# Should Jobseekers Benefit and Allowance be reformed?



## Protocol (2 May 2007)

Our unemployment benefit lasts 15 months in Ireland (UB), and unemployment assistance (UA) lasts forever, in theory.

In many other countries, benefit runs out after 6 months (UK, USA), or maybe 9 months.

Many other countries don't have unemployment assistance (USA), or else it's contingent on training or re-training, etc.

In light of our strong labour market, 15 months seems a long time?  What about cutting UB to 6 months, or maybe more only if in education/training?

What about moving to the Danish model, where UB rates are higher (e.g. 50-60% of average wages), but where the duration is shorter, and it's stricter?

*Or what about abolishing UA altogether?*


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## z108 (2 May 2007)

This is a controversial idea. Why not give UA to everyone as a non means tested basic allowance everyone is entitled to? Then whatever work they do  after that is their own choice and their income taxed accordingly. In such a case noone would ever be stuck in a  trap where it made sense for them to work in the black economy and benefit fraud would be eliminated alongside the whole apparatus and circus of bureacracy involved.


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## shanegl (2 May 2007)

With virtually full employment is there a pressing need to do it at the moment? You can be sure the various unions would grind the country to a halt over this.


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## Towger (3 May 2007)

sign said:


> Why not give UA to everyone as a non means tested basic allowance everyone is entitled to?



I believe this is done in some countries. One of the points for changing to our current  'Tax Credit' system was to allow this, with very few changes. 

It works by giving each (employable) person a Tax Credit of say €150 Per Week, which they would be credited against their tax, worked or not. The tax bands Lower, Std and Higher! COPs would just need to be adjusted to keep the overall tax take the same.

So..
Not working : Get 150 for dole office.
Working, Part Time, etc: Get Pay + (150 - Tax on Pay) from employer.

Towger


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## Welfarite (11 May 2007)

In my opinion, the whole idea of Jobseeker's Benefits/Allowances (note the subtle change byt eh government on the names of unemployment payments...puts a more positive spin on it wihtout actually doing anything to get people back into work) is window dressing. This is a welfare state. Even if you don't qualify for JB/JA you will not be allowed to starve. Supplementary Welfare Allowance, the equilalent of the JB/JA rate, is paid to anybody who is in dire straits. Most genuine umemployed people in this age, use JB/JA as a short-time payment, 50% finding work within 3 months of signing on. 

6 months entitlement to JB/JA sounds good to me. If you are still unemployed beyond that period, you should be in training , re-training or whatever. 

Too many people end up relying on a so-called Jobseeker's payment when in fact they are unemployable after years of being left to their own devices. Many have addiction problems and the state has given up on them, happy to leave them on a long-term payment, unsuited to their situations with no help other than to ask them every month "are you looking for work and any work since you last signed?"


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## room305 (11 May 2007)

shanegl said:


> With virtually full employment is there a pressing need to do it at the moment? You can be sure the various unions would grind the country to a halt over this.



Surely this is the best time to attempt reform? It would be a brave politician who would attempt reform during a period of high unemployment.

Given the massive (and ineffective) waste of resources spent trying to ascertain whether people are genuinely seeking work or not - and all the inherent problems  in defining that - I think the tax credit idea has real merit.

I seem to remember hearing such a system was implemented in Australia.


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## ailbhe (17 May 2007)

Can I point out that jobs are not that easy to come by. y partner lost his job 4 months ago and it has taken him this length to get another. We live in a large town but his area would be retail management. 
I work full time but his wage made up about 2/3 of our income. He did get UB but had to prove he was actively seeking work. They wouldn't give him anything towards our mortgage as I was working. We almost lost our house and are now very much in the red. 
I do think something needs to be changed. For one signing on once a month is absurd. So easy for people to work on the side. Hubby worked since he left school and has paid taxes in the higher bracket for that length of time. One look at his record should have shown he was a genuine case. There are some poeple who have been on UB for a significant length of time and should be made to do FAS training etc.

Anyway, my point is that I think 12 months is about right. It can take that long to find another job especially if you live in a rural area.


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## Welfarite (17 May 2007)

ailbhe said:


> I do think something needs to be changed. For one signing on once a month is absurd. So easy for people to work on the side.



People will defraud the system whether they have to sign on or not. Its only a few years when people had to sign on every week! Signing on is not a control measure any more, its a way of keeping people actively aware of their requirement to actually look for work. If you are claimiing sickness, you have to visit a doctor every week to get a cert, same thing with unemployment, prove you're still unemployed by signing on. 



ailbhe said:


> Hubby worked since he left school and has paid taxes in the higher bracket for that length of time. One look at his record should have shown he was a genuine case.



Don't see why this is relevant. Did he not get paid his benefit? Taxes (Revenue) are not linked to Social Welfare.

I agree, 12 months on JB should be about right, but the state must be in a position to offer training/retraining in that period to anybody who, like uyopur hubby, can't get work in his field. They can't do that at present so they dodge that fact by paying welfare forever and ever.


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## rock3r (17 May 2007)

Funny how everyone bar one rejects the Danish model and plumps for the pittance model.


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## Welfarite (17 May 2007)

rock3r said:


> Funny how everyone bar one rejects the Danish model and plumps for the pittance model.



Come again?


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## z108 (17 May 2007)

whats the Danish model ?


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## ClubMan (17 May 2007)

ailbhe said:


> Can I point out that jobs are not that easy to come by. y partner lost his job 4 months ago and it has taken him this length to get another. We live in a large town but his area would be retail management.


Maybe jobs are hard to get if the applicant is not willing to be flexible on what work s/he will take?


