Welfare “Wage” is €28,000

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Documents to be released this week show there is no incentive for unemployed parents to take a job paying €28,000 a year, thanks to the high level of welfare benefits. The Department of Social Protection has found that a family on this wage earn just €89 a week more than if they were on social welfare benefits.

Responding to concerns that the welfare system is discouraging people to take up employment, the department research two scenarios, comparing an unemployed couple with four children with a similar household where one parent was earning a salary of € 28,000. The total weekly income for the unemployed family was €818, while the working family earned €907. This does not take into account the fact that the working family would have to pay rent. The unemployed family would have most of their rent covered through weekly supplement payments of €230. It is this payment that causes the income gap to narrow sharply. Without the rent supplement, the unemployed family would get €588 a week, almost €320 a week less than the working family.

The department’s figures do not include work related costs such as travel or clothing, or the value of a medical card. Rent supplement has been identified as one of the key barriers to some people taking up jobs. If a person on the live register accepts a job offer of more than 30 hours per week, they automatically lose all rent supplement payment. In the case laid out by the department, this would be a loss of €966 a month for the unemployed family.

Extract from front page article by Sarah McInerney, The Sunday Times No. 9,761, October 2, 2011

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