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Social Protection – Report Card.

An assessment of the Government's perfomance on Social Welfare, 2011-2016

Result: C

kept core benefits but regressively reduced much else

Jobseeker’s allowance, jobseeker’s benefit, the one-parent-family parent payment and disability benefit. are the key welfare payments provided by the State. They were reduced drastically between 2009 and 2011-12 and have been frozen since then. To restore these core welfare payments to their 2009 level, taking account of inflation, would require an increase of at least €27 per week for a single adult and €40 per week for a couple.

Although core benefits have been maintained, almost everything else has been reduced.
Up to Budget 2015 there have been four budgets, with a net reduction to the social protection budget of almost €900m. Of all the budgets, only one saw an expansion of welfare spending: Budget 2015 saw a €198m increase in welfare funding, still less than the €226m cut of the previous year. Overall, there has been a net reduction of spending on social welfare of 4.5% since Joan Burton took over.

More generally, Budget 2016 was the fifth regressive Budget in a row. While it was not as regressive as in previous years and contained some gain for everyone, there was much more for the wealthier and far less for poor and vulnerable people. 

While single unemployed people will gain €95 a year, single people earning €75,000 will gain almost ten times as much i.e. €902.  In the case of couples, the unemployed will gain €157 a year while a couple with two earners on €125,000 a year will gain nine times as much i.e. an extra €1,408 a year. Budget 2016 widened the rich-poor gap by €506 a year.  This measures the gap between the disposable income of a single unemployed person and a single person on €50,000 per annum. If compared with people on higher salaries the rich-poor gap has widened even more (cf. p.9) 
The rich/poor gap has widened by €1,003 in two years as a result of this government’s budget decisions. 

The reality of budget 2016 is that a single unemployed adult will gain €95 per annum, while a single person earning €75,000 per annum will gain €902. An unemployed couple will gain €157 per annum, while a couple jointly earning €125,000 per annum will gain €1,400 per annum.
In 2012 under Pathways to Work labour-market ‘programmes’ (eg in-work benefits, job creation programmes, placement services, training and counselling) they were strengthened and made mandatory, and benefits were made more clearly dependentl on job-seeking efforts and engagement with social welfare services. Non-compliance of any sort can result in sanctions – a reduction of €44 per week or a cessation of payment for up to 9 weeks. For instance, refusing to take an internship can lead to this form of punishment.

The Department of Social Protection has contracted two private companies to deliver JobPath.A British recruitment firm, Seetec, has been contracted to deliver these activation services in the north of the country and Dublin. An Turas Nua, a consortium of Irish-based recruitment company FRS and the UK company Working Links, will run the programme in the south of the country. It is understood that each contractor must service 25,000 long-term unemployed people a year in their search for employment. They will do this through a supply chain of sub-contracted local, private and not-for-profit, specialist organisations.

We need more scrutiny on the motivations behind this decision and its possible consequences. The explicit driver for this partial privatisation of Irish public employment services is the inability of existing public services to support large numbers of long-term unemployed people back into the labour market.  However, we need to be mindful that, elsewhere, such privatisation has been at least partially motivated by the desire to implement sanctions-driven ‘pay by result’ regimes which many public-sector and not-for-profit organisations have been reluctant or unable to deliver. Activation policy now appears to be moving towards a ‘work first’ model that stresses job-search assistance with less emphasis on education and training. In many similar ‘work first’ and ‘pay by result’ régimes the most vulnerable of welfare claimants (people experiencing literacy, homelessness, addiction, domestic-violence, and mental health issues) are the most likely to experience sanctions. Activisation policies have been popular in the USA and Scandinavia since the 1970s; and have been warmly embraced by Merkel in Germany and Cameron in the UK.

