Do we need social welfare and tax reforms to incentivise work over unemployment?

With the raft of anecdotal evidence of people being "better off on the dole", as well as the tax system taking more and more earnings from taxpayers every year, do we urgently need to reform the social welfare benefits and tax systems to incentivise jobs, employment, and growth over long-term unemployment, particularly in lower paid and minimum wage sectors? Are some people really "better off on the dole" or is this situation anecdotal only, and an exaggeration not borne out by the figures?

Is unemployment really a "lifestyle choice" for some people in ireland, and if so, how do we incentivise work, and reverse the trend?

later12

The welfare bill needs to fall and not just through attrition into employment but in terms of welfare rates. There should be absolutely no doubt about that.

However, I would hesitate to say that the point of the cuts are to incentivise employment. Yes that could form part of the reason, but quite frankly we had a situation in the boom when there were about 20,000 people on long term unemployment assistance. I am very skeptical that a wave of laziness has overcome the Irish population.

Also, Eurostat report that for every 26 unemployed Irish people, there is 1 employment vacancy.

http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/dataset?p_product_code=TPS00172

To compare Ireland to other community members:


So perhaps we need to realise that what Ireland really needs is effectively an internal devaluation in order to make it more competitive to employers. This can be, in part, achieved by cutting the welfare bill. But the object is probably not to incentivise employment in itself, since there is very little, or no, objective indication that it needs to be incentivised more than it is for most of the population.

bbam

Really we need a decent economy and a volume of jobs available.
Then we should incentivise people out to take the jobs. How can we get people out into jobs that just don't exist.

Sleepy

Sliding scale: the longer you're claiming, the less you get.

later12

later12 wrote: »

The welfare bill needs to fall and not just through attrition into employment but in terms of welfare rates. There should be absolutely no doubt about that.

bbam wrote: »

Really we need a decent economy and a volume of jobs available.....How can we get people out into jobs that just don't exist.

I agree that rates and benefits paid need to come down, but there is another way we could drop the welfare bill without necessarily dropping the value (to the beneficiary) of the benefits paid, and also possibly generate some new jobs into the bargain by creating conditions to make that attrition from social welfare happen.

Why not use the machinery of the state, it's semi state companies, it's public sector procurement people, etc, to centrally purchase on behalf of the thousands social welfare recipients, or to give them access to things like food vouchers, petrol vouchers, Bord gais gas credits, ESB electricity credits, etc to go towards their essential outgoings (based on their particular circumstances.

That way, instead of paying out expensive cash to social welfare recipients for them to pay it back to bord gais or ESB, etc for their gas bill (the cost of which which incorporates a semi-state profit margin over and above the cost of the utility to the state) the government negotiates a better than retail rate, and all the social welfare credits spent are redeemed by the retailer/utility and paid centrally by the state, making both the beneficiary and the state a saving.

Aside from semi states, why not have the central procurement agency for the government put out tenders for all the major everyday costs in the private sector like petrol, groceries, etc, etc, and secure discounted bulk buying prices from successful private sector companies like topaz, texaco, dunnes stores, tesco, etc. The state could then offer social welfare recipients a fuel card, or a grocery card, or whatever, for their chosen store, making up part of their social welfare payment either by a mandated minimum amount based on the expenditure profile they fit, or in an amount of their choosing, depending on government policy.

In short, in lieu of some of the cold hard, expensive cash we pay out to them currently, SW recipients could avail of better value and discounted prices on all the common necessities, private sector companies could get greatly increased footfall into their businesses, and the state could make a significant saving in funding costs and leakage into private/semi state profit margins.

Now let's say we take some or all of that saving and give it to an independent state body to manage, either a new one created for the job, or an existing one like the CBI, with the express purpose of earmarking it for local SMB credit funding purposes. Operating capital loans could be offered at favorable rates, tied to conditions and targets based around job creation and growth, particularly in industries like services, hospitality, retail, etc where minimum and lower wages are part of the business model.

Alltogether, this would do 4 things:

• Firstly, decrease the welfare bill,

• Secondly, move us towards a benefits driven welfare system, rather than a cash driven one, and also create further incentive to move off of state support where employment becomes available (nobody wants to live on vouchers)

• Thirdly, increase credit into small business, generate growth, and generate new jobs in the SMB sector for social welfare recipients to apply for

• Fourthly, drive some competition in the SME commercial banking sector which may in turn force the banks to take some initiative on the issue, and make funding available instead of just talking about doing it.

later12

Deleted User wrote: »

Why not use the machinery of the state, it's semi state companies, it's public sector procurement people, etc, to centrally purchase on behalf of the thousands social welfare recipients, or to give them access to things like food vouchers, petrol vouchers, Bord gais gas credits, ESB electricity credits, etc to go towards their essential outgoings (based on their particular circumstances.

