# Dole payments should have been cut this week, not increased



## Brendan Burgess (6 Mar 2017)

I had an article in yesterday's Sunday Independent

*Dole payments should be cut, not increased*

Last week the dole was increased by €5. Cue the usual howls of protests from the poverty lobby deploring the paltriness of this increase.

But let's look at a few facts.

The dole in the Republic of Ireland is €193 per week for a single person. The dole in Northern Ireland is the equivalent of €90. That is not a typo. An unemployed person in Dundalk is getting twice the dole than his cousin who lives 14 miles away in Newry. They have the same access to free healthcare, free education and roughly the same housing, although in the Republic, a person on the dole is expected to contribute €30 a week towards their housing costs.

One might assume that the hard-pressed worker in the Republic pays much higher PRSI than a worker in the North and so maybe they deserve to get a higher dole when they lose their job? Well one would be wrong to assume that. An employee in the Republic earning €40,000 pays €1,600 a year in PRSI, whereas an employee in the North pays the equivalent of €3,700!

So, a worker in Dundalk pays half the level of Social Insurance than his cousin in Newry, yet, when he loses his job, he gets twice the dole. This is completely unjustifiable and completely unsustainable.

Despite the very low levels of tax and PRSI on low-paid employees in Ireland, it's simply not worth their while to get a job. With almost-free housing, free health care and extraordinarily generous levels of dole, they would lose money by going out to work, especially if they can supplement their dole through working in the black economy.

Is it any wonder that we have twice the number of people living in jobless households than the rest of the EU?

If you have worked continuously for 30 years and have paid PRSI for 30 years you will get €193 per week dole - the exact same as someone who has sat at home watching daytime TV for 30 years. Despite the fact that it is called "pay-related social insurance", it is neither pay related nor insurance in any normal understanding of the word. You get no extra dole for contributing to the social insurance fund. And in retirement, a person who has paid PRSI all their lives gets €10 a week more than someone who has lived on welfare all their life.

So what is to be done to bring a bit of sense and fairness into the system? The level of non-contributory dole and pension must be cut, and cut significantly. If people choose not to work, then they must be poorer than people who get out of bed in the morning and go to work and contribute to society.

A person who works for years and pays PRSI should get a much higher pension that someone who has been on the dole all their life. The non-contributory social welfare pension also needs to be reduced from its current level. For example, it's €377 for a couple in the Republic compared to €309 in the North.

One way to pull all this together would be to put each person's PRSI contributions into an account in their own name. If they work for many years and then lose their job, instead of getting social welfare, they would be drawing down their own money from their own account. When they retire, a person with more money in their account, would get a higher pension than someone with less money or no money in their account. Again, they would not be getting a social welfare pension. Instead, they would be withdrawing money from their own account.

Under such a system, someone would always be better off working than on the dole. When they are working, they would be adding to their account and building up their pension pot. When they are unemployed, they would be depleting their account i.e. spending their own money.

This personal account system would have many other advantages. Self-employed people working in cash businesses who hide their income to avoid paying tax would have very little in their account on retirement and so would get a much lower pension than a PAYE employee who has had no choice but to pay full taxes and PRSI all their working life.

At the moment, workers see PRSI as just another tax. If it were going into an account in their own name, they would resent it less.

In any event the current ridiculously high levels of social welfare are totally unsustainable for the national finances. Everything is going in our favour at present. Our exports are booming. Our tourism is booming. We have artificially high Corporation Tax receipts due to US multinationals diverting their earnings through Ireland. And although our national debt is huge, the cost of servicing it is low because interest rates are so low. Despite all this, we are taking less in tax than we are spending to run the country. When interest rates rise, when Britain leaves the EU and when Trump demands that US companies pay tax to the US government rather than to the Irish government, we will be in trouble. We should fix this now under our own control, rather than have it fixed for us under another bailout.

*Brendan Burgess is a consumer campaigner and founder of the consumer forum Askaboutmoney.com*

Sunday Independent


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## Steven Barrett (6 Mar 2017)

I agree with a lot of what you say Brendan. Dole payments are far too high in this country (cost of living is higher too though) and thus reduces the incentive to work for some. Our taxation system is all over the place too. We want to have all the benefits we see in other European countries but unlike our European countries, we don't want to pay for the benefits. We just want to fund it from the money tree. 

Where I disagree is the personal insurance fund. This is self insurance. The whole idea behind insurance is the pooled amount pays for those who have to claim. The same with car or house insurance. The collective fund pays for a claim as an individual couldn't save enough to pay for the rebuild of his house if it burnt down. 

