The Dole - 'Allowance' or 'Benefit'

Gurgle

I'm trying to get my head around some figures that don't seem to add up.

There are as many people employed in the country now as in 2004. Then it was "Celtic Tiger Boom" time, now its "We're doomed, we're fùcked, we're broke".

So off we go crunching through some numbers.

The total labour market in Ireland is around 2.2 million people (link). Approx 400k are unemployed, so there are ~1.8 million working.

The total number of private households is ~1.5 million (as of 2006 census, best I could do)(link).

So thats an average of 1.2 working people per household.

Jobseekers Benefit is not means tested, entitlement is based on PRSI contributions. In other words, even if your spouse is earning €500k you can get jobseekers benefit for a year after you become unemployed - i.e. you are on the live register.

After that year, Jobseekers Benefit runs out and you are means tested for Jobseekers Allowance. From here

The means test for Jobseeker’s Allowance can be a complex calculation.

:rolleyes:

Anyhow, assuming a spouse earning average industrial wage of ~€32k is over the limit - your average unemployed builder whos wife is an average industrial wage earner will not be getting Jobseekers allowance.(Obviously, there are a lot of skewing factors - there will be many households with 2 people still employed and many with none. A fair proportion of those who have lost their jobs will have been the only earners in the household, and there will be many cases where both partners worked for the same employer.)

Another angle is redundancy payments. If you've worked 48 weeks per year for the last 15 years then you're made redundant with €50k in your back pocket, your PRSI contributions give you a year on the dole without any means testing - how much of a hurry are you in to take a new job (probably at lower wages, i.e. less than you believe you are worth)?

And yet another angle is property and savings: These are part of the means test for jobseekers allowance. You may have lost your job, but you're still pulling in rent from the house in Athlone and the apartment in Alicante.

So, here's my hypothesis:
1) A whole heap of people will run out of time on jobseekers benefit, fail to qualify for jobseekers allowance and fall off the live register.

2) Another heap of people will see their redundancy cash running out and start looking at positions and salaries they wouldn't have considered before.

I can't find any useful data for the whens and how manys of job losses over the last 18 months, but the rate seems to have gone way down in the last 6 months. This suggests that in the next 6 months there will be a major reduction in the numbers on the live register even if no new jobs are created.

Opinions?
Comments?
(Please do not even mention the public sector vs private sector crap,this is about the true state of the economy as a whole)

Paulzx

Gurgle wrote: »

Opinions?
Comments?
(Please do not even mention the public sector vs private sector crap,this is about the true state of the economy as a whole)

Best of luck with that bit:D:D:D

ei.sdraob

there is one difference between now and 2004

1. a subset of the people who still are in employment now are either working half weeks or/and also had to take on severe pay cuts (why in the private sector of course )

2. are you sure unemployment as proportion of the population was as high in 2004?

3. lets not forget that there is a 1/5th of the unemployed who can be classed as "long term spongers" and didnt bother getting a job at peak and have no chance now

ei.sdraob

http://www.statusireland.com/statistics/most-popular/31/Seasonally-Adjusted-Standarised-Unemployment-Rates-SUR.html

i dont know where you pulled 2004 out of


there wasnt this many unemployed since 1995

thats before Celtic Tiger Era #1


it gets worse > http://www.statusireland.com/statistics/finacial-statistics-for-ireland/28/Irish-Live-Register-Figures.html

Gurgle

ei.sdraob wrote: »

there is one difference between now and 2004

1. a subset of the people who still are in employment now are either working half weeks or/and also had to take on severe pay cuts

1) Link to stats or it didn't happen.
2) Even if it did, so what? As per the rest of my post - if you're over the means test limit you don't get unemployment assistance.

ei.sdraob wrote: »

2. are you sure unemployment as proportion of the population was as high in 2004?

Thats exactly my point.
There are the same number of people working, but 300,000 more on the dole right now.

ei.sdraob wrote: »

3. lets not forget that there is a 1/5th of the unemployed who can be classed as "long term spongers" and didnt bother getting a job at peak and have no chance now

Yes, they were there in 2004 too.

ei.sdraob

once again i dont see where you got 2004 from

http://www.statusireland.com/statistics/most-popular/31/Seasonally-Adjusted-Standarised-Unemployment-Rates-SUR.html

This is the seasonally adjusted number of people on the live register. It shows the percentage of labour force and are unemployed.