> He did get UB but had to prove he was actively seeking work.


Fair enough surely?


> For one signing on once a month is absurd.


You mean it's too infrequent or too frequent? Do you have to sign on in person once a month? I was on UB for about 6 months a few years back and I don't remember having to attend the _SW _office over that period.


> Hubby worked since he left school and has paid taxes in the higher bracket for that length of time. One look at his record should have shown he was a genuine case.


But surely double checking is no harm?


> There are some poeple who have been on UB for a significant length of time and should be made to do FAS training etc.


I thought that they were after a certain period of months? I know that I was contacted and told to attend for _FAS _or related interviews just before I got a new job during my period of unemployment.


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## Welfarite (17 May 2007)

ClubMan said:


> You mean it's too infrequent or too frequent? Do you have to sign on in person once a month? I was on UB for about 6 months a few years back and I don't remember having to attend the _SW _office over that period.



If you live more than 10k from the local office, you only have to sign once every three months. before this came in, you signed at the local garda station.

Every person signing for three months is automatically referred to FAS for assessment for training under the employmant action programme. Where this falls down is that FAS do not have enough variety of training to offer. Unless, in my experience, you are into computer course or hairdressing, you will not get offered anything! This is where the problem lies and this is why people end up unemployable after years on the "dole".

As a matter of interest though, 60% of people find work within 3 months of signing on, accordingly to SW stats.


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## ClubMan (17 May 2007)

Welfarite said:


> If you live more than 10k from the local office, you only have to sign once every three months. before this came in, you signed at the local garda station.


I live about 1KM from the local _SW _office and don't remember having to sign on in person each month c. 2001/2.


> Every person signing for three months is automatically referred to FAS for assessment for training under the employmant action programme.


 I think this is new because I was only referred after 6 months.


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## rock3r (17 May 2007)

sign said:


> whats the Danish model ?


 
See post number 1


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## tomred1 (17 May 2007)

Yes the 3 month rule came in in November 06. This system only works if you have good communication between Fás and the Local Office. I think they shoud be amalgamated. I also think that Assistance should not be as high as benefit and Assistance should be limited also.


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## Welfarite (17 May 2007)

But it's back to the same old story....Ireland is a welfare state. Even if we abolished JA, people would claim SWA (JA without the criteria other than bieng broke). Beggars on the street and all that. I agree, Tomred1, FAS and SW should be amalgamated.


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## rock3r (17 May 2007)

Reprinted for those for whom scrolling to the top of the page is too arduous:



> What about moving to the Danish model, where UB rates are higher (e.g. 50-60% of average wages), but where the duration is shorter, and it's stricter?


 
I find it interesting that *everyone* bar me has ignored this blatantly obvious and vastly superior way of handling unemployment benefits.


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## Welfarite (17 May 2007)

Ther may be something rotten in the state of Denmark, though....things are not as simple as in that post. This quote from a description of Scandanavian model, whcih Denmark uses:

"However, the welfare state has never been an unchallenged system, either in Scandinavia or elsewhere, and in recent years the crisis in the welfare state has been high on the political agenda both in the Scandinavian countries and elsewhere. The crisis consist many individual elements and is partly due to the fact that the present welfare arrangements originated and developed in the 1960s and 1970s at a time of high economic growth and low unemployment. It has never been the intention either with unemployment, sickness benefits or with cash benefits that so many people should receive them or that they should receive them for so long as has been the case in recent years. The financing of the welfare state has thus become a problem, and as it has not been politically possible to increase taxes, which are already very high, the Scandinavian countries have accrued a very large national debt which on the long view could represent a threat to the welfare systems."


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## room305 (17 May 2007)

rock3r said:


> I find it interesting that *everyone* bar me has ignored this blatantly obvious and vastly superior way of handling unemployment benefits.



Benefits are already too high, it's a stretch to say making them even higher is "vastly superior" no matter how strict or short a duration you would intend them to be.


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## aircobra19 (17 May 2007)

Welfarite said:


> Don't see why this is relevant. Did he not get paid his benefit? Taxes (Revenue) are not linked to Social Welfare.



I think the point being it demonstrates that there is a history of working rather than chasing benefit. I have had experience of that before, people being grilled and finding is difficult to get anywhere with the SW. Which is hard to take if you feel you've paid your dues and other who haven't get SW with ease. Thats the perception at least.



ClubMan said:


> Maybe jobs are hard to get if the applicant is not willing to be flexible on what work s/he will take?...



I think thats a bit unfair. Its as hard to get jobs your overqualified for as those your underqualified for. Even for casual jobs with minimal skills.


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## z108 (17 May 2007)

rock3r said:


> See post number 1



Ooops, thanks I  had read that and then lost it   :/



What I was originally suggesting (and I only suggested it as a general idea needing perhaps some development) was more than a tax credit but an actual flat rate payment which everyone gets for example if everyone got 100(?) euro a week and then was told your life is what you make of it , sit on your This post will be deleted if not edited to remove bad language, go back into education (get a book allowance etc) or get a job (and enter tax system perhaps at the low rate) but thats  yours for life, what would be the likely result ?

A lot of civil servants would lose their jobs in the welfare exchanges and fraud prevention for one thing or be moved to work elsewhere  and become more productive for society. Maybe they could be shifted to revenue compliance instead. And  a lot of people might suddenly lose any disincentive or fear of taking up opportunities and suddenly become entreprenerial  or am I  being too optimistic?


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## ClubMan (17 May 2007)

aircobra19 said:


> I think thats a bit unfair. Its as hard to get jobs your overqualified for as those your underqualified for. Even for casual jobs with minimal skills.