There are lots in society who will need to claim more often than others. They are likely to be the unskilled worker. They need to be protected more than the highly qualified worker. As a society, we all should contribute to help those less fortunate.

As with all these things, it is not a black and white issue. There are a whole load of socioeconomic factors to be taken into consideration. Society as a whole seems to fail people who are born into poverty and seem quite happy to leave them there. 

Steven
www.bluewaterfp.ie


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## JamesN (6 Mar 2017)

Well thought out article. 

There is an argument that most of those who get the dole spend all of it on goods and services anyway thus their money goes straight back into the economy in any case. Therefore the real cost to the economy is much lower.


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## jjm (6 Mar 2017)

PRSI A Stamp paid up until Budget 2011 was Higher close to The UK rate. It was lowered to take account of the USC .


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## Deiseblue (6 Mar 2017)

From a quick read , the one thing that leaps off the page is the statement that the dole is €193 for a single person.
It is correct in that the dole for a single person over 26 is €193 per week however that amount does not apply to the large proportion of unemployed aged under 26 who benefit as follows:
Aged 18 -24 €102.70 per week
Aged 25 - €148.70 per week.
Surely , Brendan you should have referred to this in your article for the sake of balance ?


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## Protocol (6 Mar 2017)

jjm2016 said:


> PRSI A Stamp paid up until Budget 2011 was Higher close to The UK rate. It was lowered to take account of the USC .



PRSI ee has been 4% in Ireland for many, many years.

PRSI was not reduced to take account of USC.

In the UK, NI is 12%.


The Health levy and the Income levy were merged into the USC.


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## Protocol (6 Mar 2017)

Most other countries have generous short-term unemployment insurance, but much less generous long-term social assistance.

We are the opposite.

We give LT claimants more, as they receive the Xmas bonus.

My proposal: increase JSB, abolish JSA, and replace it with an offer of paid work.


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## Firefly (6 Mar 2017)

Deiseblue said:


> From a quick read , the one thing that leaps off the page is the statement that the dole is €193 for a single person.
> It is correct in that the dole for a single person over 26 is €193 per week however that amount does not apply to the large proportion of unemployed aged under 26 who benefit as follows:
> Aged 18 -24 €102.70 per week
> Aged 25 - €148.70 per week.
> Surely , Brendan you should have referred to this in your article for the sake of balance ?



That's interesting. For someone on the dole at 18 they can rest assured that without lifting a finger their income will rise by almost 50% in 7 years. Nice "work" if you can get it!


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## Deiseblue (6 Mar 2017)

But from a very low base Firefly 

However I do think that much of Brendan's argument is undermined by the fact that a significant proportion of unemployed do not receive weekly dole of €193 as stated by him.


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## jjm (6 Mar 2017)

Protocol
What was the Health levy and the Income Levy spent on.


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## Protocol (6 Mar 2017)

Income levy was a general tax, introduced during the early years of the financial/fiscal crisis.

Health levy was a tax earmarked for healthcare.


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## Duke of Marmalade (6 Mar 2017)

Like _Steven (Barret) _I agree with much that is in the article, basically that we have an unsustainable model vulnerable to some very plausible headwinds.  But like _Steven_, I don't see the point of the "PRSI savings account".  It may well be that PRSI is a huge misnomer for the current system but an enforced individual savings account is hardly an instrument of "social insurance".


JamesN said:


> There is an argument that most of those who get the dole spend all of it on goods and services anyway thus their money goes straight back into the economy in any case. Therefore the real cost to the economy is much lower.


I think this is somewhat faux Keynesianism.  By this logic we could all be on social welfare, we would all be spending all our income thus sustaining a full economy


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## Firefly (6 Mar 2017)

Deiseblue said:


> But from a very low base Firefly



Really? Can you back this up with rates which are higher in our neighbouring countries?


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## mathepac (6 Mar 2017)

"They have the same access to ... roughly the same housing, although in the Republic, a person on the dole is expected to contribute €30 a week towards their housing costs." sez Brendan, which is untrue and misleading.

A person qualifying for social housing is expected to pay the difference between the rent demanded by the private sector landlord and the locally approved HAP from the local authority or SW housing assistance, PLUS the €30 euro weekly minimum contribution.

For example, (Rent €140 pw) - (HAP  €102 pw) = €38 pw payable by SW recipient directly to the landlord (HAP is payable to landlord, SW housing assistance is not) PLUS the €30 minimum contribution to LA or SW. NOTE: €30 is the *MINIMUM* contribution it may be higher depending on individual circumstances.

So in this simple example, the SW recipient/HAP approved renter pays €68 pw in total, *NOT* €30 Brendan incorrectly suggest, but more than double that amount

There are of course a few caveats.

