"We must dismantle our culture of dependency"


It's not an anomaly it is how the system is designed and it is the very essence of what we have been trying to discuss.

TheBigShort said:
I do not concede that it is so prevalent so as to dramatically affect the tax deductions from paye, prsi, usc, etc.
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If a married man (or woman) with 4 kids is in receipt of this from the state:

"Employment: 20 hrs x €9.15/hr = €183/wk = €9,516/yr
FIS: (€834 - €183) x 60% = €391/wk = €20,332/yr
Rent Allowance: €1,200/mo = €14,400/yr
Child Benefit: €560/mo = €6,720/yr
Plus medical card"

Total: €50,968/yr.

And we remove the CB - bringing it to 46k NET.

Then 40k Gross salary on offer is 32k net (Using the link I gave you earlier), 615 per week, then they will be still entitled to 60% of the difference between 615 and €834, so about 115 a week on top of the 615 - 730.

However they lose 323 per week in rent allowance, then they have the added cost of working, travel, lunches etc.

They had 846 a week (44k net), and now they have the 730 minus the 323 and they have to pay for their own rent

(I am open to correction on the calculations).

TheBigShort said:
I do not concede that it is so prevalent so as to dramatically affect the tax deductions from paye, prsi, usc, etc.
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I would profoundly disagree and at this point I have to add, that 40k is not an insignificant salary and many, many families manage with rent and mortgages - not easily but they certainly do.
 
14,279 people had their benefits cut due to non-engagement. That's about 5% of those on JSA. I would expect at least half of those targeted by the DSP to engage rather than lose benefits so the pre-investigation % not really engaging of their own accord is probably at least 10%. Allowing further for the DSP not having got around to everyone, I think 10% to 15% non-engagers on JSA is a reasonable number.
 

Those figures dont make sense. How can someone not engage with DSP before "DSP not having got around to everyone"? How can you class someone as a non-engager before they have had a chance to engage?

Your avr detection rate of 1% per year makes more sense. With unemployment figures falling the numbers of non-engagers will decrease, but the detection will remain at 1% of these figures.
 
TheBigShort said:
Those figures dont make sense.
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They make perfect sense.
TheBigShort said:
How can someone not engage with DSP before "DSP not having got around to everyone"? How can you class someone as a non-engager before they have had a chance to engage?
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Johnny is supposed to engage all on his own without a push from the DSP (you might note my phrase "the pre-investigation % not really engaging of their own accord" - no mention of 'with the DSP'). And yet he doesn't - regardless of whether the DSP has got around to him yet.
TheBigShort said:
Your avr detection rate of 1% per year makes more sense. With unemployment figures falling the numbers of non-engagers will decrease, but the detection will remain at 1% of these figures.
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The 1% pa is additive until someone engages and has their reduction reversed. So 1% became 2% became 3% etc. The annual rate will slow down as the DSP gets around to everyone but it is still additive. I have found nothing to suggest or support the view that someone so non-engaging as to allow their benefits to be cut will suddenly engage afterwards - but if you have figures for how many reductions are reversed, that would probably knock a couple of % off the 10%-15% number. But as things stand, I'm happy with my number.
TheBigShort said:
With unemployment figures falling the numbers of non-engagers will decrease, but the detection will remain at 1% of these figures.
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You don't know this - it's just your opinion again. The number of non-engagers could very well stay the same (if Johnny doesn't engage for a job when threatened with loss of benefits, what's going to make him engage ever - if he's happy not working when there's high unemployment, why would he be happy working just because unemployment is dropping?) which will actually increase the non-engagers as a % of the JSA population.

As a side note, I've grown quite fond of Johnny...
 

Yes but as I pointed out to you the actual available cash in hand, disposable income, is some €534 (income for 20hrs + FIS + CB - €40 rent contribution, for a couple) a week. And for a family with 4 kids, bills, insurance, food, clothes etc it is liveable but certainly closer to the tight end of things rather than any sort of luxury.
You have identified a very precise set of circumstances for this design flaw to emerge. One of the criteria for qualifying for rent supplement is that the tenants had been occupying and paying for private rental accommodation for 6/12 months prior to being eligible.
So it is reasonable to assume? that in your example we are not talking about people who are parasites, loafers, or deliberately exploiting the system (as has been levied by some other posters here). We are talking about people who in ordinary circumstances were, and did, pay their own way, and their social insurance, until personal circumstances took a turn for worse (ie loss of employment).
The hope of course is a return to normal circumstances (paying their own way) but in the interim a p/t 20hr week minimum wage job is to hand. This on the one hand, whilst costing the taxpayer, is on the other hand playing its part in the functioning of the economy by fulflling a role for the employer who a required a minimum wage worker for 20hrs a week.
The design flaw materialises when the same employer now requires the employee to work 40hrs due to improved trade and economic conditions all round, but he refuses for fear of losing rent supplement. To make matters worse, the employer hires a second family man of 4 kids who is in receipt of rent supplement ( also a former pay his own way guy who lost his job in the recession), to work the other 20hrs. This is crushing the rest of the workers in taxes and social insurances.
So the proposed solution here is to cut welfare benefits. In this situation, it would be useful if you could identify where/how the cuts are to be made. As it would be necessary to know, if for instance the FIS thresholds were to be reduced, how this would impact on families not in receipt of rent supplement for instance. Or if your chosen cuts would actually provide the desired incentive. Perhaps as an idea FIS could require a person to work 28 hrs rather than the 19+?
This would surely push workers to work more hours. Except of course, if those extra hours are actually available. From your example above the employer would be under pressure to provide 16 extra hours a week. This would affect his wage bill detrimentally if the hours weren't available, and I know you are against increasing wage bills. Alternatively, the option to let one worker go and offer the job full-time to the other worker is an option. But neither one wants the 40 hrs for fear of losing rent supplement, but the employer cant pay 56 hrs in wages either.

