Unemployment Falling- Can It Really Be This Good?

Unemployment falling to 13.7 percent.   Employment increasing by 20,000.  THe CSO’s new Quarterly National Houshould Survey should be good news.  So why isn’t it?  When we dig a little under the numbers, what do the numbers tell us about the kind of economy that is emerging?  Why should we be concerned?

First, let’s run the headline numbers.

On the face of it, these are positive numbers:  employment up by 20,000 over last year – returning to the level of employment in 2011 while unemployment has fallen by well over 1 percent.  But now, let’s look at some numbers below this headline.

(a) The Rise of the Precarious Work

Probably the most disturbing aspect of the CSO release is the rise in precarious work.  This can be seen in the rise in under-employment.

The economy is still shedding full-time jobs.  In the last year, the numbers working full-time fell by 6,000.  The difference was largely made up by an increase of 17,000 in precarious work (a 12 percent increase) – people working part-time but wanting more work.

Some might argue that when the economy is on the floor, the first work available will be part-time and that this will turn into full-time work once recovery sets in.  Let’s hope so but there are grounds for questioning whether this is part of a normal post-recession pattern or a more qualitative change in the nature of work.

Precarious work is part of an employer strategy to minimise costs.  Courtesy of the Government’s policy to cut employers’ PRSI on low-paid work, employers are offering part-time jobs to cut their PRSI bill.  They may have full-time work available but they are breaking them up.  This ultimately costs the State through part-time unemployment supplement, lost tax revenue, higher Family Income Supplement costs.  But it also costs employees:  over one million people suffer multiple deprivation experiences in the state.  Of this, approximately half live in households where there is at least one income from work.  No doubt, this is concentrated in the low-paid precarious sectors.

It is also a policy to discipline employees.  If you are depending on getting extra hours you don’t want to go around trying to organise your work-mates into a union, or complaining about working conditions, etc.  The employee must keep quiet, suffer anything the employer throws at them, all in the hope that they will more hours on the next roster assignment.  The Government could end this by implementing  the EU Directive on Part-time work – which would give part-time employees the right to any extra hours in a firm when it becomes available – but so far they haven’t indicated any willingness to do so.

So there is a very real possibility that we may be entering into a period where precarious work becomes the norm and not just a feature of a weak labour market.

(b) The Weakness of the Market Employment

Over the last year agricultural, fishing and forestry employment increased by 16,000.  This is a good performance for this sector.  But are we getting a true picture?  The CSO has recently starting re-adjusting their samples to align them with the 2011 census.  This will be phased in over the year.  In the meantime they provide a caution about interpreting trends in this sector.  In the survey for the last quarter they state:

‘In the case of the Agriculture, forestry and fishing sector it can be noted that estimates of employment in this sector have shown to be sensitive to sample changes over time. Given the introduction of the sample based on the 2011Census of Population . . . particular caution is warranted in the interpretation of the trend in this sector at this time.’

So we have to be careful about this 16,000 job improvement.  We may find that previous estimates of employment in this sector in the past were under-stated and, so, the total level of employment in the economy.

So how can we look at this.  The following breaks down employment in three sectors: agricultural/fishing/forestry, the market economy and the non-market economy.  The non-market economy includes public administration, education, health and other sectors (recreation leisure) – these are dominated by public sector employment.

Nearly 2,000 jobs were lost in the market economy, an improvement on the 2011-2012 figure which showed a loss of 8,000.  We have, though, still to bottom out in this sector which employs 63 percent of the labour force and is the driver of value-added and exports.

Just to note, the increase in non-market employment is not related to the public sector which has been losing jobs.  There was, however, an increase of 8,000 in the health & social work sector – driven by the private sector.

(c) Increase Due to Rise in Self-Employed

The employment rise in the last year has been almost entirely due to an increase in self-employment.

As seen, while employment rose by 20,000 in the last year, this was due to the rise in self-employment – which made up 16,000 (there was another small increase in assisting relatives of 2,700).

Of course, this increase in self-employment is to be welcomed (better than a decline).  But the question here is how long-term this work will be and to what extent the numbers have been impacted by the CSO’s sampling adjustments.  Many, believing they won’t find work, will try their hand at own-work.  This can be tenuous and low-income with an eventual high-failure rate.  One insight is that the number of self-employed who, in turn employ people, actually fell over the last year by over 3,000.  This was made up by a bigger increase in the numbers of self-employed without employees.

