Oireachtas Joint and Select Committees
Wednesday, 2 October 2013
Joint Oireachtas Committee on Education and Social Protection
Job Creation and Mortgage Support Schemes: Discussion with Department of Social Protection
1:00 pm
Joanna Tuffy (Dublin Mid West, Labour)
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I advise the witnesses that, by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. I also advise the witnesses that the opening statements they have submitted to the committee will be published on the committee website after this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or any official by name or in such a way as to make him or her identifiable.
Today we have updates from the Department of Social Protection on the JobsPlus and Gateway initiatives and, separately, on the mortgage interest supplement scheme. Today's witnesses are Ms Helen Faughnan, Mr. T.J. Fleming, Ms Jackie Harrington and Ms Fiona Ward.
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.
1:05 pm
Willie O'Dea (Limerick City, Fianna Fail)
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I thank Ms Faughnan for her presentation. JobsPlus is much simpler and I acknowledge that the scheme that preceded it was a little cumbersome. However, in its final full year of operation, how much was expended on it? How much is it envisaged that JobsPlus will cost the Exchequer annually? How many people were catered for under the original scheme? How many people is it envisaged will be catered for under JobsPlus?
I received a reply to a parliamentary question about self-employed jobseekers from the Minister for Social Protection on 18 September, which states:
A small number of disallowed jobseeker's claimants are included in the Live Register published total each month. There are 687 such disallowed claimants at the end of August 2013 Live Register count. This figure does not include any claimants in the self-employed jobseekers category as this group is excluded from the Live Register.
Am I to understand from that that self-employed people who are seeking employment are excluded from the live register? If they are excluded from the live register, they are also excluded from the scheme, which is confined to people who are to be taken off the live register.
In principle Gateway is a good idea. We are discussing part-time jobs to be given by local authorities. Again this is confined to people who are unemployed and presumably on the live register. This should be extended to people with disabilities, who would be qualified to do at least some of those jobs - we are not talking about full-time employment here. Participants work for an average of 19.5 hours a week and get €20 a week in addition to their social welfare payments. Are they free to work in other employment which might be available to them for the rest of the week? If they are not doing work over and above the 19.5 hours, are they allowed to hold on to any ancillary benefits they may have?
I draw attention to the requirement for Garda vetting, which is a source of great frustration. The Garda vetting operation is far too slow. I know of people who have been trying to get on to State schemes and have missed their opportunity - I dealt with such a case last week - because of the tardiness of the Garda vetting operation. Is anything happening in that regard?
On the mortgage interest scheme I welcome the change when the house is put up for sale. However, the major change here is the requirement that somebody must have done a deal with the lender and have paid in accordance with that deal for 12 months. When people run into trouble, that is the time they most need mortgage interest supplement. It takes a while to sit down, engage and work out a deal with the lender. They are exposed during that period and they are also exposed for the following 12 months.
I am surprised at the €42 million cost based on the general feedback I am getting. Mortgage interest supplement was understandably a fairly restrictive scheme given that it only deals with the interest portion of the repayment. The feedback I have got is that this change has made it all but useless for most people. Ms Faughnan said: "The underlying principle of this change ensures that the mortgage arrears resolution process 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." I do not understand that rationale. Even if there is a simpler explanation, in any case it is cold comfort for people who get into trouble and have to wait for God knows how long until they sit down and hammer out a deal with the lender, after which they must wait for another 12 months.
Ms Faughnan said that approximately 1,000 cases are being progressed under the mortgage-to-rent scheme. How many people are on these mortgage-to-rent schemes at the moment?
1:15 pm
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I have some questions on JobsPlus. Originally an important part of the Revenue job assist scheme was that those who were on it could avail of an additional tax relief to try to help people out of the trap when returning to work, but that does not exist in this scheme. Was any consideration given to introducing that? What is the budget for JobsPlus and what is the maximum number of jobs it might support? What are the pay levels for the jobs the employers have applied to JobsPlus at the moment? I am concerned that this might encourage some employers to use JobsPlus to subsidise the minimum wage jobs. People on minimum wage would then end up being able to avail of FIS, which would then be a further State subsidy meaning that those jobs are not sustainable in the long term. That raises the whole question of Intreo and all that, but we will go into that at another time.
On Gateway, there are references to on-the-job training. When Tús was introduced there was no training budget. Is there a specific training budget for Gateway? Does the local authority pay for it? Will participants on the projects listed be able to avail of courses such as Safe Pass, manual handling, first aid, driving and ECDL. All those courses should be given to jobseekers anyway. Will that be front-loaded for those availing of Gateway?
Can social welfare recipients put their names forward? I had many criticisms of Tús. One criticism from some people was that they wanted to take part but they had to sit back and hope they would be selected. Can people put their names forward for this?
The placement will last for 22 months which will allow for other development opportunities to be provided via the local authorities. I hope the embargo on public service jobs will be lifted or otherwise it will be like the JobBridge where State agencies have used that scheme with no hope of the person getting a job within the State sector at the end of it.
It is miserly that participants are only getting €20 on top of what they would have been getting anyway. Some people might work 19.5 hours a week for almost two years with no job at the end of it and a €20 top up. While these people are not paying tax because they do not come within the tax bracket, because PRSI is levied on total, earnings a parent of four children, for example, could end up paying PRSI of €18.08 and therefore the benefit other than being in employment would be less than €2. There are anomalies in this and the top up is very miserly.
Has there been a reduction in the numbers of people who have been awarded mortgage interest supplement since the last increase? What other measures are proposed to address long-term dependants on mortgage interest supplement? Ms Faughnan said that approximately 1,000 cases are being progressed under the mortgage-to-rent scheme. However, only 30% of them are in receipt of mortgage interest supplement, which would suggest only 300. That is a very small proportion of the 11,000 people in receipt of mortgage interest supplement. What will happen to address that low number? Is there a problem there?
Ms Helen Faughnan:
Deputy O'Dea asked how much was spent on the original schemes. Approximately €2.3 million was spent on the PRSI exemption scheme and approximately €1.1 million was spent on the Revenue job assist, which gives approximately €3.4 million in total. We have a provision of €2.5 million in this year for the new scheme, rising to €21.25 million over the three years as people are taken on.
I will return to the question on the self-employed in a minute-----
1:25 pm
Willie O'Dea (Limerick City, Fianna Fail)
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Did Ms Faughnan say that the €21.25 million cost was over the three years?
Ms Helen Faughnan:
Yes, that is the provision over the three years, as we ramp up the scheme and pay the people who take it up. The final cost will depend on whether they people are on the €7,500 or the €10,000 figure.
The big problem with the earlier schemes was the extremely low take up because the employer did not know what they were getting into and what the payback would be for them. The fact that they had to wait and recoup the money from Revenue or the Department of Social Protection acted as a disincentive.
Gateway is a pilot scheme. Like JobsPlus, our initial focus is on the long-term unemployed. We will review the scheme after it has been up and running for a while to see about extending it to other cohorts of social welfare recipients, such as people with disabilities and lone parents. However, as Deputy O'Dea said, because there are so many long-term unemployed our initial engagement is with them.
