The INOU research document entitled "Welfare to Work — the Financial Benefits of Taking up Employment" is an interesting and useful study which seeks to examine the issues relating to the social welfare system and disincentives to employment.
The main finding of the study is that there is a significant reward for unemployed people when they move into paid employment, while it also draws attention to the fact that the complexity of the tax and social welfare systems means that it can be difficult for unemployed people to assess accurately the value of returning to work.
The main finding of the study is valid and substantial progress has been made in making the social welfare system more employment friendly and in dealing with disincentives to employment. The introduction in recent years of substantial PRSI free allowances; the continued enhancement of the family income supplement scheme; the reform of unemployment assistance to make it more attractive for recipients to avail of part-time or casual work opportunities; the continued development of the back-to-work allowance scheme; and the substantial improvements in child benefit which tackles child poverty without creating employment disincentive effects, can be cited as clear examples of the progress made to date in providing real opportunities and incentives to the unemployed, and particularly the long-term unemployed, to make the transition from unemployment into the active labour force.
As regards the difficulties faced by unemployed people in assessing accurately the value of returning to work, my Department is continually seeking to reinforce the message that it pays to work. In this context, my Department joined the INOU, the Small Firms Associations and the National Social Service Board earlier this year to produce practical information booklets for the unemployed and for employers. These publications have been made widely available and outline the range of supports for employers who are considering taking on new employees and for the unemployed who are seeking to make the transition from unemployment to employment.
Among the recommendations contained in the INOU study is that the family income supplement scheme should be calculated on the basis of net income rather than gross income as at present. The Deputy will be aware that a commitment to this effect is contained in the Partnership 2000 agreement and I share the view expressed in the study that this measure will make the scheme easier for people to understand as well as increasing the value of the scheme to low income families.
Our Programme for Government is designed to ensure that we develop an inclusive society where everyone is given the opportunity and the incentive to participate in the workforce and to share in the benefits of our economic growth. It is my intention to give effect to that commitment through the continued development and enhancement of the social welfare system.
