Wednesday, 3 July 2013

Questions (160)

Brendan Griffin

Question:

160. Deputy Brendan Griffin asked the Minister for Social Protection if she will provide in tabular form the current respective replacement rates for the most common scenarios in the social protection system. [32485/13]

View answer

Written answers (Question to Social)

Almost three-quarters of the people on the Live Register (317,004 people) are only claiming a personal rate for themselves. They are either single or may have a spouse or partner who is working. In addition, just over half (53%) of the people on the Live Register receive less than the maximum personal weekly rate. This means that 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 replacement rate for given income levels is a tool used to measure the degree to which of out-of-work benefits when unemployed replace take home income from work. The replacement rates my Department calculate highlight the strong financial incentive that the majority of jobseekers have to enter employment. While there is no predetermined level of replacement rate which would influence every individual’s decision to work, higher replacement rates may indicate lower incentives to take up employment. In this regard a replacement rate in excess of 70% may be considered to be excessive.

Generally, my Department calculates replacement rates for the following family types:

- Single claimants

- Married or co-habiting couples:

- Couple with no Children (1 earner);

- Couple with 1 Child(1 earner +1 Child Dependent);

- Couple with 2 Children (1 earner +2 Child Dependent);

- Couple with 4 Children (1 earner +4 Child Dependent).

The following table sets out replacement rates values, which compare social welfare income, assuming that fuel allowance is payable, with net income at National Minimum Wage (NMW), two thirds of the Average Weekly Earnings (67% AWE) and Average Weekly Earnings (AWE).

Replacement Rates 2013

-

NMW

67% AWE

AWE

Single

61%

50%

37%

Couple 1 earner

68%

64%

55%

Couple 1 earner +1 Child Dependent

72%

68%

61%

Couple 1 earner +2 Child Dependent

75%

71%

66%

Couple 1 earner +4 Child Dependent

75%

72%

66%

In general, replacement rate analysis demonstrates that for the overwhelming majority of social welfare recipients, replacement rates are relatively low and they have a strong financial incentive to take up employment. Replacement rates for certain jobseekers can be higher than those listed in the above table if the jobseeker is in receipt of rent supplement or mortgage interest supplement. However, the vast majority of jobseekers do not receive these additional supports.