IMF: social welfare benefits 'too high'

Scofflaw

Social welfare benefits are too high in Ireland and need to be revised to encourage people back to work, the International Monetary Fund (IMF) has said.

The organisation warned that dole payments are high by international standards and responsible for “low exit rates” from the Live Register.

As the IMF forecast the economy to grow by just 0.5 per cent this year, it said that certain welfare payments should be means-tested to avoid long-term unemployment.

The organisation - one of three bodies overseeing Ireland’s €85 billion bailout - suggested people out of work should be willing to take jobs regardless of suitability.

“It is also important to ensure that jobseekers are willing and able to fill jobs when they become available,” it said.

IMF Ireland mission chief Craig Beaumont suggested eligibility for child benefits should be narrowed, targeting only families that are “relatively less well-off”.

He described child benefits as an expensive part of the social welfare budget and suggested limiting the number of medical cards issued.

http://www.irishtimes.com/newspaper/breaking/2012/0718/breaking55.html

I can see that's going to be highly popular with some people, and highly unpopular with others - in other words, politically divisive and requiring both careful analysis and courage.

The suggestion is that the 'low-hanging fruit' has gone, and it's time to start looking at those harder-to-reach areas:

After five years of consolidation, few low-hanging fruit remain, especially on the expenditure side. A strategic approach focused on the efficiency and fairness of measures, that keeps all high-quality expenditure and revenue options on the table, is needed to complete the consolidation in a durable manner.

Which means perhaps cuts in benefits, reductions of medical card access, narrowing the child benefit allowance:

Maintaining expensive universal supports and subsidies is difficult to justify under present budgetary circumstances. Better targeting of the child benefit, medical card spending, the household benefits package and the expenditure on non-means tested pensions can generate significant savings while protecting the poor.

Also, perhaps, further PS cuts:

The Croke Park Agreement has facilitated personnel reductions and efficiency savings, and has helped maintain the industrial peace needed to achieve broader reform goals. Continued monitoring of the adequacy of savings in the net pay and pensions bill, and of public service provision, is necessary. Deeper reforms in health and higher education are needed to identify service priorities and deliver them efficiently.

and perhaps more taxes:

10. A base-broadening approach to raising revenue will mitigate adverse growth effects. Ireland’s combination of high personal and indirect tax rates, and relatively narrow tax bases, provides considerable scope for this approach. In this context, income tax reliefs could be better targeted to low-income taxpayers, and options to broaden the base for Pay- Related Social Insurance could be examined. The planned introduction of a value-based property tax in 2013 will provide a progressive and stable source of revenue. A suitably high level for this tax would maximize these benefits, while care is needed regarding collection modalities and lead times.

http://www.imf.org/external/np/ms/2012/071812.htm

Something upsetting in there for nearly everyone, which I suppose is a good thing - and unfortunately, yes, we've probably reached the end of the easy bit of the adjustment.

cordially,
Scofflaw

AlekSmart

Scofflaw wrote: »

http://www.irishtimes.com/newspaper/breaking/2012/0718/breaking55.html

I can see that's going to be highly popular with some people, and highly unpopular with others - in other words, politically divisive and requiring both careful analysis and courage.

Sadly,neither element features large on the Irish Social or Political scene

The suggestion is that the 'low-hanging fruit' has gone, and it's time to start looking at those harder-to-reach areas:

Which means perhaps cuts in benefits, reductions of medical card access, narrowing the child benefit allowance:

Also, perhaps, further PS cuts:

and perhaps more taxes:

http://www.imf.org/external/np/ms/2012/071812.htm

Something upsetting in there for nearly everyone, which I suppose is a good thing - and unfortunately, yes, we've probably reached the end of the easy bit of the adjustment.

cordially,
Scofflaw

The country has been faffing around for the past 4 years in an extended bout of McCreevyism..."Sure,somethin will come along soon...".

As I see it the IMF have called time on the Optimistic's.....:o

Ardent

It annoys me that successive governments have failed to tackle the issue of our incredibly generous social welfare benefits. It takes the IMF to come out and state the blindingly obvious.

We might see some action at long last. I hope it's tackled in a way that 1) minimises the impact on those who have recently become unemployed and 2) hits career welfare recipients hardest.

Sponge Bob

The Household Benefits package is a 'non core' class of S/W expenditure by international standards and has been under great scrutiny in IMF circles. They are appalled that the state pays for 30% of Domestic Telephone lines while getting no concessions at all from eircom on Broadband Objectives ..for example.

Nor are they amused at the blunderbus financial support for CIE in the form of the free travel block grant.

EchoO

The organisation warned that dole payments are high by international standards and responsible for “low exit rates” from the Live Register.

As the IMF forecast the economy to grow by just 0.5 per cent this year, it said that certain welfare payments should be means-tested to avoid long-term unemployment.

