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Dublin: 10 °C Wednesday 22 May, 2013

ESRI report says just 3 per cent better off on dole than in jobs

The organisation also recommends that the government look at diverse means of generating taxes other than relying on income-related taxes like the Universal Social Charge.

Image: Niall Carson/PA Wire

THE ESRI SAYS that the impression that people are better off on the dole is mistaken.

A new report from the organisation says that only about 3 per cent of people earn more on social welfare than they would in employment.

Eight out of ten unemployed people would increase their income by at least 50 per cent if they were to find a job, while six out of ten would more than double their income if they obtained a job, according to the ESRI.

The report is based on analysis of the ESRI’s tax-benefit model which is based on a nationally representative sample of real people.

The ESRI says that “selective  examples” have been used to support the argument that higher taxes and a range of welfare payments mean that people are financially better off being unemployed. However, it said that those examples can be misleading as they fail to take account of the range of factors affecting welfare payments and potential earnings from employment.

The researchers on the Taxes, Welfare and Work Incentives report say that measures taken between 2008 and 2011 have held a “significant financial incentive to work” for most unemployed people and that just 13 per cent of people on Jobseeker Assistance of Benefit receive a rent or mortgage supplement.

Increased taxes and cuts to tax credits since 2000 mean that about one in six workers face a marginal effective tax rate which is 10 percentage points higher than they did in 2000, the ESRI says.

Speaking at the ESRI’s Budget Perspectives conference in Dublin today, ESRI research professor Tim Callan suggested the government should look into alternative tax-raising measures, such as a property value tax, than income-related taxes:

Income-related taxes such as the Universal Social Charge have done most of the heavy lifting in raising revenue. Further tax policy needs to look at taxes which are less directly linked to income, but still have regard to ability to pay. A property value tax could be designed to meet this criterion.

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Comments (26 Comments)

  • Not everyone wants to be on the dole. And for the majority of people its through no fault of their own. Some of the scathing comments people post here make me sick. We didn’t need an esri report to tell us you’d get more money working than on the dole. It’s the additional costs such as transport and childcare that make it prohibitive for some people.

    Reply
  • Seriously 50% better off isn’t a whole lot.. Probably only cover they’re travel and lunch expenses. The people who compile these reports really dont have a clue how expensive this country is.

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    • I think the ESRI probably have a fair idea of how expensive this country is.

      And btw, you could use your argument to justify a decrease in social welfare, as wages are not going to go up anytime soon.

      Reply
  • The dole in the uk may be 69 Euros but their groceries are up to 30% cheaper and they have excellent public transport so there is no need to own a car, they also have a very good free health system and receive higher rates of housing benefit than we do.

    Reply
  • Where do these terms ‘sitting on your hole’ or ‘get off your hole’ come from? It just makes the person uttering them seem crude and ill mannered and or a lower class than those they are levelling the criticism at.

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  • Did ESRI take in in account that sitting on the dole you don’t need to pay child care (exsterimely expensive in Ireland compared to other EU countries)? No stress at work, no bosses, spending time with your children, those things cannot me mesured by money.

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    • Probably not. As usual another exercise in comparing apples and oranges by a think tank. The reality is that for certain categories of the unemployed, unskilled to semi-skilled, with families of three children or more finding employment that improves their standard of living is very difficult. Of course, there is also percentage of claimants who while ‘unemployed’ manage drive year old vehicles and seem to have no shortage of consumer goods in their homes.

      Reply
    • oops, seems like they did: (taken from the report)
      “First, the Rent and Mortgage Supplement scheme rules out those who are in full‐time employment,
      with no corresponding support for those in low‐paid employment. Second, the
      medical card scheme is also of an “all‐or‐nothing” nature. The proposals of the
      Expert Group on Resource Allocation and Financing in the Health Sector (2010)
      involved a tapering of entitlements which could avoid the sharp loss often associated
      with moving from unemployment into employment.”

      Reply
  • BW 13/10/11 #

    So because the ESRI have made a lie of the claim ‘better off on the dole’, now Social Welfare recipients are being compared to working people in the UK.

    Do people honestly think I (like the vast majority in the unemployed figures) want to be ‘sitting on my hole’?

