Past Exam Questions Flashcards
Analyse the factors that affect household income.
(Age)
(4)
Income increases as age increases and a person moves up the payscale
Monthly outgoings increase as a person gets older
Teenagers may take on a part-time job to alleviate financial family strain or for their own wants
Decrease in income when a person retires if they use the State Pension
Analyse the factors that affect household income.
(Gender)
(3)
Increased number of women in the workplace results in more dual-income homes with greater income
Legislation such as the Employment Equality Act helps ensure equal pay for equal work regardless of gender
Men still earn more than women and they dominate managerial positions
Q. Analyse the factors that affect household income.
List these factors.
5
Age Gender Socio-economic status Culture Number of family members in employment
Analyse the factors that affect household income.
(Socio-economic status)
(2)
Low socio-economic background gives few educational opportunities resulting in unemployment or low-paid jobs and therefore little opportunity for career advancement or increased income
High socio-economic background gives greater educational opportunities resulting in advancement to third-level education and the probability of obtaining higher-paid jobs
Analyse the factors that affect household income.
(Culture)
(2)
Salaries for the same occupation differ from country to country
Culture dictates whether it is acceptable for women to participate in the workplace and earn an income
Analyse the factors that affect household income.
(Number of family members in employment)
(2)
Dual-income families have a greater income
Families with only one income or single-parent families will have less of an income
Explain what is meant by tax credit.
Tax credits reduce the amount of income tax a person has to pay
Explain what is meant by USC
4
A compulsory tax taken from a person’s gross pay by an employer and paid directly to the Revenue Commissioners
Employees are liable to pay USC tax if their gross income is above 13,000 annually
Individuals who earn below 13,000 are exempt from paying USC
The amount due is calculated as a percentage of a person’s total income
Name three social welfare payments available to individuals
3
Social insurance payments (contributory) e.g. maternity benefit
Social assistance payments )non-contributory) e.g. Family Income supplement
Universal payments e.g. child benefit
Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
List these factors
(4)
Socio-economic status
Family size-stage
Location
Beliefs/values
Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(Socio-economic size)
(2)
High economic status families have more discretionary income for personal spending
Low economic status families have less discretionary income and instead have to focus spending on essential family needs such as mortgage/rent and food
Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(family size-stage)
(3)
The larger the family the greater the household expenditure, as more money is required for essential items such as food
Household costs are more expensive as larger homes are required, incurring greater costs
The stage of the family also impacts on expenditure, as extra money is required for childcare, school and college
Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(Location)
(2)
Families living in urban homes generally incur a higher cost of living e.g. higher rents, increasing household expenditure
In urban areas, travel costs are generally more expensive for rural families as they have to commute to work
Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(Beliefs/values)
Each household has its own set of beliefs or values that impact on household expenditure e.g. value for private education resulting in school fees
Explain essential expenditure
3
Money spent on items necessary to manage family life which can be fixed or irregular
Fixed: The same amount is paid at the same time such as a mortgage
Irregular: Different amounts are paid at different time e.g. food or clothing
Explain discretionary expenditure
Money spent on non-essential items e.g. holidays or entertainment
What is family income supplement?
2
A weekly, tax free payment available to low income working families with children
Families receive 60% of the difference between their actual weekly income and the income limit that applies to their family size
State two conditions that must be fulfilled in order to qualify for FIS
They must be working for at least 19 hours per week
They must have at least one dependent child
Outline the role of the household/family as a financial unit within the economy
(6)
- Families pay taxes which the government uses to fund and maintain state services such as An Garda Síochána
- Families spend wages on goods and services which generates wealth and employment
- Loans and mortgages contribute to the profits of financial institutions
- Some families rely on social welfare payments which puts pressure on the economy
- Most families are self-sufficient and don’t put pressure on the economy
- Money management skills are passed on to children which reduces the risk of them falling into debt or relying on social welfare benefits in the future.
Explain social insurance payments
2
Payments paid to individuals who have paid the minimum 39 weeks of PRSI contributions
Not means tested
Give an example of a social insurance payment
Maternity Benefit
Explain social assistance payments
2
Payments paid to individuals who have insufficient PRSI contributions
Means tested
Give an example of a social assistance payment
Family Income Supplement
What is supplementary Welfare Allowance
4
A temporary, tax free, weekly payment made by the Department of Social Protection to individuals whose means don’t meet their or their dependent’s needs
To qualify:
Satisfy a means test, e.g. be earning no income or be earning a weekly income below the Supplementary Welfare Allowance rate for the family size
Be waiting on social welfare payments that have yet to be processed
If they are not working they must be registered for work with their local intreo office
Name the two compulsory deductions taken from a person’s gross income
PAYE
PRSI
Explain PAYE
5
Pay As You Earn
A compulsory tax taken from a person’s gross pay
The employer is legally required to deduct tax owed from a person’s gross wage or salary before payment
Paid directly to the Revenue Commissioners who collect this tax on behalf of the government
This money is used to maintain state services such as education
Explain PRSI
5
Pay Related Social Insurance
A compulsory contribution taken from a person’s gross pay by an employer and paid directly to the Revenue Commissioners
The money from this is used by the government to run employment and training schemes and social welfare payments
A minimum number of 39 PRSI contributions must be made by an employee in the past tax year for them to claim social welfare benefits
Self-employed people pay low rates of PRSI and are entitled to a limited number of social welfare benefits
Explain gross income
Income earned before any deductions have been made
Explain net income
Income earned after deductions have been made (take-home pay)
Give two examples of how PAYE contributions are used by the government
Used to maintain state services such as education and the maintenance of roads
State two benefits of PRSI to the individual
Jobseeker’s Benefit
Maternity Benefit
Name two voluntary deductions that may be made from an employee’s salary/wage
(5)
Savings Private health insurance Loan repayments Pension schemes Trade union subscriptions
Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
List the areas within a management system where one could reduce expenditure
(4)
Food shopping
Household bills
Clothing
Travel
Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Food shopping)
(3)
Shop in discount food stores
Buy own-brand instead of branded products in supermarkets
Purchase non-perishable foods in bulk, especially when on offer
Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Household bills)
(3)
Turn down the thermostat on home heating systems by one degree to reduce heating bills
Compare the cost of various utility providers to avail of the best deal being offered
Use the economy setting on washing machines and dishwashers, and only turn machines on when they are full, in order to reduce electricity bills
Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Clothing)
(2)
Buy clothing from second-hand shops
Buy clothing during sales and watch out for special offers
Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Travel)
(2)
Where possible, walk or cycle to destinations to cut down on fuel or public transport costs or carpool with another individual
Buy a yearly travel pass for public transport, as it is cheaper than paying for individual fares