Maybe something got lost in translation, but the above doesn't really make sense. The fact that there is currently only 1 job vacancy for every 26 people who are unemployed is what is responsible for “low exit rate from the Live Register", not our high dole payments. It seems it is a lot easier to blame the unemployed for being unemployed than for the IMF to say that in order to fulfill the agreement you made with us, social welfare payments have to be cut. And how exactly does means testing certain welfare payments avoid long-term unemployment?

That said, the Government did agree to the bailout program. Means testing certain benefits would not have a huge effect on the overall welfare budget, further cuts to the basic welfare rates are inevitable. The closer these cuts are to next election, the more difficult it will be politically for FG and Labour. I assume they are putting it off in some vain hope that the economy will pick up in the meanwhile, thereby lessening the problem.

woodoo

I consider child benefit for well off people to be low hanging fruit. The same for medical cards for well off over 70's.

The social welfare bill is costing 21 billion a year so they really do have to take a long hard look at it.

They should also cut the dole for anyone who has been on it for more than 4 years by 20%.

KyussBishop

I find their 'encourage people back to work' line a bit disingenuous, seeing as the lack of jobs is plainly obvious.
Regardless, some welfare is high and in need of reduction, and there does seem to be a need for reform in many areas of welfare.

One thing in particular though, is (separate to welfare) the property and rental market needs some serious reform, to get the prices down (and thus reduce rent supplement);
I don't know enough in that area to say what kind of reform is needed, but the prices are still ridiculous, and the general cost of living factors in too and needs reduction.

As for our wider economic recovery:
Balancing the budget gradually will only get us so far, and will shrink our economy along the way as well (causing some degree of a negative feedback loop, requiring more cuts); need to look at wider ranging policies of debt restructuring/writedowns, and then probably some stimulus (considered carefully, in the right areas) if our reduced debt allows.

Stheno

EchoO wrote: »

Maybe something got lost in translation, but the above doesn't really make sense. The fact that there is currently only 1 job vacancy for every 26 people who are unemployed is what is responsible for “low exit rate from the Live Register", not our high dole payments. It seems it is a lot easier to blame the unemployed for being unemployed than for the IMF to say that in order to fulfill the agreement you made with us, social welfare payments have to be cut. And how exactly does means testing certain welfare payments avoid long-term unemployment?

I took your first point to be that the IMF consider the total package of benefits that one can get compared to what can earn on the minimum wage as a disincentive for people to work?

woodoo wrote: »

I consider child benefit for well off people to be low hanging fruit. The same for medical cards for well off over 70's.

The social welfare bill is costing 21 billion a year so they really do have to take a long hard look at it.

They should also cut the dole for anyone who has been on it for more than 4 years by 20%.

I do think child benefit needs to be means tested and so too should pensions as talked about

EchoO

Stheno wrote: »

I took your first point to be that the IMF consider the total package of benefits that one can get compared to what can earn on the minimum wage as a disincentive for people to work?

That might be said to be the case if there were thousands of minimum wage rate job vacancies presently going unfilled, but there isn't.

spud_gunner

woodoo wrote: »

I consider child benefit for well off people to be low hanging fruit. The same for medical cards for well off over 70's.

The social welfare bill is costing 21 billion a year so they really do have to take a long hard look at it.

They should also cut the dole for anyone who has been on it for more than 4 years by 20%.

with the exception of taking medical cards of wealthy pensioners , i suspect all of the above will be on the table of cuts in the coming years , no goverment is going to touch pensioner benefits , the public support unconditional support for pensioners irrespective of wealth

nunn351

Listening to these guys tonight , - its obvious that means-test is going to happen more and more

Dannyboy83

We knew it was coming.

http://www.rte.ie/news/2012/0613/irish-bailout-programme.html
The document also says EU officials asked whether it would be better to cut public service wages instead of reducing numbers of workers.
The report, which follows a visit by the EU/European Central Bank and IMF troika in April, looked into the operation of the Croke Park deal.

Officials asked whether reduced numbers could threaten services and whether in effect wages rather than employee numbers should have been reduced.
The Commission told the Government it would be important new public servants would be subject to a reformed pension regime.

The report also says it is closely monitoring overspending in health and social welfare.
If the budgets in these areas are exceeded there will be savings elsewhere, the Commission says.

I believe the current moves in the HSE are the start of the dismantling of the Croke Park agreement also.

I would love to have been a fly on the wall at their recent visit.
The party is over.

Stheno

EchoO wrote: »

That might be said to be the case if there were thousands of minimum wage rate job vacancies presently going unfilled, but there isn't.

It's not meant to reflect that thousands of jobs are there, but if there are 10 thousand min. rate jobs and ten thousand people won't take them as they are better off unemployed, that's an issue.