People who are working 19.5 hours a week are free to take up other employment. The idea of such initiatives is to get people engaging again with the workforce, to get used to getting up and going to work but, of course, they are then available to engage with other activities.
There have been issues with vetting by the Garda. Our Department has been working closely with the Department of Justice and Equality. That Department has received extra resources and huge inroads have been made to clear the vetting backlogs. We understand the backlogs have been quite reduced and the Department's aim is to improve the situation further by the end of the year. We have seen that improvement in the number of people who have been approved. We will be working with our customers to ensure it is not a barrier to them getting a place.
On selection, people need to be on the live register. If a self-employed person, such as a taxi driver, for example, is in receipt of a payment, they should be on the live register, but I will double check that and get back to the Deputy offline.
Willie O'Dea (Limerick City, Fianna Fail)
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My understanding is that a former employee who has been refused on means grounds can join the live register, but that that facility does not extend to a self-employed jobseeker.
Ms Helen Faughnan:
I will double check that and come back to the Deputy with a response. The rationale behind the mortgage interest supplement was that it would be a short-term income support. For example, a person who was working and paying their mortgage but lost their job would generally have been out of employment only for a short time. The supplement was a helping hand so that they did not get into trouble with their mortgage and to allow them to pay the interest on it until they got back into employment. Unfortunately, because of the recession, the numbers requiring the supplement have grown hugely. In effect, the State was paying, to the tune of €42 million, the interest portion to the banks and other lenders. However, in many cases the mortgage holder was not engaging with the lender or vice versa. That was not a sustainable solution for anybody. We therefore brought in a change. Through the Central Bank, all the banks and lending institutions have set up arrears support units purposely to engage one to one with people in mortgage difficulty. That is the correct solution. We made that change last year to ensure people are engaging with their banks and other lending institutions in order that they come up with solutions between them.
We have put in place the mortgage support arrears information and advice service for mortgage holders. That is a robust solution for people in mortgage difficulties. The approach to supporting people is three-pronged. The mortgage arrears information helpline provides general mortgage arrears information and signposts people to the code of conduct on mortgage arrears and other supports that are available to them. Approximately 7,300 calls have been made since July last year when the helpline was set up. The website www.keepingyourhome.ie is practical and popular - around 150,000 visits to that site have been made since June last year. The third strand to how we are helping is the provision of independent financial advice to mortgage holders. When the customer goes back and engages with their lender and they are presented with a long-term mortgage resolution, they can come and access a panel of accountants - 2,000 accounts are participating around the country and their details are on www.keepingyourhome.ie - and receive advice about how best to proceed. The accountants are on the side of the mortgage holder, breaking down the information that they are getting from the lender. That is a valuable support to the person in mortgage difficulty.
The mortgage-to-rent scheme is administered by the Housing and Sustainable Communities Agency on behalf of the Department of the Environment, Community and Local Government. To date, the agency is progressing around 1,000 cases, lenders are engaging with almost 600 households and 22 cases have been completed. Generally, people continue to live in their own residence but instead of paying a mortgage on it, the agency takes it over and the person pays rent to the agency. There are around 300 such cases in which mortgage interest supplement is being paid. The scheme is a work in progress, and we hope to see it developed further because we need long-term solutions for these people if they are to move out of their mortgage difficulties.
Deputy Ó Snodaigh asked about JobsPlus. More than 400 new full-time jobs have been supported under JobsPlus. As I mentioned, 1,100 employers have been approved and they can proceed to recruitment. Prospective employees can check online their eligibility to the scheme. They can then go to an employer and tell the employer they are entitled on their behalf to €7,500 or €10,000 over the three years. In effect, the scheme is a passport for the potential employee to go to the employer. As I also mentioned, 2,100 job seekers have applied to check out their eligibility on our online website.
Our Department is making the selections on the gateway scheme. That is part of the Department's three-pronged approach. We are not only income support and activation, but control. Some people are job ready and ready to engage in the workplace. Others may not be quite as job ready. Such initiatives help them to engage with the workforce.
It is similar to Tús and the community employment scheme. We write to a random selection of clients stating that if they are agreeable, we will pass on their details to the local authority with regard to the Gateway scheme. If for some reason they are not inclined to take up this offer, we will engage with them from a progression point of view to try to identify what is stopping them and whether we need to support them in areas such as literacy, or whether we need to engage with them on a control issue, because if they refuse the offer, penalty rates provisions kick in.
There will be training and support provided with regard to the Gateway scheme, and a total of €2.8 million has been provided from the Dormant Account Fund to local authorities to support training such as Safe Pass and any personal protection requirements such as boots, helmets and high visibility jackets. Any other training required, such as manual handling, will be identified on a one-to-one basis with the local authorities. Some people, possibly those who have moved from the construction industry, will be job ready and will be able to engage immediately with the local authority, but others may need a refresher course. This money has been ring-fenced to provide this.
With regard to PRSI, the other bonus for the Exchequer with regard to JobsPlus is these people will be in jobs, and while the rate of pay will be dependent on the employer, in general the minimum wage must apply-----
1:35 pm
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The question on PRSI is not with regard to JobsPlus but to the Gateway scheme. Those in the Gateway scheme will be on a wage and PRSI will be paid. A family of four will end up paying virtually the same amount as it receives over and above what it would have received anyway.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The person will no longer be on jobseeker's allowance, so it will be a wage rather than an allowance. It is not taxable because one falls outside the tax allowance. My question on JobsPlus was that in the past, Revenue job assist had an additional tax allowance, so there are two separate issues.
Joanna Tuffy (Dublin Mid West, Labour)
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I presume it is the same as the provisions for the community employment scheme.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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There is no incentive for somebody-----
Joanna Tuffy (Dublin Mid West, Labour)
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Is the Deputy correct that somebody in the situation outlined would not receive anything extra?
Joanna Tuffy (Dublin Mid West, Labour)
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The concern is still there. If what Deputy Ó Snodaigh stated is correct, it would be not worthwhile for the person from a financial point of view.
Ms Helen Faughnan:
If it is not worth one's while to take it up, and if one were to lose out, one would not be forced onto it. In general and for the majority of participants, it would be of benefit. I will work out some actual examples and present them to the committee, because it is easier when examining scenarios to see the benefits.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I also asked other questions, including one on the Gateway scheme and the family income supplement.
Joanna Tuffy (Dublin Mid West, Labour)
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Ms Faughnan has not finished replying to the Deputy's questions.
Ms Helen Faughnan:
The family income supplement could kick in, depending on the nature of the family composition, whether children are involved and the employment level. We will work out a number of scenarios and the actual benefits.