Meanwhile, PAYE employment has stagnated over last year – recording an increase of only 4,000; still, better than a decline.  However, when we strip out the numbers on Government schemes (Community Employment, Jobsbridge, etc.) the number of non-scheme employment rose by only increased by 1,700.

* * *

So what do we have?  We have some good headline news but much of this melts away when examining the details.

Full-time employment is still falling

Employment in the market economy is falling

Precarious work is on the increase – substantially so

The number of employees remains much the same as last year – especially when those on Government schemes are taken into account.

The main growth has been in the self-employed sector – but not in that part of the sector which employs people; that’s still falling

Some of the increase might be due to statistical factors unrelated to what is actually happening the economy.

Then there’s the question of emigration.  With the labour force actually falling by over 9,000 (despite new entrants from education), much of the decline in the unemployed numbers will no doubt be due to people searching for work elsewhere.

This is not a good news story.  At best, it’s mixed.  And to the extent that it presages permanent changes in the labour market – namely, the rise in precarious employment – it is depressing.

via Irish Left Review | Can It Really Be This Good?.

Child benefit cut by €10 plus drug fees doubled – The Budget

FAMILIES are facing a €10 cut in child benefit and medical card holders will see a doubling of the charges they pay for prescription drugs in next week’s Budget.

Pensioners are also still in the firing line, with changes to the over-70s medical card and the home package of free TV licence, electricity and telephone allowances still on the table.

Although the pension is safe, the rest of the benefits for the elderly have yet to be decided upon by ministers.

The Cabinet met twice yesterday to work through the health and social-welfare aspects of the budget, with another special meeting tomorrow evening.

Among the swingeing measures to emerge from the discussions are:

* A €10-a-month cut in child benefit, which will drop from €140 to €130.

* A cut to the time for which non-means-tested dole is paid from 12 months to nine months.

* A doubling of the 50 cent charge that medical card holders pay for medicines and other items that they get on prescription from pharmacies, up to a maximum of 10 items per month.

And further details have emerged about the property tax, which will come into effect next year, following yesterday’s revelations of the plan in the Irish Independent.

* Elderly people will be given the chance to pay the property tax on their home from beyond the grave

* People living in council houses are expected to be hit with higher rents – with rises of €1 or €2 a week to bring in €50-€100 a year per house.

The Government has devised a way of protecting old people who live in large houses where they raised their children and who now can’t afford to pay the property tax from their meagre pensions.

Rather than forcing them to borrow or sell their home, elderly people will be able to apply via a means test for a deferral of the property-tax payment. However, there will be a cap on the number of years that can be deferred.

Similar to the Fair Deal nursing-home scheme, the accumulated bill would then be paid when the person sells their house or if they pass away, when their estate would pay it off.

Although local-authority housing will be exempt from the property tax, the occupants will have to make a larger contribution to take account of the charge going to local services.

Those in council estates who bought out their houses will have to pay the full property tax anyway, so the Government wants to see every home make a contribution.

The property-tax rate will be at 0.2pc in a self-assessment system, with bands starting at €50,000 and going up by €50,000 each time.

There is no cap on the market value of the home, so millionaires living in mansions will pay the same percentage on the total value of their house.

Someone living in a house worth €100,000 will pay up to €200, while someone living in a house worth €1m will pay up to €2,000.

The amount of tax to be paid is set at the mid-point of the bands. For instance, where the value of the house falls anywhere within the band of €100,000 to €150,000, the homeowner will pay on 0.2pc of €125,000 i.e. €250.

A special meeting of the Cabinet yesterday saw the detail of the health and social-welfare budgets thrashed out.

Any changes to the medical-card system are not yet signed off. But the over-70s are being closely examined, especially the means-testing threshold of €72,000 for a married couple and €36,000 for a single person.

Pensioners

A move towards a GP-only card is being examined for those on healthy pensions. The pension will not be cut and the free travel scheme is not expected to be touched. But a cut to the package of free TV licence, electricity and phone is still alive.

There will be a change to the entitlement to the dole. When someone becomes unemployed, they go onto the non-means tested dole, unemployment benefit, of €188 a week.