It's a contributory factor (rate of SW vs min. wage, especially for those with dependants) as to why people won't take jobs, not a solution to unemployment.

Decrease total benefits compared to minimum wage, educate people about FIS and you might find far more people taking up such roles
Plenty of posts on here in the past that for a father supporting a partner and two kids, they need to earn 40k to be better off not on benefit.

In my local town, there are at least five small businesses advertising full time vacancies, say 300 towns are the same, that's 1500 jobs.

woodoo

Dannyboy83 wrote: »

I believe the current moves in the HSE are the start of the dismantling of the Croke Park agreement also..

It only has 18 months to run anyway.

Scofflaw

EchoO wrote: »

Maybe something got lost in translation, but the above doesn't really make sense. The fact that there is currently only 1 job vacancy for every 26 people who are unemployed is what is responsible for “low exit rate from the Live Register", not our high dole payments. It seems it is a lot easier to blame the unemployed for being unemployed than for the IMF to say that in order to fulfill the agreement you made with us, social welfare payments have to be cut. And how exactly does means testing certain welfare payments avoid long-term unemployment?

That said, the Government did agree to the bailout program. Means testing certain benefits would not have a huge effect on the overall welfare budget, further cuts to the basic welfare rates are inevitable. The closer these cuts are to next election, the more difficult it will be politically for FG and Labour. I assume they are putting it off in some vain hope that the economy will pick up in the meanwhile, thereby lessening the problem.

I'm not sure it's well quoted, to be honest. This is the IMF:

12. Reforms of social benefits can support this strategy. The flat structure of unemployment payments results in replacement rates for the long-term unemployed that are high by international standards, contributing to low exit rates from the Live Register. The highest replacement rates affect those also receiving housing benefits. To avoid unemployment and inactivity traps for this cohort, it is important to integrate the systems of social housing provision and rent supplement for those with long-term housing needs into a new means-tested Housing Assistance Payment.

That 'replacement rate' is the ratio of benefit income to working income. For long-term unemployment in Ireland it looked like this in 2001 and 2005:

Country|Single 2001|Single 2005|Family* 2001|Family* 2005
Denmark|61|59|78|77
Ireland|50|52|72|76
Austria|51|51|67|64
Iceland|48|51|73|74
Netherlands|49|50|62|61
Belgium|44|48|55|56
Sweden|49|48|72|70
Switzerland|53|48|79|70
Finland|51|47|84|77
Luxembourg|43|43|63|65
United_Kingdom|41|41|71|67
Norway|41|39|75|73
New_Zealand|40|38|44|46
Germany|54|36|63|62
Australia|36|33|66|65
OECD|35|32|57|53

* Family = single earner couple, 2 children.

Sources: http://www.cesifo-group.de/portal/pls/portal/docs/1/1193374.PDF and http://www.cesifo-group.de/portal/pls/portal/docs/1/1193022.PDF

Those rates are generous for long-term unemployment. While I don't have any objection to that in itself, I don't know whether we can currently afford to be at the top of the league tables for such benefits, even though, as people have pointed out, there may not be any jobs for people to take.

cordially,
Scofflaw

Farmer Pudsey

Stheno wrote: »

I took your first point to be that the IMF consider the total package of benefits that one can get compared to what can earn on the minimum wage as a disincentive for people to work?

I do think child benefit needs to be means tested and so too should pensions as talked about

woodoo wrote: »

I consider child benefit for well off people to be low hanging fruit. The same for medical cards for well off over 70's.

The social welfare bill is costing 21 billion a year so they really do have to take a long hard look at it.

They should also cut the dole for anyone who has been on it for more than 4 years by 20%.

At what income should we start to means test CB and if we do what are the repucussions.

Stheno

Farmer Pudsey wrote: »

At what income should we start to means test CB and if we do what are the repucussions.

I would base in on the current individualised tax system. I.e. if only one parent is working then the income level would be higher than for two.

It would be relatively complex to take into account the cost of childcare to do that, so secondarily, I would propose a tax credit.

FOr one parent/seperated families I'd have a tax credit

Dannyboy83

Scofflaw wrote: »

I can see that's going to be highly popular with some people, and highly unpopular with others - in other words, politically divisive and requiring both careful analysis and courage.

Looks like David McWiliams is already stirring it::pac:

http://www.davidmcwilliams.ie/2012/07/18/dead-end-street-politics-we-wont-accept-pay-cuts-so-now-were-stuck
In the public sector it works differently because when the employer — the State — goes bust, the public sector unions must move to protect their members, otherwise they wouldn’t be doing their job. It’s up to the Government — the employer — to make the choice.
With the Croke Park agreement, we have a choice of sorts.

So where does this leave us? It leaves us with one part of the population paying a much fiercer price from the recession and another part protecting themselves.
The insiders are protected and the outsiders are left to fend for themselves.