With regard to mortgage interest supplement, since the end of 2011 the number of mortgage interest supplement recipients has fallen. At that time the number was 18,988 and this had dropped to 11,270 by the end of August this year. The main drivers for this reduction are the introduction of the 12 month rule, the increase in the minimum contribution and the drop in the live register. Approximately 58% of mortgage interest supplement recipients are in receipt of jobseeker's payments. As the live register drops, this leads to a drop in the mortgage interest supplement numbers. We will only see the outcomes of the 12 month rule now because customers who have gone through the 12 month engagement with the mortgage arrears resolution process are starting to reappear. In July it was awarded to 67 recipients and in August it was awarded to 28 recipients. We are keeping this under review. Realistically it will take a number of months for it to wash through to see what type of solutions have been put in place with lenders and whether people need to come back to us for State support.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I asked a question-----
Joanna Tuffy (Dublin Mid West, Labour)
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Sorry, Deputy-----
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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It is a brief question. Can somebody apply to get onto the Gateway scheme?
Joanna Tuffy (Dublin Mid West, Labour)
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We will return to it later. In order that committee members are clear, the committee has agreed an order whereby spokespersons of Fianna Fáil, Sinn Féin, the Technical Group and the Government speak, after which individual members may speak.
Marie Louise O'Donnell (Independent)
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I accept that, but order is one thing and speeches are another.
Joanna Tuffy (Dublin Mid West, Labour)
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Do we want the questions to be answered or not? I cannot start interrupting-----
Marie Louise O'Donnell (Independent)
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This is not a complaint, it is an observation. Of course we want questions to be answered, but we do not want to sit here listening to nine, 11 or 12 minute speeches from committee members. Ask questions so we can get answers.
Joanna Tuffy (Dublin Mid West, Labour)
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The clerk times it.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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We only ask questions.
Marie Louise O'Donnell (Independent)
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You did not.
Joanna Tuffy (Dublin Mid West, Labour)
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Those who asked questions spoke for five minutes each and this may be too long. We can say it was three minutes but it was five, and it was recorded by the clerk.
Joan Collins (Dublin South Central, People Before Profit Alliance)
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I had a particular instance where I was contacted by a young woman who went for a job after having been unemployed for 20 months. She was asked whether she could avail of the JobsPlus scheme. She is a lone parent and could not avail of the scheme, and somebody else on the scheme got the job. I presume this would also be the case for somebody applying for a job who had become unemployed two weeks previously. Is this an incentive for employers to choose people on the JobsPlus scheme rather than other unemployed people?
I am always a bit nervous of job initiatives. What specific work are we speaking about in local authorities? Is it at CA or CO level or are jobs throughout the organisation offered? I know there is an embargo but this shows the madness of Government policy. Anybody would want to wake up in the morning to go into a real job and get paid. Under the scheme a 21 year old in receipt of a €100 jobseekers' payment and an extra €20 a week will work 19.5 hours at €6 an hour. This is an insult. I am not referring personally to the witnesses, but the policy is an insult to people. If it is a real job, one should be paid equal pay for equal work of equal value. This is my history in the workplace.
When people go onto these schemes, are they officially taken off the live register? Does it mean there are 3,000 fewer people on the live register? I must question the type of work and the jobs they do.
On the mortgage interest supplement scheme, this initiative was introduced to assist people on short-term sick leave from work. It is now being used to assist people who have lost their jobs. I do not understand the reason this initiative does not automatically kick in when a person engages with his or her mortgage lender to sort out mortgage difficulties. Currently, this only happens after 12 months, which is a huge imposition on people in difficult situations. The scheme is important in terms of assisting people during periods of distress.
1:45 pm
Marie Moloney (Labour)
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I will be as brief as I can. I welcome the recently announced decrease in the number of people on the live register. While live register figures are a million miles from what we would wish them to be, this is a step in the right direction. As stated by Deputy O'Dea, data in respect of self-employed people is not recorded because they do not receive payments as they do not have access to credits. I have raised on a number occasions with Ms Faughnan the issue of self-employed people having access to credits, which are vital for pension purposes. Perhaps it will be addressed in the report on the self-employed which we are awaiting. I ask Ms Faughnan to ensure it is.
The figures in respect of uptake on JobBridge were provided last week. However, we did not get information on the success rate of that initiative in terms of how many participants thereon moved on to full employment. I would be interested in hearing those figures if Ms Faughnan has them with her today. The last thing we need is for employers to be repeatedly taking on people from JobBridge and not creating employment.
On JobsPlus, can employers who receive money under this scheme from the Department of Social Protection let a person go after two years or are they required to keep that employee full-time for a number of years? On the Gateway initiatives, I was under the impression that these new schemes related to new jobs created rather than replacement of former employees. It was stated earlier that this relates to work which the councils cannot cater for owing to a lack of employees. I understood it to relate to work on festivals and so on. I would be concerned if employees under this initiative were displacing other employees.
It was stated that those eligible to apply are persons aged under 25 years who have been unemployed for 24 months, which is a long time for a young person to be unemployed. Perhaps a period of 12 months unemployment rather than 24 months should apply. As stated by Deputy Collins, €120 per week is very little. It is actually cheap labour for a person working 19.5 hours. Perhaps Ms Faughnan would comment on that issue.
It was stated that 25% of unemployed people would get jobs in Irish Water. While people have approached the Department of Social Protection for information on how to access these jobs it has not been provided. The Department does not even know to whom they should refer these people, which is an indictment of that Department. Will recruitment by Irish Water include 25% of unemployed people?
On the community employment schemes, it has been stated by the witnesses that participants in these schemes are considered employed and not recorded on the live register, yet for the purposes of claiming family income supplement and so on they are determined as employed. Either they are or are not employed. If they are employed and working 19.5 hours per week they should be entitled to claim the family income supplement during the 12 month period on the scheme.
I understand responsibility for the rent allowance will transfer to the Department of the Environment, Community and Local Government. Are there any similar proposals in regard to the mortgage interest scheme or will it remain the responsibility of the Department of Social Protection?
Marie Louise O'Donnell (Independent)
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I would like to focus on the Gateway initiatives. Like Deputy Daly, I believe this is a brilliant idea. I was not aware it was initiated by Deputy Daly.
Currently, people are living in their heads and watching television, with no physicality, which is part of the problem. I do not believe it has been communicated well enough to the public that this initiative is about another way of being intellectual. There is a belief that unless a person has his or her head in a book he or she has no sense of intellect. What we need is a return to crafts and skills.
Has Gateway commenced or is it still at Garda vetting stage? What cities and councils have taken up the gauntlet? Is there a dedicated person within cities and councils to operate it? Reference was made to identifying and selecting persons at random. As stated by Deputy Ó Snodaigh, can people not randomly identified or selected apply? If so, how do they do so? It is a relevant question because there are people who might like to do many of the jobs listed.
That a placement ends after 22 months and a person cannot reapply until three years after this is highly defeatist, particularly for a person who is good at and enjoys the job and likes being outdoors. How many letters have been sent out and how many people have engaged or refused to engage with the scheme? Will this initiative be funded through the €6 billion in European funding to address unemployment in the 18 to 24 age bracket? Would it be possible to extend this initiative into the private sector given the limited number of jobs currently available under the scheme? Given the stated philosophy of this is job provision outdoors, I do not believe libraries should be part of it. There are many areas that could benefit, including our seas, rivers, flora and fauna and land. Also, what is meant by "brown field site remediation"? It is important we are imaginative and artistic about this and that it does not end up being about, as stated by Deputy Collins, people putting on gloves and cleaning. I would welcome a response to my questions.
