Past Exam Questions

Question 1

Analyse the factors that affect household income.
(Age)
(4)

Answer 1

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

Question 2

Analyse the factors that affect household income.
(Gender)
(3)

Answer 2

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

Question 3

Q. Analyse the factors that affect household income.

List these factors.
5

Answer 3

Age 
Gender 
Socio-economic status
Culture 
Number of family members in employment

Question 4

Analyse the factors that affect household income.
(Socio-economic status)
(2)

Answer 4

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

Question 5

Analyse the factors that affect household income.
(Culture)
(2)

Answer 5

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

Question 6

Analyse the factors that affect household income.
(Number of family members in employment)
(2)

Answer 6

Dual-income families have a greater income

Families with only one income or single-parent families will have less of an income

Question 7

Explain what is meant by tax credit.

Answer 7

Tax credits reduce the amount of income tax a person has to pay

Question 8

Explain what is meant by USC

4

Answer 8

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

Question 9

Name three social welfare payments available to individuals

3

Answer 9

Social insurance payments (contributory) e.g. maternity benefit

Social assistance payments )non-contributory) e.g. Family Income supplement

Universal payments e.g. child benefit

Question 10

Q. Identify and explain four factors that may contribute to varying patterns of household expenditure

List these factors
(4)

Answer 10

Socio-economic status
Family size-stage
Location
Beliefs/values

Question 11

Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(Socio-economic size)
(2)

Answer 11

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

Question 12

Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(family size-stage)
(3)

Answer 12

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

Question 13

Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(Location)
(2)

Answer 13

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

Question 14

Q. Identify and explain four factors that may contribute to varying patterns of household expenditure
(Beliefs/values)

Answer 14

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

Question 15

Explain essential expenditure

3

Answer 15

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

Question 16

Explain discretionary expenditure

Answer 16

Money spent on non-essential items e.g. holidays or entertainment

Question 17

What is family income supplement?

2

Answer 17

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

Question 18

State two conditions that must be fulfilled in order to qualify for FIS

Answer 18

They must be working for at least 19 hours per week

They must have at least one dependent child

Question 19

Outline the role of the household/family as a financial unit within the economy
(6)

Answer 19

1. Families pay taxes which the government uses to fund and maintain state services such as An Garda Síochána
2. Families spend wages on goods and services which generates wealth and employment
3. Loans and mortgages contribute to the profits of financial institutions
4. Some families rely on social welfare payments which puts pressure on the economy
5. Most families are self-sufficient and don’t put pressure on the economy
6. 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.

Question 20

Explain social insurance payments

2

Answer 20

Payments paid to individuals who have paid the minimum 39 weeks of PRSI contributions

Not means tested

Question 21

Give an example of a social insurance payment

Answer 21

Maternity Benefit

Question 22

Explain social assistance payments

2

Answer 22

Payments paid to individuals who have insufficient PRSI contributions

Means tested

Question 23

Give an example of a social assistance payment

Answer 23

Family Income Supplement

Question 24

What is supplementary Welfare Allowance

4

Answer 24

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

Question 25

Name the two compulsory deductions taken from a person’s gross income

Answer 25

PAYE

PRSI

Question 26

Explain PAYE

5

Answer 26

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

Question 27

Explain PRSI

5

Answer 27

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

Question 28

Explain gross income

Answer 28

Income earned before any deductions have been made

Question 29

Explain net income

Answer 29

Income earned after deductions have been made (take-home pay)

Question 30

Give two examples of how PAYE contributions are used by the government

Answer 30

Used to maintain state services such as education and the maintenance of roads

Question 31

State two benefits of PRSI to the individual

Answer 31

Jobseeker’s Benefit

Maternity Benefit

Question 32

Name two voluntary deductions that may be made from an employee’s salary/wage
(5)

Answer 32

Savings 
Private health insurance 
Loan repayments  
Pension schemes 
Trade union subscriptions

Question 33

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)

Answer 33

Food shopping

Household bills

Clothing

Travel

Question 34

Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Food shopping)
(3)

Answer 34

Shop in discount food stores

Buy own-brand instead of branded products in supermarkets

Purchase non-perishable foods in bulk, especially when on offer

Question 35

Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Household bills)
(3)

Answer 35

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

Question 36

Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Clothing)
(2)

Answer 36

Buy clothing from second-hand shops

Buy clothing during sales and watch out for special offers

Question 37

Q. Describe four different ways a consumer could reduce expenditure when managing the household budget
(Travel)
(2)

Answer 37

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