But here’s where the problem gets more tricky because the interests of the unemployed and the employed clash.

The army of unemployed people wants to get back into a job and, typically, is prepared to accept lower wages for the chance of work. So it is in their interest to see the general wage level drop. But it is not in the interest of the people still in work to see the general wage level drop because they will lose out.

EchoO

Scofflaw wrote: »

I'm not sure it's well quoted, to be honest.

Yeah, there's a big difference in saying "contributing to low exit rates from the Live Register" and "responsible for low exit rates from the Live Register". Strange choice of wording by The Irish Times.

spud_gunner

Dannyboy83 wrote: »

Looks like David McWiliams is already stirring it::pac:

jack o connor said the main reason he didnt want to see cuts to public sector pay was because it might encourage employers to cut the wages of those in the private sector or those unemployed who are seeking work :rolleyes:

Stheno

spud_gunner wrote: »

jack o connor said the main reason he didnt want to see cuts to public sector pay was because it might encourage employers to cut the wages of those in the private sector or those unemployed who are seeking work :rolleyes:

Given that the private sector is so much better paid??????? :cool:

n97 mini

spud_gunner wrote: »

jack o connor said the main reason he didnt want to see cuts to public sector pay was because it might encourage employers to cut the wages of those in the private sector or those unemployed who are seeking work :rolleyes:

Jack O'Connor is trying desperately to avoid a public/private split (which has already happened) as he knows his position on public sector pay is untenable without support from "wurkers" in the private sector.

EchoO

Stheno wrote: »

It's not meant to reflect that thousands of jobs are there, but if there are 10 thousand min. rate jobs and ten thousand people won't take them as they are better off unemployed, that's an issue.

It's a contributory factor (rate of SW vs min. wage, especially for those with dependants) as to why people won't take jobs, not a solution to unemployment.

Decrease total benefits compared to minimum wage, educate people about FIS and you might find far more people taking up such roles
Plenty of posts on here in the past that for a father supporting a partner and two kids, they need to earn 40k to be better off not on benefit.

In my local town, there are at least five small businesses advertising full time vacancies, say 300 towns are the same, that's 1500 jobs.

Yes, there are anomalies in the system, the chief one being families with over two children who are also claiming a housing allowance. But they only make up a relatively small number of those on the live register. The vast majority would be significantly financially better off taking a minimum wage rate job than staying on the dole. Minimum wage rate jobs only account for the around 3% of all jobs in the economy. The recovery when/if it does come will be export lead, this is not a minimum wage rate sector. So the majority of new jobs that will be created in the economy will offer wages quite a bit higher than the minimum wage

Pride Fighter

Nothing wrong with the social welfare rates. The social welfare bill is far too high. For every person that is taken off it, it saves about 10k in welfare and 10k in administration per year.

The solution is to create jobs that are sustainable and long term and in large numbers.

poeticseraphim

Pride Fighter wrote: »

Nothing wrong with the social welfare rates. The social welfare bill is far too high. For every person that is taken off it, it saves about 10k in welfare and 10k in administration per year.

The solution is to create jobs that are sustainable and long term and in large numbers.

How exactly though?

Thats the issue in this economy. There is no room for growth. And the people left over from emigration are those of us already paying taxes or those unemployed. Many of whom are not the type oflabour force to supply any demand for a growth sector.

Paypal was forced to import 500 workers recently because those on the live reg in Ireland don't have a second European language.

It is not enough to have the leaving cert to have a job anymore. Many need to get their head around this. You need a second language now to work in a call centre. If we are the gateway to Europe we really need to change.

Sustainable jobs in large numbers (in our country as we have little in the way of natural resources ) require higher education investment. Min wage jobs are generally more transient and not sustainable. They are usually the types of jobs to be cut first.

To be honest for years the Govt (FF days) funnelled funding into welfare and benefits instead of setting target goals for education etc which gives a return on investment ..It is CRAZY that an EU country that calls itself the gateway to europe and has free Universities has so few graduates with a second language.

In other EU countries even secondary school graduates have a second language ...it is a huge issue in the IT sector and needs to be addressed.

We need to ask ourselves...WHAT KIND of jobs are we training those on the live reg for??? Could many of them have a second language learnt within a year? THOSE are the kinds of jobs out there that Ireland has to offer and we will lose these companies if we don't meet the demand.

On another thread a situation was brought up where an official suggested to someone onthe live reg that they retrain as a software developer. This was dismissed as the officail being unrealistic. I would suggest it is the other way around....THIS IS THE REALITY...these are the jobs on offer the old economy is over

It is not necessarily the only the jobs we need to supply...but the right kind of people....we can change the people ..not necessarily the jobs...there were 500 jobs available in paypal that it could not find suitable emloyees for because they could not find people with nordic languages or people who could learn quickly or help from the Govt to fund a progarmme for learning of lanagues for that company.

