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

Count Dooku

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?

only after 2 years of paying PRSI....

Count Dooku

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.

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.

it was not different in Germany before 2005, before they massively reduced welfare benefits for long term unemployed(Hartz IV), because salary demands were too high and was making more sense to stay on benefits

unemployment in Germany

Count Dooku

Count Dooku wrote: »

it was not different in Germany before 2005, before they massively reduced welfare benefits for long term unemployed....

Germany doesn't have an underlying left wing/socialist ethos that says you have to treat every social class with a minimum level of decency which you can no longer afford, regardless of their contribution (or lack thereof) to the state. By and large, Germany balances it's books, whatever the cost. That's one of the driving forces behind their economy, and the electorate supports it's politicians, not vilifies them, for taking very difficult decisions (like the one outlined) in the interest of the overall financial good of the country.

Here's the kicker though....we're currently struggling to decide whether to vote allow them to control aspects of our finances which get out of control, or to leave that subject to our politicians to continue to make decisions on?

I would equate that to choosing whether to allow your tax return to be balanced by a mathematician with a calculator or a chimpanzee with a crayon. Why do our politicians deserve sovereignty over our finances? What kind of willingness or ability to control them have they displayed so far?

Sleepy

Deleted User wrote: »

I would equate that to choosing whether to allow your tax return to be balanced by a mathematician with a calculator or a chimpanzee with a crayon. Why do our politicians deserve sovereignty over our finances? What kind of willingness or ability to control them have they displayed so far?

Brilliant analogy.

zing zong

also, something I don't think has been touched on here yet is rent allowance.

for all it was originally set up to do, it is, these days, a massive mistake. all it has done in reality, is to push up rent, which is fine for those that get rent allowance, and not so fine for those that do not.

If a landlord accepts rent allowance, its all good for them, as the government using our tax money, pays for this. if rent allowance were removed, rent would come down, meaning it would be affordable for everyone, and put a huge dent in the social welfare bill.

a second benefit would be that rent allowance is usually accepted in certain areas, or by certain landlords, which over time becomes known, and then carries a stigma for the area/apartment block/estate as being a rent allowance area. no rent allowance, no stigma

zing zong

Deleted User wrote: »

I would equate that to choosing whether to allow your tax return to be balanced by a mathematician with a calculator or a chimpanzee with a crayon. Why do our politicians deserve sovereignty over our finances? What kind of willingness or ability to control them have they displayed so far?

absolutely none, *but* they are *our* representatives, by proxy it is us then that deserve sovereignty over our finances. so we need to take a hard look at how we are represented, and who by.

Debtocracy

Deleted User wrote: »

I would equate that to choosing whether to allow your tax return to be balanced by a mathematician with a calculator or a chimpanzee with a crayon. Why do our politicians deserve sovereignty over our finances? What kind of willingness or ability to control them have they displayed so far?

The technocrats in Europe have shown equivalent incompetency in attempting to solve the Euro crisis. Their failure to either stimulate economic growth or purge debt from system while pumping money into zombie banks will result in the worst of both worlds – a prolonged period of absent economic growth and increasing prices (i.e. stagflation). Now that we have an economically informed electorate, I don’t see the logic in moving from democracy to totalitarianism. To believe that the same people and institutions that facilitated the current global economic crisis will now save our economy is plain naivety.

oscarBravo

Debtocracy wrote: »

Now that we have an economically informed electorate...

I wanted to read the rest of your post, but I was laughing too hard at this.

Idbatterim

(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.

agreed on all points, given the fact that the state are just totally useless at everything, would it make sense to financially reward those that report those defrauding the system if the allegations turn out to be true?

Now that we have an economically informed electorate...

I wouldnt go that far, but agree to an extent. Everyone is certainly a hell of alot more economically informed than 4/5 years ago...

golfwallah

Deleted User wrote: »

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.

If the staffing and funding isn't there to deter and detect transgressors, there are still solutions but in the private rather than public sector

The Minister for this area would be better employed resolving this problem than commenting on other issues outside her Department.

It wouldn't take too long to come up with workable solutions, if the Minister put her mind to it. For example, the job of resolving this issue could be made self financing /profitable and a source of job creation by putting it out to tender by private enterprise. That's just one proposal ... I'm sure there are many other solutions, if the Minister would only stick to the knitting and do her own job by thinking a bit more outside the box.

When all is said and done, the buck stops with her. If she's not up to the job, perhaps she should resign!

Sleepy

Idbatterim wrote: »

I wouldnt go that far, but agree to an extent. Everyone is certainly a hell of alot more economically informed than 4/5 years ago...

