Jack Wall (Kildare South, Labour)
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Question 96: To ask the Minister for Finance if he will estimate the number of people he expects to be on the live register by the end of 2009 and by the end of 2010; the percentage of the workforce he expects to be on the live register by the end of 2009 and by the end of 2010; the average cost to the Exchequer in social welfare costs and tax revenue foregone of each additional person on the live register on a full year basis; and if he will make a statement on the matter. [6351/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In the Addendum to the Stability Programme Update, the unemployment rate is forecast to average 9.2% this year and 10.5% next year. The corresponding numbers on the Live Register for this year are for an average of 340,000, reaching 400,000 by the end of the year. In terms of next year, the number on the Live Register was forecast to average 420,000. The end January figures, which have become available since the Addendum was published, show a seasonally-adjusted total of 326,000 people on the Live Register. It is important to note that the Live Register is not designed to measure unemployment as it includes part-time workers (those who work up to three days a week), seasonal and casual workers entitled to Jobseekers Benefit or Allowance. Unemployment is measured by the Quarterly National Household Survey.

Job losses have an impact on the Exchequer finances in two ways — through additional social welfare costs and reduced tax revenue. The exact additional cost depends on individual circumstances; for example, whether the individual is married or single, whether he/she is signing on with the Department of Social and Family Affairs for full benefits or signing on due to reduced working hours, and — crucially, in terms of tax foregone — on the amount of income that they would have previously been earning.

With regard to social welfare payments, it is estimated by the Department of Social and Family Affairs that each 1,000 increase in the Live Register in 2008 added €11.55 million to expenditure on Jobseeker Allowance and Jobseekers Benefit payments and in 2009 will add €11.77 million. Receipt of secondary benefits is linked to the circumstances of individuals and as such it is very difficult to disaggregate jobseekers from other social welfare recipients in receipt of such benefits. With regard to the loss of tax and PRSI revenue, a specific cost is not possible to compute without knowing the specifics of each individual's personal circumstance. However, based on a number of assumptions outlined below, an overall aggregate estimate of the likely tax foregone for every 1,000 people losing employment is approximately €8 million in a full year, based on 2008 figures.

The assumptions underlining this figure are:

The 1,000 workers are made up of workers earning the minimum wage, the average industrial wage and twice the average industrial wage;

There is a 30:55:15 distribution between those earning the minimum wage, average industrial wage and those earning twice the average industrial wage, broadly reflecting the economy wide situation; and

The breakdown by marital status also broadly follows the economy wide breakdown.

No account is taken of the following:

Employees' pension contributions or other salary sacrifice arrangements;

Minor tax credits or income tax reliefs such as health expenses relief, rent relief, trade union subscriptions;

The impact of any redundancy packages;

Whether the employee takes up alternative employment in the tax year; and

The timing of the job losses within the tax year.

The above factors are crucial in determining the actual cost in any one year and could reduce the cost significantly in that year.