SW use their rent assistance as a cap on rent so SW recipients are not allowed to rent houses/apartments above this very low figure. I challenge anyone to find a rental property in Ireland at or below SW caps / HAP
The rental figure is modest and the HAP figure is generous
Find a landlord willing to accept HAP
What's disappointing is the facts about renting are easily verifiable with very little effort here, and by using the various links provided

I have moved the discussion on this to a separate thread: 

*How much do social welfare recipients contribute to their housing costs?*


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## cremeegg (6 Mar 2017)

Ireland badly needs a think tank to advance these ideas. To get them well developed and into the public domain. (I think that if Brendan had run the article here first, S Barrett's point about an individual fund would have helped improve the article.)

Here are three principals for such a group.

Public spending should be efficient, transparent, and those in charge of it accountable at political and civil service level

All items of public spending should require public approval to be renewed at regular intervals. (we need a debate about how much we subsidise farmers)

Taxation should be no higher than needed to fund efficiently those things that individuals cannot fund individually.​
And a fourth negative principal. 

Such a group should not allow itself be distracted by non economic issues, (otherwise it would just become an anti abortion forum, see Renua).​


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## cremeegg (6 Mar 2017)

mathepac said:


> @cremeegg I disagree. The last thing we can afford are more talk shops. We have committees and enquiries to beat the band, what have they changed?  Stop the talking and take action, starting with the greatest number and the recipients of huge wads of EU and social welfare payments, the farmers



But the basic concept, that we cannot afford out present welfare system, is not widely accepted. When the 4% cap on rent increases in rent pressure zones, was proposed the general reaction was, why not everywhere.


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## Brendan Burgess (7 Mar 2017)

Deiseblue said:


> the large proportion of unemployed aged under 26 who benefit as follows:
> Aged 18 -24 €102.70 per week
> Aged 25 - €148.70 per week.





Protocol said:


> My proposal: increase JSB, abolish JSA, and replace it with an offer of paid work.



Hi Deise 

It was an 800 word article, so I did not tease out every issue. 

If it were longer, I would ask the question why should anyone under 30 in today's booming economy get means-tested dole at all?  

There was a guy on last week's Claire Byrne Show raising this point about the €102.70. He was a young, confident, articulate guy. Why on earth was he depending on you and me for his keep?  Even at a minimum wage of €9.25 per hour, he would earn €370 per week.  I just don't understand it. 

I think that Protocol's suggestion merits consideration.  Except why make them an offer of paid work? They can get that in the current economy under their own steam.  Of course, if the economy turns down, then reintroduce a basic means-tested social welfare. However, under my overall proposal for an individualised account, people would be drawing down their own money and not depending on the state during periods of unemployment. 

Brendan


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## Firefly (7 Mar 2017)

Brendan Burgess said:


> There was a guy on last week's Claire Byrne Show raising this point about the €102.70. He was a young, confident, articulate guy. Why on earth was he depending on you and me for his keep?  Even at a minimum wage of €9.25 per hour, he would earn €370 per week.  I just don't understand it.



I saw that too. Varadker handled it well. I'm obviously not suited at politics as I would have told him to get a j.o.b.


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## Brendan Burgess (7 Mar 2017)

I wonder why Claire Byrne did not ask him why he wasn't working?


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## Brendan Burgess (7 Mar 2017)

SBarrett said:


> Where I disagree is the personal insurance fund. This is self insurance.





Duke of Marmalade said:


> But like _Steven_, I don't see the point of the "PRSI savings account". It may well be that PRSI is a huge misnomer for the current system but an enforced individual savings account is hardly an instrument of "social insurance".



But, surely by this reasoning, you should abolish private pensions as well?  We would all get the same pension in retirement irrespective of what we had contributed. 

I insure my house against fire. I don't expect it to happen, but if it does, then all of those who pay premiums will help me get back on my feet. 

We are all going to need a pension in retirement.  Many people will have periods where they won't be working. We don't need insurance for that. We need savings.


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## Brendan Burgess (7 Mar 2017)

SBarrett said:


> Society as a whole seems to fail people who are born into poverty and seem quite happy to leave them there.



I certainly am not happy to leave them there.  By paying very high social welfare rates to people who are well capable of working we are condemning them to live in poverty. If we told people under the age of 30 that they would have no social welfare, they would go out to work and break out of the welfare trap. 

If we told them that the more they work the better off they will be in the long term, they would be more likely to work.

If we tell them that we will give them high social welfare, almost free housing in the location of their choice, free healthcare, why would they bother working?   If they work, they will probably have to pay for their own housing which might well be a long commute away.

