Paul McGrath (Westmeath, Fine Gael)
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Question 9: To ask the Minister for Social and Family Affairs the expected increase in take-up of the back to work allowance in 2006 since the qualifying period was reduced in budget 2006; and if he will make a statement on the matter. [4674/06]

Séamus Brennan (Dublin South, Fianna Fail)
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The back to work allowance scheme, which was introduced in 1993, is part of my Department's programme of initiatives designed to assist long-term unemployed, lone parents and other social welfare recipients to return to the active labour force.

There are two strands to the scheme, the back to work enterprise allowance for self-employment and the back to work allowance for employees. In budget 2006 the qualifying period for unemployed persons was reduced to two years for both strands of the scheme effective from 1 March 2006. It is estimated that a further 2,700 persons will access the scheme in 2006 as a result of this change.

The allowance was introduced at a time when long-term unemployment stood at 8.9%. In its early years the scheme proved very effective in helping people who had been long-term unemployed to return to the labour force. However, changes in labour market conditions since the mid-1990s has reduced the need for the scheme. This is illustrated by the drop in numbers availing of it in recent years. At present there are 8,770 participants in the scheme, compared to 39,343 in October 2000 when the scheme reached its peak.

The scheme was reviewed in 2002 in the light of economic and labour market changes and, in particular, the drop in unemployment levels since its introduction in 1993. The review also took account of an evaluation of the scheme by independent consultants. They recommended that the scheme should be restructured in the light of changes in the labour market.

In January 2003, the qualifying period for persons accessing the scheme from an unemployment payment was increased to five years. People coming from other social welfare qualifying scheme payments were not affected by this change.

In recognition of the difficulties being experienced by some persons wishing to enter self-employment after five years attachment to the live register the qualifying period for access to the enterprise strand of the scheme was reduced to three years with effect from March 2004. Access to the employee strand of the scheme from an unemployment payment was not affected by this change and remained at five years.

I recognised that some people were experiencing some difficulties returning to the labour force after five years of attachment to the live register. To address these difficulties I reduced the qualifying period to two years for both the employment and self-employment strand.

I view the scheme as a highly important support in the range of active labour market programmes available to the unemployed to assist entry and return to the workforce. I will continue to monitor its impact and adapt it as necessary to ensure that it delivers maximum supports to those accessing the scheme.