Aside from semi states, why not have the central procurement agency for the government put out tenders for all the major everyday costs in the private sector like petrol, groceries, etc, etc, and secure discounted bulk buying prices from successful private sector companies like topaz, texaco, dunnes stores, tesco, etc. The state could then offer social welfare recipients a fuel card, or a grocery card, or whatever, for their chosen store, making up part of their social welfare payment

These sound like completely un-necessary methods. The net effect is that Government loses out on VAT & duties, and the semi-states lose out on the profitability of their welfare recipient customer base. It also sounds like an administrative nightmare.

The only time methods like the one you are suggesting seem to work is when there is a danger of fraud, i.e. the resources are valued highly by the targeted poor, and less so by the rich,so there is less of an incentive for the rich to apply for them.

Given that this is not the reason behind Ireland's remarkable welfare bill, it sounds like a wasteful option without any clear benefit.

I would much rather see a straightforward reduction in the overall welfare bill while maintaining the ability of families and individuals to make choices according to their needs - and indeed for new or existing businesses to respond rapidly to consumers' needs, as might not necessarily happen under the scheme outlined.

later12

later12 wrote: »

These sound like completely un-necessary methods. The net effect is that Government loses out on VAT & duties, and the semi-states lose out on the profitability of their welfare recipient customer base. It also sounds like an administrative nightmare.

I don't agree. Firstly, lost VAT and duties would only be a percentage of the total saving the government would be making overall, a chunk of that spend goes into private and semi private sector profits, which would be done away with (instant saving) not to mention the saving from the negotiated lower rates within the private sector.
Secondly, many of our semi states are doing quite well at present. Bord Gais for example is a profitable company, so if the net effect of this move would be to make them less profitable, and make the state a saving which it can use as it sees fit, then so be it. I would wait until part of it was sold to private speculators as per the EU/IMF deal, and make my move.

As for the retail multiples, spin it any way you want, but they have been squeezing small indigenous suppliers all their lives, and have been consistently profitable from it, as far as their combined UK & Ireland results will allow us to see, so let's squeeze them a little for a change, instead of hitting all the same old sources. It's a profit tax by another name, but so what? PAYE workers have been living with stealth taxes for years...

As to the "administrative nightmare" part of it, hardly. All it requires is some modernisation of some civil service work practices, a willingness from the unions to be flexible, and a little technology. Store cards, fuel cards, and all sorts of other retail loyalty schemes use the same virtual credits technology every day of the week. It takes a bit of setting up, and there are some database and info collection and collation headaches associated with that, but the cost/benefit to the state is easily significant enough to warrant the kind of spend it would require

later12 wrote: »

Given that this is not the reason behind Ireland's remarkable welfare bill, it sounds like a wasteful option without any clear benefit.

Clear benefit 1. A move towards a benefits/credits based welfare system would not only cut welfare provisioning costs to the government through procurement savings, it would reduce our EU/IMF borrowings for cash and their associated interest payments.

Clear Benefit 2. There would be a widening of the gap between the quality of life offered by the maximum rates of social welfare, and the average earnings of a minimum wage worker, which would serve to incentivise work over welfare, where the two were close together in financial terms.

later12 wrote: »

I would much rather see a straightforward reduction in the overall welfare bill while maintaining the ability of families and individuals to make choices according to their needs

It may be controversial to say so, and I'm sure I'll come in for some stick for saying it, but i don't believe that welfare should be comfortable, or afford many choices. Irish welfare affords a far more comfortable life than many countries welfare systems do, and i think this should be amended, if not in monetary terms, then at least in terms of the choices and spending discretion that being on welfare allows. How else are we to cut costs and incentivise work when every time anybody tries to reduce the dole there is an enormous outcry from the left in general?

