Batt O'Keeffe
Question:103 Mr. B. O'Keeffe asked the Minister for Social Welfare if he proposes to ensure that it pays a person to work rather than be on social welfare. [1702/96]
Written Answers. - Work Incentive.
Since I became Minister for Social Welfare, I have given particular priority to the need to ensure that the social welfare system encourages people to create employment and to take up jobs.
I remind the Deputy of the many changes aimed at improving incentives in the social welfare system which were announced in this year's budget. First, there were three measures in relation to people with children, as these families can face particular disincentives to work. Instead of just selectively increasing child dependant allowances for unemployed families, we are increasing child benefit, which is paid to all families with children; so an employed person with children gains as much as an unemployed person. This builds on the progress made last year, when we gave a very substantial increase in child benefit. We are also increasing payments under the family income supplement scheme, which is paid to low-paid employees with children. In addition, in order to improve the transition to work for unemployed people with children, I am bringing in new arrangements whereby a person who takes up employment will continue to receive child dependant allowances for up to 13 weeks in certain circumstances.
The budget also included a substantial concession in relation to PRSI contributions paid by employers, employees and the self-employed. In particular, the employee PRSI allowance was increased by 60 per cent, from £50 to £80. This will improve the net-pay position of employees, and low-paid employees in particular. In addition, employer's PRSI rates were reduced, thereby reducing the cost to employers of creating new jobs.
Other work-friendly measures announced in the budget were an increase in the number of places available on the back to work allowance scheme, 10,000 to 15,000, and improvements in the means test for unemployed people who take up casual or part-time work opportunities.
The social welfare measures were part of a very comprehensive budget package by Government to tackle the problems of unemployment. This included tax reductions, targeted job subsidies and improved arrangements for training and work experience for the long-term unemployed.
I will continue to develop the social welfare system with the aim of removing any anomalies that prevent people from taking up work. In this regard, I understand that the expert working group on the integration of the tax and social welfare systems is nearing completion of its work, and I look forward to receiving its report in the next couple of months.