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  • Cant believe some of the w@@@ers on this putting down the genuine majority who are on the dole,after losing there jobs,there putdowns are an indication of the insecure few,who have nothing better to offer,maybe thats all they know is to put down the unemployed,it momentarily makes them feel good,then they go back to really hating themselves,very sad,karma is a bitch,lets see how they survive if they become unemployed,sad sad people u know who u r,good nite

    Reply
  • Waffler 14/10/11 #

    the dole is 188 a week, my bills are over 200 a week, i dont qualify for rent allowance so how the hell am i better off on the dole?

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  • “If this state wants to look at savings in welfare, look at the 7bn a year that goes in pension tax breaks, over 70% of which goes to a couple of thousand individuals.”

    No doubt those sitting on the Olimpus must share the pain.

    Reply
  • The dole in Ireland is 800 Euro a month which is crazy, trying being on the dole in the UK which is 57 pounds a week or 228 Pounds a month (260 Euro a month).
    Some people in the UK earn less than 800 Euro a month in a full time job !
    I’m sure there’s lots of people who live with their parents and 800 a month is more than enough to have a decent lifestyle.

    Reply
    • Sean C 13/10/11 #

      Chalk and cheese; different currencies, different costs of living, different tax regime and different pay rates to match.

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    • After bills I only have about fifty euro left to feed myself a week. So how is it too high? And no I’m not just sitting on my arse. When I lost my job a couple of years back I went to college to up skill like the government told us.

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    • @Paul. I hate to break it to you but there is more to the world than the UK. Look at the overall packages in countries like Holland etc, which are very generous compared to here, they are bailing us out. Ireland is an exceptionally expensive country.

      Also from an economics point of view, the dole money is circulated in to the local economy straight away. Local businesses get a cut, they spend it in other businesses, the Govt. gets vat. etc.

      When the dole is cut watch a swath of small businesses close across this country but then again that will suit a lot of the larger ones that have so much influence with Govt.

      There does need to be reform of Social Welfare, I am very much opposed to the on the dole for life, it destroys communities and lives, in most of the Social democracies of Europe it is not tolerated and they have better economies for it, they also do not tolerate or entertain the loohlah economics of FG/FF/PD’s which have broken this state 4 times in 90 years and given us mass unemployment so that their friends and crony’s could be protected.

      If this state wants to look at savings in welfare, look at the 7bn a year that goes in pension tax breaks, over 70% of which goes to a couple of thousand individuals.

      Even a fraction of that money, put aside, to fund new start ups by now unemployed people could be transformative.

      Reply
    • Sorry Tony, please explain

      “If this state wants to look at savings in welfare, look at the 7bn a year that goes in pension tax breaks, over 70% of which goes to a couple of thousand individuals.”

      7,000,000,000 x 70% = 4900000000 / 2000 = €2,450,000 tax breaks per annum, per person. If that’s correct I may even join SF.

      Reply
  • i do wonder about some people on the dole,i was on it for 9 months last year. Rarely does anyone drop a CV into the shop o now work in, i think 2 since January. People need to start making an effort. we have actually hired more people since i started. Get off your holes and stop dragging your feet.

    Reply
  • Yes but they’d be able to sit at home on their hole and do nothing.

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  • the ERSI should really watch the TV3 / 3e documentary on Social Welfare Fraud that was aired a while ago before making stupid claims like this, its clearly alot more than 3%

    Problem is the gov will listen to this crap research and not listen to the people!

    Reply
    • BW 13/10/11 #

      TV3/3e Documentary…..

      Now theres an Oxymoron if ever I’ve seen one!

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    • cant believe you’re comparing a professional long respected institution concerned with economic analysis staffed by some of the best academics in the country with tv3!! good man, i bet you use your vote intelligently!

      Reply
    • Sean C 13/10/11 #

      So Simon in effect what you’re saying is the government should ignore the scientifically obtained facts and act instead on the views of some TV documentary producer, and the prejudices of a random number, because we’re ignoring the science, of the population.

      Reply
  • They don’t take into consideration medical cards and rent allowance and the rest of the hand outs that if they were to get jobs they would have to pay for themselves

    Reply

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