Ideally, i think a state welfare system should look at you and your family's core needs such as health, food, shelter, clothing, warmth, and access to state facilities to improve your employment prospects, and separate those out from any other non-essentials (Sky TV, budget holidays, nights down the pub, etc) and provided you have paid your social insurance contributions you should receive those essentials, along with maybe to a small cash payment to use at your discretion, and that is all. State benefits abnd access to state services, rather than cash, should be the order of the day.

ronano

The majority of those on social welfare are not better off compared to even minimum wage jobs. You always got to keep in mind the closing of gap between the two though so as not to create a 'poverty trap' but really we just need jobs.

Sleepy

It depends on family circumstances tbh. As a co-habiting couple renting a home in Dublin, myself and my other half would have welfare entitlements totalling €29,112.80 (Adult Couple Dole Rate @ €312.80 p/w, Two Dependent Children @ €29.80 p/w, Rent allowance @ €925 p/m less weekly contribution of 26) before including the benefits of a medical card, back to school payments etc.

Using the tax calculator on Deloitte that equates to approximately a €37,500 gross salary if the couple are co-habiting or roughly €33,500 if they're married (and sharing tax credits). That's considerably more than minimum wage (€16,867.50 p/a).

Obviously it changes drastically if a family are living in their own home or to those who seem to think that being unemployed shouldn't prevent them from paying off a mortgage (rather than selling and renting something they can afford) but I think my figures demonstrate a fairly major barrier to work. And as I said, I'm being conservative: I've not accounted for the value of a medical card etc. nor for the costs of commuting to work, maintaining a work wardrobe etc.

Farmer Pudsey

It is hard to know what to do while there are some people trying there hardest to get jobs there is a core of people on social welfare who it will never pay to work. The biggest disincentive to going back to work is that on many jobs you are no better off working that unemployed or you may be worse off.
The cost of transport to and from work is now becoming the main issue. I often come accross people who it is costing them over 50 euro/week and even 100euro/week is not uncommon. There needs to be a relisation that the government need to discrimate towards the worker and not towards welfare recipents.
Is there a need to cut welfare, yes there probally is as if we do not and continue to place all the costs on working people the stitutation will become worse.
There is a core of unemployed who have never worked, there parents never worked and there childern will never work.

Guy:Incognito

While it looks on the surface that theres plenty of jobs, actually getting a shot at one is a different story. I want off the dole but it's not happening at the minute.

I was a plumber for 4 years as my last job. Before that I was in retail for 10, with management in one job. I have'nt been at all picky, I've been applying for loads of different jobs from looking for a mechanic apprenticeship (my preferred option) to one that sticks out which was a van assistant job, not even van driver. The job basically entailed helping to lug stuff in and out of the van, read a map and have a decent knowledge of Dublin. The closest I've gotten to either is an inital auto email acknowledgement of recieving my application.

golfwallah

Deleted User wrote: »

I agree that rates and benefits paid need to come down, but there is another way we could drop the welfare bill without necessarily dropping the value (to the beneficiary) of the benefits paid, and also possibly generate some new jobs into the bargain by creating conditions to make that attrition from social welfare happen.

Why not use the machinery of the state, it's semi state companies, it's public sector procurement people, etc, to centrally purchase on behalf of the thousands social welfare recipients, or to give them access to things like food vouchers, petrol vouchers, Bord gais gas credits, ESB electricity credits, etc to go towards their essential outgoings (based on their particular circumstances.

I also agree that the total cost of the Welfare bill has to be reduced and although, your proposals may seem reasonable on face value, I doubt if they would work for a number of reasons:

- Mixing Welfare as "tied", low margin customers" of semi-states would make these government controlled entities less profitable and attractive as state assets to be sold off (proposals in this regard are under examination, as I understand it).

- The market for energy has been opened up to competition - you can buy gas & electricity from Bord Gais, ESB, Airtricity .... so the old monopolies for these services no longer apply.

- EU regulations as regards discriminatory pricing to Welfare customers as opposed to other customers would have to be looked at.

Government needs to bring down Welfare costs by managing this area much better than has been happening for the last number of years (a difficult balancing act for a Fine Gael / Labour coalition).

later12

Sleepy wrote: »

It depends on family circumstances tbh. As a co-habiting couple renting a home in Dublin, myself and my other half would have welfare entitlements totalling €29,112.80 (Adult Couple Dole Rate @ €312.80 p/w, Two Dependent Children @ €29.80 p/w, Rent allowance @ €925 p/m less weekly contribution of 26) before including the benefits of a medical card, back to school payments etc.