Brendan


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## Duke of Marmalade (7 Mar 2017)

I'm as Thatcherite as the next duke, but even Mrs. T accepted the need for state provided social protection (insurance, call it what you like).  The 19th century model of relying on the private sector through charity is no longer fit for purpose.

The existence of social protection will always give rise to anomalies such as "but if I work or if I save I will give up my entitlement to social protection".  So it is important that the incentive to work or save overcomes this anomaly.  As I understand the _Boss_' argument he believes that our regime, when compared to 100 miles up the road, is too generous in that regard and I tend to agree. (Aside: I hope no-one is suggesting a means and merit system whereby applicants are asked what did they spend their money on and why didn't they save.)

Now about this SEPSAIA (state enforced personal savings and insurance account); this is so not Mrs. T.  This is nannyism.  But it still suffers big time from the above anomaly.  Take a person working all their lifetime at a fairly modest income level.  Without doing the sums I feel pretty sure that her SEPSAIA would not even achieve a level of OAP at the social protection levels.  She should still be no better off than the lifetime dole sponger.


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## Deiseblue (7 Mar 2017)

Sorry Brendan but that's a bit of a cop out , it would have been simple to say that the dole can be up to €193 on an age dependent basis.

I appreciate the fact that you were confined to 800 words but surely to unequivocally state that the dole is €193 for a single person when such is simply not the universal case , in my eyes at least , undermines  the premise  of the article..


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## mtk (7 Mar 2017)

I think our short term unemployment benefits are too low and too short term (  max 9 months )
They should be restored to 15 months .

There was a  pay related element in the 80s as far as I recall .

Our welfare system for contributory benefits  has been cut over the years . Another example ......
Dependent relative on oap contributory began being means tested 5/6 years ago.


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## cremeegg (7 Mar 2017)

cremeegg said:


> All items of public spending should require public approval to be renewed at regular intervals.​



It is probably bad manners to quote one's self, but I hope I will be excused.

The change which brought Job Seekers Benefit and Job Seekers Allowance into line was a huge change in the concept of Pay Related Social Insurance. It cut the link between pay and benefit.

This was done without any consultation. A major shift in policy made for idealogical reasons by faceless civil servants. Its not good enough in a democracy.


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## Firefly (7 Mar 2017)

Deiseblue said:


> Sorry Brendan but that's a bit of a cop out , it would have been simple to say that the dole can be up to €193 on an age dependent basis.
> 
> I appreciate the fact that you were confined to 800 words but surely to unequivocally state that the dole is €193 for a single person when such is simply not the universal case , in my eyes at least , undermines  the premise  of the article..



Any update to my question on post #13?


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## orka (7 Mar 2017)

Deiseblue said:


> to unequivocally state that the dole is €193 for a single person when such is simply not the universal case , in my eyes at least , undermines  the premise  of the article..


The message in that section was that the dole in Ireland is significantly higher than the UK (€193 vs. €90).  The UK also has a (very) low rate for under 25s (they can get up to £57.90 pw).  It would get a bit wordy and unwieldy to have to mention that both systems have rates 'up to' an amount - and it would get the reader wondering that if both systems are 'up to', are we comparing like with like.  I think the €193 to €90 comparison is valid and the fact that there is also a €103 to €67 comparison for young people doesn't affect the message.

It's not a large proportion of the unemployed either.  Of 246K JSA recipients, 31K are under 25 and 146K are receiving personal rate only - so those on reduced rate make up max. 20% - 25% of JSA single rate recipients? - so 75% - 80% getting full rate.


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## Deiseblue (7 Mar 2017)

Firefly said:


> Any update to my question on post #13?



Not really Firely , I consider a base of €102.70 weekly low.

If you wish to draw a comparison between other counties please don't let me stop you.


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## newirishman (7 Mar 2017)

Deiseblue said:


> From a quick read , the one thing that leaps off the page is the statement that the dole is €193 for a single person.
> It is correct in that the dole for a single person over 26 is €193 per week however that amount does not apply to the large proportion of unemployed aged under 26 who benefit as follows:
> Aged 18 -24 €102.70 per week
> Aged 25 - €148.70 per week.
> Surely , Brendan you should have referred to this in your article for the sake of balance ?



PRSI should rightly be an insurance payment - not a free handout for anyone. 
It is unbelievable that anyone who hasn't worked and paid PRSI contributions gets any money at all, regardless of age.
Why does an 18 year old person have to get any money from the state? Just because the person turned 18?


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## Purple (7 Mar 2017)

PRSI is not pay related and it's not insurance. Why don't we just have income tax and stop with the nonsense?
The big problem here is that long term rates are as high as short term rates.