Joanna Tuffy (Dublin Mid West, Labour)
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I will ask Ms Faughnan to respond to the questions thus far, following which Deputies Daly and Ryan can put their questions.
Ms Helen Faughnan:
I will respond first to the point made by Deputy Collins. I am aware of the case of the lone parent who applied to JobsPlus. While the scheme is being piloted, we are concentrating on the long-term unemployed. We will be reviewing the scheme and at that point will take into account issues such as those raised by the Deputy. The long-term unemployed, in respect of which numbers are very high, are our focus as part of the Pathways to Work programme.
On the Gateway levels of pay, for an unemployed person in receipt of a reduced payment of €100 or €144 per week owing to their age, this will increase to €208 per week as part of the Gateway initiative. As this is paid work, those who participate will be regarded as employed and not recorded on the live register.
On the mortgage interest supplement scheme, I appreciate from where the Deputy is coming. The Exchequer was subventing the lending institutions to the tune of €42 million per year. In some cases people were two to five years or more on the mortgage interest supplement scheme. This meant the bank or lending institution was receiving the interest but from the State. There was no engagement between the bank or lending institution and the mortgage holder, whose mortgage could have been sustainable. We needed to ensure mortgage holders were engaging with their lenders ahead of participation in the scheme. We will be reviewing the scheme in the context of the nature of the clients coming to us post-engagement with the mortgage arrears resolution process, MARP. It was never intended to be this type of scheme. As stated in the Keane report, this is not a sustainable solution.
I note Senator Moloney's points with regard to the self-employed and I will feed that message back as it relates to people on the live register on credits. With regard to the JobBridge figure-----
1:55 pm
Marie Moloney (Labour)
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The witness may supply the figure later if it is not to hand.
Ms Helen Faughnan:
I had them a second ago. Of the participants in JobBridge, three in five secured employment within five months of completing internships. This particular scheme has been very successful, as was recognised by the independent review that was carried out. There was a 61% progression rate, meaning it has one of the best outcomes of any scheme in Europe. That is possibly because it is the first time we have attempted this type of scheme in Ireland.
Marie Moloney (Labour)
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Could the employer use JobsPlus after JobBridge?
Ms Helen Faughnan:
Yes. The participants can move directly from that. JobsPlus will be running for two years and there is no requirement for an employer to keep those people on after that period. We are hoping that if the person engages and works hard, he or she will be kept on. It is kind of a safety net for an employer, who can take on somebody, work with his or her and help his or her development along the way. Our hope is that people would be retained in employment at the end of the period.
The Senator mentioned concerns about displacement because of Gateway. These people will be carrying out work that is not currently being done by councils because they just do not have the money, people or resources to do it. It will also work for new projects, and there is a range of work being done. This feeds into the question from Senator O'Donnell as well. The process will consider outdoor maintenance of public spaces and amenities, and some good work has been done with brown-field sites, particularly in Dublin. People are working on abandoned sites to see how they can be developed to benefit the community.
Other types of initiative include digitisation of records held by councils, as well as some tourist and leisure-related trail developments and walks. There is also work being done on restoration of heritage assets and various environmental improvements. The process is open for any opportunities, developments or initiatives. We have many well-skilled people on the live register and this is an opportunity for them to engage, develop and show the skills they have available. The local authorities are engaging with unions to ensure there will not be displacement, which is one safeguard.
With regard to those under 25, we are targeting people who have been on the live register for two years as we are concerned about people who are long-term unemployed. This is an opportunity to engage with that specific cohort. At the end of the six-month trial we will review the matter to see if there is enough take-up from that cohort or if we should consider reducing the two-year timeframe.
Senator Moloney was concerned about the water company. Significant work has been done by the Department, which is engaging with water facilities and helping to select people in some areas. In other areas the water company has, if the members will excuse the pun, been flooded with applications. I have regularly seen messages around the country that advertise jobs and ensure people on the live register can get opportunities. The jobs are being advertised and our Department is indicating that if people need training or any kind of supports to get people job-ready, it can engage with them. I can get the details of engagement in the south west, as there has been a fair amount of it.
Marie Moloney (Labour)
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People have been told to e-mail an application but they have heard nothing afterwards. I can provide names if the witness so wishes.
Marie Moloney (Labour)
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A percentage of the people must be unemployed.
Ms Helen Faughnan:
Yes, and we have flagged to the various companies that we are here to help. We can help select these people and prepare them in advance if they identify the types of skill required. We are engaging on a proactive basis. The Department has set up a specific employer engagement unit, with key people right around the country responsible for engaging with employers, and much work has been done in this regard.
We are working with the Department of the Environment, Community and Local Government and local authorities, as we have over many years, to transfer long-term rent supplement recipients to the local authorities, as that is where responsibility exists to meet people's long-term housing needs. There are no plans to transfer mortgage interest supplement, as it is a completely different scheme.
The Gateway process has started and is still in an initial period.
Marie Louise O'Donnell (Independent)
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What does that mean?
Ms Helen Faughnan:
We have 22 councils engaging with the Department and our target is to fill 1,200 placements on Gateway by the end of this year, with the balance of the 1,800 next year. Different councils are at different stages. In Cork I know letters have issued to participants, and Cork City Council is looking at having five teams of 12 people in place on the various schemes. We are probably writing to approximately three times as many people as the councils need to ensure we are oversubscribed and will have sufficient people referenced to the councils. I can give a list of the names.
Marie Louise O'Donnell (Independent)
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So it has not really got off the ground yet?
Marie Louise O'Donnell (Independent)
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How is that being done?
Marie Louise O'Donnell (Independent)
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That is okay.
Marie Louise O'Donnell (Independent)
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I understand the answer.
Joanna Tuffy (Dublin Mid West, Labour)
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Senator O'Donnell also raised the matter of time limits.
Marie Louise O'Donnell (Independent)
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I have raised many issues. Who is in charge of the process?
Joanna Tuffy (Dublin Mid West, Labour)
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The Senator should not ask additional questions.
Marie Louise O'Donnell (Independent)
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Is there a room with a sign saying "Gateway" over the door?
Marie Louise O'Donnell (Independent)
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The only other question concerned the letters, and that has been partially answered. Nobody has refused the offer yet.
Marie Louise O'Donnell (Independent)
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What about the defeatist element of the three-year period?
2:05 pm
Marie Louise O'Donnell (Independent)
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Is this part of the youth guarantee?
Marie Louise O'Donnell (Independent)
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Is the Department looking for funding within that?
Marie Louise O'Donnell (Independent)
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The Department is not specifically targeting this?
Marie Louise O'Donnell (Independent)
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That is fair enough.