Source: Central Statistics Office

there haven't been this % of unemployed since '95

Gurgle

ei.sdraob wrote: »

once again i dont see where you got 2004 from

http://www.statusireland.com/statistics/most-popular/31/Seasonally-Adjusted-Standarised-Unemployment-Rates-SUR.html



there haven't been this % of unemployed since '95

For the third time in as many posts:
There are as many people employed in the country now as in 2004

ei.sdraob

Gurgle wrote: »

For the third time in as many posts:
There are as many people employed in the country now as in 2004

but now there are more unemployed and a lot more under employed, your forgetting that population size is not static hence % unemployed hasnt been this large since 1995




as per stats below (figure doesnt include people on disability and some other forms of welfare)


some stats from CSO (someone want to do %ages of full/part/un employment?)


unemployed 15+:

2004q2 = 87,800
2009q2 = 264,600



employed full time:

2004q2 = 1,852,200
2009q2 = 1,938,500




employed including part time:

2004q2 = 1,940,000 (87,000 under employed)
2009q2 = 2,203,100 (264,600 under employed)

cavedave

Anyhow, assuming a spouse earning average industrial wage of ~€32k is over the limit - your average unemployed builder whos wife is an average industrial wage earner will not be getting Jobseekers allowance.

So take a standard couple. On 36K your take home pay will be about 580 a week and get no jobseekers allowance*. Now this is a good wage.
Both of you jobseekers allowance get 204
Rent allowance up to 92
Fuel allowance, medical card, bin allowances and a few others. say 20 euro a week.

So working 40 hours in a good job earns a couple 560 not working about 630. And that is 36k not 32k. So what is the point for the average worker working if their partner is unemployed?

Tipp Man

cavedave wrote: »

So take a standard couple. On 36K your take home pay will be about 580 a week and get no jobseekers benefit. Now this is a good wage.
Both of you jobseekers assistence get 204
Rent allowance up to 92
Fuel allowance, medical card, bin allowances and a few others. say 20 euro a week.

So working 40 hours in a good job earns a couple 560 not working about 630. And that is 36k not 32k. So what is the point for the average worker working if their partner is unemployed?

Great point and i think that a lot of people who have suffered a job loss in the household are thinking the same, especially if they can get a good redundancy package.

Everyone is different but it is defo something people need to consider, which is reality is a very sad reflection on this country, promoting people not to work. When is this idiotic level of social welfare going to end??

Tipp Man

Gurgle wrote: »

For the third time in as many posts:
There are as many people employed in the country now as in 2004

so what??

there are 300k MORE unemployed, and as per ei.sdraob's post the %age has risen from 4.4 to 11.6 and rising. i don't get your point

This larger number coupled with increases in the social welfare per claimant and large increases in public sector numbers and wages means that we as a country are in big trouble

Liam Byrne

Gurgle wrote: »

For the third time in as many posts:
There are as many people employed in the country now as in 2004

I know someone who's on a one-day week; do they count ?

Gurgle

I'll make one final effort at my point, then give up.

I think a significant percentage of the 400k unemployed are on jobseekers benefit and won't qualify for jobseekers allowance when jobseekers benefit runs out.

Is it an attention span problem?
Was my first post too long?

baalthor

Gurgle wrote: »

So, here's my hypothesis:
1) A whole heap of people will run out of time on jobseekers benefit, fail to qualify for jobseekers allowance and fall off the live register.

The official unemployment rate is determined by the Quarterly National Household Survey, not the Live Register. So people coming off the Live Register does not mean that the unemployment rate falls. (More details on QNHS versus Live Register)

A wealthy unemployed person is still an unemployed person.

You might say: who cares so long as we don't have to pay them welfare?

Well first, the less likely they are to qualify for JSA mean the more likely it was that they paid a higher than average amount of Income Tax. Therefore the state has lost the income tax they would have paid while working.

Take Bill and Bob for example. Bill earned 30k per annum and Bob (the builder?) earned 130k. Bill's (relatively) low income meant that he contributed very little income tax to the state. Bob on the other hand might have paid say 60k per annum.

Now both are unemployed and have used up their PRSI. Bill gets full JSA of 10k per annum and Bob (cos he's still got money) gets 0.

So as you can see, unemployed Bill costs the state 10k, while unemployed Bob costs the state 60k through foregone income tax.

And for the dual income household you mentioned the remaining income now has to cover an additional person so the household will cut back on purchases and/or go shopping in the North which again is not good news for the economy here.

Gurgle wrote: »

2) Another heap of people will see their redundancy cash running out and start looking at positions and salaries they wouldn't have considered before.

