Written answers

Tuesday, 21 February 2017

Department of Social Protection

Employment Support Services

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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322. To ask the Minister for Social Protection the extent to which he and his Department have examined issues preventing or discouraging unemployed persons from obtaining employment; if he has examined various schemes available to his Department with a view to ensuring adequate incentivisation; and if he will make a statement on the matter. [8794/17]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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The main social welfare schemes offered by my Department for unemployed persons are the jobseeker’s allowance and benefit schemes. Both the jobseeker’s benefit and the jobseeker’s allowance schemes provide significant support to unemployed persons so that they can work up to 3 days a week and still retain access to a reduced jobseeker’s payment.

In addition to the two jobseeker’s schemes my Department’s main in-work support is the family income supplement (FIS), which targets families with children on low incomes and who work at least 19 hrs per week. The payment effectively preserves the incentive to take up or remain in employment in circumstances where the employee might only be marginally better off than if s/he were claiming other social welfare payments.

Where a long term unemployed jobseeker is offered employment of more than 3 days but less than 24 hours a week, they may be eligible for the part-time job incentive scheme. Under this scheme they can receive a weekly payment of €119 per week if they are single or €193.90 if they have an adult dependent.

My Department is also currently analysing incentives to work in the social welfare system for jobseekers with children with a view to developing the Working Family Payment. The two main principles guiding the development of the Working Family Payment are to make work pay and to reduce child poverty.

This analysis is supplemented by research from the ESRI, which shows that people are better off in work than on welfare. The ESRI research, based on an analysis of current incomes, benefits and taxes, demonstrates that more than eight out of ten unemployed jobseekers would see their income increase by at least forty per cent upon taking up employment. Fewer than three per cent would, in the short-term, be financially better off not in work.

The risk of facing weak financial incentives to work is higher for unemployed persons with a spouse and children, as the income support goal of the welfare system means that they tend to have higher welfare payments. However, even among that group, fewer than one in fifteen would be financially better off not working. With the introduction of the Back to Work Family Dividend (BTWFD) scheme, that figure drops to one in twenty.

The combination of jobseekers, FIS, BTWFD and the part-time job incentive schemes provides considerable income support for individuals who have part time employment by allowing them retain access to a social welfare payment.

Reflecting the impact of government policy, and the overall improvement in the labour market, long term unemployment continues to fall. The most recent data show that unemployment has fallen from a peak of 15% in 2012 to 7.1% in January 2017.

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