Lucinda Creighton (Dublin South East, Fine Gael)
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Question 158: To ask the Minister for Social and Family Affairs the qualifying criteria and the new payment scheme in respect of jobseeker's benefit; and if she will make a statement on the matter. [35623/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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As the Deputy will be aware, Ireland's social welfare system is based on two quite different types of entitlement — a social insurance system for people who have paid sufficient PRSI contributions and a social assistance system for people without adequate contributions who have little or no household means of their own.

Social insurance is intended both to enable people to insure themselves against adverse life events such as illness or unemployment and to provide for their state pensions and other benefits, through contributions to the national Social Insurance Fund. Social insurance benefits are not means-tested. Instead, entitlement depends on having paid the required number of PRSI contributions relevant to the particular benefit you wish to claim.

For the past eleven years, the Social Insurance Fund has been in surplus, with more than sufficient income to the fund to cover the payments being made from it each year, without the State having to provide a subsidy. However, that is changing. As a result of further increases in the live register, expenditure is expected to exceed income to the Fund by over €200 million this year and about €900 million next year. Although these current deficits can be met from the accumulated surplus, it looks likely that the Exchequer may yet again have to subsidize expenditure from the Social Insurance Fund within a few years.

In that context, it is appropriate to look at some of the instances where people with a very limited or distant contribution record have been able to qualify for very significant benefits, regardless of their household income.

Currently, people who have paid just 52 contributions in total can qualify for jobseekers benefit, illness benefit and health and safety benefit. This means, for example, that migrants or young workers who have only worked here for a total of one year are entitled to claim jobseekers payments for 12 months, without having to satisfy a means test. This will change from next January, when the number of required paid contributions will be doubled to 104 for new claimants.

A further anomaly that exists at present is that some people, who were previously working part-time, can receive a higher rate of payment from these schemes than what they were actually earning whilst at work. Again, this is considered to be inappropriate — a disincentive to employment — and so, and from next January, this situation will be addressed by increasing the earnings thresholds which currently apply to the reduced or graduated rates of payment from €150 to €300 per week.

At present, it is necessary to have made 13 paid contributions in the relevant tax year in order to qualify for illness benefit. However, this condition does not exist for jobseekers benefit, with the result that people who may not have paid PRSI contributions in the past number of years can qualify. Again, it is considered that this position does not adequately reflect the contribution-based rationale for social insurance and so from next January, new claimants for jobseekers benefit will be required to satisfy the same conditions as those on illness benefit and must have paid 13 contributions in the relevant tax year.

The other two changes being made to jobseekers benefit relate to the duration of the payment. At present, people who have 260 or more paid social insurance contributions can receive jobseekers benefit for up to 15 months. As of today, this is being limited to 12 months for current claimants with less than six months duration on the scheme as well as all new claimants. Where the claimant has less than 260 paid contributions, the maximum duration of jobseekers benefit will be 9 months (instead of 12 months) if the claimant currently has been in receipt of benefit for less than three months and in respect of all new claimants.

In summary, new claimants for jobseekers benefit will in future have to have paid a total of at least 104 contributions to the Social Insurance Fund, with at least 13 of these paid in the relevant tax year. The rate of payment will more closely reflect what the individual was earning prior to becoming unemployed and the duration of the payment will be either 12 or 9 months depending on the number of social insurance contributions they have made in the past.

Taken together, these changes to jobseekers, illness and health & safety benefits are expected to generate €72.7 million in savings next year and €119 million a year from 2010 on.

I would like to stress that people who will be affected by these changes will be able to claim jobseeker's allowance or supplementary welfare allowance instead, if they have limited means. The maximum rate of these two schemes is paid at the same rate as jobseekers benefit.