Tuesday, 11 December 2018

Questions (563)

Thomas P. Broughan

Question:

563. Deputy Thomas P. Broughan asked the Minister for Employment Affairs and Social Protection the estimated savings in each of the years 2009 to 2014, in tabular form, arising from the policy decision to reduce the jobseeker's allowance payments to young persons under 26 years of age; and if she will make a statement on the matter. [52173/18]

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Written answers (Question to Employment)

An age-related reduced rate of €100 per week for Jobseeker's Allowance recipients was introduced in the Supplementary Budget in 2009 in respect of 18 and 19 year olds. Budget 2010 extended the €100 per week rate to 20 and 21 year olds and introduced a new €150 per week rate for 23 and 24 year olds.  Budget 2011 reduced the €150 per week rate to €144 per week and Budget 2014 extended the €144 per week rate to 25 year olds.

In line with other EU and OECD jurisdictions where such measures feature in their social welfare systems, age-related reduced rates of jobseeker’s allowance for young unemployed people were introduced on a phased basis to tackle high youth unemployment. Receiving the maximum rate of JA without a strong financial incentive to engage in education or training can lead to long-term welfare dependency from a young age. In this regard, the most recent data shows that Irish youth unemployment has fallen from a peak of 31.2% in 2012 to 12.3% in November 2018.

The age-related reduced rates are not applicable in certain circumstances, such as where the claimant has a qualified child, is participating in a recognised education or training course, transferred from Disability Allowance or where the person was formerly in State care.

Age-related reduced rates apply to new entrants but not to existing recipients and the rates were also introduced at different times in the year (e.g. the 2009 Supplementary Budget measure took effect from the first week of May 2009).  Accordingly, in calculating estimated savings, certain assumptions are applied.  The estimated savings provided in this response are based on a combination of average Jobseeker’s Allowance recipient numbers in each of the years, estimated proportions of young jobseekers on age-related reduced rates and estimates of savings from the date the Budget measures were introduced.  In this regard, the estimated savings in each of the years 2009-2014 are set out in the following table, as requested by the Deputy.

Year

Estimated Savings €

2009

12.0 million

2010

64.0 million

2011

95.7 million

2012

105.5 million

2013

133.4 million

2014

154.3 million