Using the tax calculator on Deloitte that equates to approximately a €37,500 gross salary if the couple are co-habiting or roughly €33,500 if they're married (and sharing tax credits). That's considerably more than minimum wage (€16,867.50 p/a).

Obviously it changes drastically if a family are living in their own home or to those who seem to think that being unemployed shouldn't prevent them from paying off a mortgage (rather than selling and renting something they can afford) but I think my figures demonstrate a fairly major barrier to work. And as I said, I'm being conservative: I've not accounted for the value of a medical card etc. nor for the costs of commuting to work, maintaining a work wardrobe etc.

There is the point that if you were on an income of less than €31,304 p.a. you would be entitled to additional welfare support under FIS, for example.

Godge

later12 wrote: »

There is the point that if you were on an income of less than €31,304 p.a. you would be entitled to additional welfare support under FIS, for example.

Yes, but the point Sleepy is making is that the social welfare benefits exclusive of medical card, working costs etc. are equivalent to a married couple's income of €33,500 which is above the FIS threshold so that is not of relevance.

Farmer Pudsey

later12 wrote: »

There is the point that if you were on an income of less than €31,304 p.a. you would be entitled to additional welfare support under FIS, for example.

But you are still worse off due to the cost of having to travel to work with the cost of fuel and if you have kids going to college you are way worse off. Not to mind Childcare costs, in this state you are expected to pay to go to work

later12

Deleted User wrote: »

I would wait until part of it was sold to private speculators as per the EU/IMF deal, and make my move.

As for the retail multiples, spin it any way you want, but they have been squeezing small indigenous suppliers all their lives, and have been consistently profitable from it, as far as their combined UK & Ireland results will allow us to see, so let's squeeze them a little for a change

Eh no, lets not. Punishing private companies, or even semi states, will always fall back on the taxpayer, whether that be via increased prices or job losses. I don't think it is in the state's best interests to see retailers 'squeezed', I'm not sure what logical basis you have for suggesting this.

As to the "administrative nightmare" part of it, hardly. All it requires is some modernisation of some civil service work practices, a willingness from the unions to be flexible, and a little technology. Store cards, fuel cards, and all sorts of other retail loyalty schemes use the same virtual credits technology every day of the week.

You are talking about bespoke welfare plans, and you are not providing evidence of any clear benefit, nor any credible explanations as to how a bespoke welfare plan for every man and woman on welfare assistance would be anything other than an administrative nightmare. It doesn't make any sense. There is no logical reason to undertake a project like that which you are suggesting.

later12

Godge wrote: »

Yes, but the point Sleepy is making is that the social welfare benefits exclusive of medical card, working costs etc. are equivalent to a married couple's income of €33,500 which is above the FIS threshold so that is not of relevance.

There might be an issue here for individuals with a number of children living in the most expensive rental area in the country, indeed, but we should not forget that only about 17% of the unemployed have even one child or more, and most areas of the country do not have maximum rental rates like Dublin, so it isn't necessarily an indicative picture.

zing zong

the very first thing that needs to be done regarding social welfare is to change the current definitions, this would immidiately clear up alot of the nonsense about it.

there should be 3 "labels" (for want of a better description)

1. unemployed
2. employed
3. post - employed

the post-employed, being those that were employed, and are now no longer employed, should get full benefits, perhaps on a sliding scale over time. the post-employed have payed PRSI, and should receive all that the contribution is meant to cover, thats the whole point. any talk of cutting anything for the post-employed is BS and really should not be entertained.

the umemployed however, would be those that have never worked, ever. these people should not get a single cent, they should be offered education, and nothing else. (the unemployed would not be a label applied to those with disabilities.)


I think we would be better able to focus on the problem areas of the social welfare cost once/if these new labels are applied

NIMAN

I've always thought that to encourage people to look for work, you should never be better off on the dole than someone who is working.

Even if that means that the people working still receive a certain level of benefit to make working pay.

Probably hard to implement, but surely people prepared to work in McDonalds should be rewarded for taking the job?

golfwallah

We’re already committed to reforms in Social Welfare and tax in the state’s agreement with the EU / IMF (Programme of Financial Support for Ireland).

Actions included in the Jan 2012 update of the Memorandum of Understanding, formally agreed between Government and EU / IMF, include financial sector reform, sale of state assets, Taxation, Social Support spend, etc.

