The back to work allowance scheme, which was introduced in September 1993, is part of my Department's programme of initiatives designed to assist long-term unemployed people, lone parents and other social welfare recipients to return to the active labour force. There are two strands to the scheme, namely, the back to work enterprise allowance for self employment and the back to work allowance for employees.
The number of recipients at the end of the years 2001, 2002 and 2003 are shown in the tabular statement following:
|
2001
|
2002
|
2003
|
Self Employed
|
15,973
|
13,510
|
9,873
|
Employees
|
16,218
|
11,566
|
7,197
|
Total:
|
32,191
|
25,076
|
17,070
|
The allowance was introduced at a time when long-term unemployment stood at 8.9%. In its early years, the scheme proved very effective in helping people who had been long-term unemployed to return to the labour force. However, changes in labour market conditions since the mid-1990s has reduced the need for the scheme. This is illustrated by the drop in numbers availing of it in recent years.
At present there are 12,097 participants in the scheme, compared to 39,343 in October 2000 when the scheme reached its peak. The scheme was reviewed in 2002 in the light of economic and labour market changes and, in particular, the drop in unemployment levels since the introduction of the scheme in 1993. This review also took account of an evaluation of the scheme by independent consultants. They recommended that the scheme should be restructured in light of the changes in the labour market. In particular, the review recommended that the scheme be refocused on the longer-term unemployed, that the non-financial supports be enhanced and that the overall numbers on the scheme be reduced.
In January 2003, therefore, the qualifying period for persons on unemployment benefit or assistance was increased to five years. Recipients of other social welfare qualifying payments were not affected by the change. The scheme is continually monitored to ensure its relevance to current labour market and economic conditions. It was recognised that there was some difficulty being experienced by persons wishing to enter self employment after five years attachment to the live register. Therefore, in budget 2004, the qualifying period for access to the self-employed strand of the scheme was reduced to three years.
From March 2004, persons in receipt of unemployment benefit or assistance accessing the self employed strand of the scheme only require three years on their unemployment payment to qualify for participation in the scheme. I will continue to monitor the scheme to ensure that it continues to assist those furthest from the labour market to gain a foothold into sustainable employment or self-employment and will therefore keep the scheme under review.