Not sure how a non rhetorical question can be unfair...


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## Welfarite (17 May 2007)

The whole premise of unemployment payments is to tide you over...basic living...until you find a new job. They should be short term payments. In the 1980s in Ireland, the system was stretched to breaking point with unemployment reaching 20%. There were no jobs, no training, no help for you if you had to sign on. That, to all intents and purposes, is still the case. 
Despite the Celtic Tiger, and with full employment, the state has failed to put any system in place to cater for such a scenario in the future. 

There are many people on the dole who never worked and are unemployable. The state is happy to pay them Jobseeker's Allowance, a misnomer for all those let down by the state's agencies. If we did away with unemployment payments, the state would have to pay these unemployable people something else. Moving deckchairs on the Titantic springs to mind....

Until we can say; "here's a payment for six months, after that you will be moved into training/retraining for six months, after that if you don't get a job you can starve", nothing will change. It's the middle bit that's the problem for the state.


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## z107 (17 May 2007)

> after that if you don't get a job you can starve



There would be an uprising.

Benefits are a good way to enforce state control over the masses.


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## room305 (17 May 2007)

sign said:


> What I was originally suggesting (and I only suggested it as a general idea needing perhaps some development) was more than a tax credit but an actual flat rate payment which everyone gets for example if everyone got 100(?) euro a week and then was told your life is what you make of it , sit on your This post will be deleted if not edited to remove bad language, go back into education (get a book allowance etc) or get a job (and enter tax system perhaps at the low rate) but thats  yours for life, what would be the likely result ?



I think it is a great idea as it holds to the original reason for introducing social welfare - a safety net to prevent people from starving if they lose their job,  the existence of which should stimulate more entrepreneurial ventures (because you always have welfare to fall back on if you fail).

It is only of late that it has become a career option.


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## rock3r (18 May 2007)

room305 said:


> Benefits are already too high, it's a stretch to say making them even higher is "vastly superior" no matter how strict or short a duration you would intend them to be.


 
There are cogent arguments to be made against having any welfare system at all.

But if you look at the measured results of differing welfare systems, especially regarding the level of extreme poverty among the children of welfare recipients, the Irish/UK/USA is blatantly and obviously very far below the Danish model. It is illogical to accept the need to have a welfare system, yet to choose a model which causes vastly more child ultrapoverty than an alternative which costs only fractionally more, and less in some cases.

The current model used in our Irish/UK/USA systems guarantees child ultrapoverty at a structural level.

If child ultrapoverty is an acceptable ill (as the Beijing government, for one, believes) then it's sort of weird to even bother with a welfare state.


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## room305 (18 May 2007)

rock3r said:


> But if you look at the measured results of differing welfare systems, especially regarding the level of extreme poverty among the children of welfare recipients, the Irish/UK/USA is blatantly and obviously very far below the Danish model. It is illogical to accept the need to have a welfare system, yet to choose a model which causes vastly more child ultrapoverty than an alternative which costs only fractionally more, and less in some cases.



What leads you to believe that the differences in child poverty are related to the social welfare system? Perhaps it is a cultural problem. Also, the benefits systems in Ireland and the UK are vastly different to those in the US.


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## ClubMan (18 May 2007)

Er - what is "ultrapoverty" and how exactly is it defined?


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## rock3r (18 May 2007)

room305 said:


> What leads you to believe that the differences in child poverty are related to the social welfare system? Perhaps it is a cultural problem. Also, the benefits systems in Ireland and the UK are vastly different to those in the US.


 
Well, let's scientifically experiment to see if it's really cultural or structural to the welfare system.

We simply take every welfare recipient whose name on the birth certificate begins with an 'L' (or some other method of assuring a reasonable amount of randomness), and offer them the choice of the status quo or the Danish system.

Then we track poverty amonf those on the Danish system against the rest of the state. If there's no difference between them outside the margin of error, then it may indeed be cultural. If there is a major difference between them outside the margin of error, then logic suggests it's systematic and not cultural. Frankly, I think the chances of the difference being cultural are laughably low, but show me data that says different and I'll change my mind. What will it take to get you to change YOUR mind?

There's no quantum physics involved, just tried and true testing methods.

By restricting the experiment to the L-names, we limit the cost massively, obviously, but get the benefit of knowing whether our welfare system can be fixed based on hard data, not ideological assumptions.


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## Nige (18 May 2007)

room305 said:


> Benefits are already too high, .


 
Do you honestly believe that?

Do you think you could live on the dole or disability allowance for long?


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## room305 (18 May 2007)

Nige said:


> Do you honestly believe that?



Yes.



Nige said:


> Do you think you could live on the dole or disability allowance for long?



Yes, although I would question why I would need to draw the dole for a prolonged period of time.


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## Towger (18 May 2007)

"Ultra poverty" in this country is 'cultural'. No matter how much money you give it will be drunk, smoked, injected or gambled etc. As 'normal poverty' is now taken as having a family income in the bottom 15%, there will always be poverty. But using the old system of 'can you afford a pair of shoes and warm coat?' there is no longer a problem, unless they are trapped by an ultra poverty ‘culture’. But will our nanny state save children effected by ultra poverty, by taking them away from their parents. No, not until they are already damaged and trapped by the Ultra Poverty they are brought up in. 

You could also go into how the SW state breaks down the Family, but that is another debate.