Are they? When our political parties range from as far left as the SWP/PBP/Sinn Fein et all all the way to the centrist likes of Fianna Fail and Fine Gael, we have an environment where only those who've studied economics are even aware of the liberal / right-wing policies.

later12

Deleted User wrote: »

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.

I presume this is complete speculation.

I can't stop you from believing that only 17% of claimants have children. And neither am I myself convinced that the number of fraudulant claims would put any serious dent in that figure.

I do, however, think that any suggestion that civil servants are deliberately hiding the number of children of parents who are social welfare dependents is a pretty outlandish claim, which appears to have no logical basis - let alone evidential basis - to support it. It looks like a conspiracy theory that gets pulled out when someone doesn't like a particular statistic.

(i)It's easy to defraud the Irish social welfare system,

Is it?

We can't expect 100% of claims to be genuine, but no, I'm not convinced that Ireland has a serious problem with welfare fraud, or at least not relative to other EU member states.

later12

Count Dooku wrote: »

it was not different in Germany before 2005,

The main difference was probably the economic environment. I posted a link to Ireland's job vacancy rate, which suggests that the problem is not that welfare is too generous in itself, but that there is a serious lack of employment opportunity.

Having said that,I do of course agree that welfare needs to be cut - both as part of a step towards internal devaluation and as a way to lower current expenditure.

Naggins

Deleted User wrote: »

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?

There is also the issue of living standard of which Ireland's standard is pretty high. Wouldn't say any unemployment is a "lifestyle choice" considering the lack of opportunities in the job market. The argument is somewhat nullified during an economic crisis and financial downturn as the jobs aren't there but during the boom you could have made for the long term unemployed who weren't working despite the job market being relatively fine.

later12

Naggins wrote: »

The argument is somewhat nullified during an economic crisis and financial downturn as the jobs aren't there but during the boom you could have made for the long term unemployed who weren't working despite the job market being relatively fine.

And it is probably worth repeating that during the boom the LT unemployment figure was at about 20,000 - not all of whom would have been on (or entitled to) benefits.

That's about as low as that figure was ever going to get in a labour market of Ireland's size, short of actually dragging people away from the kitchen sink.

daltonmd

libra02 wrote: »

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.

Absolutely correct here's some of the smaller spend:

"For example, last year the department spent: free travel, €74m; free television licence, €57m; telephone allowance, €118m; house appliances, €5.5m; furniture, €2.5m; bedding ,€1.4m; adult clothing, €7m; pram, buggy, cots purchase ,€2m ."
http://www.independent.ie/national-news/greece-got-us-the-deal-now-lets-slash-waste-2829926.html

For a further breakdown see here:
http://www.independent.ie/opinion/columnists/john-drennan/john-drennan-a-third-of-governments-expenditure-now-goes-on-social-welfare-2829940.html

25% is basic unemployment benefit and 22% pensions.

later12

later12 wrote: »

...any suggestion that civil servants are deliberately hiding the number of children of parents who are social welfare dependents is a pretty outlandish claim...

Not deliberately hiding, just continuously failing to investigate properly or reform their staffing practices to allow for the information to be ascertained. There's a big difference between taking action to distort figures and burying your head in the sand. In short, until something is done to at least find out what the real figure is, the 17% figure has to have some doubt over it given the levels of vested interest it represents.

later12 wrote: »

We can't expect 100% of claims to be genuine, but no, I'm not convinced that Ireland has a serious problem with welfare fraud, or at least not relative to other EU member states.

I think we'll have to agree to disagree here. Until the system is tightened up, and active deterrents such as policing and proper sanctions are put in place, i would be convinced that Ireland's fraud figures would tend towards the high side relative to other EU countries. It stands to reason, as our welfare rates are higher by comparison, our economic situation is far worse than most which creates greater necessity, and there have to be less resources spent on enforcement and detection. I fail to see how other countries could be spending any less on detecting fraud.

I would cite the model of TV license detection here. Unlike social welfare, there is plenty of enforcement for those suspected of TV license fraud. It's not uncommon to have a license inspector knock on your door at any hour of the day if you are suspected of having acted fraudulently, and as a result the rate of licensing compliance is high, and fraud is kept to a minimum.

