Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Deputy Richard Boyd Barrett raised an important issue. In the Bill, as published, the period specified was 15 months. I tabled an amendment suggesting a period of 12 months and this was accepted by the Minister. This is moving in the right direction. The logic seems to be to align the relevant period with the qualifying period for those on jobseeker’s benefit who are accessing other forms of social welfare support. This is true in the case of the back-to-work enterprise allowance scheme, in respect of which the period is 12 months. The period for the back-to-education scheme is now nine months in certain cases for a third level course. We have all met people in our constituency offices who are unemployed but chomping at the bit to return to third level education or start up a new business. They are told they are not on the dole for long enough to qualify. This is a general issue across a number of schemes and it needs to be addressed.

The incentive under discussion is very modest. I said on budget day that the last thing somebody unemployed for 12 months worried about was paying income tax on the profits of a business he or she had not yet set up. One is exempt from income tax on the first €40,000 of profit in years one and two - this is great and I hope those eligible will have enough profit to avail of the relief - but the reality for most people starting a business involves their hanging in the first year or two. I am not sure how beneficial the relief will be in practice, but the qualifying period of 12 months is one we need to examine. It must also be examined in respect of other schemes. We must incentivise people as soon as they receive jobseeker's benefit. Where they are relying on basic State support, the incentive should kick in as quickly as possible to get them into education, self-employment or mainstream employment.

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