With many people claiming they earn more money by not working, Cathal O’Reilly takes an in-depth look at our social welfare system and its shortcomings
Over the past number of months, our government has been facing continued scrutiny from the Irish people regarding the continued struggle they face cracking down on social welfare cheats. Allegedly, the number of people treating the social welfare system as a means of substantial income has risen dramatically with the current economic climate and the lack of employment available.
Our current social welfare payment is approximately €188 per week, which some people feel is far too much for those who are unemployed to receive. The general belief is that the system is flawed, as it allows people to have a much too comfortable lifestyle while out of work.
At the same time, there have been reports of 40-week waiting lists for those desperately seeking disability allowances. From January 2014, people under the age of 25 will face cuts that will leave them only able to claim €144 per week under the new budget.
Hard-working taxpayers are becoming more and more concerned about where their money is being allocated, and want to see a healthy and effective social welfare system that cannot be abused in the same way as the present system. Social welfare is an investment in our economy, not simply a pay out, and workers need to be able to trust that the government is operating a proper system.
Minister for Social Protection Joan Burton believes that the most important aspect of achieving social welfare reform is to adopt a universal view when looking at our social policy. The idea of a Scandinavian approach has been favoured in the past, treating all people equally with a healthy social divide allowing everybody to gain from the generated income from tax.
A small minority, however, oppose this view, and instead favour a capitalistic system with a ‘survival of the fittest’ mindset. This would involve cutting the current social welfare payment dramatically, which would ultimately force people back into work in order to have a greater income. But can people be forced into jobs that simply don’t exist?
Innovation and entrepreneurship are two vital aspects of our economy, however, education is a primary focus for Joan Burton and the Department of Social Protection. The minister has been working extremely hard in recent years, primarily investing in and treating education as a number one priority. It is important to keep people moving so that if the opportunity arises, people will be job ready.
One of the biggest difficulties when getting people back to work is a lack of motivation. When someone has been made redundant due to cutbacks, it is extremely difficult to encourage them to get back into the workforce.
One such investment is the JobBridge scheme, which commenced in June 2011. This scheme was set up to provide jobseekers with the opportunity to acquire new skills and work experience through internship programmes.
Since its inception, more than 20,000 people and 9,000 companies have been involved in the scheme. It has been quite successful, with 61% of its interns acquiring full-time paid positions upon completing the programme.
These positive figures highlight the importance of education in getting people back to work. Burton has spotted a niche in the jobseekers market in providing a fantastic incentive that shines a light on the opportunities available to people who are out of work.
There is also a scheme available for eligible people claiming social welfare to avail of a second chance education programme. The Back to Education Allowance scheme provides people with the chance to participate in full time education. This is available to nearly all social welfare receivers, including the unemployed, people with a disability and lone parents.
This scheme again highlights the importance of education in getting people on social welfare back to work. An interest in education will make prospective candidates stand out to any potential employer.
Burton has made this opportunity available to everyone claiming social welfare and it has proven to be hugely successful. Numbers for the end of the academic year 2012/2013 were 25,961, showing a 191% increase to the 2007/08 figures.
When asked about the huge waiting lists for people on disability benefits, a spokesperson for the Department of Social Protection said, “Prompt processing of claims remains a priority for the minister. Schemes that require a high level of documentary evidence, particularly in the case of illness related schemes, can take longer to process.”
Taking into account the high level of work hours required for these documents, it should indeed be the highest priority of the Department of Social Protection. It may even lead to the creation of more jobs in this department, as opposed to the proposed cuts of 159 jobs this January.
The notion that the lack of technological capabilities to deal with the large number of applicants seems quiet distressing considering the high standard of current technology.
Modern generations are able to download applications to their smart phones, making it a personal office anywhere in the world; but the idea of technology being introduced to deal with high numbers of disability applicants has been overlooked and has left a huge number of people affected.