Examples of planned Social Support changes are:

By end 1st Quarter 2012:
Efficient Social Support Expenditure: The Department of Social Protection will submit to Government the comprehensive programme of reforms that can help better targeting of social support to those on lower incomes, and ensure that work pays for welfare recipients.

Activation of the unemployed:
- The authorities will take steps to strengthen activation and training policies to help jobseekers get back to work and will commission and publish and external evaluation of the data and reporting systems required, under the new “Pathways to Work” approach, to enable ongoing evaluation of activation and training policies, including whether:
o The large numbers of unemployed across all regions, including long-term unemployed, have adequate incentives and skills needed to return to work;
o More efficient interventions are being put in place, including with respect to group interventions (3 to 6 months) and ongoing interventions (post 6 months); and
o Penalty sanctions are being imposed (including the number and level of sanctions),
- Based on its recommendations the Department of Social Protection will prepare an implementation plan.
-
By end 2nd Quarter - 2012:
Efficient social support expenditure:
- The Department of Social Protection will provide an evaluation of the actions taken in respect of job seekers payments recipients who do not attend employment activation interviews.

By end 4th Quarter - 2012:
Efficient social support expenditure:
- The authorities will provide an evaluation of progress in relation to labour market activation measures to enable the unemployed to return to active employment against the targets set out in the “Pathways to Work” plan.

For full text see: http://www.finance.gov.ie/documents/publications/MOU/MOUjan2012.pdf

jimmycrackcorm

I think the unscientific observation of the high proportion of non-Irish people working who in service positions such as McDonalds and Lidl etc is an indicator for the social welfare work disincentive.

NIMAN

jimmycrackcorm wrote: »

I think the unscientific observation of the high proportion of non-Irish people working who in service positions such as McDonalds and Lidl etc is an indicator for the social welfare work disincentive.

Why would these people not just sit on the dole too then? Sure they would get the same benefits as Irish nationals on the dole, wouldn't they?

maninasia

We’re already committed to reforms in Social Welfare and tax in the state’s agreement with the EU / IMF (Programme of Financial Support for Ireland).

It's so embarrassing to me when I read this, that we cannot take the bull by the horns ourselves, our government are effectively middle managers. It's shameful.

BarackPyjama

NIMAN wrote: »

Why would these people not just sit on the dole too then? Sure they would get the same benefits as Irish nationals on the dole, wouldn't they?

Integrity? The will to work and be productive? Who knows. You have to admit though, for all of the moaning and complaining that 'native' Irish people do about not being able to find a job, you see very few if any of us working behind the counter in Lidl, McDonalds, etc.

As they would have been seen as 'menial' jobs during the boom, many Irish people would probably feel embarrassed to take these jobs and would rather be on the dole than to be seen behind the counter of Burger King.

If pride is an incentive to stay on the dole for Irish people rather than getting out there and finding employment then you know we need some serious welfare reform. And very, very fast.

libra02

Same old lines are trotted out here everytime someone starts a thread like this and sweeping generalisations are made.

However there is no one simple solution. One problem is firstly the people who never worked, do not ever want too. It is here the Gov should first tackle but we all know they never will as these people have playing the system down to a tee - they know exactly what to say and do to ensure their benefits remain, they have the bleedy heart liberal out behind them and the Gov and local SW authorities are too scared to take them on.

Secondly it is not the basic €188 which is driving the SW bill up per se but all the extra's such as fuel, telephone etc which are given out is where one of the major problem lies. These also need to be looked at and reduced somewhat. In this day and age why should the Gov be paying the TV Licenses of the OAP's stop that and let them do like alot of people do buy the TV stamps every week over the year and you would not feel it being payed off. Incomes over a certain amount should either get Child Benefit taxed or reduced etc.

As a poster above said the good majority of people on the dole now have worked hard and contributed to this economy for years and look at the way they are being treated like something someone scrapped off the end of their shoe. They get the basic €188 that is it, no fuel, no GP / medical cards are like gold dust so they still have to pay to go to the doctors or try to hang onto some level of VHI whatever.
It is these people who should get the most help for the first year or that as they want to get back to work as soon as possible.

later12

later12 wrote: »

There might be an issue here for individuals with a number of children living in the most expensive rental area in the country, indeed

Where a full 25% or more of the population of the country actually live, and which produces a disproportionate amount of the employment and tax take, and as such where the workforce should be particularly incentivised to work versus draw welfare. You can't simply dismiss the busiest city in the country as an exception to the rule.

later12 wrote: »

we should not forget that only about 17% of the unemployed have even one child or more

If this is from the same set of figures that is trotted out by the defenders for the lack of social welfare reform in the public sector every time the issue comes up, i would take those figures with a large pinch of salt. They are the social welfare's own statistics, from people's declarations. They come from a system where there is a financial incentive to incorrectly declare your parenting and habitation status, and no policing or prospect of being caught by doing so, so they are questionable from the word go.

