Income and welfare – the forgotten debate?

 

EAPN Ireland Election Blog No. 4

By Paul Ginnell, Policy Officer, EAPN Ireland

“Poverty is not an accident. Like slavery and apartheid, it is man-made and can be removed by the actions of human beings.” Nelson Mandela

This quote opens EAPN Ireland’s recent poverty briefing and its proposals to candidates and political parties in the general election. Just as political decisions in the past have helped create poverty, the next Dáil and Government have the opportunity and responsibility to make the decisions to ensure no-one in this country has to endure the burden and the stigma of living in a situation that it not of their making.

Poverty is a very real experience for many people in Ireland. Three quarters of a million people, including around 132,000 children, are at risk of poverty and so live on less than €209 per week. Almost one in every ten people live in material deprivation, meaning that they cannot afford two of eleven basic necessities. This includes one fifth of those at work.

During the election campaign we have heard some of the candidates and parties outline what they will do to tackle poverty. There has been some important discussion of how to provide adequate services and how to support people to get decent jobs. However, we have heard little if any discussion on our social welfare levels. Our basic social welfare levels, particularly for those of working age, must be set at a level which keeps people in poverty. Of course, if someone on social welfare can get a decent job this can help them out of poverty. But the reality is that in the short or long term, there will always be people who are dependent on social welfare. This is because we will always have people who are in vulnerable situations in their lives because of caring responsibilities, a disability or illness, or because they are looking for work.

However, for those of working age, our main social welfare rates are now €188 per week, down from €204.30 in 2009 and at a level which is €20 per week below the poverty line. According to the Vincentian Partnership for Social Justice  198 of 214 urban family types which are dependent on social welfare will not be able to meet a minimum essential standard of living in 2016.

Is this really the type of society we want, where we effectively condemn hundreds of thousands of people to live a life of poverty? I don’t think so. It breaches their human rights and it shames us as a society.

So why do we allow it, and why is there no public outcry or even little public debate about it?

Maybe it is because powerful people in our society look on people who are dependent on social welfare as some sort of drain on our society, while the rest of us are living “respectable and hard-working” lives? There is a widespread view, based on very selective examples in the media but not born out in our experience, that many people who are happy to live on social welfare when they could be looking for a job. These exceptional examples are used to write off everyone else.

Maybe it is because we think that they brought poverty on themselves, so “why should we be looking after them?” Do we think this is an okay attitude for people with disabilities or carers? Or have we not matured as a nation in our understanding of those who are parenting alone?  Over 43% of those who are fully dependent on unemployment payments have been on them for less than one year and many more for less than two years. The vast majority of those who have been unemployed are doing everything in their power to get work and suffer.

Maybe it is because the right of people to have a decent income is seen as less important than the fear that if social welfare levels are too high it will not motivate people to look for work. However, does this apply to those with a disability or illness or in a caring role? If so, then for those whose situation might allow them to work, even for a few hours, it is certainly not simply about the level of their social welfare support but there are another range of issues to be addressed in terms of services and supports.

If we are talking about those on unemployment payments then there is evidence that for the majority of people social welfare rates do not replace the income people can get for work and does not disincentive them. Even for those where secondary benefits, such as housing supports, mean that income from social welfare might be close to what those people can get from work the majority of people are still motivated to get a job. Of course this also relates to the issues of decent pay from work and how people can retain secondary benefits as they move from welfare to work.

As part of this discussion we also need to understand how we can justify paying lower social welfare rates to those under 26 years of age, as a form of motivation to stay in the labour market, and €19.10 to asylum seekers in direct provision, often for many years, with no opportunity for them to get a job.

If we really want to have a discussion in this election as to what type of society we want then we need to have a mature and informed discussion about how we look after those in our society who are the most vulnerable or at a vulnerable time in their live. How we set our welfare supports so that they are adequate to keep people out of poverty and allows them to have a decent life needs to be part of the wider discussion on creating a fairer and more equal society.

For more background, see the papers from the European Minimum Income Network (an alliance led by EAPN Europe).

