Written Answers. - Welfare to Work Report.
Ceist:
10
Mr. Hayes
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
her views on the conclusion that the budget has no impact on the attractiveness for unemployed people to take up jobs, as outlined in the INOU Report, Welfare to Work - Did the Budget Make the Journey Harder.
[7654/98]
Monica Barnes
Ceist:
66
Mrs. Barnes
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
her views on the conclusion that the budget has no impact on the attractiveness for unemployed people to take up jobs, as outlined in the INOU Report, Welfare to Work - Did the Budget Make the Journey Harder.
[7656/98]
Paul Connaughton
Ceist:
74
Mr. Connaughton
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
her views on the conclusion that the budget has no impact on the attractiveness for unemployed people to take up jobs, as outlined in the INOU Report, Welfare to Work - Did the Budget Make the Journey Harder.
[7655/98]
Nora Owen
Ceist:
87
Mrs. Owen
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
her views on the conclusion that the budget has no impact on the attractiveness for unemployed people to take up jobs, as outlined in the INOU Report, Welfare to Work - Did the Budget Make the Journey Harder.
[7706/98]
I propose to take Questions Nos. 10, 66, 74 and 87 together.
This Government's priority is to continue to improve the co-ordination of changes in the tax and social welfare systems to remove disincentives to take up employment.
In the first instance, the December budget was the first salvo in our battle to cut taxes. The standard rate of income tax was cut from 26 per cent to 24 per cent while the top rate comes down from 48 per cent to 46 per cent. Changes in PRSI mean that an extra 60,000 workers pay no PRSI but still qualify for benefits while almost two thirds of industrial, commercial and service sector jobs are now at the low rate of PRSI.
These changes are important in terms of improving living standards generally but also in terms of providing an incentive to return to work. Also in the December budget we introduced new initiatives and further developed existing policies and instruments, which are specifically targeted at assisting the long-term unemployed into jobs.
A significant element of this focused approach is the introduction of a two part initiative which provides a special tax allowance in the first year of employment of £3,000, plus £1,000 for each child and a double tax deduction for wages for employers who employ the long-term unemployed person. Participants will retain their secondary benefits. This allowance will be an alternative to other existing back-to-work incentives.
What this initiative does is that it adds to the range of options available to the long-term unemployed returning to the labour market on the one hand while, on the other hand it can make it more attractive to potential employers to take on a long-term unemployed person.
Other initiatives include an increase of 5,000 places, in 1998, on the back to work allowance scheme, the extension of the area based allowance to the entire country, an additional 1,000 places on the part-time jobs option and 1,000 places on the jobs initiative. In addition, on the basis of a commitment in Partnership 2000 to calculate entitlement to the family income supplement on a net rather than a gross income basis, this Government has completed this process by removing income tax from the basis of assessment with effect from October next. Moreover, the current family income thresholds are being increased by £7 per week from June. As a result, the average weekly payment for existing FIS claimants will rise by £11 to £50.
The combination of fiscal initiatives, the extension and enhancement of in-work benefits and the increased number of places on active labour market programmes have as their overriding objective the removal of disincentives to work. I fail to see how our approach can be interpreted as making the journey from welfare to work harder.
