Denis Naughten (Roscommon-South Leitrim, Independent)
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31. To ask the Minister for Social Protection her plans to ensure that persons are financially better off in employment than they are on welfare; and if she will make a statement on the matter. [24628/15]

Joan Burton (Dublin West, Labour)
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My Department is actively engaged in supporting job seekers of working age to avail of opportunities to get back to work.

The ESRI Report “Making Work Pay More: Recent Initiatives” published this week, finds that the majority of jobseekers have a strong financial incentive to take up employment. The analysis shows that almost 80% of jobseekers would see their income increase by at least 40% on taking up employment and six out of ten would double their income. In addition they find that, of the small number of people who would be better off on welfare than in work, close to five out of six still chose to work.

The back to work family dividend (BTWFD), which I introduced in Budget 2015, improves the work incentives of unemployed jobseekers with children. The scheme allows unemployed jobseekers with children, as well as one-parent family payment recipients, to keep the increases for qualified children they were receiving on their payment for up to a year when they take up employment. They can keep half of that amount for their second year in employment. This means that during the first year of employment a former jobseeker or one-parent family payment recipient can receive €1,550 per child.

The ESRI report finds that in the first year of the BTWFD the proportion of families with children facing a replacement rate of over 70% fell from 39% to 32%. They also find that the BTWFD results in the proportion of jobseekers that would be financially better off not working decreases from 1 in 15 to 1 in 20.

As the BTWFD is paid on top of an individual’s entitlement to the family income supplement it is very effective in further improving the work incentives for people with children.

It is therefore clear that work pays with more than 100,000 additional people now at work and unemployment has fallen by over a third since the peak of the crisis.