After 12 months, they move to the means-tested payment of the same amount. However, if another member of their family is working, this can put them over the means-test limit.

This period will be cut back to nine months to encourage people to get back to work.

But Labour Party sources believe this will not have a major effect on its policy not to cut welfare benefits. Party figures claim it is not a direct cut to a core social welfare payment.

– Fionnan Sheahan and Fiach Kelly

via Child benefit cut by €10 plus drug fees doubled – The Budget, National News – Independent.ie.

via Child benefit cut by €10 plus drug fees doubled – The Budget, National News – Independent.ie.

Families told to wait up to 10 months for welfare payment

FATHER-OF-THREE Stephen Kinsella spent two years out of work until he finally secured a job (on a three-month rolling contract) at a local factory in May 2012.

It was happy news, especially as his wife Mary was expecting their fourth child. However, the Carlow resident would still have money worries, despite the weekly income. As a result, he discovered that he is entitled to the Family Income Supplement and applied for the payment in June this year.

At the time of application he was told it would take up to 20 weeks for a decision to be reached.

This week, the Department of Social Protection said it would be March 2013 before the application is processed.

“I was hoping to have this extra financial aid in place by now so instead of being rewarded for working, my family and I are being punished,” he told TheJournal.ie. “I imagine lots of other families or single parents are in the same boat.”

They are.

The department confirmed that at the end of last month there were 15,131 applications awaiting decisions. This included 7,267 new FIS applications and 7,864 renewals.

The delay has been caused by the continued strong claim intake, according to a spokesperson.

A programme to try and eliminate the backlog has been devised, including the outsourcing of work to a Letterkenny office. It will also see the newest applications processed first.

A statement from the department outlined the procedure, which began on 5 November:

The first steps taken to permanently eliminate future backlogs in FIS are to put in place sufficient capacity and suitable structures and processes to deal with the weekly intake of work. The programme sees the normal weekly new claim and renewal intake processed without delay while the backlog is ring-fenced and a focused team assigned to this work with a clear plan for its elimination.

“A separate team including additional temporary resources has been identified and is already assigned and working on the backlog of claims. The Department is fully focussed on the elimination of the backlog of claims in the shortest possible timeframe, concentrating in the first instance on those claims which were previously in payment but where payment has expired.”

It is expected that the backlog will be fully eliminated by April 2013. Claims which are eventually approved will be backdated to the date of the application or the date of expiry of the previous claim. The department has issued assurances that all arrears due will be paid.

Families with low incomes are eligible for FIS if there are dependent children living in the household. The payment varies depending on salary and family size.

‘Not good enough’

TD for Roscommon and South Leitrim, Denis Naughten says the long waiting time being forced on low-income working families is “not good enough”.

“In the last 10 days I have been inundated with complaints from struggling families throughout the country who are relying on the approval of their social welfare top-up payment to meet Christmas bills,” he said.

He cited another family who had applied on 15 July for the payment. They will also have to wait until April 2013, he told TheJournal.ie.

Naughten believes this could force families into borrowing money they cannot afford.

“The Family Income Supplement is effectively a top up payment designed to assist families in getting off the dole by taking up low income work…[the delay] will have an enormous impact on the families involved…it also represents a significant failing on the part of the government when looked at in terms of their policies towards low and middle income households.

On one hand the Government say they are encouraging those on the dole to find work, but when they do, they are faced with this bureaucratic barrier of the Government’s own making.

“The fact of the matter is these delays are leaving vulnerable working families under increasing financial pressure and facing an uncertain future. The families affected are not asking for special treatment or extra protection, instead they have shown huge dedication by enter the workforce at this time only to be let down by the Departmental bureaucracy.”

Kinsella echoed this sentiment. “What I find hard to believe is a man in my situation is better off on the dole but I am happy to work. Another ironic thing is if my contract is not renewed in the new year, I may be unemployed again when this application gets sorted.”

Deputy Naughten also passed on details of another father affected by the delays. Here is his letter in full:

I am writing to you in desperation. I am a 54-year-old public servant with a wife and six children. As the sole earner in my household I have a weekly income of €538. As such, I am entitled to claim FIS to top up my income. I received my last FIS payment on 20 September: eight weeks ago. It is currently under annual review.

