Róisín Shortall (Dublin North West, Labour)
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Question 816: To ask the Minister for Social and Family Affairs the basis on which it is estimated that €21,000 is the average cost in welfare payments and lost taxes for every person who loses his or her job and signs on the live register; the secondary benefits that are included in reaching this estimate; and if the cost of redundancy payments has been factored into this estimate. [38362/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Earlier this year, my Department estimated that the additional cost in social welfare payments of each 1,000 on the live register (LR) amounted to approximately €12.95 million in respect of jobseekers payments and secondary benefits. The Department of Finance estimated that lost tax revenue amounted to around €8 million in a full year for each 1,000 loosing employment. Combined these estimates amounted to €20.95 million giving the basis for the figure of €21,000 per person mentioned in the question.

The cost of increased jobseekers payments was based on the estimated average cost of each 1,000 additional claimants of jobseekers benefit (JB) and jobseekers allowance (JA) in 2008. As part of this exercise, the predicted average live register figure for the year was adjusted to include those eligible for JA or JB but who are not recorded on the LR such as systematic short-term workers, those over 65 years of age and the formerly self employed. People signing on the live register for social insurance credits only were deducted and some provision was also made for the estimated average number of claims which are not likely to be in payment during the year because they are pending a decision.

The secondary benefits which were included in the estimate were Supplementary Welfare Allowance Basic Payments, Rent and Mortgage Interest Supplements, Exceptional and Urgent Needs Payments and Back to School Clothing and Footwear Allowance. Where the data were not available, the cost was based on the percentage of recipients receiving these secondary benefits who were in receipt of a jobseekers payment. Insolvency and redundancy payments were not included in the estimate.

The cost of rising unemployment on social welfare expenditure is influenced by the composition of the live register. The actual impact at any one time depends on the particular circumstances of the individuals concerned such as whether the claimant is married or single, has children or not, is fully unemployed or on reduced working hours, their social insurance contribution history or any other income or means that they may have. Over time the average cost will change reflecting the changing dynamic of unemployment.

The situation in relation to tax revenues is a matter for my colleague, the Minister for Finance.