be reviewed in respect of the claim at any time.
• The employment must be in the State.

Qualifying from One-Parent Family Payment (OFP) or Jobseeker’s Transitional Payment (JST)

• A customer must be aged less than 66 years and have been in receipt of Child Support Payment on their One-Parent Family Payment or Jobseeker's Transitional Payment claim in respect of at least one qualified child at the date of cessation of the claim.
• For those aged between 66 and 70 years of age, where they choose to defer the draw down of their State Pension (Contributory), they must be in receipt of Child Support Payment on their One-Parent Family Payment or Jobseeker’s Transitional Payment claim for the relevant amount of time in order to receive Back to Work Family Dividend.
• A customer must be in or have taken up insurable employment/self-employment within four weeks of the close of their One-Parent Family or Jobseeker’s Transitional Payment claim.
• Time spent on a qualifying scheme (see 2.1 above) can be used for the purposes of BTWFD eligibility, where as part of the scheme or programme, Child Support Payment in respect of at least one qualified child was in payment. The time spent on the qualifying scheme can be before or after the time spent on One-Parent Family Payment or Jobseeker’s Transitional Payment.
• Persons applying for and in receipt of BTWFD must satisfy the Habitual Residence Condition (HRC). HRC must be satisfied at all times and can be reviewed in respect of the claim at any time.
• The employment must be in the State.

Qualification from a combination of relevant payments or schemes

A customer may qualify for Back to Work Family Dividend (BTWFD) from a combination of time spent on the relevant payments and schemes, under the normal linking rules that apply to those payments and schemes. This will be subject to the conditions that;

• A customer must be aged less than 66 years and have been in receipt of Child Support Payment on their relevant payment or scheme, in respect of at least one qualified child at the end date of their claim/scheme.
• For those aged between 66 and 70 years of age, where they choose to defer the draw down of their State Pension (Contributory) they must be in receipt of Child Support Payment for a qualified child on a qualifying payment for the relevant amount of time in order to receive Back to Work Family Dividend.
• A customer must be in or have taken up insurable employment/self-employment within four weeks from the close of their claim/scheme.
• Persons applying for and in receipt of BTWFD must satisfy the Habitual Residence Condition (HRC). HRC must be satisfied at all times and can be reviewed in respect of the claim at any time.
• The employment must be in the State.

Qualification of a customer where the spouse/civil partner or cohabitant is in or takes up employment

Subject to all the qualifying criteria set out above for customers on Jobseeker’s Allowance, Jobseeker’s Benefit, Jobseeker’s Benefit (Self-Employed) or a qualifying scheme (2.2.a above), the employment requirement outlined above may be satisfied by a spouse, civil partner or cohabitant but it is always the former primary claimant who must satisfy scheme, duration and HRC requirements as it is they who must claim BTWFD. In every case, both the qualified customer and the spouse/civil partner or cohabitant must be exiting the relevant payment or scheme.

Entitlement to Back to Work Family Dividend does not exist where a spouse/civil partner or cohabitant is an adult dependant on any claim, has or makes a claim in their own right or is a participant on any qualifying scheme or departmental approved course of employment/work experience or education/training/development (see 2.6 ‘Disallowances’ below).

Break in Back to Work Family Dividend

Back to Work Family Dividend is payable for a two-year period only, in respect of each qualified customer or couple. Where there is a break in payment and less than two years duration of the dividend has been paid, entitlement to payment may resume when the customer returns to employment or self-employment. This is subject to a maximum of two breaks in a Back to Work Family Dividend claim.

In the case of resumption by a customer who originally came from jobseekers or who went to jobseekers during their break in BTWFD payment, the requirements to have 312 days and 156 in the last 12 months should NOT be applied at the time of resumption.

Changing employment or taking up self-employment

A qualified customer in receipt of Back to Work Family Dividend, or their spouse, civil partner or cohabitant if it is they who are satisfying the qualification conditions is free to change employment or take up self-employment at any time, for any number of times during the lifetime of the Back to Work Family Dividend claim.

Disallowances

A claim for Back to Work Family Dividend will be disallowed in the following circumstances, where an entitlement is no longer deemed to exist.

Customer (Customer here also refers, where relevant, to a spouse/civil partner or cohabitant)

• The customer was not in or did not commence employment or self-employment within four weeks of the date of the end of their prior claim or qualifying scheme.
• The customer ceases to be employed or self-employed.
• The customer takes part on any of the qualifying schemes mentioned at 2.1 above.
• The customer is in receipt of any benefit or assistance payment as specified under the legislation. This includes Basic Supplementary Welfare Allowance (SWA) but not Working Family Payment (WFP) or Child Benefit. See 3.6 below.
• The customer does not satisfy HRC.
• The customer is employed outside the State.

Children

Where a child in respect of whom Back to Work Family Dividend is in payment, is subject to any of the following, entitlement in respect of that child will cease:

• If the child is a qualified child in respect of any assistance or benefit payment as set out in the legislation or the equivalent to a qualified child on any scheme or programme.
• If the child is a qualified adult in respect of any assistance or benefit payment as set out in the legislation or the equivalent to a qualified adult on any scheme or programme.
• If a child claims in their own right any assistance or benefit payments, as set out in the legislation.
• If the dependant or dependants participate(s) in any of the qualifying schemes, as outlined at 2.1 above.

Where entitlement ceases to exist in respect of a child, for example Child Support Payment is being paid for the child on another claim, BTWFD may cease (if this was the only child on the claim) or be reduced. Following such a reduction, if for example the child ceased to be claimed as a qualified child on another claim, BTWFD should not increase back to the original rate.

