'Significant' incentive to work - Burton

Wed, Jun 13, 2012, 01:00

Families with children in receipt of unemployment assistance and rent supplement could be in poverty traps, Minister for Social Protection Joan Burton has said.

However, over two-thirds of unemployed people had a “significant financial incentive” to work she said, with the proportion of families with children on the live register and getting rent supplement amounting to just 2 per cent of those on the register.

She was responding to an Economic and Social Research Institute (ESRI) paper finding that 44 per cent of families on welfare were better off on the dole than in work.

The paper was withdrawn by the ESRI yesterday as Ms Burton rejected suggestions the organisation may have come under Government pressure to pull it.

The institute withdrew the study into possible financial disincentives to moving away from welfare. It finds 44 per cent of Irish people with children would be better off on the dole than in employment.

Richard Tol, formerly with the ESRI and now a professor at Sussex University, said he used two separate sets of CSO data in the paper entitled The Costs of Working in Ireland.

The ESRI said last night the paper would be removed from its website over concerns the public “could be misled by its content”, as it was a “work in progress”.

Interviewed on RTÉ radio, Prof Tol was asked whether the withdrawal of his paper was an example of his not being allowed by the ESRI to publish “true information”. He said: "It could easily be constructed as such . . . I don’t know why this decision was made or what pressure led to this decision."

Asked if he suspected Government pressure had been brought to bear he said: "It could have happened."

At the publication of a separate ESRI report today, Ms Burton said: "Well there was certainly no pressure from myself," adding evidence-based-policy was critical to making good decisions, particularly around how social welfare money was spent.

Asked whether her department would be examining the findings of Prof Tol’s report she said she would “certainly look at any research as it relates to unemployment”.

She said, however, she found it “odd” that media were highlighting this unpublished finding given that her Department published CSO statistics on the live register every month. These indicate 51 per cent of people on the live register received less than €188 per week, and 67 per cent, or 289,000 people received this amount or less.

She said there was a minority, particularly families with a high number of children, who might also be in receipt of rent supplement who were in a “poverty trap”.

Some 43,600 people on the live register (10.1 per cent) were in receipt of rent supplement as well. People with two or more children and rent supplement comprise 3 per cent of the live register, according to the department.

Ms Burton said: “If a family with four children had a rent supplement of €1,000 per month, moving into employment could mean a loss of €12,000 per year.

“So what I have been seeking to do is to have that [payment] transferred to local authorities and to the Department of the Environment where it would be dealt with as a housing issue. So when somebody in receipt of rent supplement takes up employment they are assessed in terms of their means.”

They would have their supplement cut down rather than removed altogether as at present, she said.

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