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## Deiseblue (7 Mar 2017)

Okra - to my mind there are two elements here - the unequivocal statement that the dole of €193 applies to every single person has to be challenged as it's palpably incorrect.
Your correct contention that a similar age dependant system applies in the UK is not really valid for comparison purposes if one contends as I do that the benefits system for the unemployed in the UK is not what we should aspire to as I consider their dole payments to be both derisory & shameful .
I think it's to the credit of successive Governments that social welfare payments have been maintained through the bad times & increased , as we have seen recently , in the good times , it is also telling that the level of benefits does not seem to be a bar to taking up employment as the Irish Times reports that full employment may be achieved far in advance of the Government target of 2020.
Now I don't doubt your figures on JSA recipients for a moment but I wonder could you provide a link to same ?


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## Protocol (7 Mar 2017)

*German system of UI*

Social insurance = 60% of former net wages for 12 months, 67% if married

*After 12 months of unemployment*, move to AG II scheme, equivalent to JSA "dole"

Social assistance = 409 pm for a single person

Couples = 368 pm per person

Child 13-18 = 311 
Child 6<13 = 291
Child <6 = 237 pm


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## Purple (7 Mar 2017)

The Dutch system is pay related social insurance; it is linked to your average income over the last 12 months (75% for first 2 months and 70% after that, up to a maximum of €203.85 per day) and it runs out after a maximum of 36 months, shorter if you haven't been working for very many years. After 6 months on benefits you are obliged to accept any job offer, no matter what it is or what the pay level is.


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## orka (7 Mar 2017)

Deiseblue said:


> Now I don't doubt your figures on JSA recipients for a moment but I wonder could you provide a link to same ?


http://www.welfare.ie/en/Pages/Annual-SWS-Statistical-Information-Report-2015.aspx

The numbers are in Section C - working age income supports.


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## Deiseblue (7 Mar 2017)

Thanks Okra , its a breakdown I was always interested in but could never find !


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## Firefly (7 Mar 2017)

Deiseblue said:


> Not really Firely , I consider a base of €102.70 weekly low.



That's kinda like stating the weather is cold outside then isn't it?


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## Brendan Burgess (7 Mar 2017)

Protocol said:


> *German system of UI*
> 
> 
> *After 12 months of unemployment*, move to AG II scheme, equivalent to JSA "dole"
> ...



Per month? Around €94 per week. 

Brendan


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## Protocol (7 Mar 2017)

Yes, per month.

Please note that the Health Insurance premium of those on UI or Hartz IV "dole" in Germany is paid by the State.

So no change to your health insurance if you lose a job.

Also, there are housing benefits on top of the ALG II Hartz IV "dole" in Germany.


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## Gerry Canning (7 Mar 2017)

Having been on Dole a couple of times over the years  , really made me think about (free) money.
On balance, our flawed system works ok and I really do get the issue of why someone like myself who mostly contributed should not get a % more over a non worker, ergo a lazy git !.
My observation is that there is  not a huge cohort of lazy gits ; when you drill down into them ,quite often you find they have caring roles that otherwise drop onto a more costly state. Or indeed they do not have work locally , nor can faraway work pay rent etc .
Also it looks like our finances just cant keep covering the payments made ; if that becomes unsustainable dole will be cut. 
 The Dole drops well below the (MISC.ie) minimum income standard , and I see few nuff making dole a life choice .
I really congratulate those who by working are obviously no better financially than if they were on the dole.


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## Brendan Burgess (9 Mar 2017)

Protocol said:


> *German system of UI*
> 
> Social insurance = 60% of former net wages for 12 months, 67% if married
> 
> ...



Hi Protocol

It's interesting that the dole is €94 for a single person in Germany compared to €193 in Ireland.
For a married  couple, it's €170 in Germany compared to €321 in Ireland.

However, there is an additional €30 a week for a dependent child in Ireland, compared to between €55 and  €72 in Germany.

I had the impression that the Irish system was more geared towards children. 

Brendan


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## Steven Barrett (9 Mar 2017)

Brendan Burgess said:


> But, surely by this reasoning, you should abolish private pensions as well?  We would all get the same pension in retirement irrespective of what we had contributed.
> 
> I insure my house against fire. I don't expect it to happen, but if it does, then all of those who pay premiums will help me get back on my feet.
> 
> We are all going to need a pension in retirement.  Many people will have periods where they won't be working. We don't need insurance for that. We need savings.



Contributing to a private pension is the individual decision of a person to save additional funds for retirement so they can maintain their lifestyle after they stop working. Just like people keep an emergency fund in case they find themselves out of work and can still live the way they are accustomed to. 

Completely different to an insurance fund for those out of work. 