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## rock3r (18 May 2007)

Towger said:


> "Ultra poverty" in this country is 'cultural'. No matter how much money you give it will be drunk, smoked, injected or gambled etc. As 'normal poverty' is now taken as having a family income in the bottom 15%, there will always be poverty. But using the old system of 'can you afford a pair of shoes and warm coat?' there is no longer a problem, unless they are trapped by an ultra poverty ‘culture’. But will our nanny state save children effected by ultra poverty, by taking them away from their parents. No, not until they are already damaged and trapped by the Ultra Poverty they are brought up in.
> 
> You could also go into how the SW state breaks down the Family, but that is another debate.


 

I'm curious where you got the notion that 'normal poverty' is now taken as having a family income in the bottom 15%.

In fact, poverty's defined as having below 40% of the median income, which is so different from "having a family income in the bottom 15%" that I don't even know where to begin explaining the difference.

Obviously, ultrapoverty requires that income be very far below the basic metric of "below 40% of the median income", and "very far" is a subjective measurement on which reasonable people will differ.

What constitutes poverty which is "very far" below in your eyes?

I think, given the huge and rising cost of living, that anything less than 80% of the basic poverty metric constitutes ultrapoverty, especially when you consider rampant inflation.

Maybe you think that a human child could be trying to survive on half (50%) the poverty metric and still not be ultrapoor, I'd disagree but would accept your right to a different point of view.


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## wolfspeed (18 May 2007)

It is an interesting discussion of a complex issue. I wonder though, if we were to have this discussion in the 80s or 90s if people would have the same attitude? 

While many of us feel pretty good about the economy we should remember that it wasn't all that long ago since we were exporting people out of here and we didn't have enough jobs for the population who stayed here. I am not trying to be a prophet of gloom, but there is a possibility that over the next 5 years or so more people will need the supports the State provides. We should bear this in mind when deciding that we should turf people off benefits.


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## ClubMan (18 May 2007)

rock3r said:


> Obviously, ultrapoverty requires that income be very far below the basic metric of "below 40% of the median income", and "very far" is a subjective measurement on which reasonable people will differ.


Not obvious at all - I asked for an explanation of what "ultrapoverty" is and how it is defined (and who defines it) but nobody seems to know...


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## room305 (18 May 2007)

rock3r said:


> In fact, poverty's defined as having below 40% of the median income ...



This is an absolutely nonsensical definition of poverty and is used by the likes of Fr. Sean Healy to pretend poverty is still a major problem. I read an interview with him before and he was calling for social welfare benefits to be kept on par with a "comfortable wage". Why not two cars and the 3-bed semi-detached in an exclusive address as well while we're at it?

If we imagine a country with population of 100 people, one person earns a million a year, one earns €10k a year and the rest earn between €100,000 and €150,000 a year. Assuming a similar cost of living to Ireland, we might reasonably assume that only one person in this country can be considered "poor". However, according to CORI, this terrible country is afflicted with a truly horrendous poverty rate of 99% as everybody but the millionaire lives below the "poverty line" of €198,000 a year!

People living on state support are can do so because of the labour of others. It is a privilege not a right and should be afforded to those who truly deserve it.


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## Towger (18 May 2007)

rock3r said:


> I'm curious where you got the notion that 'normal poverty' is now taken as having a family income in the bottom 15%.



This is what various religious groups have recently been using on the radio etc as a measure of relative poverty.



rock3r said:


> In fact, poverty's defined as having below 40% of the median income, which is so different from "having a family income in the bottom 15%" that I don't even know where to begin explaining the difference.



According to http://en.wikipedia.org/wiki/Relative_poverty The "European Union uses 60% of national median equivalised household income."

Anyway. The problem in Ireland is Cultural or what is now called Generational Poverty. It is either self induced or inherited from parents. The SW system will always take care of you. Money it not the answer, €500 per week can be drink or injected just as fast as €100.

Clubman, I have seen at first hand levels of poverty that I would call real Ultrapoverity, street children with horrific festering injuries/missing limbs etc. It does not exist in this country.

Towger


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## ClubMan (18 May 2007)

Still none the wiser as to what ultrapoverty means.


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## gonk (18 May 2007)

ClubMan said:


> Still none the wiser as to what ultrapoverty means.


 
Google is your friend . . .


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## wolfspeed (18 May 2007)

In order to properly discuss this issue, I think we have to avoid generalisations. Poverty is this or poverty is that. There are some people who are in poverty.



Towger said:


> Anyway. The problem in Ireland is Cultural or what is now called Generational Poverty. It is either self induced or inherited from parents. The SW system will always take care of you. Money it not the answer, €500 per week can be drink or injected just as fast as €100.
> 
> Clubman, I have seen at first hand levels of poverty that I would call real Ultrapoverity, street children with horrific festering injuries/missing limbs etc. It does not exist in this country.
> 
> Towger


I completely disagree that *all* poverty in Ireland is generational. There is no way that view can be backed up with hard facts. It might well be popular in a pub but popularity doesn't mean something is true.

There are cases in this country of people who are poor and it is not self induced or inherited. But that is a fact that doesn't fit with some people's social theories, so the easiest thing to do is to generalise. It really only shows up our ignorance of the situation.


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## room305 (18 May 2007)

wolfspeed said:


> There are cases in this country of people who are poor and it is not self induced or inherited. But that is a fact that doesn't fit with some people's social theories, so the easiest thing to do is to generalise. It really only shows up our ignorance of the situation.



There is no denying there are some genuine hard-up cases out there but by its very nature social welfare must generalise. I would agree with Towger that the bulk of poverty in this country is down to cultural, generational and educational/parenting issues. Throwing taxpayer money at the problem in the form of increased social welfare is a wasteful and ineffective solution from a lazy government. The deliberate inducement of a culture of state dependence in certain unemployment blackspots is something the government should be ashamed of. It is (or should be) an affront to people's dignity and an insult to all those who must work to support the creation of these isolated mini-welfare states.


