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Budget 2014

Dáil Éireann Debate, Tuesday - 5 November 2013

Tuesday, 5 November 2013

Questions (418, 435, 436, 437, 442, 443)

Pearse Doherty

Question:

418. Deputy Pearse Doherty asked the Minister for Social Protection the number of persons in County Donegal that will be affected by the changes announced in Budget 2014 in relation to the social welfare payments for the under 25's; and if she will make a statement on the matter. [45612/13]

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Aengus Ó Snodaigh

Question:

435. Deputy Aengus Ó Snodaigh asked the Minister for Social Protection the research produced or commissioned by her Department that informed the reduction in jobseeker's allowance to persons aged between 22 and 25. [45758/13]

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Aengus Ó Snodaigh

Question:

436. Deputy Aengus Ó Snodaigh asked the Minister for Social Protection the advice or opinion given by the European Commission on the reduction in jobseeker's allowance payments to the 22 to 25 year olds in Budget 2014. [45759/13]

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Aengus Ó Snodaigh

Question:

437. Deputy Aengus Ó Snodaigh asked the Minister for Social Protection the number of jobseeker's allowance claimants that her Department estimated will be affected by the changes to jobseeker's allowance for the 22 to 25 age group in Budget 2014 each year for 2014, 2015, 2016 and 2017. [45760/13]

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Caoimhghín Ó Caoláin

Question:

442. Deputy Caoimhghín Ó Caoláin asked the Minister for Social Protection the estimated savings from the decision to reduce jobseekers' allowance for young unemployed persons aged 23-24 in 2014; the basis for calculation of those savings; and if she will make a statement on the matter. [45789/13]

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Caoimhghín Ó Caoláin

Question:

443. Deputy Caoimhghín Ó Caoláin asked the Minister for Social Protection the estimated savings from the decision to reduce jobseekers' allowance for young unemployed person's aged 25 in 2014; the basis for calculation of those savings; and if she will make a statement on the matter. [45790/13]

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Written answers

I propose to take Questions Nos. 418, 435 to 437, inclusive, 442 and 443 together.

As part of the Budget package this year changes have been made to the job seekers scheme for job seekers under 26 years of age. These changes are expected to deliver estimated savings of approximately €32 million in 2014 or €72m in a full year. It is my intention to incentivise young jobseeker’s allowance recipients to avail of education and training opportunities and to minimise the risk of them becoming welfare dependent from a young age. Such rates in respect of younger jobseekers were first introduced in 2009.

By extending the €100 jobseeker’s allowance rate to ages 22, 23 and 24 the changes provide that claimants in this age bracket will be €60 better off if they engage in education or training such as the back to education programme as they will then receive €160 per week. Persons aged 25, had previously been subject to no financial incentive measure, will now receive €144 per week. These individuals will generally be €16 better off if they engage in education or training as they will now receive €160 per week.

The decision to reduce the amount of jobseeker’s allowance payable to young jobseekers was made on foot of on-going consideration of unemployment and activation policy by Government. The changes are targeted measures aimed at protecting young people from welfare dependency.

I believe that it is necessary to provide young jobseekers with a strong financial incentive to engage in education or training or to take up employment. If they do not improve their skills, it will be much more difficult for them to avail of job opportunities as the economy recovers and they are at risk of becoming long term unemployed from a young age.

Under the new economic governance rules each Member State must submit the following year's budget to the EU Commission in October. The EU Commission will then publish an opinion no later than 30th November. The Department of Finance would have submitted a report to the Commission and to date the European Commission has not published their opinion in relation to Ireland’s Budget 2014 package.

However, it should be noted that jobseeker’s allowance is a special non-contributory benefit for the purposes of EU Regulations. This status allows jobseeker’s allowance to be paid exclusively under domestic legislation and only in the country of residence.

In preparation for the forthcoming implementation of the Youth Guarantee, Budget 2014 contained an additional €46 million to support a number of initiatives aimed at young people. These include;

- reducing the threshold (in terms of duration of unemployment) for JobsPlus eligibility from 12 months – to 6 months or less – in the case of young people;

- an additional intake of 1,500 young people on to the very successful JobBridge scheme;

- ensuring that 1,000 places on the Tús scheme are targeted at young people;

- developing a pilot programme to support young unemployed people to take up opportunities under schemes such as Your First EURES Job; and

- ring-fencing a minimum of 2,000 training places for under-25s by the Department of Education and Skills, under a follow-up to the successful Momentum programme that operated in 2013, with income support for participants being provided by my Department; and

- Furthermore the Department of Jobs, Enterprise and Innovation will invest in the region of €2.5m next year in making funds available to young entrepreneurs via Micro finance Ireland and other business start-up schemes.

These measures are in addition to the significant existing spend of approximately €170 million per annum on employment, training and further education programmes for young people.

The changes to the jobseeker’s allowance scheme are due to take effect from 15 January 2014. It is not possible to determine, on a county by county basis, the numbers of claimants who will be affected. However, the table below illustrates the estimated number of recipients affected by the change to the jobseeker’s allowance scheme in 2014, 2015, 2016 and in a full year;

Year

Estimated recipients affected

2014

13,767

2015

22,756

2016

28,193

Full year

31,577

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