Entitlement in respect of a child does not stop if that child reaches 18 years of age, or 22 years of age if attending a course of education, as payment is based on the customer’s Child Support Payment entitlement on the date of their exit from welfare.

Note: If a customer has more than 4 children, they would only be paid for a maximum of 4. The customer will be paid first for those that are on a higher rate.

Rates Structure

Back to Work Family Dividend is payable for a two-year period only, in respect of each qualified customer or couple. For the first year (52 weeks) the rate of BTWFD payable is equal to the relevant Child Support Payment rate, subject to a maximum of four children.

In the second year of payment (weeks 53 – 104), the rate of BTWFD payable is 50% of the relevant Child Support Payment rate, subject to a maximum of four children.

Claims

Applications for Back to Work Family Dividend are processed by the department’s network of Intreo Centres and Branch Offices. Applicants must complete form BTWFD1, available from all the department’s Offices and from the department’s website - Back to Work Family Dividend

Employment or self-employment must commence within four weeks of the end date of the customers claim or qualifying scheme.

No more than the 104 weeks, as set out by legislation, are payable to any customer or couple in respect of a Back to Work Family Dividend claim. As outlined at 2.4 above, a customer who does not receive 104 weeks of entitlement to Back to Work Family Dividend in one continuous claim period, will be entitled to claim for the balance of the 104 weeks when they return to employment or self-employment. There is no time limit attached to the period of time that can elapse between claims other than the lifetime of the scheme itself, and subject to there not being more than two such breaks in the Back to Work Family Dividend claim.

Late Claims

Entitlement to BTWFD starts from the date of claim. However, in line with other schemes such as Jobseeker’s Allowance, a Deciding/Appeals Officer may award in respect of a period of up to 6 months prior to the date of claim – if they are satisfied that entitlement to BTWFD existed on this date and that there was good cause for the delay in making the claim.

The prescribed time for making a claim is 3 months – claims within this period are paid from date of entitlement, claims outside of this period are paid from the date of claim.

Documentation

Part 3 or Part 7 (as applicable) of the application form (BTWFD1) must be properly completed per instructions on the form.

In the case of self-employment (Part 3), the self-employment registration certificate as issued by the Office of the Revenue Commissioners must accompany the application form. In the case of employment, Part 7 must be fully completed by the employer or their agent only.

In all cases where claims have resumed after a break, form BTWFD8 must be completed, as above, with the employment/self-employment verified accordingly.

Incomplete or insufficient applications will be returned to the customer.

Decisions

All decisions on Back to Work Family Dividend claims are decided at local level by a Deciding Officer of the department.

Where a claim is awarded, the customer is notified and the claim goes in to payment. A review date of twelve (12) months from the date of award is entered.

Review of entitlement and Appeals

If a customer is dissatisfied with the decision of a Deciding Officer, they may request a review of entitlement, to be carried out by another Deciding Officer in that Office. Also, on receipt of any new or additional information in support of an application, a Deciding Officer may make a revised decision.

The Back to Work Family Dividend scheme is a legislative scheme and therefore an appeal of a decision, to an independent Appeals Officer as appointed under the Social Welfare Acts, may be made. Appeals must be submitted to the Social Welfare Appeals Office within 21 days of the decision being made.

Payment

Back to Work Family Dividend is payable weekly, in arrears, for a maximum of two years. Payment is made by Electronic Fund Transfer (EFT) only. Payment is daily based.

Back to Work Family Dividend and other Social Welfare payments

(2.6a also refers)

A customer may be in receipt of Back to Work Family Dividend while also in receipt of Working Family Payment, Child Benefit, Death Benefit, Disablement Benefit, Domiciliary Care Allowance, Guardian's Payment (Non-Contributory), Respite Care Grant and Widowed or Surviving Civil Partner Grant.

A customer may also be in receipt of Back to Work Family Dividend and Illness Benefit, Injury Benefit, or Occupational Injuries Benefit Scheme, for the first 36 days (6 weeks) of any such Illness Benefit, Injury Benefit or Occupational Injury Benefit claim. This applies for every Illness/Injury or Occupational Injury Benefit claim opened with any one BTWFD claim. The Back to Work Family Dividend claim will be suspended after the 36th day of any such Illness/Injury or Occupational Injury Benefit claim.

Maternity Benefit, Paternity Benefit, Health and Safety Benefit and Adoptive Benefit are payable concurrently with Back to Work Family Dividend effective from December 19 2016, and Parent's Benefit from 1 November 2019.

Entitlement to certain payments under the Supplementary Welfare Allowance Schemes may continue, for example, SWA Supplements including Rent Supplement.

BTWFD is disregarded in the Rent Supplement means assessment.

A customer’s spouse/civil partner/cohabitant may also receive any of the above while the customer is in receipt of BTWFD.

Note: BTWFD is not payable with Basic SWA.

Full information on specific entitlements is available from the department’s network of Intreo Centres and Branch Offices.

Claim Maintenance and review of entitlement

Back to Work Family Dividend claims are reviewed at 12 months in order to determine a customer’s continuing entitlement. The rate in payment is adjusted down by 50% at this point.

Back to Work Family Dividend is subject to any appropriate budgetary changes.

Changes in circumstances, such as a reduction in the number of children payment is being made in respect of, may apply from the date of the change in circumstances.

Back to Work Family Dividend and Jobseeker’s Credits

Jobseeker’s Credits is a scheme in its own right. If one of a couple avails of Back to Work Family Dividend, this will not preclude the other from availing of Jobseeker’s Credits provided that they have an entitlement to and satisfy all the other conditions of the Jobseeker’s Credits scheme.