Jim Daly (Cork South West, Fine Gael)
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I thank the delegation for coming in today to discuss these extremely important initiatives. Labour activation measures are very important. I commend the Department on the proactive approach it is taking to labour activation measures, which challenges the perception people have, rightly or wrongly, that its function is to write cheques on a weekly basis.
I welcome the introduction of Gateway, which is a principle for which I lobbied as far back as 2010. I have numerous pieces of correspondence from the previous Government on trying to get an initiative like this off the ground. I believe the then Minister, Deputy Ó Cuív, went as far as announcing an initiative similar to this one on 30 August 2010, in which he set a target of 10,000 by the year end and 40,000 over the following two years. They were far more ambitious targets.
I welcome this scheme, for which I have lobbied hard. I have raised this with Mr. Fleming on numerous occasions as well as the Minister, but I have a difficulty with the figure of €20. We are talking about the equivalent of the community employment scheme. Deputy Ó Snodaigh spoke earlier about PRSI and he is right in that regard. I have the figures here. If somebody has a dependant and four children, he or she will get €422 on welfare and €433 if he or she goes on a community employment scheme. Effectively, what he or she is getting with the PRSI is €11 for a week's work. There is no incentive for anybody to go out to work for €11.
The scheme itself is very worthwhile and important. When I first went public with this in 2010, I was on many of the national stations. At that time, I was a county councillor and my office was flooded with inquiries. However, I was talking about an additional €100 per participant, which would be fair for anybody willing to go out to work for 20 hours.
We must be realistic, especially where I come from in Cork. Much of the work being done by Cork County Council is maintenance work, including the maintenance of roads, hedgerows, roadways, drains and parks. Let us be honest in stating that not an awful lot of training is required for that. It is manual work. The workforce has been hugely depleted over the past few years and this is a way to restore it.
The Government and the Department of the Environment, Community and Local Government should have put significant resources into this because it would have represented exceptional value for the taxpayer. It would have been a win-win situation for the person who participated, for the taxpayer and for the community. Unfortunately, we have introduced this while demonstrating an inability to think outside the box. We have replicated the Tús scheme and have run that through the councils. It is very disheartening and disappointing that we have missed this opportunity. I feel very strongly about it and I want to register a protest at the €20 because it takes the good out of it.
We are talking about keeping 15% of places for the under 25s. I would not worry about that because they will not do this for €120 per week. They will not go out to work for 20 hours, nor should they. I note the Help to Work scheme introduced in Britain this week by the Chancellor of the Exchequer. He is forcing people to work for their welfare, although that is a slightly different debate. There is a voluntary element here, although there are penalties. I am not sure those penalties will come to much because history has shown that they do not. I regret being negative because I fought and lobbied hard to see this scheme come about, but it is a compromise because of the €20.
The British Chancellor of the Exchequer has put £300 million into the scheme he has introduced and has targeted it at 60,000 long-term unemployed people. We are putting in an average of €7 million per annum, or €21 million over three years, and are targeting it at 3,000 people per annum. It is a pittance and it is a pity.
Could I get figures for Cork County Council? I have had numerous meetings with the director of services for roads. The council has been extremely positive about this. I was pushing for this scheme during my time as mayor of that local authority. Could I get those figures to do some further analysis on this? I do not know whether it is available today but I could I have the figure for the number of people availing of community employment schemes? If the delegation does not have that figure I will understand, because it is not part of today's discussion. However, this scheme is very similar to the community employment one.
I referred to the Help to Work scheme introduced by the British Chancellor of the Exchequer, which has been received very well in the UK over the past four or five days. Polls suggest up to 60% of the people there support it. It replicates the work for dole scheme in the United States. Has the Department of Social Protection any plans to introduce such a scheme? Perhaps in a different forum, is there a possibility we could discuss that?
I mentioned the announcement of a scheme by a former Minister, Deputy Ó Cuív, on 30 August 2010. It was called "work for dole" on RTE. Did that scheme ever take off or did 10,000 people avail of it in 2010? At the time, it was hoped 40,000 would avail of it in two years. We are only aiming to have 3,000 per year on this scheme, which is 6,000 over two years. We are not being very ambitious here, given that more 200,000 people are long-term unemployed. The reason we cannot be ambitious is because of the €20.
What is the Department's reaction to the criticisms in the recent OECD report, particularly in regard to community employment schemes and the overriding lack of ambition in the Department with regard to serious labour activation schemes? Are there more ambitious long-term targets for Gateway comprising more than 3,000 people per annum, given the amount of work to be done in local authorities? One does not need a former councillor to tell one that. We have to be fair to people.
In regard to JobsPlus, the number of placements awarded by the year end is 400. Perhaps Ms Faughnan will repeat the figure for next year. What steps are being taken by the Department to make employers aware of it? Unfortunately, it is the old problem of employers not being aware of it. I have done surveys and have met employers who are still not aware of it.
Joanna Tuffy (Dublin Mid West, Labour)
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Deputy, you have gone a good bit over the time. Will you wrap up now?
Jim Daly (Cork South West, Fine Gael)
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I appreciate that. I will move on, but I requested this meeting. I have a particular interest in this and have done much work on the scheme, so I beg the Chairman's indulgence based on that.
What steps have been taken to advise employers of the scheme? What is the Department doing to let the unemployed know about it? I think it is writing randomly to the unemployed but I would prefer to see a more co-ordinated approach, if it is possible.
Has there been any reaction from employers to date and from the 1,100 who are eligible or the 400 people who have taken it up? I know the delegation gave the figure for the revenue assist scheme, but could I have the number of employers who availed of it last year? I know from a parliamentary question I tabled in a previous year that it was miserly. What was it for last year?
Joanna Tuffy (Dublin Mid West, Labour)
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Deputy, you have been speaking for more than eight minutes, which is far more time than other members had. We talked of a time limit of three minutes. It is well over that. In terms of fairness, a lot of information can be gleaned from parliamentary questions.
Jim Daly (Cork South West, Fine Gael)
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I am nearly finished. I am on to the last scheme, the mortgage interest relief scheme. There is a school of thought that it is a bail-out for the banks because we are providing €42 million directly to them. How much has this been reduced by since the new eligibility criteria? I refer to the fact that the house can now be for sale.
Has that made a stark difference or has it made a major contribution to the reduction in the numbers? I know that many people have gone through the MART process, which has also made a significant difference.
Are there plans ---
2:15 pm
Joanna Tuffy (Dublin Mid West, Labour)
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I am sorry Deputy, but I will have to go to Deputy Ryan at this stage to be fair. He may ask some of the questions that Deputy Daly wishes to ask.
Brendan Ryan (Dublin North, Labour)
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On the Gateway initiative, I agree with those who have said that the €20 payment is a difficulty, apart altogether from the tax issues that Deputy Ó Snodaigh raised. A person living in my constituency, participating in the scheme and travelling from Balbriggan to Swords, for example, would end up in a minus position because of travel costs.