The Govt needs to approach companies and find who is hiring and can't find suitable applicants (they are there) and train people for those particular jobs.

And if people on the live reg are not prepared to change ....we have bigger problems...

But the PayPal situation is being repeated all over the country and it has been said before ....companies cannot find the employees not because of the lackof people...but the lack of correct skills suited towards their business

There is little point in havinga low corp tax rate for a company who needs IT workers who speak German if we don't have IT workers who speak German....

We had better find out what is out there ..what numbers are needed and what skills and organize training accordingly.

There are jobs there is seems there is a disconnect inn the economy between the people and jobs whether it be due to unsuitable skills or the salary not meet the monetary dependancies or responsiblities of people or not meeting them as well as benefits.


Even if it meant cutting benefits for unemployed but giving something to those on lower wages through housing or child benefit for a short time.

Make it better to work.


But really it seems to me there is a disconnect between the people and the jobs that are there.

And also we have to get real about the types of jobs that will be created in future and the type of people that will be needed...it's the 21st century if you don't have a degree and a language ..get them...and EVERYONE can...the influx of workers from oher countries to fullfill those jobs proves they are there.

Our tourism industry is not exploited because of language deficiencies...we could really sell Ireland to the EU much more easily than America...

If we want to be the ageway to the Eu for America and China we need to supply the kind of people who can facilitate those jobs. In all kinds of industries. THATS where our future and potential lies...but you have totrain the people for it.

It's like the Govt is not in the 21st century.....its be a teacher or a bulider era in their heads....i hope they join us in the year 2012

Pride Fighter

Pride Fighter wrote: »

Nothing wrong with the social welfare rates. The social welfare bill is far too high. For every person that is taken off it, it saves about 10k in welfare and 10k in administration per year.

The solution is to create jobs that are sustainable and long term and in large numbers.

Really?

jank

How about implementing a credit card system for dole payments where certain items cannot be bought with it. I.E Booze and tobacco.
If the system is automated it could save billions. That would require the unions getting on board but I suppose they are more interested in protecting mary and joes job down the dole office.

Dave!

How would that scheme save the state money (billions, no less) if we're giving out the same amount? Surely we'd just get less tax back from booze and cigarettes...

How much would it cost to set it up?

And what unions do we need to get on board for your plan? I don't think there are any unions for unemployed people

I think we need to flesh out the details before we implement that scheme...

Welease

jank wrote: »

How about implementing a credit card system for dole payments where certain items cannot be bought with it. I.E Booze and tobacco.
If the system is automated it could save billions. That would require the unions getting on board but I suppose they are more interested in protecting mary and joes job down the dole office.

What difference does buying booze and tobacco make?
The payment will still be €188 per week (or whatever relevant amount).

Nody

jank wrote: »

How about implementing a credit card system for dole payments where certain items cannot be bought with it. I.E Booze and tobacco.
If the system is automated it could save billions. That would require the unions getting on board but I suppose they are more interested in protecting mary and joes job down the dole office.

Beyond the issues raised above the simple fact is that the dole receipent would sell them on at a slight discount to get cash to buy it anyway.

Farmer Pudsey

The reality is that social welfare has gone down by only 10% since the start of the recession ( and they got a rise at the start of it). Pay rates in the private sector have gone down by10-50% depending on sector and tax has gone up so take home pay is reduced further.

I asked a question earlier about at what level CB should be means tested at, the issue with CB is the same as third level fees/grants/medical cards/ dental benfits/ the price of car fuel the couples working on 30-100k suffer disportionally and the same with local charges.

The reality is that unless you are hungry ( metophorically) you will not change. Also both parents of a family are unemployed then there is too much of a loss if one goes back to work especially if they have childern going to college.

We have one of the highest rate of welfare in europe and the highest paid civil Servise and the higher grades are paid about twice the rate that there EU counterparts get. Also we have pro rate a bigger no of TD's Senators, more councillors and a bigger no of local authority's pro rata. We have over 800 quang'o compared to around 400 in Great Britian ( we even set one up to collect Farm plastic instad of contracting it out for 3-5 years). And the present government want to set up more quango's. What happens to all the money Repak collect???

Unless the government start tackling all the issues it is not a matter of more tax and reduced benifits on workers or else there will be less workers

antoobrien

Farmer Pudsey wrote: »

I asked a question earlier about at what level CB should be means tested at, the issue with CB is the same as third level fees/grants/medical cards/ dental benfits/ the price of car fuel the couples working on 30-100k suffer disportionally and the same with local charges.

I think there's a few things that could be done:

All welfare should be means tested with graded support levels based on the various factors. For arguments sake full benefits stop at the average wage, with graded reductions up to 75k where there are no benefits paid.