Within that project, there were two important Irish reports:

• report on the adequacy, reach and take-up of minimum income schemes in Ireland; and
• The final report on the case for a strengthened system and a roadmap to achieving it. This report says:

“… an adequate and effective minimum income system is essential for the achievement of a sustainable recovery and a more inclusive society. This is not just about the amount of money in people’s pockets but about the buying power of that money.

“We need to strengthen our minimum income scheme to ensure that everyone has the opportunity to remain active in society, reconnect to the world of work and live in dignity.  

“Inadequate minimum income schemes trap people in poverty and lead to greater social, health and economic costs for individuals and society. Inadequate schemes may help in addressing very basic needs in the short term, but they can contribute to locking people in a cycle of dependency without adequate means to access opportunities or to fully participate in society.

“Research has shown that shame accompanies poverty, and this has a disabling effect on people’s capacity to seek work and progress their lives. Austerity measures taken by Government during the crisis have had a very negative effect on those on minimum income schemes in Ireland, through more stringent means testing, changes to eligibility criteria and in some cases cuts in rates.

“Adequate and effective schemes help reduce inequality, which benefits the whole society. It is widely accepted that more equal societies are better for everyone, not just then poorest, and are more stable than more unequal societies.

“They have a high return on investment, while the cost of not investing has enormous immediate impacts for the individuals concerned and long term costs for society.

“High-level social protection systems act as ‘economic stabilisers’. Within the European Union, countries with high-level social protection systems have been best placed to resist the negative impacts of the recent crisis….”

 

The

The Vincentian Partnership for Social Justice has developed the most comprehensive approach to defining a minimum essential standard of living for Ireland.

minimum essential standard of living for Ireland.

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The most radical social welfare in decades – We can’t afford to get it wrong!

Social Welfare reform and a single welfare payment for all people of working age must address poverty traps, access to supports and services and the availability of jobs

The Minister for Social Protection, Joan Burton, has signalled the most radical change in the social welfare system for decades.  She proposes to replace seven of the most important payments with a single payment rate and common conditions for eligibility.  This process has already begun with the changes to eligibility for the One Parent Family Payment and payments for those on Community Employment schemes. The Department has also signalled that detailed proposals will be put to the Troika in March.

EAPN Ireland supports the general principle of a single payment on condition that the correct services and supports are put in place.  Equally, we are not opposed to activation measures if these supports and services are in place and if appropriate work is available.  However, as the Department itself has acknowledged, to make such changes in current conditions risk pushing some of the most vulnerable people in the country further into poverty and creating even greater poverty traps preventing people taking up work.

Background to these proposals

In November 2010 the Department of Social Protection published a Report on the desirability and feasibility of introducing a single social assistance payment for people of working age The overall proposal is that everyone age 18-64 years on this social welfare payment would be directed to the support or services they need in order to return to work or other education or training opportunities. The report proposes that all payments be aligned to the Jobseekers Allowance payment and apply to all new applicants for social welfare supports whether they be a person with a disability, a lone parent, qualify for farm assist, etc. The report proposes that carers not be included in the single payment but recently there are suggestions that they will be excluded.  

The 2010 report clearly states that the changes should only be brought in if they reduce poverty and social exclusion for people and make work pay. It also recognises that the development of supports and services is necessary to this.  It outlines clearly the major loss of income for most groups provided separately under the current system.

Since the report was published there have been consultations with different organisations including those representing people affected by the changes. It is clear from these consultations that while no organisation is opposed to the introduction of a single working age payment there are major concerns particularly in relation to the capacity of the state to provide the necessary supports and services and in relation to the current lack of jobs and opportunities for people to take up.

Therefore, organisations, including EAPN Ireland, have asked that no changes are made that would reduce the current level of current income supports until such a time that the services and supports outlined in detail in the report are put in place.

EAPN Ireland proposals to Oireachtas Committee

The Oireachtas Joint Committee on Jobs, Social Protection and Education is now preparing a report on the single working age payment.

The Europe 2020 working group of EAPN Ireland (membership below) has made a submission to the Joint Oireachtas Committee.  The submission makes it clear that we support the idea of a single social assistance payment for all people of working age, provided that the necessary services, supports and pathways to employment are put in place.   

