Liz McManus (Wicklow, Labour)
Link to this: Individually | In context

Question 7: To ask the Minister for Social and Family Affairs when she will change the rules for the back to work enterprise allowance to allow jobseekers to qualify before they become long-term unemployed. [9276/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

The back to work allowance scheme is designed to assist the long-term unemployed, lone parents, people with disabilities and other social welfare recipients to return to work. The scheme is designed to support people who would not otherwise be able to return to the workforce for financial reasons. There are two strands to the scheme, the back to work allowance for people who take up employment and the back to work enterprise allowance for people who become self-employed.

To qualify for the back to work enterprise allowance, a person must set up a self-employment business that has been approved by a partnership company or one of the Department's facilitators and, in the case of a person on the live register, he or she must be in receipt of a jobseeker's payment for two years prior to commencing self-employment. Participants on the back to work enterprise allowance receive a tapered percentage of their social welfare payment over a four year period. Participants may also retain entitlement to certain other secondary benefits. On 20 February 2009, there were almost 7,730 participants availing of the back to work scheme, of whom 4,430 were participating in the self-employed option.

The operation of the scheme has been reviewed and modified over the years to ensure it continues to remain relevant to those needing its support. The position regarding accessing and retaining employment and self-employment has become more difficult over the past year. As the Deputy is aware, the Government is determined to ensure we do all we can to help people stay in work or get back to work as quickly as possible. The back to work allowance scheme is being monitored on an ongoing basis in this context.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

This is very similar to the earlier question from Deputy Enright with regard to the back to education allowance. The back to work enterprise allowance is a very worthwhile scheme which has significant potential. It makes no sense to insist that a person must be on the jobseeker's payment for two years before they can avail of that scheme. The priority in the current climate must be to ensure that the people losing their jobs now do not become the long-term unemployed of the future. If the Government is forcing people in that position to remain on the dole for two years before they can get any assistance in setting up a new business, it will make them the long-term unemployed.

This makes no sense. A welder from Kildare who was made unemployed contacted me recently. He saw an opening in the market to set up a small tyre garage. He is in receipt of jobseeker's allowance and it would be a big risk for him to give up all his payments in order to go into this enterprise but the State should facilitate him in trying to find new employment for himself and possibly others.

What is the justification for saying to that person that he must remain unemployed for two years before he can start his enterprise? It makes no sense at all so will the Minister please consider changing the rules?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

I share with the Deputy the idea that the back to work enterprise allowance, in particular, is useful. A distinction should be made between the back to work allowance and the back to work enterprise allowance, although both come in under the same scheme. Approximately €80 million is set aside for the scheme for this year. I mentioned earlier the Cabinet sub-committee on economic co-operation and one of the issues we are looking at in that respect is the enterprise element. There are certainly many people out there with many good ideas.

We should bear in mind that this is a social welfare payment not a grant to set up a business. It facilitates people coming off long-term unemployment in setting up their own business. I am open to a change in the scheme of the enterprise allowance.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

That is the one I am asking about.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

Yes.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

The Minister should not tell me about some other scheme. Will the Minister prioritise the changing of rules of the back to work enterprise allowance?

Arthur Morgan (Louth, Sinn Fein)
Link to this: Individually | In context

The Minister has indicated she is considering the matter but will she tell us when she will make a decision? Many people out there know they will face unemployment very shortly and they are already trying to come up with enterprise ideas.

Whatever about public finances and the banks, the one factor required to fix the economy is job creation. There are many people who want to get into what may be best described as garage industries and we need more enterprise parks to facilitate this. All of that rides on the back of this very laudable scheme, which is an excellent idea. When will the Minister make a decision on bringing the required waiting period down to perhaps a maximum of three months? After this people may develop bad habits and get out of the work ethic. They should be allowed to go back to work and to create other jobs on the back of this.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

As I stated at the outset, I am certainly open to changing this particular aspect of the back to work scheme. It is being examined in the context of that interdepartmental committee and we hope that in the next few weeks we will be able to come forward with proposals.

Arthur Morgan (Louth, Sinn Fein)
Link to this: Individually | In context

What about a provision for a three-month period?

Olwyn Enright (Laois-Offaly, Fine Gael)
Link to this: Individually | In context

I am glad the Minister is open to potential changes. The logic behind this is that when people come out of work they have experience and fresh ideas that, in a shorter period, could be transferred to a job where they could work for themselves. Will we have a response on this by the time the budget comes forward early next month?

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

I welcome the Minister's statement that this matter is under serious consideration and that there should be a decision within the next few weeks. I urge the Minister to consider a reasonable time lag, perhaps of three months. If somebody has lost his or her job and comes up with an idea for a small enterprise, three months seems very reasonable in the current climate. I look forward to an early announcement on that.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

We are working on the issue. People going into enterprise might have options under other schemes to be able to get grants to set up businesses etc. from other Departments.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

The risk of giving up the payment is important.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

This is a social welfare payment which allows somebody going to work through setting up a business to be able to hold on to some of the social welfare payment.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

That is key.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

It was always designed for somebody who was already unemployed, which the Deputies appreciate. I see the value of trying to encourage people who have ideas and may employ not only themselves but others. We want to facilitate them as much as possible.