For those in employment I think we should not pay cash but, at least partially, use tax credits instead. So for someone earning say 25k, you'd get 50% cash, 50% tax credits.

I think we also need to have a serious look at tax credits for childcare.

Mr. teddywinkles

Did I not just read in the Irish Independant yesterday that SOME civil servants are getting more now than during the boom years :rolleyes:
The government needs to grow a pair and deal with this foolish rewarding and bonus system for just doing your job like everyone else

Tipp Man

Farmer Pudsey wrote: »

The reality is that social welfare has gone down by only 10% since the start of the recession ( and they got a rise at the start of it). Pay rates in the private sector have gone down by10-50% depending on sector and tax has gone up so take home pay is reduced further.

I asked a question earlier about at what level CB should be means tested at, the issue with CB is the same as third level fees/grants/medical cards/ dental benfits/ the price of car fuel the couples working on 30-100k suffer disportionally and the same with local charges.

The reality is that unless you are hungry ( metophorically) you will not change. Also both parents of a family are unemployed then there is too much of a loss if one goes back to work especially if they have childern going to college.

We have one of the highest rate of welfare in europe and the highest paid civil Servise and the higher grades are paid about twice the rate that there EU counterparts get. Also we have pro rate a bigger no of TD's Senators, more councillors and a bigger no of local authority's pro rata. We have over 800 quang'o compared to around 400 in Great Britian ( we even set one up to collect Farm plastic instad of contracting it out for 3-5 years). And the present government want to set up more quango's. What happens to all the money Repak collect???

Unless the government start tackling all the issues it is not a matter of more tax and reduced benifits on workers or else there will be less workers

You raise a hugely important point which is being missed

If you means test the child benefit then it is yet another reason not to come off the live registrar

The simple case being 2 working parents have to pay for childcare - yet they will be the 1's who would loose out if it means tested - yet 2 parents not working get the child benifit yet their child costs are much much lower.

so means testing the CB could actually be (yet another) encouragment not to get work

The arguement could easily be made that if both parents aren't working then no (or greatly reduced) child benefit should be paid - they don't have to pay for childcare - that would probably save us more money than means testing it - and far easier to implement

Why in this state are those that are working being constantly punished for doing so - the mentality is all wrong - work should be rewarded and those not working so not expect anywhere near the same standard of living as those in work - that is most definately not the case in this country

Great insights to what the 'man in the street' might think of any adjustment right here: http://www.boards.ie/vbulletin/showthread.php?t=2056704981


To say that say a builder must be flexible enough to retrain as a software developer is a total fallacy. What I think must happen (jobs are kept simple for simplicity's sake) is that SOMEONE trains as the software developer and in turn a job is created in his local computer shop, say.

The link we're missing is that the builder must be flexible enough (i.e. it must be worth his while to get straight back into employment) to take the job in his computer shop and begin to retrain in computer sales.

Where we are now is that the builder was making up to 100k PA a few years ago, and is picking up ~ 30k worth of benefits. He isn't going to take a job for 25k, even if it could lead to a managerial role etc eventually - because payments are at a point where he can continue to live comfortably (i.e. with pretty much every creature comfort - sky/internet/booze) and has no real drive to go and make the sacrifice of taking what he might consider to be a crap job. Why would he?

Geuze

An anecdotal case:

Retired couple, gross income = 1000 pw, 52k pa

They pay maybe 10% income tax, maybe a bit less

They receive:

• two medical cards
• two travel passes
• the Household Benefits package (free TV licence, telecom allowance, elec allowance)

I wouldn't mind giving them all these benefits if they pay more tax, but about 10% is too little!!!

bbam

I think some great points have been made here such as capping welfare payments at the average ind wage.

However the big problem is still that there is no work out there. I still feel that we need to be careful cutting rates too much as well just be driving portions of society into poverty. Yes there probably are numbers of jobs there currently unfolded as for many the economics of taking them don't stack up, however the solution surely is more return to work support rather than cutting rates and forcing families into low standards of living.
And really how many jobs are there at present? If we cut welfare by 30% it would force many out to low paid positions, there are no jobs for the rest so they have less money and no job prospects, ye result is poverty for the sake of it and the rise in social problems that are associated.

It's too simplistic to say cut SW rates and the lazy feckers will go out and get a job. There are genuinely very few jobs out there and if you're unlucky to be unemployed and living in a rural area the outlook is bleaker.
I fully support SW reform but great care needs to be taken before radical steps are taken to ruin the lives of the 400,000+ unemployed and their families.

jank

Dave! wrote: »

How would that scheme save the state money (billions, no less) if we're giving out the same amount? Surely we'd just get less tax back from booze and cigarettes...

