In line with other EU and OECD jurisdictions where such measures feature in their social welfare systems, Jobseeker’s Allowance (JA) age related reduced rates were introduced on a phased basis to tackle high youth unemployment. Receiving the full adult rate of a jobseekers payment at 18 years of age, without a strong financial incentive to engage in education or training, can lead to welfare dependency from a young age. The reduced rates for aged 18 and 19 JA recipients were first introduced in April 2009 and extended to jobseekers aged 20 to 24 from December 2009. The reduced rates were further extended to 25 year olds in Budget 2014.
A key feature of the introduction of the JA rate reductions was that subsequent participation in full-time education and training would lead to an increased rate in payment. As a result, if a young jobseeker on a reduced JA payment participates on an education or training programme they receive the maximum weekly personal payment, currently €198. Budget 2019 increased the rate of JA weekly rates by €5 which means that JA customers under 26 years of age will also benefit from an increase of €5 in their personal rate of payment from 25th March 2019.
Under Pathways to Work 2016-2020, the Department committed to review and report on the impact of the reduced rates for JA recipients aged 18 to 25. The National University of Ireland, Maynooth (NUIM) undertook research which examined the effectiveness of the reduced rates in encouraging young jobseekers to avail of education, training and employment. My Department did not commission this research but allowed the NUIM access to the data from the Jobseeker’s Longitudinal Database to undertake this research. The University examined data for 18 and 19 year olds as the reduced rates were first introduced for this cohort. The NUIM published its findings in December 2018 which found positive results noting a significant reduction in unemployment durations.
My Department's officials recently met with the authors of the NUIM publication and have used their detailed findings as an input into my Department’s own review of the impact of the reduced JA rates. The review is a stand alone report which will be completed shortly.