Steven 
www.bluewaterfp.ie


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## Steven Barrett (9 Mar 2017)

Brendan Burgess said:


> I certainly am not happy to leave them there.  By paying very high social welfare rates to people who are well capable of working we are condemning them to live in poverty. If we told people under the age of 30 that they would have no social welfare, they would go out to work and break out of the welfare trap.
> 
> If we told them that the more they work the better off they will be in the long term, they would be more likely to work.
> 
> ...



It's not a black and white issue though Brendan. 

I used to do work for someone who ran a charity on trying to get children from disadvantaged areas through school and to work. The child never knew they were getting help from a charity. Kids used to get bullied because they were doing well/ turning up for school. Some had to be rehoused because of the abuse they used to get every day for trying to better themselves. One kid they worked with for years and got him a job with the council was the first person in their family to have a job! 

For kids who have never seen their parents work or any of their family work or get encouragement to succeed, it's a very hard battle for them to get out of that trap. They need more than being told they won't get the dole to escape that. Reduce the payments fine, but redirect the money into programmes to keep the kids in school and how to get useful skills so they can have well paying jobs. 


Steven
www.bluewaterfp.ie


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## Steven Barrett (9 Mar 2017)

Protocol said:


> *German system of UI*
> 
> Social insurance = 60% of former net wages for 12 months, 67% if married
> 
> ...



Do you know what the taxation system in Germany is? How much is income tax, employer PRSI and Corporation tax? 

We are usually very quick to point to the great benefits that are available in other European countries without understanding how it is paid for. In Ireland, we want to have all the benefits, but we don't want to pay for any of them.


Steven
www.bluewaterfp.ie


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## Brendan Burgess (9 Mar 2017)

SBarrett said:


> For kids who have never seen their parents work or any of their family work or get encouragement to succeed, it's a very hard battle for them to get out of that trap. They need more than being told they won't get the dole to escape that.



Agree fully.  

That is why it's so important to break the cycle. Tell the parents that it will be worth their while to work and they will work. That will benefit them and their children. 

Brendan


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## Brendan Burgess (9 Mar 2017)

SBarrett said:


> Completely different to an insurance fund for those out of work.



But PRSI is not insurance, except in name.  People who are very unlikely to claim will pay far more than those who are more likely to claim. 

I insure against my house being burnt down.  
I don't insure against the cost of something I expect to happen. I save for that. 

Likewise, we should all be saving for our retirement and our pension should be based on our contributions. 

Many people can expect periods of unemployment. They need to save for that. They don't need insurance. 

Brendan


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## Duke of Marmalade (9 Mar 2017)

Social insurance is society insuring against circumstances which happen to some but not all.  It cannot be provided by the private sector because those at risk are very identifiable (perhaps even born with the circumstance as in disability) and therefore the free market will not be able to extract adequate payments for the insurance pool from those at very little or no risk.  Unemployment is the obvious example.

So what about the OAP? To be sure, reaching old age could hardly of itself be classified as an insurance risk as the vast majority will incur that risk and, unlike death which is commercially insurable, they know when they will get there .  But reaching old age without adequate means for provision is a risk, which thankfully is reasonably uncommon.  _Brendan_, you seem to be arguing that reaching old age without adequate provision is a risk which can be avoided by the vast majority if only they were prudent enough to save.  This may be true to some extent and it may well be that many who come claiming the non-contributory OAP have been less than prudent in their working lives but do we want a society which dumps such folk into cardboard boxes for their indolence?

So we do need social insurance which includes OAP and we do have such a system albeit by peer standards apparently over generous.

What does seem truly anomalous is the sham of how we pay for it through PRSI.  This is most exemplified in the OAP where those who have "paid" for it all their working lives get €10 more per week than those who never paid a bean.  It would be more honest to abolish PRSI (and USC with it) and subsume these into the income tax regime.


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## Protocol (9 Mar 2017)

SBarrett said:


> Do you know what the taxation system in Germany is? How much is income tax, employer PRSI and Corporation tax?
> 
> We are usually very quick to point to the great benefits that are available in other European countries without understanding how it is paid for. In Ireland, we want to have all the benefits, but we don't want to pay for any of them.
> 
> ...



German PRSI alone is 20% approx of wages:

Pension insurance
Health insurance
UI
LT care insurance


Overall, German taxes are higher, and German personal income taxes incl. PRSI are higher than here.


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## Brendan Burgess (9 Mar 2017)

Duke of Marmalade said:


> Social insurance is society insuring against circumstances which happen to some but not all.



A few points 

People should put money aside from their income to provide for foreseeable unemployment and pension needs. If they lose their job, or if they want to take time off to retrain, they would be getting their own money back, rather than getting a handout. 