How much would it cost to set it up?

And what unions do we need to get on board for your plan? I don't think there are any unions for unemployed people

I think we need to flesh out the details before we implement that scheme...

The unions in the public sector. Such technology is available already however to implement it would need the unions to get on board. We all know the unions answer when it comes to automation and efficiency.

Money would be saved by making the process more efficient (less overheads), less money would be spent on imported products such as cigarettes and beer and other crap the unemployed might buy. The dole is a means to survive and not starve, not some commodity where one enjoys all the luxury trappings of before.

jank

Nody wrote: »

Beyond the issues raised above the simple fact is that the dole receipent would sell them on at a slight discount to get cash to buy it anyway.

What would they sell?

Nody

jank wrote: »

What would they sell?

The card/voucher/what ever you'd implement that would only be used to buy food products with but not alcohol/tobacco/<insert item people want to restrict>. And before you bring it up; yes they would also get to borrow the ID if that's required and no, it would be checked seriously. This is what is done already in UK with dole receipents borrowing money on their future dole payments (and the loan shark gets their ID and collects their dole for them to pay back the loan that they are owed).

jank

Well if people receiving dole payments begin to "sell" their future credits for a few beers and fags then whatever befalls them is their own fault.

Farmer Pudsey

Tipp Man wrote: »

You raise a hugely important point which is being missed

If you means test the child benefit then it is yet another reason not to come off the live registrar

The simple case being 2 working parents have to pay for childcare - yet they will be the 1's who would loose out if it means tested - yet 2 parents not working get the child benifit yet their child costs are much much lower.

so means testing the CB could actually be (yet another) encouragment not to get work

The arguement could easily be made that if both parents aren't working then no (or greatly reduced) child benefit should be paid - they don't have to pay for childcare - that would probably save us more money than means testing it - and far easier to implement

Why in this state are those that are working being constantly punished for doing so - the mentality is all wrong - work should be rewarded and those not working so not expect anywhere near the same standard of living as those in work - that is most definately not the case in this country

This is the issue most working parents use child benfit for to partially pay for childcare directly or indirectly. It is 140 euro's/ child if it is means tested will both parents income be taken into account, strictly it is paid to the mother so you could have a situtation where a couple earning 70K lose CA but a unworking mother who's husbands earns 100k getting it. If you have two childern in a year it is 3340 euro's a working couple on the higher rate will need over 6700 in taxable income to replace same while on lower rate they would need around 5K to replace it. And we have no childcare/creche setup in place.

Also it will cause working couples to put off haveing a family or reducing there family size but if you are unemployed there is no disencentive so you can have any size family especially if you want the local authority to give you a bigger house or get higher on the list.

General Atomic

This race-to-the-bottom mentality with regards to our social safety net is incredibly stupid. It's a bad thing that we provide better for our unemployed than other countries? I think that's something to be proud of, frankly. It's also something that the people in this thread will appreciate when they need to avail of it.

http://trueeconomics.blogspot.ie/2012/01/3012012-irish-long-term-unemployment.html

This post shows statistics for long-term unemployment pre-crisis. Long-term unemployment refers to a period of unemployment greater than 12 months, that being the disabled, single parents and, yes, people taking advantage of the system. Pre-crisis our long-term unemployment numbers were some of the lowest in Europe, it's only the recession that's changed that. If we have such an attractive social welfare system, why didn't people just leave their jobs en-masse prior to the collapse and avail of this fantastic cushion?

It's a complete mischaracterization by the IMF and people in this thread to say that our unemployment problem stems from the sheer comfort of €188 per week. This is the same organization that thinks imposing austerity measures fixes economies, I wonder how many of you agree with that too? There are very few jobs available right now outside of a select few sectors that are inaccessible to most of the unemployed; we're not a country of moochers, people want to work and feel some degree of dignity and purpose but that work simply isn't available anymore.

And by the way, cutting social welfare would not be good for our already struggling economy. What do you think would happen to local demand and businesses if you were to cut 10% or more of the income for 400,000 people? Do you think it would be a good thing? Wake up and realize that paying down our debt really isn't the most important thing we can do right now, getting people back into work is.

spud_gunner

Geuze wrote: »

An anecdotal case:

Retired couple, gross income = 1000 pw, 52k pa

They pay maybe 10% income tax, maybe a bit less


They receive:

• two medical cards
• two travel passes
• the Household Benefits package (free TV licence, telecom allowance, elec allowance)

I wouldn't mind giving them all these benefits if they pay more tax, but about 10% is too little!!!

a retired couple over the age of seventy can bring in 1400 euro per week and still recieve a medical card

this should be tackled before looking at issues like child benefit or dole, its obscene

spud_gunner

General Atomic wrote: »

This race-to-the-bottom mentality with regards to our social safety net is incredibly stupid. It's a bad thing that we provide better for our unemployed than other countries? I think that's something to be proud of, frankly. It's also something that the people in this thread will appreciate when they need to avail of it.

http://trueeconomics.blogspot.ie/2012/01/3012012-irish-long-term-unemployment.html

This post shows statistics for long-term unemployment pre-crisis. Long-term unemployment refers to a period of unemployment greater than 12 months, that being the disabled, single parents and, yes, people taking advantage of the system. Pre-crisis our long-term unemployment numbers were some of the lowest in Europe, it's only the recession that's changed that. If we have such an attractive social welfare system, why didn't people just leave their jobs en-masse prior to the collapse and avail of this fantastic cushion?

