The unemployed

ronbyrne2005

irish indo article,i think people should work even if they lose money ,its the only way they will better themselves

LAST week's Budget contained very few flaws. It was designed to be generous and please as many people as possible, and it has largely succeeded. But a serious defect has emerged which arises out of its very generosity.

In the 12 months to last June, average industrial wages have risen by 2.4pc, but basic social welfare rates have been rising annually by over 10pc. The social welfare increases announced in the Budget create a "poverty trap" of such proportions that an unemployed man with a wife and children could lose up to €7,300 a year by taking a job. Taking in the latest increases, a married couple with three children will receive €326 a week in benefits. This does not include benefits which are not means tested - or the rent supplement, a crucial point.

If either adult in the household takes a job at the minimum wage, he or she will earn €306 for a 40-hour week. Family income supplement will take the figure to €461 a week. But losing the rent allowance could make the family €141 a week, or €7,332 a year, worse off in a job than on the dole.

This is a hypothetical case, and actual situations would doubtless be somewhat different or very different. Nevertheless, it remains the fact that a substantial loss of income from substituting work for unemployment is a possibility.

Two principles here come into apparent conflict. In a society which is both affluent and caring, there can be no question of depriving those who depend on social welfare, children in particular, of decent standards. Whether this is achieved through family income supplement, or child benefit, or any other means, is a separate argument.

At the same time, however, it most certainly is not right, that people should lose money by going to work. The authorities could usefully look at one area in particular.

Threshold, the housing organisation, regards €1,200 a month as a typical rent for a Dublin house. That is surely an extortionate rent in any but the most sought-after areas. If it is indeed typical, the Government and the local councils should take steps to increase the supply.

But that is not the core of the question. The great majority of people want to work for many reasons, not least self-respect. And society needs their contribution. They should not be discouraged or penalised - and they should not be trapped

Captain Trips

ronbyrne2005 wrote:

irish indo article,i think people should work even if they lose money ,its the only way they will better themselves

LAST week's Budget contained very few flaws. It was designed to be generous and please as many people as possible, and it has largely succeeded. But a serious defect has emerged which arises out of its very generosity.

In the 12 months to last June, average industrial wages have risen by 2.4pc, but basic social welfare rates have been rising annually by over 10pc. The social welfare increases announced in the Budget create a "poverty trap" of such proportions that an unemployed man with a wife and children could lose up to €7,300 a year by taking a job. Taking in the latest increases, a married couple with three children will receive €326 a week in benefits. This does not include benefits which are not means tested - or the rent supplement, a crucial point.

If either adult in the household takes a job at the minimum wage, he or she will earn €306 for a 40-hour week. Family income supplement will take the figure to €461 a week. But losing the rent allowance could make the family €141 a week, or €7,332 a year, worse off in a job than on the dole.

This is a hypothetical case, and actual situations would doubtless be somewhat different or very different. Nevertheless, it remains the fact that a substantial loss of income from substituting work for unemployment is a possibility.

Wow! That's very interesting. I had no idea the disparity between being on welfare and working could amount to such a big amount. WOuld it be better if government matched minimum wage to what benefits most get, so it would be the same but doing something?

Nevyn

And that is the rent allowances alone never mind the medical cards for the entire family covering dr and perscriptions.

Hobbes

No offense but "€326 a week in benefits" is total crap amount of money for a married with children family.

For one person working 40 hours a week on minimum wage they will make €306. They will get benifits on top of that as well as now tax free. If both parents are not working they only get 326?

I think the figures are a bit screwy.

Nevyn

http://oasis.gov.ie/employment/pay_and_employment/family_income_supplement.html#id3142237

el Bastardo

Is the dole rate linked to the minimum wage? It certainly should be IMO. It would hardly make sense to give people greater benefits than they would get if they had to work for it.

Hobbes

Missed this bit: "This is a hypothetical case, and actual situations would doubtless be somewhat different or very different. ".

Which would explain that this is probably not the norm calculation.

seedot

This makes the case for a basic income in the form of refundable tax credits to replace social welfare.

An examination of the social welfare system back in the early to mid 90's agreed that this would be the best way to avoid poverty traps, but it would was seen as too expensive to implement. This would surely be a good time to bring it in rather than paying people for unemployment and having such huge drops in support / benefits as soon as they start to work.