I know of a couple who live together with a child day-to-day, but on paper according to the social welfare figures they are completely unrelated single people, and are dealt with completely separately by the welfare system. The mother receives full social welfare, rent, child support, and a raft of other allowances, and claims as a lone parent, and the father (under a different address) receives the full single person's allowance and other benefits. They combine their benefits and live a comfortable life together, and have no real interest in finding work. Neither of them have had any level of inspection or scrutiny whatsoever from welfare inspectors for several years now.

Were this couple and others like them married, or living together legitimately and properly declaring their jointly dependent child, or were inspectors properly resourced to root out such fraud, the social welfare's figures would look starkly different.

NIMAN wrote: »

I've always thought that to encourage people to look for work, you should never be better off on the dole than someone who is working.

Even if that means that the people working still receive a certain level of benefit to make working pay.

This is another important reform which i think could be put in place.The department of social protection could make up the shortfall between the applicable social welfare rates and the salary which a worker coming off welfare specifically to accept a low-paying job had been offered. This would be done on a case-by-case basis, figures would vary each time as applicable, so as to ensure there was no financial disincentive for workers to get off the dole.

I would even include a small premium, an incentive payment (call it a "back to work allowance" or whatever) over and above that for a period of twelve months or so to create a solid reason of profit for people, even at very low incomes, to get back in the workforce (where there is more of a likelihood they will stay once that initial 12 month period has elapsed).

later12

Deleted User wrote: »

Where a full 25% or more of the population of the country actually live, and which produces a disproportionate amount of the employment and tax take, and as such where the workforce should be particularly incentivised to work versus draw welfare. You can't simply dismiss the busiest city in the country as an exception to the rule.

Not sure what your point is here, research does suggest that Dublin has one of the lowest unemployment rates in Ireland. Unfortunately this is not captured on Irish QNHS reports.

If this is from the same set of figures that is trotted out by the defenders for the lack of social welfare reform in the public sector every time the issue comes up, i would take those figures with a large pinch of salt. They are the social welfare's own statistics, from people's declarations. They come from a system where there is a financial incentive to incorrectly declare your parenting and habitation status, and no policing or prospect of being caught by doing so, so they are questionable from the word go.

Eh, are you suggesting that social welfare recipients are under-reporting their number of children? Because that would make no sense to me.

I know of a couple who live together

Sorry, not getting into anecdotes. Because that's when third hand accounts of Nigerians driving free cars tend to emerge, and this is the internet, which is (pretty) anonymous.

golfwallah

maninasia wrote: »

It's so embarrassing to me when I read this, that we cannot take the bull by the horns ourselves, our government are effectively middle managers. It's shameful.

Embarrassing, yes, “that we cannot take the bull by the horns ourselves” but, perhaps more accurate that our politicians wouldn’t do what was needed to get our finances in order – without being “forced” to do this by the people from whom we have borrowed so heavily.

Agreed – “our government are effectively middle managers” – they wouldn’t risk being unpopular, “man up” and do what was necessary in the good times .... sure, weren’t we all enjoying the party, while it lasted!

Now, Ireland along with Greece and Portugal have had to agree to ‘bailout’ plans with the so-called “Troika” [the European commission, the European Central Bank (ECB) and the International Monetary Fund (IMF)].

This effectively hands over sovereign control of our national finances to our new masters – our creditors, who so willingly pumped in loans to fund profligate spending during the “bubble”.

later12

later12 wrote: »

Eh, are you suggesting that social welfare recipients are under-reporting their number of children? Because that would make no sense to me.

No, i'm not suggesting that, but i am suggesting that an unemployed lone mother of one child living in rented accommodation and an unrelated single man living at a different address and claiming his full social welfare entitlements separately receive more in combined benefits than they would if they had been recorded as married or cohabiting together as a family unit.

