Written answers

Tuesday, 26 March 2013

Department of Social Protection

Social Welfare Code Issues

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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To ask the Minister for Social Protection the way she intends to incentivise taking up additional days at work for part-time workers (details supplied). [14772/13]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The current total of 424,617 persons on the Live Register includes over 80,000 casual workers in receipt of jobseeker’s allowance or jobseeker’s benefit.

It should be noted that the great majority of people on the Live Register have a strong financial incentive to work and significant numbers leave the register each year for employment. Indeed, for many unemployed people, unemployment is a short-term experience and the jobseeker’s schemes have an important role to play in supporting people through periods of involuntary unemployment.

The replacement rate for given income levels measures the proportion of out-of-work benefits received when unemployed against take home pay if in work. While there is no pre-determined level of replacement rate, which would influence every individual’s decision to work, clearly the higher the replacement rate, the lower the incentive to work. A replacement rate in excess of 70% may be considered to be excessive as the higher the replacement rate the greater the disincentive to take up offers of employment.

The comparison of an individual’s total income on a jobseeker’s payment with total income equivalent to two thirds the average industrial earnings shows that;

- 82% of Live Register claimants have a replacement rate of less than 60%;

- 12% of Live Register claimants have an RR above 60% but less than 70%; and

- 6% of Live Register claimants have an RR above 70% but less than 80%

This demonstrates that for the overwhelming majority of social welfare recipients, replacement rates are relatively low and therefore availing of an employment opportunity is financially worthwhile. This finding is supported by analysis conducted by the ESRI.

I recognise that a changing labour market has resulted in a move away from the more traditional work patterns, with a consequent increase in the number of casual workers. In fact, the number of casual workers in receipt of a jobseeker’s payment has increased more than four-fold over the last seven years. In acknowledgement of this trend, my Department is considering the future structure of the jobseeker schemes. A key feature of this work will be ensuring that social welfare recipients, including those who work part-time, continue to have a significant financial incentive to avail of an employment opportunity.

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