David Stanton (Cork East, Fine Gael)
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Question 71: To ask the Minister for Social and Family Affairs the number of persons still on the back to work allowance when the last person will complete the scheme; the number on the back to work allowance in 2007, 2008 and 2009; the cost to her Department of the back to work allowance in each of these years; if her Department has conducted research into the cost incurred by the State each year of the back to work allowance scheme through the retention of secondary benefits; and if she will make a statement on the matter. [9032/10]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I presume the Deputy is referring to the back to work allowance scheme for employees which is one of two strands in the Department's back to work programme. The scheme was designed to assist the long-term unemployed, lone parents, people with disabilities and other social welfare recipients to return to work. The allowance is paid on a reducing scale over a three year period. Participants retain any additional secondary benefits they had prior to participation.

In order to respond effectively to the growing numbers on the live register, the changing profile of jobseekers generally and the current employment situation, it was decided in April 2009 to refocus the existing resources for back to work schemes towards helping people into self-employment. The intention is to support enterprises that will, in due course, create further employment opportunities. To this end, the back to work allowance scheme for employees was closed to new applicants from 1 May 2009. Existing participants retained their entitlements and, in general, the last of these will have finished by the end of April 2012. However, the scheme contains a provision that participants who drop out before their entitlement ceases can in certain circumstances resume where they left off. Consequently, there may be a small number of people re-entering whose entitlement will not expire until after April 2012.

There were 4,305 people on the back to work employee scheme at the end of 2007. The equivalent figure was 3,558 at the end of 2008 and 2,012 at the end of 2009. The expenditure figures collated by the Department do not distinguish between the back to work allowance scheme and the related back to work enterprise allowance. The overall expenditure on both schemes in 2007 was approximately €71 million. In 2008, it was over €73 million. The outturn for 2009 has not yet been finalised, but the estimated figure is approximately €76.5 million.

Participants in the back to work allowance scheme retain any secondary benefits they were in receipt of prior to participation, as long as they satisfy a household income means test where applicable. The Department has not undertaken specific research on the annual cost to the State of this measure, which has always been seen as important to the success of the back to work allowance scheme.

David Stanton (Cork East, Fine Gael)
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Can the Minister confirm that 20% of those who are unemployed are under the age of 25? Does she agree that the scrapping of this scheme has robbed such people of any hope of getting employment? Can she tell me why the scheme has been abandoned at a time when the rate of unemployment in this country is the second highest in the European Union? Why has the Government decided to abandon young people and a scheme that seemed to be working well? Was there evidence to suggest that the scheme was a failure in some way? If so, why was it maintained for so long? How many people are now on the short-term enterprise allowance scheme, which replaced the previous scheme?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I do not accept that the scheme has anything to do with young people. It was designed to enable those who were becoming long-term unemployed to get back into the work force. Our aim with young people is to ensure they do not become long-term unemployed in the first instance.

Olwyn Enright (Laois-Offaly, Fine Gael)
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Approximately 40% of them are unemployed.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Our priority for them is to get them into training, activation, education or work placement programmes. I suggest that the scheme under discussion is not the appropriate one for them. A scheme that has been introduced as part of our efforts to get people back into work - the back to work enterprise allowance - might be the most appropriate one for them. It enables young and old people who have ideas to get social welfare support while pursuing those ideas. Having closed the back to work scheme, we decided to focus on the back to work enterprise allowance in order to encourage innovation and enterprise. At the end of last year, some 6,603 people were availing of the enterprise scheme. The relevant figure for short-term enterprise allowance, which was also mentioned by the Deputy, was 1,195.

David Stanton (Cork East, Fine Gael)
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Am I right in saying that the number of people availing of short-term enterprise allowance is greatly below expectations? Does the Minister agree with the CSO that 60% of unemployed people are at serious risk of long-term unemployment? At a time when so many people are at risk of long-term unemployment, why did she scrap a scheme which focused on the long-term unemployed? Some 12.7% of the population is unemployed. That figure was 15.7% when the scheme was introduced in 1993. Does the Minister intend to wait until the unemployment rate reaches 15.7% again before she introduces a meaningful scheme to give hope to the long-term unemployed?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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A number of new initiatives have been introduced. The useful back to work enterprise scheme encourages innovative people who have ideas to set up their own enterprises. The number of people on the back to education scheme, which is the only guaranteed way of ensuring one does not become long-term unemployed, has increased significantly, to over 20,800, by comparison with last year and the year before. We have introduced the PRSI incentive scheme, which is designed to take people off the live register and put them into work. It has the potential to be costly this year. In order to avail of the scheme, one needs to have been on the live register for at least six months. If people are taken off the live register after six months, they are protected from becoming long-term unemployed. Such people are put into work, which is exactly where many of them want to be. The employer does not have to pay the PRSI for them. That scheme costs €3.3 million for every 1,000 people who participate in it. We reckon that it could cost a significant amount of money this year. It will have the exact effect that the Deputy wants to achieve. It will ensure that people get back into work, rather than staying on the live register for too long.