The ESRI is warning that the high cost of childcare makes it unviable for many to return to work
New research has found that nearly one-in-five lone parents are better off not working.
The Economic and Social Research Institute (ESRI) has said the high cost of childcare and proliferation of low-paid part-time employment options mean it does not make economic sense for many lone parents to return to work.
The research examined the impact of changes to the One Parent Family Payment between 2011 and 2018.
The changes removed the entitlement to the payment for lone parents with a child over seven-years-old and reduced the amount a lone parent can earn before their payment is reduced.
Lone parents with a child over seven are now also obliged to engage with job search and training services.
The research found that the changes saw lone parents who took up work suffering an income loss of between 1% and 2%.
However the number shot up when the high cost of childcare was factored in.
“We have extremely high childcare costs compared to other OECD countries,” said Dr Claire Keane, senior research officer at the ESRI.
“So if we look and see how many lone parents are currently better off not working before we take these childcare costs into account it is around 2%,” she said.
“If we move to include childcare costs, 16% of lone parents are financially better off not being in employment.”
When the new Affordable Childcare Scheme subsidies are taken into account, the figure falls to 13%.