The Department’s 2010 report which laid the basis of the current proposals for a single payment acknowledges that, without policy changes in other areas, most people moved onto Jobseekers Allowance will suffer a loss of income.  The Minister needs to spell out how these supports and services will be put in place before changing the payments or eligibility criteria. 

We are concerned that changes have already been made in Budget 2012 and that an implementation plan will be presented to the Troika in early April without any clarity on how the concerns expressed in the Department’s own report and in consultations will be addressed.

The current system allows for appropriate policies to be developed over time to meet the needs of particular groups. It would be a negative step from a policy point of view if the appropriate responses to group needs are lost in the implementation of a new single payment based on a simple template of Jobseekers Allowance.  

The services and supports in place to address the needs of those currently on the Live-Register are already under pressure and the National Employment and Entitlement Service which is being established will also not have the resources to address this. Adding even greater numbers to this system, including people facing a complex range of barriers, will only overburden an already struggling system, which is in the process of reform.

It is clear from our members’ experience and from studies that the vast majority of those who would be impacted on by the introduction of a single payment want to work but are prevented from doing so due to the barriers outlined in the Department’s report.

We are concerned that if the reforms are not correctly implemented they will increase the negative attitude towards groups such as lone-parents and people with disabilities who are often attacked, despite the evidence, as being unwilling to work.

There are currently very limited jobs available. The reforms to the welfare system must therefore go hand in hand with a strategy to create decent jobs. 

 

Poverty Traps

It is vital that any changes to the system remove, and do not deepen, poverty traps.

We have a number of very specific issues and concerns.

• The Department of Social Protection’s 2010 report clearly acknowledges the loss of income for different groups if the single payment is introduced without other changes.  The current differential supports were put in place precisely to cover costs of services and supports such as childcare. The loss of income under the proposed changes would in particular apply to carers, to those in Community Employment and those going to work who qualify for income disregards. If the services and supports are not provided it will result in poverty traps for these families forcing them to meet these costs from more limited resources or to leave or not to take up a job or a place on a Community Employment Scheme.
• Income disregards play an essential role in addressing the cost of services related to going to work for those receiving these payments. This includes the cost of childcare and afterschool care for lone parents and the costs incurred by having a disability such as transport.  As highlighted above, the loss of income disregards will immediately impact on the capacity of people to be able to take up employment. In this situation the changes might appear at first hand to be a saving for the Department but the actual impact would be to act as a barrier to people moving off social welfare supports and is therefore an actual increase in costs to the state.
• While a reform of the means testing system for secondary benefits would be welcome, the introduction of a single payment based on Jobseekers Allowance would result in the loss of secondary payments for people under some of the existing payments. This would include the Household Benefit Package and free travel for people on Disability Allowance, Carer’s Allowance and the Blind Pension. The loss of these supports would be detrimental for the people affected in light of the extra costs of disability.
• The role of Family Income Supplement (FIS) needs to be explored as it could help to overcome some of our concerns.  However, member organisations are aware of major waiting times to get this payment so if it does become part of the single working age payment support system, it will need to be easier to access.

With the exception of those undertaking caring responsibilities, the majority of those on social welfare payments want to work. They would welcome a system of accessible services which addresses their needs and supports them to access a decent job, so allowing them and their families a decent income. The implementation of a single working age payment in a considered way, with all the elements being developed together, allied with a job creation strategy, has the potential to make a key contribution to this. However, in the current climate, with cuts to essential services and little if any work opportunities, now is not the time. Cutting social welfare supports and imposing even greater conditions on people to engage with the system when there are so few opportunities will only have negative consequences for people and undermine the Department’s own goal of ensuring that all people of working age have sufficient income and opportunity to participate as fully as possible in economic and social life.

The Government must re-engage in real consultation and not continue to press forward with changes at a time when such changes will only result in greater poverty for the groups involved making it even more difficult for them to take up work and training opportunities.

Membership of the EAPN Ireland Europe 2020 Working Group includes Age Action Ireland, Congress Centres Network, Disability Federation of Ireland, Dublin Employment Pact, EAPN Ireland, Irish National Organisation of the Unemployed, Irish Traveller Movement, Migrant Rights Centre Ireland, National Adult Literacy Agency, National Youth Council of Ireland, National Women’s Council of Ireland, One Family, OPEN and SIPTU.