I was delighted to launch JobsPlus yesterday in Waterford with the Taoiseach, the Tánaiste and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton. The new scheme, JobsPlus, is a simplified scheme. It is as easy as I could make it for employers and applications are made online. The scheme replaces the employer job PRSI exemption scheme, which started in June 2010, and the Revenue job assist scheme which began in 1998. Employers had said to me that while these schemes were very good, they were very clunky and the numbers of people applying for them were very small. I went around the country and talked to employers and the result is that this new scheme is as simple as I can make it.
There is an immediate financial incentive to employers. The incentive is payable on a monthly cash-back basis over a two-year period while the employee is retained in full-time employment of over 30 hours per week. In respect of recruits who are more than 12 months unemployed, but less than 24 months, the incentive is €7,500. This amounts to over €300 per month. For somebody who has been unemployed for two years or more, the incentive is €10,000 over two years. This is worth approximately €400 per month. This is a cash-back or wage subsidy scheme paid directly to the employer in respect of a qualifying employee taken on.
I travelled around the country and listened to employers in this regard. Approximately 2,500 employers attended the nine or ten road shows I conducted around the country.
Most people said they had never heard of the schemes or that they were very awkward to implement. This one is simple and, hopefully, it will be a help to the long-term unemployed, who now constitute a significant number of those unemployed in this country, and will also be a cash-back wage subsidy to employers who take on people.
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While conducting employer road shows throughout the country last year, I listened to the views of employers who perceived the old schemes as being complicated and burdensome. The low take-up of the old schemes endorses these views, and that is why I have introduced a simple, easily understood and attractive scheme to encourage employers to recruit from the longer-term unemployed.
The State offers supports to private business through a number of Departments and agencies, the objective being to attract and retain investment and nurture indigenous industries to create employment and contribute to the Irish economy. JobsPlus aims to alert employers to the talented pool of workers on the live register and encourage them to offer this group an employment opportunity. The structure of JobsPlus, which biases the incentive in favour of employers who recruit long-term unemployed people, lessens the likelihood of economic deadweight associated with interventions of this nature. While unemployment has stabilised recently, persons on the live register for a year or more now account for about 45.5% of all persons on the live register and this rate has been increasing slowly in recent months.
Every new full-time job supported under JobsPlus not only reduces social welfare payments made by the State but, critically, reduces the payments made to longer-term unemployed people, who evidence suggests are more likely to become long-term dependants of welfare. In addition, these new full-time workers will now contribute to the Exchequer by paying tax and PRSI.
The introduction of JobsPlus is closely aligned with Government policy on job creation, which is central to overall Government policy, particularly in times of high unemployment. The Government’s activation strategy as presented in Pathways to Work outlines the overarching objective of the strategy, which is to maximise the number of new jobs to be filled by the unemployed. This investment in jobs creates an additional stimulus, having a multiplier effect on the domestic economy and domestic demand which, as the Deputy knows, is crucial to our recovery.