Whilst waiting for a decision I have received some support from the Community Welfare Officer but still am short €150 a week.

As it was, at the end of each month, I literally had nothing left – but at least I could manage. Last week, I exceeded my overdraft limit with my bank by €48. Little did I realise that €48 was the price of my independence and dignity. At 54 years of age I have had to turn to a relative for €48 to put my account back under its limit and to a friend for €10 to put diesel in my car so I can get home from work this evening.

I drive 32 miles to work and will have to ask someone else to loan me diesel money to come to work tomorrow and Wednesday which at least is pay day, but as I have already overdrawn half of my fortnightly wages I do not know how I can keep going into the future.

I have just contacted the Department of Social Protection’s FIS section and been informed that the backlog in processing renewal claims means that my claim will not be dealt with before the end of December! This situation occurs every year in relation to FIS but this year’s delay is the longest yet. In the past I have been able to manage and simply go without but never to the point where I could not put fuel in my car and go to work.

I have never had to ask anyone for help in my life, and whilst I appreciate that the waiting list is the same for everyone, €48 it seems is the cost of my pride and I am therefore asking you, is there anything you can do to help me in this matter?

FIS can be claimed if weekly income is less than €506 per week for families with one child. The limit increases for each extra child.

via Families told to wait up to 10 months for welfare payment.

via Families told to wait up to 10 months for welfare payment.

Actor says he stole groceries to avoid telling his children there was no food –

AN ACTOR who pleaded guilty in court to stealing groceries said he did it because telling his three children that there was no bread and milk “was a step too far”.

Joe Purcell (57) of Donomore Park in Tallaght, Dublin, said a mix-up with children’s allowances meant the payment was stopped for a short time last August.

“That’s why we were left with no money and nothing in the fridge,” Purcell told The Irish Times yesterday.

“For myself I can deal with it, but for the three kids it was different. I couldn’t let them ask for a glass of milk in the morning and not get any,” he said.

The actor, his wife and three children, aged nine, 12 and 16, is living on social welfare payments and the small earnings from on and off acting work .

He did decorating work on his return from the UK five years ago but this dried up. Acting work included a part in Pygmalion at the Abbey Theatre last year.

Last Thursday he pleaded guilty at Tallaght District Court to stealing €58 worth of groceries from two shops in Firhouse last August 6th. Judge Anthony Halpin ordered him to complete 100 hours of community service.

Judge Halpin told the court that middle-class people unable to buy food for their children was a new type of poor that had emerged from the recession.

However the judge said there were “green shoots”.” He described the recent appearance of Taoiseach Enda Kenny on the front page of Time magazine as a “great launch for this country to show that we are pulling ourselves up by our boot straps”.

Yesterday Purcell said he had originally decided to ask for some credit in local shops on August 6th but was refused. “I had no money. I had to get bread and milk, simple things,” he said. Purcell said the manager caught him getting into his car outside the second shop.

“I said I don’t do this all the time, I’m not a thief, but the manager said, ‘You are a thief,’” Purcell explained. He felt there was “a difference between stealing a million dollars or mugging an old lady and stealing a loaf of bread”.

He was ashamed at first but is no longer ashamed. “What man wouldn’t, if your children are hungry? It’s basic instinct,” he said. His family manages to live on the social welfare payments but was always to the pin of its collar, he said. He and his wife have given up smoking and no longer have a drink once a week.

He hopes he can get more acting work to help.

“This Monday morning we had €10 left until Thursday and we will stretch that, no matter what happens,” he sai

via Actor says he stole groceries to avoid telling his children there was no food – The Irish Times – Wed, Oct 17, 2012.

via Actor says he stole groceries to avoid telling his children there was no food – The Irish Times – Wed, Oct 17, 2012.

Unemployed will have to sign contract to get dole payment

UNEMPLOYED people will have to sign a “contract” before they can get their dole payments in a radical shake-up of the social welfare system.

It is the first time that people seeking jobseekers payments will have to undergo such a process.

Previously it was a matter of supplying basic personal details such as name, age and PPS number to get a payment.

Under the “social contract”, they will have to co-operate with social welfare staff to develop a “Personal Progression Plan” to help them secure training or employment.

They will also have to attend all scheduled meetings and provide all the requested information about their job history and education level.