The witnesses made reference to monitoring the scheme with trade union support. Has trade union support around the country been generally positive? It seems to me that it has been. A question was posed earlier on local authorities and I wish to know if Fingal County Council has participated thus far. On the question of Garda vetting, it appears that such vetting would not be required for many of the jobs on offer. Is that the case? The witnesses also mentioned development opportunities within the councils and referred to training programmes such as Safe Pass and so forth. Beyond the basic training to do the various jobs, what kind of training opportunities are available to participants? Is there any limit on the number of participants per local authority? On the issue of gender, I had some initial concerns about this scheme because it seemed that it would present more opportunities for men than for women. In that context, are there enough opportunities for women under the scheme?
Terry Brennan (Fine Gael)
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I will be brief because one of the three questions I wanted to pose has already been answered. Could the witnesses give some indication as to when they will be in a position to review the Gateway scheme to determine its success or otherwise. How long do vetting approvals last and are they reviewed? If a person is, for argument's sake, vetted and approved for a carer position and then decides to take a job as a taxi driver, does that person have to be vetted again? I am glad to hear that the length of time that the vetting procedure takes has been reduced. I know five or six people who are participating in the scheme at the moment who have part-time jobs. They are anxious to work and are supplementing a part-time job. One individual, for example, is self-employed but does not have enough work to keep him going and is very happy on the scheme. Many scheme participants are very satisfied and do not want to go back on to the live register. In that context, we should consider keeping some people on who are genuinely anxious to continue working.
Ms Helen Faughnan:
I will cover the questions in a general response. Deputy Daly referred to investment and the criticism from the OECD. It is estimated that €1.05 billion is being spent on employment support programmes in the Department, which represents 5.3% of total departmental expenditure. We are aware of the OECD report but do not accept the point about a lack of ambition. This is a new concentration for the Department of Social Protection in terms of its remit. The responsibility for FÁS and employment and community services moved to our Department at the beginning of last year. The criticisms of the community employment schemes, in terms of a progression, are valid. However, the remit of community schemes is to meet the social needs of communities. An enormous amount of beneficial work is being carried out through community employment, in the provision of services such as home-help, meals on wheels and so forth. These provide invaluable support to the economy and to the general public. It is a balancing act between trying to meet those needs and providing employment opportunities. We accept that in terms of progression, the ratio is probably 80:20, with 80% of the benefit on the social side and 20% on the progression to employment side. We are very conscious of that and are trying, with some of newer schemes we are putting in place, to address some of those concerns.
A question was asked about Cork County Council and we expect approximately 140 to 150 people to be involved in the Gateway scheme there. On the question of working for the dole, people are receiving a top-up payment on various schemes, including the Gateway scheme, the Tús programme, community employment schemes and so forth. Concerns have been voiced about the value for money to work but when one looks at the live register, one sees that approximately three quarters of those on the register are claiming a personal rate only. They do not have adult or child dependents so while the top-up payment is not a huge amount, any disincentive in terms of increases to adult or child dependent payments does not exist for them.
The amount of funding in place for the Gateway and JobsPlus schemes is substantial. The additional €20 per week, in the context of the overall fiscal contraction situation, is still a substantial investment in people. We would not push people to participate in the schemes if they would incur enormous travel expenses in doing so. However, we have found that many people are very happy to engage with this and they value the experience of working and getting back into the workforce.
We are reviewing all of the schemes to assess their impact. Senator Brennan asked when we will be reviewing the Gateway scheme. That scheme is only starting to get up and running so it will be next year before we can assess how it is evolving. We are actively engaging with 22 local authorities at present and hopefully we will progress to the remainder soon. We will review the scheme at some stage next year but we need to get it fully operational first in order to be able to learn from it.
Deputy Ryan asked whether there is any limit on the local authorities in terms of the Gateway scheme and the answer is "No". We want to engage with the authorities to ensure the take-up of the full number of places that are available. On the question of gender balance, while a lot of the positions seem to be focused on maintenance and outdoor activities, there is no bar on women taking up those positions. However, in terms of balanced gender involvement, there are a number of initiatives in place, including one concerning the historical recording of data. I am convinced that many of the fairer sex are quite happy to engage in the various initiatives in place. We are aiming to recruit men and women for the various schemes.
The issue of JobsPlus and engagement with employers was raised. We launched JobsPlus with one of the main companies involved in the south east, Eishtec. That company was fully involved in terms of recruiting. We held a stakeholder briefing on 24 June for employer bodies and representative associations involving the Institute of Directors, ISME, the National Recruitment Federation, Chambers Ireland and many other employer bodies.
We engage with chartered accountants because they see the benefit to their client businesses. We briefed the Oireachtas Members on 10 July 2013. We have run a number of jobs fairs, including in Dundalk, Balbriggan and Blanchardstown, and we had specific hospitality fairs in Kilkenny. We had stands at the National Ploughing Championship last week. Our staff on the ground are engaging with local employers and promoting all of this work. We will be conducting a six-month review to see if we need to publicise it more. The numbers signing up to it - more than 2,000 employees and 1,000 employers - show it is progressing well.
Deputy Daly asked about the number of employers who availed of the Revenue Job Assist scheme. Approximately, 1,700 employees and 800 employers availed of it in the past year. The number of employers and employees availing of JobsPlus exceeds that.
In terms of the drop in numbers for the mortgage interest supplement, we are not able to differentiate between house sales and a requirement to engage with the lender. The house sale condition was raised with us. There was a strong recommendation from one of the earlier groups, the Cooney group, to make that amendment. We put that in place last year.
Let me respond to Deputy Ryan's question on Fingal County Council. We hope to engage with Fingal County Council towards the end of this year or early next year before the county council comes on board. I will ensure our divisional managers who are engaging with councillors know we can provide briefings for the local representatives on how Gateway is progressing and on our engagement with the county councils. That might be useful for Senator Brennan.
Vetting is an issue that we have raised with the Department of Justice and Equality. Some people can be vetted a number of times - for example, a care worker, a person involved with scouts or a taxi driver. We understand the Department of Justice and Equality is examining the procedure.
2:25 pm
Terry Brennan (Fine Gael)
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The vetting is not valid for a specified period. One must go through the vetting procedure if one changes jobs.
Ms Helen Faughnan:
As I understand it, the vetting covers a period of three years and one must then re-qualify, but it is specific to the organisations. I know that concern has been flagged with the Department of Justice and Equality, but there were data protection issues. They are examining it. Up to 25 extra staff have been assigned to the vetting unit and significant volumes were cleared during the summer months.
Ms Helen Faughnan:
I was asked about the numbers on community employment schemes. As at 30 June, more than 22,500 people were on community employment schemes. We had 5,760 on Tús and 2,700 on the rural social scheme as of June of this year. I also have the figures for the end of August, at which time the number on community employment schemes was 22,790, we had 6,450 on Tús and on the rural social scheme we had 2,670. I have rounded the figures up slightly.
