Friday 15 December 2017

Academic does us all a favour with a few home truths

Charlie Weston

Charlie Weston

IT may be one of the nastiest and bitterest academic spats we have seen in this country, but there are some huge issues at play in the row over benefits versus taking up a job.

Granted, the row is largely academic in a country with close to 430,000 people on the Live Register and precious few jobs being created.

The key factors to be considered, if there is a job on offer, will be the disposable income from staying on the dole, the salary for the job and the costs associated with taking up work.

Parents who leave the house to go to work have to cover the cost of transport, lunches, childcare and clothing.

Professor Richard Tol did us a favour when he put some numbers on these costs for the first time.

It costs a worker €7,000 a year if there are no children in the house to cover expenses like lunches and commuting. This rises to between €9,000 and €10,000 for those with one child under five.

In fact, the cost of going to work is five times greater than being at home all day, the now-disputed ESRI research by Prof Tol contends. He found that it costs an average of €106 a week in commuting costs alone. Other costs include €49 a week on food for those who work and €14 a week on childcare, along with €36 on clothing.

For a family with a child all of the different work expenses amount to €227 a week. This is €185 more a week than an unemployed person would have to pay out.

Over a full year this works out at a cost of €9,620 in work-related expenses. Those who are on the dole have expenses but they are lower.

Are these figures too high?

The Department of Social Protection thinks so. It doubted that many people in work would spend almost €50 a week on food.

It said childcare costs would not be incurred if one partner worked in the home.

And most of those on the dole are single people with no children, it contended.

But many people contended yesterday that some of the Prof Tol work-expense figures were too low. If two people were working, then they would end up shelling out a multiple of €14 a week on childcare.

Benefits

A key issue is what a family gets in welfare benefits if the adults are out of work.

The department has produced fresh figures admitting that a family with four children, where the parents are on the dole, gets €40,500 in welfare payments.

The department argued that the same family would end up with €46,500 after tax, if they took up a job paying €28,000. This family would get €10,000 in family income supplement, which is effectively a payment to incentivise people to take low-income jobs and not stay on unemployment allowance.

If Prof Tol's research is correct, this working family would incur close to €10,000 in work-related expenses. This would mean their disposable income would fall to €36,500.

This indicates the family with four children would be €4,000 better off on the dole.

Irish Independent

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