It would be nice if the fund was fully personal, with no insurance element. But in reality, that is not achievable.  But it needs to move from the current system where those working pay into it , but everyone has the same claim to one where those who pay in a lot get more out of it. 

Some people will never have enough money put aside for their unemployment and pension.  The tax system should look after them, but less generously than it does at present. I don't see any need for insurance as such. 



Duke of Marmalade said:


> do we want a society which dumps such folk into cardboard boxes for their indolence?



No, but we should tell people up front that if they don't build up a fund, they will be poor in retirement.  If they build up a fund, they will be a lot better off.


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## Gerry Canning (9 Mar 2017)

Thread was (dole payments should have been cut  not increased).

As evidenced by recession , most of those on (dole) found their way back into work and I assume @ more than dole pays , so that indicates that for most( Dole ) is not a monetary disincentive to work.
(less generously than at present ) . (Dole) is NOT generous ! check Misc .ie for what is considered adequate . Since ( Dole) drops well below a thought out minimum , all that will happen is those in (dole) type scenes will get worse off .


on the broader point that we should be rewarded for our own good provision , I am with that 100%.
on the broader point that this (social provision monster) needs review , I am with that.


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## Purple (9 Mar 2017)

SBarrett said:


> For kids who have never seen their parents work or any of their family work or get encouragement to succeed, it's a very hard battle for them to get out of that trap. They need more than being told they won't get the dole to escape that. Reduce the payments fine, but redirect the money into programmes to keep the kids in school and how to get useful skills so they can have well paying jobs.


Well said.


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## Purple (9 Mar 2017)

Protocol said:


> Overall, German taxes are higher, and German personal income taxes incl. PRSI are higher than here.


 German taxes on low and middle income earners are higher. Taxes on high earners aren't.


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## Protocol (9 Mar 2017)

*Personal income tax rates*
Germany has progressive tax rates ranging as follows (2016 tax year):


*Taxable income range for single taxpayers (EUR)*

*Tax rate (%)* *Over* *Not over* 
0                  8,652                                               0%
8,653            53,665                                           14%*
53,666           254,446                                         42%
254,447 and above                                              45%

* Geometrically progressive rates start at 14% and rise to 42%.

It's unusual, as there aren't just 3 or 4 MTRs.

The MTR itself increases from 14% to 42%.


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## jjm (9 Mar 2017)

I read your article on sunday. You did not addressed the fact that people in Ireland working in the private sector paying PRSI A stamp have up until the USC was brought in were paying for the services of others.The USC which you want to do away with leveled up the playing field.
In my own case The PRSI and the USC total was around the same after the USC came in.Note employer has to pay another 10.75 of my wages also in prsi for the pleasure of employing me.
Around 1985/1986 1987 I was on lay off for a few months each year To the best of my knowledge I was paid 75% of my wages was which was a great help to me at the time  mortgage rates were around 16% Since then I have not being out of work .
Around 1885?1986/1987 every week you opened the Sunday papers there was always someone on about the fact that people on layoff could get up to 75%of there wages and that it was discouraging people from taken up employment which in most cases the reverse was true.In our own case it allowed the company to go on lay off when the work was not there without breaking there workers service .

For the pleasure of paying almost 10% PRSI for over 40 years Matched by over 10% by company They thanks I get Is that the last LABOUR MINISTER took away the retirement transition year between age 65 until 66.


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## Brendan Burgess (9 Mar 2017)

Sorry, I don't really follow your post. 



jjm2016 said:


> The USC which you want to do away with leveled up the playing field.



I don't want to do away with the USC at all.  It is the only tax a lot of people pay. Having said that, I would like to see it incorporated in a single tax system.  



> In my own case The PRSI and the USC total was around the same after the USC came in.Note employer has to pay another 10.75 of my wages also in prsi for the pleasure of employing me.



I don't understand how that happened.  Employees' PRSI was not reduced. So your total contribution to PRSI and USC should have increased. Unless your salary was so low, that you didn't pay USC?  But then your employer would have paid a lower rate of PRSI. 




jjm2016 said:


> For the pleasure of paying almost 10% PRSI for over 40 years Matched by over 10% by company



The Employees rate is currently 4%.  I don't think it has been much higher in recent years, but I am not sure. But we did have health levies and other stuff. 

If I recall correctly, there was a ceiling for PRSI.  It was 4% up to say €50,000 and reduced to zero or maybe 1% after that. That is  they system that they have in the UK at present, although the employees rate is 12%!

Employers do pay 10.75%. But up to a few years ago, it was 10.75% up to a certain limit and zero after that. 

