Dáil Éireann debate -
Tuesday, 11 Apr 2000

Vol. 517 No. 6

Written Answers. - Employment Support Services.

Michael Bell

Question:

322 Mr. Bell asked the Minister for Social, Community and Family Affairs if the improvements in the back to work scheme announced by him on 23 January 2000 are available to those qualifying for back to work enterprise; his views on whether advance training, the travel or training allowance and the cash bonuses payable would be of great advantage to those starting their own business on the scheme; if the improvements to the scheme are not available to those starting their own business, if he will extend these to them; and if he will make a statement on the matter. [10858/00]

Minister for Social, Community and Family Affairs (Mr. D. Ahern):

The improvements in the back to work scheme which I announced in January are for the benefit of people out of work for more than five years. The enhancements being made are designed to encourage this cohort of unemployed people to return to work by providing them with training and additional cash bonuses. The improvements are intended specifically to help people who find it difficult to obtain employment with an employer and are a direct response to what we are hearing from long-term unemployed people who are encouraged by present economic circumstances to believe that they can find work.

The extension is not designed for people becoming self-employed. A wide range of sup ports already exist for persons becoming self-employed under the back to work enterprise allowance programme. These include, four years of financial support including a first year at 100% of their former unemployment payment rate as compared with three years for employees; financial assistance in the setting up of the business towards e.g. the cost of training, advertising, preparation of business plans etc. and a contribution towards the cost of capital items; a special interest free start up loan from the Department's joint enterprise loan fund with First Step Limited and credit union loans guaranteed by the Department's credit union loan guarantee fund.

In addition my Department's jobs facilitators will advise on other options which may be available from other sources for those involved. In these circumstances the application of the new arrangements to the self-employed category would not be warranted.

Michael Bell

Question:

323 Mr. Bell asked the Minister for Social, Community and Family Affairs if he will re-consider the changes announced in the rent and mortgage supplement entitlement assessment under the supplementary welfare scheme applicable to persons on back to work allowance or on community employment; and if he will make a statement on the matter. [10859/00]

Minister for Social, Community and Family Affairs (Mr. D. Ahern):

The new conditions for the retention of rent and mortgage interest supplements has been designed in consultation with the social partners under Partnership 2000 to ease the transition from welfare into work. Following those consultations the substantial changes to the conditions for the retention of rent/mortgage interest supplement by participants on active labour market programmes were announced in budget 2000 and came into effect on 6 April 2000. These changes include generous disregards in the assessment of means and a tapered withdrawal of the supplement. I have no plans to reconsider the changes at this time.

While the £250 gross household weekly income limit will still apply, any back to work allowance and family income supplement in payment will be disregarded in the assessment of this income. Furthermore, the £250 monthly rent and mortgage supplement limit will be abolished. Instead, withdrawal of the supplement will be tapered out over four years. Some 75% of the previous rate entitlement will be paid in year one, 50 % in year two, 25% in year three, and 25% in year four.

These measures have been designed to assist and encourage people some of whom are long-term unemployed to make the transition from welfare into work. Previously a person would receive support at a constant level for the duration of the scheme and then be faced with a sharp drop when moving into full-time employment. Under the new tapering system the withdrawal of the supplement is gradual over the dur ation of the scheme making the transition into full-time employment easier.

The new measures are also particularly beneficial to families. Previously rent and mortgage interest supplements were capped at £250 per month. A family with a high monthly rent of £650 would under the old rules only retain £250 of their £642.50 monthly rent supplement. This was a drop of £392. Under the new rules they will retain £482 in year one, £321 in year two and £160 in years three and four.

These new measures are also more equitable as all participants are treated in a similar manner. Under the old rules families and single people were capped at the same level which did not take account of the difference in the rent they were paying.

People who started back to work or community employment schemes prior to 6 April 2000 can choose to be assessed under either the old or the new rules, whichever is most beneficial to that individual. However, after 6 April 2000 people who take up a CE or BTW scheme will be assessed under the new rules.