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## Protocol (19 May 2007)

I'll explain some poverty terms:

"Ultra poverty" - never heard of it.  I'd say you mean "*absolute poverty*", which tends to exist only in some parts of the third world.

*Relative poverty* - where people are poor, relative to the norms in that society.

The EU define *relative income poverty* as having a disposable income less than 60% of the median equivalised disposable income.  If you fall into this group, you are defined as being "*at-risk-of-poverty*".

See the latest CSO report:

[broken link removed]

So even if your income is less than 60% of the median, you may not actually be poor, but you are at risk of poverty, due to the low income.

*Consistent poverty* = this is an Irish term, meaning you are at risk of poverty and you lack certain items which are deemed necessities.


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## gonk (19 May 2007)

Protocol said:


> "Ultra poverty" - never heard of it. I'd say you mean "*absolute poverty*", which tends to exist only in some parts of the third world.


 
OK, to make it even easier for those who seem never to have heard of Google either:


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## rock3r (19 May 2007)

It's true that the income of a very poor typical Irish person are about equivalent to a typical upper middle class Indian person who employs a maid and a butler full-time. Wealth and poverty are inherently relative.

If you don't want to recognise this, then the outright scrapping of all forms of welfare makes sense.

This thread is abour reforming welfare rather than scrapping it, if the title means anything.

So how come nobody's willing to talk about the Danish system? 

One theory about why Denmark has so little poverty (either absolute or relative) compared to Ireland is that their "culture" (whatever that may be) is different.

The other theory as to why there's so much more relative poverty in Ireland over Denmark is that their poverty-prevention mechanisms are orders of magnitude more intelligently planned and engineered than the Irish system.

I incline towards the latter view.

However, if you think the Irish welfare system is better or equal to the Danish one, please explain how. If you've got some killer points of information to make, or insights to give, I might change my mind. But frankly, it'll have to be good.


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## room305 (20 May 2007)

rock3r said:


> So how come nobody's willing to talk about the Danish system?



Perhaps nobody is talking about the Danish system because very few people on the board have any knowledge of the intricacies of how the Danish social welfare model operates. Instead of barking at everyone to discuss it, why not take the time to explain its relevance?

I know successful Nordic countries are long regarded as the economic equivalent of a Rorschach test - people on the left see the generous social welfare entitlements, people on the right see open economies pushing for a deregulated EU with both groups regarding the cause of one as the reason for the success of the other.


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## z108 (20 May 2007)

I'd like to hear more about the Danish model too. I hope you'll  forgive me for my lack of knowledge about economics but below I will share the only information I have for discussion on this topic.
Denmark is one of the diminishing number of  countries I havent been to in Europe yet but somehow I feel the Danish economy is less open than ours. Their attitude to  immigration for example.
A Danish engineering colleague once told me about 2 years ago  I quote : 'we decided we dont like the immigrants' then he told me how his government is doing everything to discourage immigration. Since then I've read an article about how a non EU spouse (US lady) of a Danish citizen had a lot of trouble coming to live there and was possibly refused.  In contrast our economy is built upon continuous immigration so Im presuming  we should be growing at a much faster rate  and  need a welfare model different to the Danish one (where numbers in employment wont grow so rapidly) or does one size fit all ?


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## Welfarite (21 May 2007)

This, apparently, is the "Danish model" as regards unemployment benefits, which I have already talked about on this thread:

"Unemployment
Regulatory Framework
First law: 1907. Current laws: 1970 (employees) and 1976 (self-employed).

Type of program: Subsidized voluntary insurance system.

Coverage
Employees aged 18 to 65, the self-employed, and persons who have completed at least 18 months of vocational training. Covered persons must be members of an approved unemployment fund established voluntarily by trade unions (for instance, in industry, commerce, office work, agriculture, handicrafts, catering, transport, or quarrying).

Source of Funds
Insured person: Membership contributions to an unemployment insurance fund consists of a variable contribution toward financing the fund (rates vary according to fund), a mandatory fixed contribution toward the payment of unemployment insurance, and a voluntary fixed contribution toward payment of early retirement pay.
Employees and the self-employed pay 8% of their gross salary or earnings toward the Labor Market Fund to cover state expenditure on unemployment insurance benefits and voluntary early retirement pay.
Employer: A part of the supplementary 3% value-added tax base of the enterprise.

Government: Any cost above the insured person's and employer/employee contributions.

Qualifying Conditions
Unemployment benefit: Membership in an unemployment fund during the last 12 months (self-employed included) and 52 weeks of employment in last 3 years.

Unemployment must not be due to voluntary leaving, misconduct, a labor dispute, or the refusal of a suitable job offer. The claimant must be registered for employment and capable of, and willing to, work.

Voluntary early retirement pay scheme: Resident and aged 60 to 65 (including the self-employed) and a member of an unemployment fund for 25 of the last 30 years; 20 of the last 25 years if born before July 1, 1964; or 10 of the last 15 years if born before March 1, 1952.

Unemployment Benefits:
90% of average earnings of the previous 12 weeks, up to 3,205 kroner a week. The benefit is payable from the first day of unemployment (5 days a week) for an initial period of 1 year (job-seeking period). The self-employed have a waiting period of 4 weeks. The initial benefit period may be followed by a second period of 3 years. If the unemployed person is aged 55 to 59, the second period may be extended until the 60th birthday to allow entitlement to the voluntary early retirement pay scheme.
Voluntary early retirement pay scheme: The maximum benefit is 91% of the highest unemployment benefit, but not more than 2,916 kroner a week. Certain favorable conditions apply to workers staying in the labor market for a minimum period of 2 years after age 60."