It's a complete mischaracterization by the IMF and people in this thread to say that our unemployment problem stems from the sheer comfort of €188 per week. This is the same organization that thinks imposing austerity measures fixes economies, I wonder how many of you agree with that too? There are very few jobs available right now outside of a select few sectors that are inaccessible to most of the unemployed; we're not a country of moochers, people want to work and feel some degree of dignity and purpose but that work simply isn't available anymore.

And by the way, cutting social welfare would not be good for our already struggling economy. What do you think would happen to local demand and businesses if you were to cut 10% or more of the income for 400,000 people? Do you think it would be a good thing? Wake up and realize that paying down our debt really isn't the most important thing we can do right now, getting people back into work is.

the goal should be to look at each case individually , blanket cuts or benefits are neither affordable or the right thing to do

Count Dooku

General Atomic wrote: »

And by the way, cutting social welfare would not be good for our already struggling economy. What do you think would happen to local demand and businesses if you were to cut 10% or more of the income for 400,000 people? Do you think it would be a good thing? Wake up and realize that paying down our debt really isn't the most important thing we can do right now, getting people back into work is.

Do you mean default and balance books overnight?

bbam

Why not like for like reductions.
So, for the vast majority on SW it's not by choice and they would rather be working, so too those working would like to stay working.
If SW is cut by say 20% then why shouldn't PAYE rates be increased likewise, I mean for most in jobs it's mostly luck they are still there rather than on SW.
Wouldn't it be a great dig out for public finances if PAYE was increased by 20%. I mean if your working why would you need Internet access, and apparently meat dinners are just for the odd day.
It's essentially the same argument, yes we're borrowing money to pay SW, but we're also borrowing to have hospitals for the PAYE workers and their children so why shouldn't they suffer too.

Those in employment need to think hard before calling for cuts against the less fortunate in society.

And I'm PAYE.

Sleepy

Yeah, it's "luck" that those of us who invested time and money in our educations still have jobs while those who left school to work on the sites / did a BA in Irish History to help persue their career in retail management / jumped on the construction bubble with a civil eng/architecture degree and haven't done a conversion course since 2008 don't. :rolleyes:

bbam

Sleepy wrote: »

Yeah, it's "luck" that those of us who invested time and money in our educations still have jobs while those who left school to work on the sites / did a BA in Irish History to help persue their career in retail management / jumped on the construction bubble with a civil eng/architecture degree and haven't done a conversion course since 2008 don't. :rolleyes:

Not all on SW were in the building bubble. A sizeable number have manufacturing and industury backgrounds. There are plenty with qualifications on SW payments. You make it sound like those on the dole deserve it.
If your willing to impose severe hardships on those unfortunate to loose their jobs due to the exonomic downturn then why shouldn't the Emoyed shoulder an equal burden of hardship.
Lots calling for these cuts seem to forget that most are ordinary hard working families who have paid their dues through the years. It's essentially saying "cut their modest payments so my tax isn't increased. "

If people are making genuine efforts to become re employed then they deserve to be supported to do so, yes fraudsters and those hacking the system need to be weeded out but I believe these are a small minority of the 400,000.

Terrontress

All we hear is anecdotal information about people going to other eurozone nations and paying less for a variety of items than they pay in Ireland. "Cost of doing business" we're told. High wages, high rents. This is what leads to a requirement for high social welfare. Cut SW, up income tax. People have less to spend, consumption falls, prices fall, rents fall, things even out with the same standard of living as at present.

bbam

Terrontress wrote: »

All we hear is anecdotal information about people going to other eurozone nations and paying less for a variety of items than they pay in Ireland. "Cost of doing business" we're told. High wages, high rents. This is what leads to a requirement for high social welfare. Cut SW, up income tax. People have less to spend, consumption falls, prices fall, rents fall, things even out with the same standard of living as at present.

In theory yes.
But if your family income is hit with the idea to force you out to take a job that probably isn't there, the time lag between your income being cut and living costs coming down would be a terrible time of poverty and social exclusion. In many cases your throwing the less fortunate and vounerable in society to the wolves just to reduce the cost of living.