How is this relevant?

It just means that the number of applicants for available jobs will rise. If the total number of jobs available doesn't increase (which it won't until growth returns to the economy) then there won't be a decrease in the unemployment rate.

Gurgle wrote: »

I can't find any useful data for the whens and how manys of job losses over the last 18 months, but the rate seems to have gone way down in the last 6 months. This suggests that in the next 6 months there will be a major reduction in the numbers on the live register even if no new jobs are created.

You can read Constantin Gurdgiev's view on the Live Register figures here

Gurgle

Thanks for the info, it certainly sheds some light though it doesn't really answer my questions...

baalthor wrote: »

A wealthy unemployed person is still an unemployed person.

You might say: who cares so long as we don't have to pay them welfare?

Well first, the less likely they are to qualify for JSA mean the more likely it was that they paid a higher than average amount of Income Tax. Therefore the state has lost the income tax they would have paid while working.

Well yes, we're not going to have the same tax income as e.g. December
2007 as there are a lot of people out of work.

But it still seems there will be a major reduction in what it costs the state:

Average industrial wage is €32k or so, which after credits etc results in PAYE of ~5k (ish).

Jobseekers benefit is €10k pa.

If you consider an extreme example:

100,000 people lose their jobs one day, 80,000 of them have another source of income to the household.

For the next year, the state is down the tax intake from these people and the jobseekers benefit paid to them.

For that first year, the cost to the state of those 80,000 is €1.2 billion.

The following year, assuming they all remain unemployed and their spouses all continue working, that cost is reduced to €400 million - i.e. the missing PAYE.

jeckle

cavedave wrote: »

So take a standard couple. On 36K your take home pay will be about 580 a week and get no jobseekers allowance*. Now this is a good wage.
Both of you jobseekers allowance get 204

The full JA rate for a couple is €339.90

cavedave

The following year, assuming they all remain unemployed and their spouses all continue working, that cost is reduced to €400 million - i.e. the missing PAYE.

But will spouses remain working if it means having less money? There are many reasons to work but earning money is probably the major one.

cavedave

jeckle

The full JA rate for a couple is €339.90

True even at 340 rather then 410 someone on 32k and less has marginal benefit working. Thsi is assuming the rent allowance stays the same for a couple. If a couple decide to no longer be a couple they earn more money? That seems an odd incentive. It probably isnt in societies interest to punish people who want to make long term commitments to each other.

jeckle

cavedave wrote: »

Thsi is assuming the rent allowance stays the same for a couple.

Well yes, as they can only claim one rent allowance. Of course your assuming that they are renting, & not repaying a mortgage, in which case they can claim a Mortgage Interest Supplement, which is means tested (using the interest portion of the repayments) in much the same manner as rent allowance, is only a temporary payment, & only provides assistance with the interest portion of the repayments - the capital portion still has to paid to the bank, leaving the recipients with sfa to live on.

cavedave wrote: »

If a couple decide to no longer be a couple they earn more money? That seems an odd incentive.

Do you think there should be an incentive to claim social welfare?

cavedave wrote: »

It probably isnt in societies interest to punish people who want to make long term commitments to each other.

I know, just look at the Civil Partnership debacle!

cavedave

jeckle
Do you think there should be an incentive to claim social welfare?

I am not sure I understand you. I believe Social welfare should prevent people from living in extreme hardship.

baalthor

Gurgle wrote: »

Thanks for the info, it certainly sheds some light though it doesn't really answer my questions...

Well yes, we're not going to have the same tax income as e.g. December
2007 as there are a lot of people out of work.

But it still seems there will be a major reduction in what it costs the state:

Average industrial wage is €32k or so, which after credits etc results in PAYE of ~5k (ish).

Jobseekers benefit is €10k pa.

If you consider an extreme example:

100,000 people lose their jobs one day, 80,000 of them have another source of income to the household.

For the next year, the state is down the tax intake from these people and the jobseekers benefit paid to them.

For that first year, the cost to the state of those 80,000 is €1.2 billion.

The following year, assuming they all remain unemployed and their spouses all continue working, that cost is reduced to €400 million - i.e. the missing PAYE.

Well I guess the key point as you've said is the % of JSB who don't convert to JSA but who remain unemployed.

Will this % make a significant difference to the total unemployment bill or the numbers on the Live Reg?

