Noel Grealish (Galway West, Independent)
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422. To ask the Minister for Social Protection if he will consider setting up a task force to find solutions to the problem of persons on social protection payments facing so many disincentives, through loss of benefits, that they feel they cannot return to work; his plans to rectify this situation; and if he will make a statement on the matter. [27112/16]

Leo Varadkar (Dublin West, Fine Gael)
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Government has already taken a number of steps in terms of examining these issues and putting measures in place to address them.

The Programme for Government; the Comprehensive Employment Strategy for those with a disability; and an entire strand of The Pathways to Work 2016-2020 labour market activation strategy all commit to actions to ensure that work pays. In addition, the Back to Work Family Dividend (BTWFD), introduced in Budget 2015, is very effective in further improving the work incentives for people with children.

The ESRI Report “Making Work Pay More: Recent Initiatives” found 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 Government recognises, however, that additional efforts are needed. The Programme for Government contains commitments to improve the take-home pay of families on low-incomes. One of the most significant is the proposed ‘Working Family Payment’ targeted at low-income families. Over the course of the next four months, we will develop proposals for the new payment. In doing so, we will be guided by two principles. First, that it should ensure that work pays and that no family is better off on welfare than at work, and second, though equally important, that it has a positive effect on child poverty.

Making Work Pay cannot just be about welfare payments and top-ups. It also has to tackle low pay. The Programme for Government also commits to supporting an increase in the minimum wage. The Government will also strengthen the role of the Low Pay Commission to examine the gender pay gap and strengthen regulations on precarious work.

The ESRI report found 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.

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.

In respect of people with disabilities the Government’s Comprehensive Employment Strategy for People with Disabilities sets out a ten year approach to ensuring that people with disabilities, who could and want to work, are supported and enabled to do so. Strand 3 of the Strategy, which my Department is leading [and which my colleague Minister McGrath is progressing], sets out the work programme which addresses many of these issues.

Under Strand 3 of the Strategy an interdepartmental group has been set up under an independent chair, Professor Frances Ruane, to prepare and submit a report to Government by the end of this year.

The interdepartmental group is examining the interaction between:

- social welfare income supports (including secondary benefits),

- the tax system

- other supports (including the medical card) and

- net income from employment.

In addition, the group will identify any significant disincentives for people with disabilities in taking up or in returning to work and make recommendations accordingly; the analysis will include consideration of options around ensuring that people with disabilities have a streamlined way to resume their disability payment and other supports, in the event that there is a deterioration in their condition or that they have to leave the job. The group has been charged with ensuring that options recommended are fully aligned with the “Pathways to Work” labour market activation agenda.

I am confident these measures will help to ensure that work pays for low-income families, those with a disability and others that may otherwise face financial disincentives in moving into employment.