Brendan Griffin (Kerry South, Fine Gael)
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I thank the witnesses for the interesting information. People are our most valuable resource. Anything that can be done to try to get people into work and to optimise people's potential must be encouraged. The efforts that have been made to date are welcome. There are more than 400,000 on the live register, so more needs to be done. JobsPlus is a very positive initiative. I wonder if it can be tweaked in any way to make it better. Have the employers who have not signed up for JobsPlus given the officials any feedback on how the scheme could be made more attractive for them?
I have spoken to people who, because of various expenses - for example, the cost of travelling to work - believe the extra €50 payment under JobBridge does not make it viable for them to take up work. If the payment was greater, they might be inclined to take up the opportunity of a JobBridge placement. In a perfect world that could be done, but there would be a cost. How was the €50 figure payable under JobBridge arrived at? The fact that three out of every five progress within five months to full employment shows that it is a positive labour activation measure. That is a good result. We need to focus attention on the scheme and try to push it further. Is there any statistical data on what would be involved or can we even check the viability of that scheme?
Fidelma Healy Eames (Fine Gael)
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I welcome the panel. I concur with Deputy Jim Daly's point on the lack of ambition in the Gateway programme. Let me illustrate the point. Around ten days ago, an employer in the engineering manufacturing business, an exporting company - which we know is our big hope as it can improve our GDP - told me he cannot get people to work for him on 1.5 times the minimum wage, which is over €12 an hour. I do not know how one can motivate people to work for an extra €20 in addition to their social welfare if employers are failing to engage them on €12 plus per hour because they are afraid of losing benefits. I am talking to the Department of Social Protection. There is work to be done and I plan to raise this issue with the Minister, Deputy Burton. First, employers do not know that the applicant can keep some of his or her benefits even after he or she takes up work. I know I am crossing over, but I am making this point because this information must filter through. A great deal more must be done with employers to empower and enable them to respond to the applicant who says the employer is not offering enough money.
About one in four children live in jobless households. That is probably one of the major indictments of our system right now. We have a thousand educated young people leaving our shores.
Marie Louise O'Donnell (Independent)
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Some 62% of them are leaving voluntarily.
Fidelma Healy Eames (Fine Gael)
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They are leaving. It is a brain drain. Job activation must become far more aggressive. It is not working enough. I am of the view that all we are doing is tinkering at the edges. What must be done is that the witnesses must promote the schemes to employers outlining what social protection benefits applicants can still avail of - for example, rent allowance, medical cards and so on - while taking up a job that pays 1.5 times the minimum wage. An employer will tell me that a person attending for interview will ask him or her to sign a form saying the person has applied for a job, which is a requirement for continuing to receive social welfare.
This is not hanging together. For that reason I agree with Deputy Daly regarding the lack of ambition for the Gateway programme. I am saying there is a lack of ambition in the entire social protection system. What is the take-up of Gateway in Galway and what is the profile of those who are engaging in it? I apologise if this question was answered in my absence.
There is very good intent in the JobsPlus initiative. What is the minimum income a person must be earning so that an employer can recoup the €10,000 for someone who is out of work for more than 24 months? What evidence is there to tell us how many employers know about the scheme? That is one of the more positive schemes.
2:35 pm
Joanna Tuffy (Dublin Mid West, Labour)
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I also have a couple of questions. There seems to be a problem with the availability of accommodation to train people for things such as Tús, certainly in my constituency. If the places are being increased, is the space available for people? Why do people on JobBridge get €50 extra when those on the Gateway and CE schemes get €20 extra? Why is that anomaly there? Why can it not be standardised one way or the other?
I have noticed the significant drop in the number of people receiving mortgage interest supplement. The number of people in mortgage arrears has increased dramatically in that same period of time. It seems as though there is a disincentive to applying for it, which is possibly the 12-month period that applies after a person gets into the mortgage arrears process. Can that be reduced to six months? We want people who need the payment to get it.
The reports on mortgage arrears by the Department and by others - I think the Keane report was one - also recommended revising the means test and allowing people who were working full time to apply for the mortgage interest supplement. People need that payment, so will the officials look further at trying to facilitate people? The opposite seems to be happening at the moment. The number of people who are qualifying for it is dropping at a time when mortgage arrears figures are climbing.
Ms Helen Faughnan:
I might start with the question on the mortgage interest supplement. Any kind of major change to the mortgage interest supplement, such as reducing the full-time work condition or changing the means test, would have to be considered in a budgetary context. In respect of reducing the referral back to the lenders from 12 months to six months, for somebody to engage and comply with the forbearance arrangements, a six-month period is quite short. This is effectively State money subventing the lenders and whether this is the best use of that money is a policy consideration. We will wait to see the outcomes for the people who have come through the forbearance process, and whether they have engaged with the lenders, whether solutions have been put in place for them, whether they are meeting them and so on. That will take a couple of months or more to wash through, and may possibly take 12 months. However, we will engage on that issue.
The reason for the setting up of JobsPlus was the feedback from employers that the employer PRSI scheme, which had been set up in 2010 under the Revenue Job Assist scheme, which itself had been running since 1998, was not working. It was too cumbersome and was difficult for employers to operate. We took account of all that feedback and came up with a simpler scheme, JobsPlus. The feedback from the employers with whom we are engaging is extremely positive and the take-up from 2,000 employers at the moment is showing that. We will be keeping in touch with them and, as our staff are out and about meeting the employers, we will be taking the feedback. We are engaging with the small and medium business associations to get feedback on the scheme.
The €50 extra for the JobBridge scheme was decided at the time it was set up, and it has been working. Again, we are into budgetary constraints, because the funding for JobsPlus had to be met from within the resources of our own Department. The cost of providing an extra €20 per participant naturally has a budgetary context. We must take into consideration the personal rate on the live register. Three quarters of those on the live register are single, or they may have a spouse or a partner who is working. Fifty three percent of people on the live register receive less than the maximum personal weekly rate, so coming up to €208 per week is an increase for them. They have a financial incentive to take up that piece of work, and significant numbers on the live register do take up the various positions. In summary, there are just under 79,000 placements for all the various employment support initiatives that we have. I will circulate to committee members the breakdown of the various schemes and the number of recipients on them.
In respect of the point made about the lack of vision, a huge amount of work has been done in our Department. Members are aware that 1,000 staff came to us from the community welfare service and approximately 700 staff from the former FÁS organisation came into our Department as well. In addition to making weekly and daily payments, we are concentrating on activating the unemployed. We have a commitment to redeploy up to 300 staff from our divisional units into activation by the end of the year. We have identified 160 staff to train as case officers to engage with the unemployed. We will have up to 300 case officers by the end of the year. That is a huge focus. We also have local employment services which supplement our engagement with the unemployed.
In response to the question about the engineer on one and a half times the minimum wage, that is an issue, as is the concern that they are losing benefits. There is much miscommunication out there. Among the 50 action plans coming out of Pathways to Work, we are currently developing a "better off in work" module. It will be online and people will be able to log on. It is like a pension calculator whereby people can feed in their circumstances to get an indication of whether they are better off in work on an income of X. That will be going to trial and we hope to have it online by the end of the year or early next year.