Social Protection Minister Joan Burton’s department said that people who fail to live up to their commitments under the contract will have their payments reduced and ultimately cut off.

The new system for helping unemployed people is designed to improve the training and job opportunities available to them. Rather than being left to drift into long term unemployment, they will be expected under their contract to engage with social welfare staff to improve their chances of getting a job.

The new system, known as Intreo, is in place in just four of the state’s social welfare offices at the moment – Sligo town, Parnell Street in Dublin, the Square in Tallaght and Arklow in Wicklow.

It is due to be rolled out in all social welfare offices by 2014.

via Unemployed will have to sign contract to get dole payment – National News – Independent.ie.

via Unemployed will have to sign contract to get dole payment – National News – Independent.ie.

Editorial comment

Maybe this is just another way  to message the figures .

It also raises the question of how legal is a one sided contract?

PRSI budget increase proposed in return for welfare safety net –

SELF-EMPLOYED people will face a large PRSI hike in the budget in return for enjoying the safety net of social welfare benefits if the Government adopts a proposal from an expert group.

The self-employed pay social insurance contributions at 4 per cent in order to be eligible for their limited entitlements, while employers and employees together pay 14.75 per cent, enabling employees to obtain a greater range of benefits.

Minister for Social Protection Joan Burton will be advised to raise the PRSI contribution of self-employed people by the advisory group on tax and social welfare, with an increase from 4 per cent to 17.3 per cent among the options expected to be presented.

Due to the recession, large numbers of previously self-employed people have attempted to access social welfare supports for the first time only to discover their entitlements are limited compared to those available to people who have been employed by others.

Self-employed people cannot access jobseeker’s benefit and illness cover, although they get the same State contributory pension provisions as employees.

Ms Burton asked the group to explore whether providing social insurance cover for self-employed people was “technically feasible and financially sustainable”. The group based its discussions on an actuarial review of the social insurance fund carried out by KPMG.

The review found that the annual rate of social insurance contribution required from the self-employed to cover the cost of the State contributory pension would be 15 per cent. Close to 16 per cent would be necessary if jobseekers benefit was included with the State contributory pension, while the figure rose to 17.3 per cent if invalidity pension was also factored in.

via PRSI budget increase proposed in return for welfare safety net – The Irish Times – Wed, Oct 10, 2012.

via PRSI budget increase proposed in return for welfare safety net – The Irish Times – Wed, Oct 10, 2012.

Advisers tell Burton to axe disability allowance for under-18’s

DISABILITY ALLOWANCE payments to under-18s will be ended in the budget if the Government adopts a proposal from the expert group that recommended reducing the rate of child benefit.

The Coalition was forced into a U-turn after last December’s budget when its plan to stop the practice of paying disability allowance directly to 16- and 17-year-olds met strong opposition from the parents of severely disabled children and Opposition parties.

The contentious proposal to increase the minimum qualifying age for the allowance from 16 to 18, while providing a compensatory payment for the teenager’s parent or guardian, is back on the agenda as Budget 2013 approaches.

Minister for Social Protection Joan Burton has said the EU–European Central Bank–International Monetary Fund troika has raised concerns about social welfare payments going straight to under-18s and said she was worried about young people losing the incentive to stay in education.

Ms Burton charged the expert advisory group on tax and social welfare with resolving such anomalies in the social welfare code. The group submitted its report on family income supports, including child benefit, to Ms Burton earlier this year. The Minister will receive the group’s work on State payments to the disabled shortly. The group will propose withholding disability allowance from 16 year olds who are new claimants while extending the domiciliary care allowance to the children’s carers. Currently, a domiciliary care allowance is paid to the parents of a child with a disability until the child is 16, after which the teenager goes on disability allowance in his or her own right.

The weekly maximum rate of disability allowance is €188. The domiciliary care allowance rate is €309.50 per month, although those in receipt of the payment may also qualify for carer’s benefit or carer’s allowance. A respite care grant of €1,700 a year can also be claimed and child benefit is not affected.

via Advisers tell Burton to axe disability allowance for under-18s – The Irish Times – Tue, Oct 09, 2012.

via Advisers tell Burton to axe disability allowance for under-18s – The Irish Times – Tue, Oct 09, 2012.