Looking forward, technological improvements have been made to combat waiting lists regarding other problems in the system. The Public Services Card (PSC) is a new system in place that is designed to combat the duplication of efforts across the board with enhanced security systems and identity authentication. This will help fraudulent behaviour within the system, however, there is yet to be any noticeable improvement in the processing of disability claims.
According to the Department of Social Protection: “A PSC involves the capture/utilisation of an individual’s photograph and signature and the verification of identity data already held by the Department.”
To date, the Department has deployed two registration methods. A face to face process involving personal attendance at a DSP Office and a centrally managed reduced process that does not require personal attendance, but rather utilises data already held by other state agencies such as the Passport Office.
Over 343,684 PSCs have been issued to date. The majority of these cards have been issued to new claimants for Jobseekers Benefit/Allowance and applicants for a new PPS number. The Department Spokesperson believes, “This new technology is proving to be successful in the area of detecting social welfare fraud.”
Four week sick leave pay has been a huge problem facing employers in recent years. A signed medical certificate is essential when making an application, which must be approved by a certified GP and passed before sick leave is paid.
It has become increasingly easy in recent years to access signed medial certificates, and employers feel negligence on the part of doctors in signing these documents is becoming an issue. Essentially, there is no solution to this problem, but businesses are suffering because of the high expenses of sick leave.
An anonymous local business person commented on current system and its detrimental effect on employers. “The company that purchased my business had a paid sick leave policy in place and all employees availed of their paid sick days… I believe this policy was abused.”
Another flaw in the social welfare system is the loss of benefits to employees once they work over a certain amount of hours per week. Essentially, it is more beneficial for some people to claim social welfare rather than join the workforce and contribute to society. This is not the fault of the jobseeker. Rather, it is the government and the lacking social welfare system currently in place.
A second anonymous employer told the University Observer, “Some employees, especially unmarried mothers, are allowed to earn up to €300 before they lose their benefits. If you are offering them a full-time position, they are not interested. So the biggest competition to employers is the social welfare system. Applicants will confirm at the interview that they are only interested in working so many days per week.”
Budget 2014 saw no change to basic social welfare rates, meaning the mentality of jobseekers to find work will also likely remain unchanged in the coming year.
Old-age pensioners, medical card holders, working mothers, savers and families with health insurance were all targeted once more in the budget, and spending cuts and tax increases amounted to €2.5 million.
Low to middle income families with sick children are in danger of losing their medical cards as a result of a wide scale review. One in ten old age pensioners are also going to lose their medical card due to a change in the income limits. Once more, it is the most vulnerable who will suffer, while many remain comfortable on the income they are receiving in social welfare payments.
The latest statistics from the CSO show a staggering 408,670 people on the live register. This is 20,665 less than last year, which suggests a positive rise in employment levels. A large proportion of this reduction can be equated to increasing numbers of emigrants. The still significantly high levels of unemployment in Ireland mean the social welfare payment is a huge expense for the government.
The Department of Social Protection spokesperson explains, “As Minister for Social Protection and Member of the Government, Joan Burton’s main challenge is to get people who become unemployed back into the workforce again or to become job-ready. Recently, Minister Burton appointed leading industry and policy experts to a new jobs council that will drive the implementation of the Government’s Pathways to Work 2013 strategy to tackle unemployment.”
But the crackdown on people abusing the social welfare system remains a huge problem. It is simply unfeasible for the government to operate a system where individuals are better off financially from not working. The Public Service Card hopes to eliminate fraudulence and waiting lists in the future.
Business owners are risking their financial wellbeing and the wellbeing of their families to create jobs and drive our economy forward. On the other hand, people are choosing to stay at home as they earn more on social welfare than they do at work, leading to a decline in social morale and a lack of motivation in the workplace.
Trust in the allocation of the taxpayers’ money is vital and the idea of hard-earned money paying for people who are cheating the system and having no contribution to the workforce will continue to cloud the efforts of Joan Burton in the continued struggle to achieve social reform.
With dole payments remaining high for the healthy over 25s, vulnerable groups continue to face cuts in this year’s budget with a lack of consideration for the importance of entrepreneurship and existing business’s nationwide.