Some people 'better off' on social welfare

THERE IS “no escaping” the fact that some people are “better off” on social welfare than going to work, a Department of Social Protection official told an Oireachtas committee yesterday.

David Dillon, principal officer at the department said people with large families and those in receipt of rent or mortgage interest supplement were “better off” on welfare than earning the minimum wage.

In a submission from the department, the Oireachtas Committee on Jobs, Social Protection and Education was told an income “replacement rate” analysis was carried out in February this year on more than 300,000 people in receipt of jobseekers’ allowance and benefit.

Replacement rates measure the proportion of out-of-work benefits, such as fuel allowance and rent supplement, received by an unemployed person against his or her take-home pay if in work. The higher the replacement rate, the lower the incentive to work.

The study showed more than 30,000 had “replacement rates” of more than 70 per cent.

“The great majority of people on the Live Register have a strong financial incentive to work and significant numbers leave the register each year,” the committee was told.

“However, despite the cash support provided by some schemes such as family income supplement, some households perceive particular difficulties in moving off the register.”

Rent supplement was a particularly “big barrier”, Mr Dillon said, but there were plans to address that.

The transfer of tenants from rent supplement to the local authorities’ rental accommodation scheme, under which rent is based on a percentage of net income regardless of employment or unemployment, would remove barriers to employment, he said.

He also said some claimants had a “psychological and comfort” attachment to the medical card and did not realise they would retain it for three years if they took up employment.