I'm suggesting that in an under-resourced system where physical "knock on your door" checking of claimant's living arrangements is almost unheard of because of lack of staffing resources for the vast number of claimants, there is virtually no disincentive against the couple above declaring themselves (entirely separately) as unrelated single people with separate addresses, and receiving more in combined benefits than they are entitled to, regardless of the fact that they may in actual fact live together and function as a family unit.

The system rewards dishonesty, and does not effectively deter or detect fraud.

later12 wrote: »

Sorry, not getting into anecdotes. Because that's when third hand accounts of Nigerians driving free cars tend to emerge, and this is the internet, which is (pretty) anonymous.

Sure, i accept your point, and it's a very valid one.

I would contend though, that cold hard evidence to support the kind of anecdotes we are talking about on a wide scale, by it's very nature cannot exist. The levels of fraud in a system like the social welfare benefits system cannot be effectively measured. It's hidden. You can never know if you've detected it all. You can measure how much you've detected and eradicated, but that might be the tip of the iceberg.

The inefficiency of a major system like the public service by the same tune, can't be measured, only the efficiency improvements, because there is no finite, fiscal definition for what 100% efficiency equates to in a system as diversified and immense as it is.

This is the reason that there is often no widespread evidence of that which people (anecdotally, and in personal experience terms) can see as plainly as day.

golfwallah wrote: »

Agreed – “our government are effectively middle managers” – they wouldn’t risk being unpopular, “man up” and do what was necessary in the good times....

It's still going on. There has been little or no willingness to tackle the thorny issues like tougher cuts to social welfare recipients, or real, meaningful public sector reform outside of what the troika has mandated. On anything but the items they have literally been forced to tackle, our governing politicians are still dragging their heels for fear of losing votes, or being harangued by the opposition.

It's the modern day equivalent of Nero fiddling while Rome burned. Our politicians play politics while the hole we are in keeps getting deeper and deeper.

later12

Deleted User wrote: »

No, i'm not suggesting that, but i am suggesting that an unemployed lone mother of one child living in rented accommodation and an unrelated single man living at a different address and claiming his full social welfare entitlements separately receive more in combined benefits than they would if they had been recorded as married or cohabiting together as a family unit.

Sure, that's a possibility. But as regards the statistics, 17% is the figure we (or rather, the Department of Social Protection) have and I don't think we can safely adjust it upwards or downwards because of what our perception that it ought to be might be.

I would accept that there is perhaps some grounds for concern over the lone parents' scheme, but on the other hand there have been media reports of social welfare inspectors knocking on doors to verify claims.

http://www.joe.ie/news-politics/current-affairs/joan-burton-is-planning-a-serious-clampdown-on-social-welfare-fraudsters-0022981-1

Over the past few months, the Department of Social Protection has called to the homes of suspected fraudsters and interview them. Since these interviews and house calls began, 600 payments have been terminated. This has saved the exchequer €6.33million.

later12

later12 wrote: »

Sure, that's a possibility. But as regards the statistics, 17% is the figure we (or rather, the Department of Social Protection) have and I don't think we can safely adjust it upwards or downwards because of what our perception that it ought to be might be

Sorry to labour the point, but i don't see how you can afford to rely on the figure that the dept of social protection, a clearly politically driven department provides, without any scrutiny, when there are several vested interests at work in generating it and financial incentives for giving incorrect info. Some claimants (we have no idea how many, but some) will be misrepresenting their living/employment situation for financial gain.Furthermore the figure that is offered, the 17% is unlikely to be given any further scrutiny or criticism by politicians or senior civil servants who will be unwilling to uncover any additional inefficiency/inequality in the welfare system at such a politically sensitive time, unless they can be seen to be rooting it out.

At the very least, as the 17% figure cannot be somewhat independently verified or checked as accurate until a proper regime of policing and spot checks is in place (a mammoth undertaking), it should be taken as a low estimate of reality (it is unlikely that people are under-declaring their eligibility for benefit). At best it is a debatable figure, especially so in light of the aforementioned anecdotal evidence of fraud, which abounds.

In any case, to get away from squabbling over figures, i would return to the central points.

(i)It's easy to defraud the Irish social welfare system,
(ii)It's financially very beneficial to do so, particularly at the moment with money so scarce
(iii)There is very little by way of proper staffing and funding resources in place to deter or detect transgressors.

Given these points, even if everybody is behaving themselves and nobody at all is defrauding the system (highly unlikely) it's still an indictment of our public service and welfare system that it should be so easy to defraud IF the wish was there.