Brendan


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## Purple (9 Mar 2017)

jjm2016 said:


> Note employer has to pay another 10.75 of my wages also in prsi for the pleasure of employing me.


That's the wrong way of looking at it. What actually happens is that 10.75% of your wage is taken in tax before you ever see it. If there was no Employers PRSI there would be more money in the market to pay people so wages would increase. It's a tax on your wages.
10.75% + 52% = 62.75% tax
100 - 62.75 = 37.25%
VAT is 23% so that's 23% of 37.25% = 8.5%

Out of every one Euro you earn in overtime at the marginal rate the state takes  62.75% + 8.5% = 71.25%.
... and they still want more! ... and you'll still get no more from the State than someone who never worked in their life.


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## XMarks (9 Mar 2017)

During the recession when we had to close our previous business we were on job seekers for close to 6 months. 

I cannot remember exactly how much we received but I do think it was in the region of €320 per week. We were lucky that a family member paid for most of our mortgage so we didn't have that to worry about. 

We did not find living on €320 a week a struggle. We switched our shop to Lidl so our food cost was in the region of €50 per week (pre-kids) and even with bills we had money left over. We still had our cars, mobile, heating e.t.c. so we were in no way living in poverty.

I do wonder sometimes how people claiming social welfare and often disability benefit on top of that seem to struggle week to week. A friend who works in that area told me that some spend huge amounts on convenience foods and takeaways as that is all they have ever known.

I agree with the poster who said we should cut dole and spend it on education programs instead.


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## Purple (9 Mar 2017)

XMarks said:


> During the recession when we had to close our previous business we were on job seekers for close to 6 months.
> 
> I cannot remember exactly how much we received but I do think it was in the region of €320 per week. We were lucky that a family member paid for most of our mortgage so we didn't have that to worry about.
> 
> ...


Can I ask if the State provided you with a house and paid all of your medical costs would you be able to survive on what you got (plus a few cash in hand nixers)?
By the way, I feed myself and 4 kids for not much more than that every week. I'd certainly never spend more than €100 and mostly spend less than €80. Two people should be able to live very comfortably on €50 a week for groceries and toiletries etc.


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## XMarks (9 Mar 2017)

We did not have a medical card or a state provided house and we had surplus cash each week. 

Incidentally we continue to shop in Lidl and spend about €80 (with children) per week on our shop despite earning good salaries now.


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## jjm (9 Mar 2017)

Brendan re post 54 Can you please google PRSI Contribution chart  the year before USC came in and post the link hear please.Do the same with the employers chart please up to present day .You will see what I am on about Which is in your interest  to understand.


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## Brendan Burgess (9 Mar 2017)

Thanks. I had thought it was a flat 4% for years. 

Employee PRSI rates in 2010 



Employee rates in 2011 



And the USC rates


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## jjm (9 Mar 2017)

Thanks the position is but I stand to be corrected 4% was put in a fund to to pay social walfare payments this fund was always in surplus up to a few years ago .I believe it is back in surplus now .It would be a good Idea to show the full charts so we can see how much each vested group really paid over the years and stop the wool being pulled over the eyes of the average paye worker who went to work year in and year out. I started out working back around 1970 just to give you an example a trade persons wages was around 9 pounds some one serving there time got one fifth of 9 pounds and paid around 33% for there stamp in the first year.a trades person would have paid 11% stamp


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## Protocol (9 Mar 2017)

Brendan,

are I right in thinking you are calling for a closer link between SI conts and SI benefits?

Well, in terms of the CSP, that is planned.

The plan is to move from a CSP based on average conts to one based on total conts.

So then those who have paid more conts will get a bigger pension.


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## jjm (10 Mar 2017)

The Question needs to be asked Why are the Government planning to do this for one Group of PRSI claas A workers And have no plans for another group paying the exact same rate.  Employer actually pay an extra 10.75% to the Government for the group it has no plans to pay extra for total conts


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## jjm (10 Mar 2017)

Just for the record The Government total take For someone  working in the private sector  and I have checked it against my own p60 for 2013/2014 is a total of 20.65% for someone earning 60000 euro made up of( 5.85 USC )( 4%  employees PRSI ) (and 10.75% employer PRSI.) they total take is over 12250 Euro before income tax.We would be better off question who along with the people on the Dole are having a party at our expenses>


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## TheBigShort (28 Sep 2017)

Looks like they are notbeingcut again anytime soon

http://m.independent.ie/irish-news/...ldnt-live-on-198-welfare-a-week-36176649.html

Of course lefties and the socialists will be toblame despite the fact that they are not the ones in power making the decisions.
The only conclusion then is to consider is that the broad political spectrum across the country has gone left?


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