City council owed €380m by debtors – National News – Independent.ie

The country’s biggest local authority, Dublin City Council, is owed a massive €380m by various debtors — and a new report urges that rents be deducted directly from social welfare payments paid to 70 per cent of its tenants.

Projecting an income of over €72m from 24,000 tenants this year, which is described as the single most important source of council revenue after rates, the report said direct deduction at source from social welfare payments will “result in substantial savings and efficiencies”.

The report from the City Council Finance Department says that despite the current economic circumstances of tenants “rent arrears have stabilised for 2010-12”.

via City council owed €380m by debtors – National News – Independent.ie.

via City council owed €380m by debtors – National News – Independent.ie.

State will face €324bn shortfall over pensions – The Irish Times – Wed, Sep 12, 2012

THE GAP between the State’s future pension and social welfare liabilities and revenues to fund them stands at €324 billion, according to an unpublished report commissioned by the Government, which has been seen by The Irish Times. That figure is almost twice the size of the national debt as it currently stands.

The review of the Social Insurance Fund – the pot into which about €8 billion in pay-related social insurance contributions (PRSI) go to fund a range of benefits – was commissioned by the Department of Social Protection. Last year the fund’s annual shortfall stood at €1.5 billion, or 1.1 per cent of gross national product.

via State will face €324bn shortfall over pensions – The Irish Times – Wed, Sep 12, 2012.

via State will face €324bn shortfall over pensions – The Irish Times – Wed, Sep 12, 2012.

‘They’re being treated appallingly’ | Kerry’s Eye

Man goes on hunger strike over social welfare claim

A Killarney councillor has slammed the government over what he described as the “appalling treatment” of a local family who are seeking social welfare assistance. Cllr Donal Grady warned this week that Jan De Neubourg, who has begun a hunger strike to draw attention to his situation, could be dead within two weeks unless something is done.

Me De Neubourg (56) and his wife Claire, who live in Barraduff, have been waiting four months to see if the state will provide financial support to them.

The Belgian nationals, who have been living in the Killarney area for fifteen years, have been in serious financial circumstances since Jan’s pension from Belgium was stopped.

He says he has written to “everyone” on the issue of whether he is entitled to financial assistance in Ireland.

He has vowed to continue his hunger strike until he gets a response from the Department of Social Protection over whether he is entitled to any help from the state. He said has not eaten or drank anything since last Sunday.

The Belgian Embassy in Dublin confirmed this week that they are aware of the situation regarding Mr De Neubourg.

Killarney Town Councillor Cllr Donal Grady said that Jan is being treated appallingly by the state.

“He is an EU citizen, and they have been giving him the run-around since May. Minister Joan Burton has treated him terribly,” Cllr Grady said.

“He has done nothing wrong. They should have given him an answer by now.

“Since this government came into power I have been fighting for people every week for people to get entitlements. This was not the case previously.”

This week the Belgian native said that he will continue not to eat or drink until the government give him an answer.

“All we want is a decision on whether we can get financial assistance,” he said.

“We have written to everyone, including Minister Joan Burton, local politicians and various agencies but nothing.

“It has been four months and we don’t know what is going on.

“We have been promised every day that we will get an answer, but we don’t.

“The Department is playing games, the way they are treating people is not human.”

Mr De Neubourg, who suffers from depression and other health problems, is currently appealing against the cessation of his Belgian pension.

In the meantime the family’s only income is a small pension his wife receives.

“There is a little money coming in and friends have been very good to us, but we want the state to do what they supposed to do,” he said.

“Overnight they can decide to give billions to the bank, but they can’t make a decision on whether we are entitled to anything.”

via ‘They’re being treated appallingly’ | Kerry’s Eye.

via ‘They’re being treated appallingly’ | Kerry’s Eye.

Bad News for Pensioners

Children’s Minister Frances Fitzgerald has confirmed that various allowances for pensioners will be looked at and confirmed that free travel for pensioners is under review. However, she  insisted that as of now the Government has made no decision yet on next year’s Budget.

the IMF is due to publish a report tomorrow which is expected to push for universal social welfare reform as well as the speedy introduction of the property tax.

If you are a pensioner now is the time to start making your voice heard. Let the ripple of your actions be an inspiration to the nation