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ESRI report contradicts claims that ‘families better off on the dole’

ONLY a small minority of families would be better off on the dole than working, the latest research from a government-funded think tank has found.

This directly contradicts a working paper issued by the same academic body in the summer that found that two-fifths of families would be better off on the dole.

Yesterday the Economic and Social Research Institute (ESRI) issued new research insisting that most families and single people would be financially better off to take up a job.

Just one in seven, or 14pc, of families with young children would make more money on the dole than taking up a job.

This is mainly families getting a rent supplement or state support to pay a mortgage.

But the vast majority of people would be better off in work, despite high childcare costs.

The research comes as Social Protection Minister Joan Burton refused to rule out cuts to social welfare rates in the Budget. She said it would be "extremely difficult" to implement €540m in new social welfare cuts while trying to protect the most vulnerable.

And she revealed she will have to find an extra €200m next year to pay for the rising cost of state pensions.

The IMF and EU have repeatedly asserted that welfare rates are too high and need to come down, prompting fears of new cuts to these payments in the Budget.

However, the latest ESRI report challenges those claims.

"Previous analyses do not accurately represent Ireland's position, largely because the examples chosen included rent and mortgage supplement, which is given to only a small proportion of unemployed people," it says.

"Excluding this supplement gives a more accurate picture and shows that Ireland is similar to many EU countries."

The report also argues that 94pc of people are better off in work, and 86pc of those who have children would earn more in a job.

But it admits that those who get the State to help them pay their rent have little incentive to take up a job.

The latest findings are in stark contrast with a working paper written by Prof Richard Tol when he was with the ESRI. He has since left the think tank.


He concluded in June that thousands of families would be better off on the dole than working.

Once the costs of transport to work, lunches and other expenses are factored in, it costs parents almost €10,000 a year just to get themselves to work, Prof Tol's initial paper worked out.

Working people incur five times the expense of someone who is unemployed, the study found.

That report sparked a fierce debate about the generosity of our welfare system.

But the new ESRI report has also concluded that welfare rates for the unemployed are no more generous here than those in 15 other EU countries.

Meanwhile, Ms Burton notably did not repeat the commitment in the Programme for Government to leave social welfare rates untouched despite being pressed to do so by Fianna Fail TD Willie O'Dea and Sinn Fein TD Aengus O Snodaigh.

At the Oireachtas Education and Social Protection Committee's pre-Budget briefing, she said that all her department's schemes were being examined.

"I don't have the information. No budgetary decisions have been made yet," she said.

Irish Independent