It doesn't strike me as vastly superior or differnet to Irish system.


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## room305 (21 May 2007)

Looks very similar to Swedish model which has the highest rate of employee absenteeism in Europe. Nearly ten percent of all working-age employees are out on permanent disability benefits (up to 80% of gross salary). Government payouts on sickness benefits blow nearly 20% of the government's yearly budget.

Gunnar and Alva Myrdal were the intellectual founders of the Swedish welfare state and have previously opined that if the "welfare state cannot work in Sweden then it simply cannot work anywhere".

Increasing the incentives available to live off of other citizens is rarely a good idea.


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## Welfarite (21 May 2007)

I agree, 305, and also with your earlier comment on "lazy government". Getting caught up in definitions of poverty (be in educational, cultural or monetary) danish models, etc. cannot get away from this state's inability to offer the long-term unemployed anything that will change the mindset of "living off the state". 

My fear is that, in the Celtic Tiger era, we are deferring an opportunity to reform our SW system and ignoring the threat a downslide into the catastrophe that was the dole queues of the 1980s. My reform would be to restrict jobseeker's payments to those that are willing to work or re-train adn for a certian period only. This can only be done when the state keeps its side of the contract....proper training schemes, educational schemes, apprenticeships before their benefits run out.


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## rock3r (21 May 2007)

The reason I think it's vastly superior is that there's no more than 8% of the population living in relative poverty in Denmark.

Imagine a typical earner bringing home EUR384 a week after tax losing his job in Ireland and Denmark. Assume he has an ordinary net debt of EUR100,000.

Danish unemployed chap will have about EUR345 a week coming in. 

Let's further assume that there's a really crappy, low-value McJob going which both the guys could get. No prospects, long hours. Under the benefit rules, the job does not count as suitable work.

The Irish guy will usually take that job, because although he could still draw his €135 per week for about a year with no questions asked, the sheer difficulty of living on that little is too hard, and paying off the debt will eat a massive chunk of that pittance, even if he's getting help with it. Odds are he'll sell up his assets, even at a loss, to clear or reduce the debt.

The Dane, however, tends to wait for an opening in a high value-added job suited to his skills and experience. His career restarts off more or less where he left it, and in a few years he's typically taking home 400 or 500 a week after tax.

After the same amount of time, the Irish counterpart will have gotten no more than the basic minimum wage hike, as his career was destroyed by the job loss, and he's lost his assets too. 

Assume that they have kids and it ceases to be a mystery why child poverty is almost unknown in Denmark and close to the norm in Ireland.

How is that not greatly superior?


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## ailbhe (24 May 2007)

_Let's further assume that there's a really crappy, low-value McJob going which both the guys could get. No prospects, long hours. Under the benefit rules, the job does not count as suitable work.

The Irish guy will usually take that job, because although he could still draw his €135 per week for about a year with no questions asked, the sheer difficulty of living on that little is too hard, and paying off the debt will eat a massive chunk of that pittance, even if he's getting help with it. Odds are he'll sell up his assets, even at a loss, to clear or reduce the debt.

The Dane, however, tends to wait for an opening in a high value-added job suited to his skills and experience. His career restarts off more or less where he left it, and in a few years he's typically taking home 400 or 500 a week after tax.
_

Have to say I can see the point in this. My husband lost his job and was on UB for 3-4 months. in this time, despite working in a 45k+ job before, the SW officer was pushing him to go for €20k jobs. This is fine in theory but would have involved us selling our house and not being far off the poverty line. We were fortunate that our parents could help us with the mortgage and I was working so we managed to keep our heads above water. I just don't think it's right that the government expect people who suddenly lose their jobs to take the first job going even if it means losing everything they've worked for their whole lives. The idea of a wage based UB payment over a shorter period of time seems good in theory. After a few months they could reduce it / enforce training.


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## rock3r (25 May 2007)

ailbhe said:


> I just don't think it's right that the government expect people who suddenly lose their jobs to take the first job going even if it means losing everything they've worked for their whole lives.
> 
> The idea of a wage based UB payment over a shorter period of time seems good in theory. After a few months they could reduce it / enforce training.



Yes not only is the status quo in Ireland cruel, it's harmful to the economy to force people to liquidate their savings/assets AND take a job which is far beneath their skills, just because it takes a few months to get an opening in their field.

As far as I'm aware, it's rather good in practice too. I'm sure there's just as many chancers in Denmark as Ireland, but they just get their payments reduced and then stopped.


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## room305 (25 May 2007)

rock3r said:


> How is that not greatly superior?



You're asking the taxpayer to foot the bill until somebody who loses a job finds a job they like. Why can't the person take the first available job and continue to search for something more suitable, without presenting such a burden to the taxpayer?

What happened to having savings to cover periods of unemployment, instead of expecting the taxpayer to do so? Or failing that they can purchase mortgage protection to cover debt payments during periods of unemployment.

As for being better for the economy, I fail to see how this can be the case, if people are subsidised by the state to only have to work in jobs they really like. An economic downturn would virtually guarantee that anyone laid off would use their maximum length of welfare entitlements before seeking new work. This puts additional pressure on existing workers and will delay recovery. Labour unions and CORI would spend their time continually pressuring the government to extend the length of time available for the maximum benefits.

You mention Denmark as an example but France has a similar percentage-based welfare scheme. So cannot simply infer that such a welfare scheme is responsible for the success or otherwise of Denmark's economy.