I will have a look out for any stats that could help answer this but probably not tonight as its been a long day and I'm watching Jordan on the Late Late now - although maybe the stats would be more entertaining !

dresden8

baalthor wrote: »

Well I guess the key point as you've said is the % of JSB who don't convert to JSA but who remain unemployed.

Will this % make a significant difference to the total unemployment bill or the numbers on the Live Reg?

I will have a look out for any stats that could help answer this but probably not tonight as its been a long day and I'm watching Jordan on the Late Late now - although maybe the stats would be more entertaining !

If somebody finishes on jobseeker's benefit and doesn't qualify for allowance they should and do sign for "credits", in which case they stay on the live register but do not get a payment.

Anybody who fails a means test should always sign for their credits, they may qualify you for your pension or other social welfare benefits in the future.

They're the "other registrants" in table 1a.

http://www.cso.ie/releasespublications/documents/labour_market/current/lreg.pdf

baalthor

Looking at Table 1A in the CSO document, there was a fall of 15,691 in JSB claimants in September.

If this was repeated every month for 6 months with no change in the JSA figures then this would give a unemployment benefit spend reduction of around €1bn (per annum).

As I understand it though, the fall in September was attributed to seasonal issues.

Another thing to consider is that people who don't qualify for JSA now, may qualify in the future as they use up their cash and assets.

So for a saving of €1bn per annum based on JSB not qualifying for JSA we would need:

1. The 180,000 now receiving JSB to fall by 50% - ie 50% of JSB claimants would not qualify for JSA

2. No significant increases in unemployment

3. No significant numbers of people converting from "Other" to JSB

Caoimhín

I read in the Times lately that there has been over 25k visas issued for Australia alone in the past 12 months. Add that to all the builders gone to London/UK, people moving to Canada and the US. Many people were signed onto FAS courses therefore keeping the live register figure down and many self employer people simply never qualified.

I would like to know the figure for jobs lost in the past 18 months, that would probably show why there is such a hole in the revenue finances (among other obvious things).

dresden8

http://www.cso.ie/releasespublications/documents/labour_market/current/qnhs.pdf

This gives some commentary on annual changes rather than over the longer period.

Less participation, non-nationals not in the labour force etc.

Gurgle

Caoimhín wrote: »

Many people were signed onto FAS courses therefore keeping the live register figure down

Explain?

Caoimhín

Gurgle wrote: »

Explain?

As far as i am aware, once you begin a FAS course, you are not counted as on the live register.

Gurgle

Caoimhín wrote: »

As far as i am aware, once you begin a FAS course, you are not counted as on the live register.

When you're doing a training course... like ECDL, Carpentry for Beginners... you're taken off the live register?

Are you sure about this?

Caoimhín

Gurgle wrote: »

When you're doing a training course... like ECDL, Carpentry for Beginners... you're taken off the live register?

Are you sure about this?

As far as I know, yes.

_Kooli_

OP, i see what you are saying.
And thank you. You have made me think about this and made me feel that i would be happy enough if i got the chop.

There is another scenario, like my own.
Both myself and the other half are working.
Since we realized that things might take a turn back at the start of 2008 we have put all of my wages (the higher wage - we spend none of it) away into the bank, with the result that there is a nice chunk of money in there now. We used to save a lot already anyway.

So if one of us loses our job we have a nice cushion:

- We would start off with a nice lump of money in savings already. Several years wages.

- We have gotten used to living on one wage very comfortably now. We even save some of that one too.

- If i am made redundant i will get a nice lump sum + my last months wages and any holiday pay. This will go into the bank.

- I will get a year on the dole at about €900 a month (thats what my PRSI pays for - i dont feel guilty). This will go into the bank too. I would expect to be taken off the dole when means tested.

- My other half will gets my tax credits


It would be heaven not to have to get up in the mornings for a while:). I wouldnt see myself needing to work for another 4 or 5 years. Hopefully the recession should be well over by then.

Now if we both got made unemployed - thats a different story. We would both be pulling the dole, but could probably stay on it longer if we had to. But it would be harder alright.

As the OP says. Not much incentive to get a job for a while after alright.

Joe1919

So, here's my hypothesis:
1) A whole heap of people will run out of time on jobseekers benefit, fail to qualify for jobseekers allowance and fall off the live register."

Many continue signing for credits even if their not getting any money and so they continue on the live register (AFAIK).
Dont forget also that there can be some movement to disability and invalidy welfare claims as a way of continuing payment (150,000+ are drawing these allowances + FAS ) and this put more pressure on the health service.
Also could we see a 'baby boom'.........(one payment family payments?)