THE GOVERNMENT will not cut social welfare rates during its term in office but plans to radically reform the system to make it fairer and help more people get back to work, Minister for Social Protection Joan Burton has said.
In an interview with The Irish Times, Ms Burton said she favoured creating a social insurance scheme for self-employed people and reviewing the universal social charge and child benefit system. She also plans to tackle fraud, which she said undermines the social contract between State and citizen.
“That is why rooting out fraud is so important . . . I want to ensure those who are playing the system and fiddling are reduced to an absolute minimum,” she said.
New figures show the department achieved welfare fraud control savings of €483 million in 2010, which was short of its target of €533 million.
Ms Burton said she wanted to prioritise reforms to family and child income supports and create a new insurance scheme for self-employed people and small business owners to enable them receive benefits when out of work.
“We have a changing labour force. We have people who are self-employed and contractors who have small businesses and who have no social insurance protection against unemployment or illness . . . I am very interested in addressing this,” said Ms Burton.
Groups representing the unemployed have lobbied for the introduction of this type of scheme. Self-employed people and small business owners, who make up a fifth of the workforce, are generally not eligible for jobseeker’s benefit. They rely on jobseeker’s allowance, a separate means-tested payment that is often refused to people whose partners work.
Ms Burton said a new insurance scheme would have to be funded by self-employed workers.
“I don’t think the word free is in the vocabulary of this Government or its capacity,” she said.
She said the previous government had left the country in an “appalling situation” and it was a great shame that it took its eye off the ball in the years of the Celtic Tiger and had not introduced the reforms that other countries had.
She said she was impressed by the Scandinavian model of dealing with unemployment, which aims to get people off benefits quickly.
“I think the big social evil that is facing Irish society is the return of long-term unemployment. Experts such as Prof David Blanchflower have set out just what a life-changing event that long-term unemployment is, particularly for young men. Even 20 years later in their 40s and 50s the scars of long-term unemployment remain,” she said.
She said her department would act as a springboard to get people back to work and education and the Government would provide a major jobs programme financed by the pension reserve fund.
“Creating infrastructural employment with shovel-ready projects that are ready to go will generate activity in an otherwise depressed domestic economy,” she said.
Ms Burton said that she supported the previous government’s policy of reducing the benefits of unemployed people who refuse to go on training or work placements.
She added that the difficult fiscal situation would constrain the Government but said the two Coalition parties are committed to maintaining current welfare rates.
Ms Burton said a commission on welfare and taxation would review the child benefit system and the controversial universal social charge, which was introduced in the last budget.
“Like any form of taxation, it [universal social charge] has to be fair and I think in particular its impact on low-paid people, people with medical cards and widows has to be considered,” she said.
She did not rule out adjusting child benefit rates if these were compensated for through more targeted income supports for poorer families. But she said she strongly supported maintaining universal child benefit payments.