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## ailbhe (25 May 2007)

room305 said:


> You're asking the taxpayer to foot the bill until somebody who loses a job finds a job they like. Why can't the person take the first available job and continue to search for something more suitable, without presenting such a burden to the taxpayer?
> 
> What happened to having savings to cover periods of unemployment, instead of expecting the taxpayer to do so? Or failing that they can purchase mortgage protection to cover debt payments during periods of unemployment.


 
In our case we had mortgage protection which will only pay out after 6 months of unemployment and we bought our house last year so our savings were minimal as all our savings had gone on the deposit for the house.

And as tax payers surely that is what we pay our taxes for. To have support if anything unexpected happens to us, healthwise, workwise etc... 

If you go by the logic that "You're asking the taxpayer to foot the bill" then I assume you have private healthcare, your children go to private schools etc........
Not everyone can be prepared for something completely unexpected.


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## aircobra19 (25 May 2007)

I don't get, "You're asking the taxpayer to foot the bill".  Indeed is that not why we pay tax? While it would be wonderful to have have built up enough savings and private insurance plans to cover every eventuality, thats not always possible. Equally I can't imagine that someone in difficult situations would refuse any job. More likely its difficult to get a job your overqualified for. Besides someone with a solid work history isn't likely to be work shy.


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## rock3r (28 May 2007)

room305 said:


> You're asking the taxpayer to foot the bill until somebody who loses a job finds a job they like. Why can't the person take the first available job and continue to search for something more suitable, without presenting such a burden to the taxpayer?
> 
> What happened to having savings to cover periods of unemployment, instead of expecting the taxpayer to do so? Or failing that they can purchase mortgage protection to cover debt payments during periods of unemployment.
> 
> As for being better for the economy, I fail to see how this can be the case, if people are subsidised by the state to only have to work in jobs they really like.


 
The point is not to find a job they like as to find a job which adds greater value. Such jobs typically pay more salary, which pays more taxes, which repays the cost of €5000 in a short period of years. The Irish system, which you seem to support, pushes the person into a minimum wage job which pays *little or no tax*. The economy has lost a high-value added worker to the burger-flipping sector, and the Revenue has lost a source of income under your system. That's not efficient. Sometimes, the operation of a free market produces sub-optimal, crummy results, and this is an obvious perfect example.

The Dane's savings stay in the bank and are used to finance investment Denmark's robust economy. In your scheme, the savings are liquidated to provide for subsistence living.

The Danish method is simply a far more efficient use of resources.


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## room305 (28 May 2007)

rock3r said:


> The point is not to find a job they like as to find a job which adds greater value. Such jobs typically pay more salary, which pays more taxes, which repays the cost of €5000 in a short period of years. The Irish system, which you seem to support, pushes the person into a minimum wage job which pays *little or no tax*. The economy has lost a high-value added worker to the burger-flipping sector, and the Revenue has lost a source of income under your system. That's not efficient. Sometimes, the operation of a free market produces sub-optimal, crummy results, and this is an obvious perfect example.



Labour mobility is one of the cornerstones of capitalism. It is one of the reasons it works. Would China's growth be so rampant if people didn't flock from the countryside to urban areas in search of jobs? Would Ireland have grown so successfully over the years without inward migration? Closer to home, such a scheme would kill regional development stone dead as fewer workers will be willing to move to where the jobs are. I know my own sector of employment would be nowhere near as vibrant without workers willing to travel from other countries to obtain jobs here.

Look at France - the economy remains sluggish because there is so little labour mobility. During the riots over the (possible) introduction of relaxed labour laws, newspapers there were filled with commentary decrying how anyone could plan ahead if they could be fired from their job. The concept of losing your job and being forced to move elsewhere for a new one was completely alien to them. The same newspapers also pondered why so few new jobs were created.

You seem to imply that if someone takes a job flipping burgers then they are stuck flipping burgers forever. Why would this be the case? I doubt anyone takes a job flipping burgers with the intention of doing it for life. If the state is willing to pay people until they find their perfect job then you will find fewer and fewer people willing to take on crappy jobs.

Rather than looking at this from the point of view of someone who loses a high paying job and is forced to take a lower paying one - imagine you are in a low paying job, working hard in the hope to progress your career. Would you be happy to know that a neighbour who had one blow out year working in real estate and then got laid off, was getting paid a six figure annual salary to wait for the next bubble-du-jour? How about a highly paid CEO?

The possibilies for fraud increase as well. Contract workers could very easily arrange with their employers to get paid a bumper nine month salary by their employer and get "laid off" for three months of the year, while still surreptitiously working for the same employer. The cost to the company is the same but the salary is increased at the expense of the state.

I'm going to hazard a wild guess and say you must work in the public sector. It takes a certain hubris to say that the free market produces "sub-optimal, crummy results" (which it quite possibly does in some cases) but to then imagine the government can produce a better result.

EDIT: What are Denmark's redundancy laws like? In many cases, the mandatory redundancy payments should serve as a buffer for workers who are laid off and need to find another job. With regards the liquidation of assets, I imagine this rarely happens. A highly qualified worker with a solid employment history who was laid off could talk to his bank and gain some kind of reprieve while he found a new job. It is unlikely the bank would foreclose on his house in such a situation.


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## room305 (28 May 2007)

ailbhe said:


> And as tax payers surely that is what we pay our taxes for. To have support if anything unexpected happens to us, healthwise, workwise etc...



I wasn't advancing the argument that we should have no social welfare, just that social welfare shouldn't be paid out as a percentage of your previous income.


