Working versus being on the dole
Sir, – Whether the findings in the ESRI’s recent report comparing the costs of working versus remaining on social welfare turn out to be accurate or not (Home News, June 13th), the debate does serve to highlight one essential point: the whole system of benefits and allowances is too complex to allow for an easy assessment of whether an individual should accept a job offer or not.
With this in mind, I think it is time to consider a radical simplification of the system of unemployment benefits and their integration within the tax system.
Unemployed people should be paid a “salary” based on a percentage of the minimum wage for a standard 40-hour working week, and this should be subject to the tax system like any other salary. The various income supports, carer’s benefit, child benefit, etc, should all be done away with and replaced by a system of tax credits, just as we have at present for PAYE workers, those who are blind, etc.
Rent supplement should be phased out over a few years as it is just a subsidy for landlords; the rental market will find its level over time. Social housing could offer variable rents based on the underlying gross salary. Childcare should be subsidised, tax-deductible, or both. A compulsory system of universal health insurance would have to be included in tandem with this system, since the disincentive of losing the medical card is a major barrier to taking up work.
Such a move would have the following advantages: it is equitable (workers and welfare recipients would receive the same benefits); it is straightforward and transparent; it does not require new administrative systems; and most of all it allows for a seamless transition from welfare to work and an easy comparison of one’s financial situation before and after accepting a job.
Of course the costs associated with taking up employment (transport, lunches, clothing, etc) will not disappear. However if there is a sufficient gap maintained between the standard unemployed “salary” and the minimum wage, then this should not be too much of a concern.
Has anyone in Government got the courage to adopt such a vision and sell it to the Irish people? – Yours, etc,
A chara, – Perhaps 14 per cent of single and 40 per cent of married ESRI staff should be offered dole instead of pay for the foreseeable future, at least until they get their act together? – Yours, etc,