Ms Helen Faughnan:

I thank the committee for this opportunity. I am one of the assistant secretaries in the Department with responsibility for regional support and supplementary welfare allowance. Ms Jackie Harrington is principal officer with responsibility for supplementary welfare allowance, based in our offices in Sligo, Ms Fiona Ward is our divisional manager in the Dublin south division, and Mr. T.J. Fleming is principal officer responsible for employment supports, based in Tubbercurry and Carrick-on-Shannon.

With regard to the three topics, the first relates to the newly introduced initiative, JobsPlus, which aims to encourage employers to recruit people from the live register who have been unemployed for long periods. The second relates to the scheme we are now calling Gateway, a work placement initiative that the Department has been developing with county and city councils over the past number of months. Finally, I will provide an update on the third mortgage interest supplement scheme.

JobsPlus is a simplified scheme which was introduced in July of this year to replace the employer job PRSI exemption and Revenue job assist schemes. This is a more targeted intervention to influence employers to channel full-time job opportunities to the longer term unemployed. JobsPlus provides an immediate financial incentive to employers who recruit employees from the long term unemployed on the live register. The incentive is payable on a monthly basis over a two-year period while the employee is retained in full-time employment. An employer will be paid €7,500 in monthly instalments over two years if it recruits a person who is between 12 and 24 months on the live register. This subsidy increases to €10,000 paid in monthly instalments over two years if they recruit a person who is more than 24 months on the live register.

This new scheme is simple and deals with the criticisms of the schemes it replaced. First, it allows recruiting employers to avail of a direct cash incentive of known value paid on a monthly basis. The previous schemes effectively offered employers a credit on their PRSI and corporation tax liabilities. The difficulty with that was the amount of the credit was dependent on the wages paid to the employee, which could fluctuate on a weekly basis, and it only benefited employers when taxes-PRSI contributions fell due to be paid, which, in some circumstances, might be a considerable time after the employee was recruited. Second, the scheme is simple to access and operate. The previous schemes required employers to submit paper applications to two separate organisations - my Department and Revenue - after the employee was recruited with no information available as to whether the employee would qualify for the incentives. The application process for JobsPlus is predominantly online and employers and employees can verify eligibility for the scheme in advance of the recruitment decision. We believe the new scheme is easily understood and that it will prove attractive in encouraging employers to recruit from the longer term unemployed. Initial feedback and take-up is encouraging with 980 employers approved to proceed with recruitment. To date, more than 400 new full-time jobs have been supported. More than 2,100 jobseekers have applied to check their eligibility as a prospective employee under the scheme.

Gateway is the name that is being used for a new initiative that the Department is working on with county and city councils. As part of the commitment to support work placements in the Pathways to Work strategy, county and city councils will provide 3,000 part-time, short-term working opportunities for unemployed people. The objective of the scheme is to assist the personal and social development of participants by providing short-term work opportunities within county and city councils undertaking tasks normally undertaken by councils but for which they no longer have the staff or other resources to undertake or where new work is identified. For the person on the live register, Gateway will provide another opportunity to bridge the gap between unemployment and re-entering the workforce.

Gateway will operate in a similar manner to Tús, the community work placement initiative, in that participants will be selected on a random basis by the Department. There will be no opportunity for a person to apply for this initiative. In our selection we will focus exclusively on those who are 24 months or more on the live register and who must be in receipt of a jobseeker's payment. However, we will also reserve at least 15% of placements for those who are under 25 years of age and 24 months unemployed. The basic structure we use for community employment and Tús will be used on Gateway. This will mean that participants will be expected to work for an average of 19.5 hours per week. The placement will last 22 months, which will allow for other development opportunities to be provided via the county and city councils. During their period of engagement on Gateway, participants will receive a payment equivalent to their underlying jobseeker’s payment plus €20 per week. The Department has begun the selection of participants in a number of local authority areas and the first people are expected to be put on the payroll later in October when Garda vetting processes have been completed. Our immediate target is to have 1,200 places in the course of being filled by the end of this year with the remainder being filled in the early months of next year.

The mortgage interest supplement scheme provides short-term income support to eligible people who are unable to meet their mortgage interest repayments in respect of a house which is their sole place of residence. The supplement assists with the interest portion of the mortgage repayments only. There are approximately 11,300 mortgage interest supplement recipients for whom almost €42 million has been provided in 2013. Given the increasing difficulties facing mortgage holders in recent years, the supplement has been the subject of a number of reviews, the latest being the Keane review in 2011. As a result of the findings of the various reviews, changes have been introduced to the scheme within the last 16 months. The most significant is an amendment to the eligibility criteria for the scheme introduced for new customers effective from mid-June 2012. The supplement is not payable until applicants have reached agreement with their lender and complied with an alternative payment arrangement for a cumulative period of not less than 12 months. The underlying principle of this change ensures that the mortgage arrears resolution process, MARP, operated by the lenders functions alongside State supports, including the mortgage interest supplement scheme, and that the forbearance arrangements implicit in the MARP are reflected in the eligibility criteria for the scheme. The scheme continues to provide appropriate support to customers in line with the new Code of Conduct of Mortgage Arrears issued by the Central Bank, effective from 1 July 2013. Departmental records show that to date 650 applicants have been referred bank to engage with their lender. However, many customers, having discussed their situation with an officer of the Department, do not proceed to make an application when the eligibility conditions are not being met and, thus, they are not recorded on our systems.

In December 2012, the condition which provided that entitlement to mortgage interest supplement should be discontinued where the property is offered for sale was removed. The removal of this condition allows persons to engage in selling their residence for whatever reason, including trading down and downsizing, and continue to remain eligible for the supplement subject to satisfying the other conditions of the scheme. The overarching theme of the Keane group or interdepartmental mortgage arrears working group was that the mortgage interest supplement is not an appropriate long-term support and should become a time bound payment with an appropriate exit strategy formulated for the recipient. The group recommended the establishment of mortgage to rent schemes for eligible households to access social housing supports as an exit strategy. The latest available data to the Department from the Department of the Environment, Community and Local Government indicate that approximately 1,000 cases are being progressed under the mortgage to rent scheme, of which up to 30% are in receipt of mortgage interest supplement. The Department is continuing to review the mortgage interest supplement scheme in the context of the overall Government strategy in addressing the mortgage arrears problem. I trust the presentation covering the various topics raised by the committee is of assistance and I am happy to answer any questions.