If the TV license was sold on the honour system, where nobody knocked on your door, and only a declaration on paper was required without any other form of checking (much like our welfare system is currently) do you expect that the compliance rate would be nearly as high?

golfwallah wrote: »

If the staffing and funding isn't there to deter and detect transgressors, there are still solutions but in the private rather than public sector

I imagine that the public sector unions would have a canary at the prospect of creating private sector jobs to do new work in the civil service instead of upping recruitment. To my view, irish public service unions have become less interested in the common good and more about selfishly protecting their own member's benefits and entitlements. I think they are part of the problem at this stage, rather than anything to do with the solution, and successive governments have shown a complete lack of bottle in taking them on.

golfwallah wrote: »

The Minister for this area would be better employed resolving this problem than commenting on other issues outside her Department...

Lol, yeah, Burton needs to learn to think INSIDE the box. In all seriousness though, i think she's learning her lesson after recent rebukes. Big Philly seems to be the one with the knives out for him at the moment (interesting timing for the release/leak of the info about his meeting with Lowry, kick an old dog when he's down and you might finish him off for good) and Burton seems to have learned to shut her yap and stay more or less out of the media's way on the issue.

I think the FG/Lab administration has had a marked lack of a clear communications strategy since they got into power. Senior government ministers like Varadkar, Burton, etc, going on repeated solo runs and then even more senior ministers having to "Clarify" the party's position just looks panicked and disorganized, like there's no clear underlying strategy.

Farmer Pudsey

The only way to reduce the social welfare bill is to reduce the benifits all other plans are fruitless or cost too much. The reason that some couples are allowed to claim the single mother and single rate of welfare is a decision to allow this so that single mother might find a partner and stop being a drain on the welfare system, it did not work as if they found a partner they only most when they found a partner they only milked the system more. I agree with Dr Ed Walsh this is now becomeing a livestyle choice and they should be treated the same as anyone else on welfare.

It is impossible to police by a knock on the dooor type system the TV licience system has about 20% non compliance if you believe the figures. The reality is you need a 10% cut in welfare to see what happens I know there will be hardship but at present the hardship is being felt by the low paid worker and then cut side benfits as well

Borboletinha

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?

Just to clarify. Not all nacionalities are entitled to the dole. Even if you work and pay taxes you are not entitled. Im from brazil and 100% sure that brazilian people cannot claim any benefits. So you either find a minimum wage job, go back to brazil or you starve. Theres your incentive to work in mcdonalds.:cool: Nobody chooses foreigners over irish nationals for no job, but employers know who will appreciate and care about the job the most and thats the people that have no choice but to work.

ardmacha

Not all nacionalities are entitled to the dole.

Every nationality is entitled to the dole, if they are resident. There is a period of time after arrival in the country before you become resident.

As to the general point, there will be a time when some pressure to get people off welfare will be needed. This is hard to achieve when there are few jobs, but with any increase in vacancies then the time will come.

Borboletinha

ardmacha wrote: »

Every nationality is entitled to the dole, if they are resident. There is a period of time after arrival in the country before you become resident.

As to the general point, there will be a time when some pressure to get people off welfare will be needed. This is hard to achieve when there are few jobs, but with any increase in vacancies then the time will come.

WRONG! Its not like that at all!! You dont wait a period of time and magically become resident!!! You only become resident if you marry an irish/european citizen or if you renew a work permit 3 times which takes 7 years. If you are only a student ( like most brazilian,asian,etc) you can stay here 10+ years and still NOT BE ENTITLED TO THE DOLE.

Also most non EU residents like myself hope to someday get irish citizenship and if you claim the dole even if you have the right to do so and paid loads of taxes, your chances of getting citizenship are zero.

Count Dooku

Borboletinha wrote: »

ardmacha wrote: »

Every nationality is entitled to the dole, if they are resident. There is a period of time after arrival in the country before you become resident.

As to the general point, there will be a time when some pressure to get people off welfare will be needed. This is hard to achieve when there are few jobs, but with any increase in vacancies then the time will come.

WRONG! Its not like that at all!! You dont wait a period of time and magically become resident!!! You only become resident if you marry an irish/european citizen or if you renew a work permit 3 times which takes 7 years. If you are only a student ( like most brazilian,asian,etc) you can stay here 10+ years and still NOT BE ENTITLED TO THE DOLE.

Also most non EU residents like myself hope to someday get irish citizenship and if you claim the dole even if you have the right to do so and paid loads of taxes, your chances of getting citizenship are zero.

Wrong!
After 5 years is possible to apply for stamp 4 and also for citizenship
Of coarse it doesn't apply for students, because" education" for them is only to bypass work permits

Icepick

Debtocracy wrote: »

Now that we have an economically informed electorate

If 'economically informed' means that they know economy exists, then we indeed have that.