A person on a medical card who takes up employment can retain the medical card for three years. A person with children who goes into low-paid work that is more than 19 hours per week can avail of family income supplement. We have tapering-off arrangements for rent supplement. If somebody is regarded as RAS-eligible after 18 months, he or she can retain the rent supplement.
Fidelma Healy Eames (Fine Gael)
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Can Ms Faughnan repeat that?
Ms Helen Faughnan:
Somebody who is on rent supplement for more than 18 months is regarded as being eligible for the rental accommodation scheme, or RAS, which is looked after by the local authorities. Even if the person has not moved but still meets the criteria, he or she can continue to receive rent supplement and take up employment.
Our staff encourage employers and brief them along these lines.
We can definitely ensure that we improve it to a greater degree.
There is also engagement with the unemployed and we now carry out what are called group engagements. We bring together cohorts of unemployed people at the early stages of unemployment and brief them not only on income supports but on all the various options available to them if they take up work as well. Employees know themselves when they are going in. These group engagements have been well received by the unemployed. Following them, they move on to a one-to-one engagement on the basis of their personal circumstances.
2:45 pm
Fidelma Healy Eames (Fine Gael)
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Ms Faughnan is giving me wonderful information. She must be rather disappointed, therefore, that it is not filtering down. That is the feedback I got from a recent employer. There are many anecdotal accounts but I have a specific account in mind. It indicates that none of this knowledge is filtering down.
Fidelma Healy Eames (Fine Gael)
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Yes, this is an employer. Equally, employees are also giving feedback to the employer suggesting that if they take a given job at €12 odd per hour they will lose their benefits and they know about the transition re-arrangements. There is work to be done around communication. I like the proposal about a better-off-at-work calculator, but can Ms Faughnan bring it to the Minister? It might need a widespread information campaign. It could save a good deal of money on welfare.
Ms Helen Faughnan:
It is true. The one-to-one engagement we have with clients is as crucial as the group engagements. It is our new way of interacting with them. We are hitting bigger volumes of people. We are also looking at job fairs. We took part in several, for example, in Balbriggan, Blanchardstown and Kilkenny, where there were employers and unemployed representatives, including the Irish National Organisation of the Unemployed. A good deal of briefing and interaction went on between employees and employers. We are using various methods to communicate with both sides of the coin because they are equally important in empowering the employees.
I referred to the extra involvement with our staff and the take-up on the Gateway scheme. We have started it and we are engaging with 22 local authorities. Senator Healy Eames asked about Galway city. Our local people there have met the local authorities. They met two weeks ago and another meeting is scheduled for the middle of October. The initial number of places is approximately 40 but there will be ongoing interaction. We are looking at approximately 55 people initially under Galway County Council.
Fidelma Healy Eames (Fine Gael)
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Is that on the Gateway scheme?
Ms Helen Faughnan:
Yes. Those are the initial numbers for Galway city. They are looking at placements for tree management, litter management, community events, hedge laying, etc. These are the initial placements that have been identified. Galway County Council has indicated placements for general maintenance of walls, repair and painting, landscaping, village enhancement, dog licensing duties, which is a slightly new one - perhaps there is an issue in Galway County Council with dogs, I am unsure - sports partnerships and supporting different facilities in the Galway County Council area. The scheme is for whatever is suitable and we will fully support it with our engagement.
Fidelma Healy Eames (Fine Gael)
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The work is valid, there is no doubt about that, but is the Department satisfied with those take-up rates?
Joanna Tuffy (Dublin Mid West, Labour)
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I am keen to conclude because we have been here a long time.
Joanna Tuffy (Dublin Mid West, Labour)
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I believe that was answered, it had to do with financial constraints for the new schemes. Ideally, they should be standardised.
Joanna Tuffy (Dublin Mid West, Labour)
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Perhaps it would be would be better to pay everyone €30. That is one possibility. I am conscious that we have been here a long time. If anyone has anything to say, please keep it short.
Jim Daly (Cork South West, Fine Gael)
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Are there any plans to cap the time for which someone can get mortgage interest supplement? Ms Faughnan referred to it but we did not get an answer. Are there any definitive plans to cap the length of time that someone can avail of mortgage interest supplement?
Jim Daly (Cork South West, Fine Gael)
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Ms Faughnan referred to it in her opening address. Is there anything more definite?
Ms Helen Faughnan:
Various review groups have come back to us, including the Cooney group report and the Keane group report. All have stated that mortgage interest supplement is not an ideal solution. It started as a short-term measure and it has effectively gone into the long term. In the case of mortgage-to-rent we are seeking to move people onto more long-term and sustainable solutions. That is the route we are going.
Brendan Griffin (Kerry South, Fine Gael)
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I asked some questions on JobBridge and the possibility of increasing it to €50. Are there any figures relating to what precisely would be involved in doing that? Does Ms Faughnan have any idea what the figures would be? Can Ms Faughnan elaborate on JobsPlus and the employers feedback?
Joanna Tuffy (Dublin Mid West, Labour)
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I have no wish to open up a series of new questions now. Perhaps we will just address that first question.
Brendan Griffin (Kerry South, Fine Gael)
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These are questions I have already asked.
Joanna Tuffy (Dublin Mid West, Labour)
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I think they were answered. The issue is budgetary constraints.
Brendan Griffin (Kerry South, Fine Gael)
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I asked what the ballpark figures would be if that were to be increased.
Brendan Griffin (Kerry South, Fine Gael)
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What about an increase to the JobBridge allowance? Will the Department come back with what a €10, €20 or €30 increase in JobBridge would amount to and what the various costs would be? Will the Department provide that in tabular format?
Brendan Griffin (Kerry South, Fine Gael)
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I am asking about the other data as well. I asked a question about JobsPlus. What was the feedback from employers and why are none of them taking up JobsPlus?
Ms Helen Faughnan:
JobsPlus kicked off during the summer months. A number of companies were not recruiting and summer is not always a good time to engage recruitment. Some of the employers that applied were not tax compliant and therefore their applications were turned down initially. It depends on where the employer is in terms of recruiting. The scheme started in the summer and the feedback suggested some employers were not recruiting at the time. However, we have over 2,000 employers who are now registered with us and we hope to see that improving over time.
Senator Marie Louise O'Donnell:
I thank the deputation because they run a benevolent operation and their answers have been comprehensive. However, I have one question as a new Senator. I have only learned my way around the corridors after two years and I might not be here on Monday or whatever the story is. Is there anything the deputation has learned from us that they can take back or is this exercise relatively futile?
Ms Helen Faughnan:
No, absolutely not. As soon as the transcript is issued to us we go through it line by line to feed back to the policy people responsible for the various schemes. The committee members and the Deputies in the House are the people on the ground and the information they provide to us is very useful.
Joanna Tuffy (Dublin Mid West, Labour)
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We will conclude on that note. I thank Ms Faughnan and her team. It has been an informative and helpful discussion.