Brendan Keenan: Troika asking hard questions on social protection payments
Efficacy of employment programmes and handouts is under the microscope in effort to make Ireland jobs-friendly
I HAD some familiarity, in the long ago, with the workings of social welfare -- or, as we called it in Belfast, the Bureau (pronounced Broo). The key thing was, that you had to be available for work.
It still is, and it always has been. Nothing could be simpler. Make oneself available, but find no work, and benefit is paid. Not be available, and it is cut, or even stopped.
For some reason -- indeed for many reasons -- it has not worked that way. Instead, the issue of welfare payments and availability has become a bone of contention between the Government and the lenders in the troika.
Last week's quarterly understanding with the troika contained the promise of outside consultants to pore over the mechanisms of the Department of Social Protection. Minister Joan Burton has complained of her difficulties with officials from the troika ensconced in her department; looking not only at the mechanisms but how they actually operate in practice. It is clear that all is not sweetness and light in this area, with politicians well aware of the dangers of any changes to welfare payments.
We, along with the troika, could start by asking how much it is to do with work at all? The social protection budget ballooned, even as unemployment fell to 4 per cent. Ms Burton's defence of her patch has not included any explanation of how this happened, and why much of it cannot be reversed.
The connection between unemployment and the Broo has become much more tenuous since those far-off simpler times. The summary budget for Social Protection shows €2.6bn spent on the jobseekers' allowance out of a total disbursement of €13bn last year. Child benefit cost almost as much, while the one-parent payment came to half the cost of supporting the unemployed.
Lurking in the figures is the €400m for community employment schemes in which no one (except the participants) believes, not even the department itself.
There is a lot more here than just being available for work. The Government has promised the troika that it will have adequate data by the end of next month to allow proper examination of the effects of the system on incentives to work and the provision of suitable training.
For the moment, Ms Burton's first line of defence is firm application of that old, much-abused rule. There have been savings of €640m from cracking down on fraud, she says -- helped by a much greater willingness by members of the public to grass on nixers. Inspectors are to get more powers.
It was Ms Burton's party colleague Ruairi Quinn, in the previous administration, who asked the simple question as to why there was a 100,000 difference between numbers on the Live Register and those who said in surveys that they were unemployed.
He refused to be fobbed off by civil service answers and strict application of the rules then saw much of that difference disappear. That may not be the case now. Sean Healy of Justice Ireland says most of the €640m was overpayments by the department. But if it is proper checks, and an insistence on genuine availability for work and training did have similar results to the Nineties, it might go a long way to avoiding the politicians' nightmare of more cuts in payments.
The troika has taken up the long-standing OECD campaign against Ireland's indefinite unemployment payments. In most countries, even those who are available for work go on to a different kind of benefit if they cannot find a job after a certain period of time.
I am not sure that is as good an idea as the OECD maintains. One certainly wants to avoid the situation of the UK -- extreme in Northern Ireland -- where classifying unemployment more rigidly led to an explosion in the numbers described as disabled.
Properly implemented, the availability rule should meet the troika demand for sanctions on those who will not train or work, but I suspect the Government will be forced into making formal changes to the rules. The really difficult area is training and re-training.
There is rather more convincing OECD research on what does help to get people into work and what does not. Ireland does not score well but it will be quite a task to put a better system in place.
Attempts to do so will also run up against the argument that it is all pointless when employment is still falling.
Certainly, we should be under no illusions. Employment will not grow until the economy does, and that is not even in the troika's gift.
But, with so many out of work and the labour force still growing, when the economy does turn, it will need to be as employment-friendly as it is humanly possible to make it.