Delancey

I don't think anyone wishes to see a situation that rewards unemployment or otherwise acts as a disincentive to work but we must remember that our unemployment rate has soared from a low of circa 100,000 to a current number of 400,000 + .
300,000 people did not suddenly become lazy or decide the dole was the way to go - there are few jobs out there and no amount of incentives will plug that gap.

Although the headline rates for unemployment and signing-on numbers are showing relatively little movement the sharp rise in long-term unemployment is very worrying and nobody seems to give a fiddlers about it.

Delancey

Delancey wrote: »

I don't think anyone wishes to see a situation that rewards unemployment or otherwise acts as a disincentive to work but we must remember that our unemployment rate has soared from a low of circa 100,000 to a current number of 400,000 + .
300,000 people did not suddenly become lazy

Undoubtedly true, but while this is the case and the lack of a gap between work and welfare is a legacy of fianna fail overspending and vote-buying that should have been addressed while there WERE jobs to avail of, the situation has now become dire, and we probably won't have as solid an opportunity to cut welfare rates and benefits again for a generation or more. I think that while cutbacks are accepted as a necessary evil under the troika program as they are at the moment we should grasp the nettle and bring rates down.

It's important to remember that with every budget that passes where our government continues to increase tax take and fails to adequately cut welfare, the lack of an incentive, the gap between welfare and lower earnings effectively gets greater. This is a crazy situation.

Delancey wrote: »

IAlthough the headline rates for unemployment and signing-on numbers are showing relatively little movement the sharp rise in long-term unemployment is very worrying.

A consequence of the long recession we're in. Every year, thousands more fall over into the 12months+ bracket and are classified as long term unemployed. We won't be able to see any change in that either, until new jobs start coming on stream, and even at that, employers will hesitate to employ someone who is out of work for a long period versus someone who has had a short break in their work history but is still used to working life and doesn't have to re-accustomize themselves.

Count Dooku

Delancey wrote: »

300,000 people did not suddenly become lazy or decide the dole was the way to go - there are few jobs out there and no amount of incentives will plug that gap.

Main reason why they had jobs before is that property bubble created a lot of well paid low skilled jobs in construction sector
wont happen again for long time

Drake66

Deleted User wrote: »

Germany doesn't have an underlying left wing/socialist ethos that says you have to treat every social class with a minimum level of decency which you can no longer afford, regardless of their contribution (or lack thereof) to the state. By and large, Germany balances it's books, whatever the cost. That's one of the driving forces behind their economy, and the electorate supports it's politicians, not vilifies them, for taking very difficult decisions (like the one outlined) in the interest of the overall financial good of the country.

Here's the kicker though....we're currently struggling to decide whether to vote allow them to control aspects of our finances which get out of control, or to leave that subject to our politicians to continue to make decisions on?

I would equate that to choosing whether to allow your tax return to be balanced by a mathematician with a calculator or a chimpanzee with a crayon. Why do our politicians deserve sovereignty over our finances? What kind of willingness or ability to control them have they displayed so far?

Germany breached the Stability and Growth Pact for years.

Borboletinha

Count Dooku wrote: »

Wrong!
After 5 years is possible to apply for stamp 4 and also for citizenship
Of coarse it doesn't apply for students, because" education" for them is only to bypass work permits

:rolleyes:


Tell that to my brazilian and asian peers at DBS who are paying several thousand euros a year to obviously ''bypass work permits'':rolleyes: Who cares about a third level education or learning english?? Its only important like everywhere else on the planet...:pac:


Now I actually wish all foreigner students would leave ireland to see if it would be so good for the economy... People dont seem to realize how much money they actually spend before they even come here...
Foreigner doesnt equal starving or charity case...:(

Drake66

Drake66 wrote: »

Germany breached the Stability and Growth Pact for years.

Yes. Hence my use of "by and large" rather than " always". Anyways, that's irrelevant now. They have the financial muscle to call the shots at the moment. We don't. They will be signed up to the same automatic deficit controls as we (hopefully) will, but they have shown a willingness to make the tough, unpopular, but clearly necessary decisions that our politicians have consistently shied away from and played politics on to date.

German administrations may not be whiter than white in terms of their public spending either, but at least they have the guts to get their house in order after they've made a mess of it. I think we could use some of that kind of thinking and decisive action here, rather than years of tough talk and not enough follow-through.

Nothingbetter2d

Deleted User wrote: »

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?

the key to making minimum wage jobs more appealing is to lower fuel taxes... if energy costs, commuting costs, and haulage costs came down then we could justify another dole cut, and make minimum wage jobs alot more appealing.