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## aircobra19 (28 May 2007)

room305 said:


> I wasn't advancing the argument that we should have no social welfare, just that social welfare shouldn't be paid out as a percentage of your previous income.



I must have missed that. I thought they were arguing why is so hard to get if you have a good work history, and a history of very few if any claims?


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## room305 (28 May 2007)

aircobra19 said:


> I must have missed that. I thought they were arguing why is so hard to get if you have a good work history, and a history of very few if any claims?



No, rock3r was advancing the case for implementing a Danish model. In the event of unemployment you may claim benefit that is the same as your previous wage for a fixed period of time.


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## aircobra19 (28 May 2007)

room305 said:


> No, rock3r was advancing the case for implementing a Danish model. In the event of unemployment you may claim benefit that is the same as your previous wage for a fixed period of time.



Ah now I'm with it. Seems like a great idea to me, but I can see how as you're suggesting it would be open to abuse.


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## room305 (29 May 2007)

aircobra19 said:


> Ah now I'm with it. Seems like a great idea to me, but I can see how as you're suggesting it would be open to abuse.



Probably mean higher taxes as well.


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## rock3r (29 May 2007)

I didn't read anything on google about Denmark giving all workers a percentage of their actual employment income, meaning an ex-CEO on the dole would get six figures. I read it as saying it pays a percentage of the average or median wage, for a short period of time, and presumably several other caveats to prevent abuse. Did you see that?


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## room305 (6 Jun 2007)

rock3r said:


> I didn't read anything on google about Denmark giving all workers a percentage of their actual employment income, meaning an ex-CEO on the dole would get six figures. I read it as saying it pays a percentage of the average or median wage, for a short period of time, and presumably several other caveats to prevent abuse. Did you see that?



Emmmmmm ... I had assumed you were the expert on the superiority and intricacies of the Danish social welfare system.



Welfarite said:


> This, apparently, is the "Danish model" as regards unemployment benefits, which I have already talked about on this thread:
> 
> "Unemployment Benefits:
> 90% of average earnings of the previous 12 weeks, up to 3,205 kroner a week."





rock3r said:


> The reason I think it's vastly superior is that there's no more than 8% of the population living in relative poverty in Denmark.



Only 7% of the Irish population is at risk of social deprivation according to ESRI so calling the Danish system "vastly superior" is a bit of a stretch. Relative poverty in Denmark in 2004 (latest I could find statistics for) was 13.2%. Better than Ireland at 22.5% but only around the EU average. So why pick Denmark as your model - why not the Czech Republic or Romania?


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## Protocol (6 Jun 2007)

The at-risk-of-poverty rates are as follows, 2005 data:

Ireland = 20% of population
Denmark = 12% of population

See here:

[broken link removed]


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## Protocol (6 Jun 2007)

The CSO data for our at-risk-of-poverty rate is 18.5% of the population according to their EU-SILC report, see here:

[broken link removed]

The "consistent poverty" rate in Ireland is 7% in the same year, 2005.


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## room305 (7 Jun 2007)

Very interesting statistics Protocol, thank you. I couldn't seem to get the Eurostat data to display in my browser but could view the link provided. 

Did some checking and "equivalised" income means income which has been adjusted to take account that people in a household have disproportionate income needs. The income from the earners in a household is then split in a weighted fashion among all members in a household. The weightings are 1 for the first adult over 13 and 0.5 for subsequent adults and 0.3 for children.

It would appear that in 2005 the 60% threshold of the median wage was €192 per week, so below that would put someone in the "at risk of poverty" category. So a family of two adults and three teenage children would be "at risk of poverty" for a combined annual income of less than €29,952.

The "consistent poverty" category is based on not being able to afford two or more items from the following list.

1. Two pairs of strong shoes
2. A warm waterproof overcoat
3. Buy new not second-hand clothes
4. Eat meals with meat, chicken, fish (or vegetarian equivalent) every second day
5. Have a roast joint or its equivalent once a week
6. Had to go without heating during the last year through lack of money
7. Keep the home adequately warm
8. Buy presents for family or friends at least once a year
9. Replace any worn out furniture
10. Have family or friends for a drink or meal once a month
11. Have a morning, afternoon or evening out in the last fortnight, for entertainment

http://www.socialinclusion.ie/


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## rock3r (7 Jun 2007)

Yes, and Denmark scores over 50% better than Ireland on those criteria you listed. Thus, they're 50% superior.


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## room305 (7 Jun 2007)

rock3r said:


> Yes, and Denmark scores over 50% better than Ireland on those criteria you listed. Thus, they're 50% superior.



Yes but for the "at-risk-of-poverty" or relative poverty categories. Even the social inclusion website has doubts about the veracity and suitability of comparisons with other countries. Ireland has a quite high rate of home ownership for example, compared to Denmark but the measure does not take this into account.



> What is ‘at risk of poverty’?
> 
> The ‘at risk of poverty’ indicator identifies all those (households or people) who fall below a certain income threshold, which in the EU has been set at 60% of the median income. Median income is the amount that divides the income distribution into two equal parts, half of people having incomes above the median and half having incomes below the median. This measure is the best known and quoted indicator as it affords some comparisons with other countries. It does not, however, measure poverty as such, but rather the proportion of people below a certain income threshold who may be ‘at risk of poverty’. Whether persons below the 60 per cent threshold are actually experiencing poverty will depend on a number of factors. These include:
> 
> ...



It also begs the question - why the comparison with Denmark? Plenty of other countries have similar or better relative poverty scores, yet they do not all have similar social welfare schemes.


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