Report Card – Social Welfare

Minimum Wage
“We will reverse the recent cut in the national minimum wage”. This was done; and Budget 2016 announcement of an increase of 50 cent per hour to the statutory national minimum wage was progressive. This increase will ensure that a full-time worker on the minimum wage will receive an additional €1,014 per annum in gross pay. However, the new hourly minimum wage rate of €9.15 is more than 25% below the living wage of €11.50 per hour.
Social Inclusion
“The elimination of poverty will be an objective of this Government. We are committed to achieving the targets in the National Action Plan for Social Inclusion to reduce the number of people experiencing poverty. A new approach is needed to break the cycle of child poverty where it is most deeply entrenched. We will adopt a new area based approach to child poverty, which draws on best international practice and existing services to tackle every aspect of child poverty”. The number of people living in consistent poverty which currently stands at 376,000 has doubled since 2008, while 1.4 million people are experiencing deprivation, an increase of 128% since 2008. There are 700,000 people at risk of poverty, including 211,000 children, which equates to one in six children. In other words, there is widespread poverty in Ireland.
National Employment and Entitlements Service
“We will replace FÁS with a new National Employment and Entitlements Service so that all employment and benefit support services will be integrated in a single delivery unit managed by the Department of Social Protection. This integrated service would provide a ‘one stop shop’ for people seeking to establish their benefit entitlements; looking for a job; and seeking advice about their training options. It will process citizen entitlements”. FÁS was abolished and a new national education and training service SOLAS established in October 2013 with a Further Education and Training Strategy 2014–2019 published. Intreo, a new service from the Department of Social Protection was introduced in 2012. It is a single point of contact for all employment and income supports. Designed to provide a more streamlined approach, Intreo offers practical, tailored employment services and supports for jobseekers and employers alike at 58 locations.
Rent Supplement
“We will progressively reduce reliance on Rent Supplement, with eligible recipients moving to the Rental Accommodation Scheme”. The current rent supplement for a single person is €520 per month and for a couple, €750 per month, despite the fact that the cost of renting a two bedroom property in Dublin city, for example, is €1,700 per month.
Child Benefit
No reference to sensitive issue of children’s benefit Child benefit was increased by €5 per month to €140 from January. Despite the Labour Party promise to protect child benefit, the payment had been reduced by €10–from €140 a month per child to €130 – in Budget 2013. In 2008 it was €166 monthly.
Before the cut was made, the option of taxing or means-testing the payment was addressed after an expert report recommended it as one of the “most feasible options for change”. Many believe such universal payments are regressive anyway.
Family income supplement threshold has been increased by €5 per week for each of the first two children.
Free Pre-School
We will maintain the free pre-school year in Early Childhood Care and Education to promote the best outcomes for children and families. In fact, free pre-school childcare will now be available for children from 3 years until they start primary education or reach the age of five and a half years.
Fuel Poverty
“We will complete and publish a strategy to tackle fuel-poverty”. Increases in the weekly fuel allowance to €22.50 weekly were announced in Budget 2016. The length of the period of payment of the winter fuel allowance was cut by 6 weeks in Budget 2012. Fuel allowance is a means-tested payment designed to help pay winter fuel costs which is “paid to people who are dependent on long-term social welfare and who are unable to provide for their own heating needs”. According to the most recent CSO data, 12% of people were in households which had “gone without” heating at least one time in the previous 12 months, and 8% were in households which had been unable to afford heating at all at least one time in the previous 12 months.
Voluntary Sector
“During a time of recession and deep unemployment the Government acknowledges the vital role of the community and voluntary sector working in partnership with local communities, State agencies and local authorities”. The Partnership programmes, such as the Dublin Inner City Partnership, which were progressive and well-regarded by communities have been replaced by more market-friendly institutions.
In 2012 under Pathways to Work labour-market ‘programmes’ (eg in-work benefits, job creation programmes, placement services, training and counselling) they were strengthened and made mandatory, and benefits were made more clearly dependentl on job-seeking efforts.
A New €28m Social Inclusion and Community Activation Programme was launched in April 2015 to tackle poverty, disadvantage and social exclusion in local communities.
Welfare Fraud
“We will take a zero tolerance policy in relation to
welfare fraud, underpinned by a majoranti-fraud enforcement drive”.
A new Anti-Fraud Strategy was published in 2014. 20 gardaí have been assigned to tackle welfare fraud as well as new fraud prevention and detection powers granted to Social Welfare inspectors. Approximately 3% of social welfare claims appear to be fraudulent. Hundreds of welfare recipients have been forced to repay millions of euro in means-tested benefits after it emerged they had large sums of undeclared bank savings.
New figures show investigations into the practice – code-named Operation Dirt – yielded some €21 million for the exchequer between 2013 and 2014. Over a million control reviews have been carried out yielding control savings of over €460m.