So while I appreciate and acknowledge that after 24 pages or so, you have provided a very precise set of circumstances that shows up a design flaw, I would be interested in how your proposal of welfare cuts would actually be applied.
Bearing in mind, it is my contention, that in general such cuts will do nothing more than drive people further into poverty.

Btw, I will be opening a topic on the case for increasing wages as an alternative to welfare cuts.
 
ppmeath said:
Laughed out loud at that - thanks!!
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Thats a very good point, in Johnnys case anyway. But it doesnt explain the proposition that cutting welfare will motivate and incentives welfare recipients to engage or to go out to work does it?
I mean if cutting welfare is supposed to push people into getting a job, then presumably of the 14,000 or so who had their benefits cut, most will have come crawling back to the department looking to engage, or actually just got a job and are now no longer accountable in these figures?
If 14,000 had their welfare cut, and after 5yrs, none of them engaged with the system or went and got a job then what does that say about the effectiveness of cutting welfare?
 
http://www.thejournal.ie/rent-supplement-2-2850665-Jun2016/

Just an article from the Journal at the government press launch to increase the rates of rent supplement earlier this year.
It costs €267 million a year to fund , with 56,000 on rent allowance and 11,000 on HAP.
So on average, the yearly payment per recipient is €267,000,000 / 67,000 recipients = €3,986 per year, or €76.76 a week.

So the typical amount provided is a way less than the example provided with rent supplement as low as €180 a month for a single adult in Co Cavan.

No doubt it is still a lot of money. But in our discussion, we are only concerned with the portion of that amount that is being provided to people who refuse to take up employment of 30hrs or more for fear of losing the rent supplement. As distinct to the worker who can only get p/t work.
Another interesting aspect of all this is that the money ultimately goes to the landlords. So the increase will surely entice more property lettings? Perhaps easing rental costs? Perhaps generating construction activity? Perhaps creating jobs? Perhaps reducing the dole queues further?

Seems plausible to me rather than the nonsense going on in central banks with QE, to buy stocks and bonds to try generate a wealth effect, that will eventually "trickle-down" to the rest of society.
Dont they realise by now that economies built on expanding credit and loading debt on citizens creates a wealth effect that "trickles-up"?
 
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The income is as follows:

"Employment: 20 hrs x €9.15/hr = €183/wk = €9,516/yr
FIS: (€834 - €183) x 60% = €391/wk = €20,332/yr
Rent Allowance: €1,200/mo = €14,400/yr
Child Benefit: €560/mo = €6,720/yr

703. From this they paid 40 a week so disposable income is 663.

The 40k job is 32k net or 615, then they will be still entitled to 60% of the difference between 615 and €834, so about 115 a week on top of the 615 = 730 and on top of that the CB is 129 per week so they now have 859.

They do not have their rent allowance of 1,400 or 323 per week - they have to pay at least this plus the 40 from the 859 - 363 so now they have - 859 <323> <40> = 496

They had 663 - now they have 496.


You misunderstood - they received 1,400 rent allowance - they paid the 40 a week on top of this.

TheBigShort said:
You have identified a very precise set of circumstances for this design flaw to emerge
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No I haven't. I have informed you of a very real and existing situation.

TheBigShort said:
One of the criteria for qualifying for rent supplement is that the tenants had been occupying and paying for private rental accommodation for 6/12 months prior to being eligible.
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Yes.


Never, not once, did I refer to any person on any kind of welfare being a parasite. In fact, if you care to scroll back, you will see that you are the one who has been disrespectful to people on welfare.

I have posted the definition of the "culture of dependency" at least twice, but because your purpose here wasn't to discuss this issue at all, you still don't understand it and your reference to a prime example - is now a "flaw".


They can't because just to keep still then need to earn almost 70k. because they have 50k net (or 44k exc CB) working 19 hours a week, and that is what the equivalent gross earnings are for someone working 40 hours a week and keep in mind that if you earn over 75k you are classed as in the top 10% of earners in this country.

http://www.irishtimes.com/news/soci...0-per-cent-of-all-income-in-ireland-1.2105100
"The Tasc report also shows that two-thirds of tax cases had gross household incomes of less than €35,000. Conversely, about 200,000 of the tax cases reported to Revenue – the top 10 per cent – had incomes of more than €75,000. Two-thirds of these cases were dual-income couples."

We are not including the benefit of a medical card for 2 adults and 4 children.


And this is the "culture of welfare dependency" please, please, refer back to the definition. Many, many, many, many families can manage on much, much,much less.



No.No.No.No. And I would ask that you cease misrepresenting what I said. I did not make any such proposal. In this situation that is the very essence of the question that was posed and now that you can see that there clearly exists a "culture of dependency" - you might realise that when the OP said "We must dismantle" it - now you see the dilemma.

You have confused issues, you have put Johnny with this person and his situation together - when they are different, you don't understand that if we didn't have Johnny (and his offspring) then we could target those who really can get back to work - in a more precise manner.


This is yet another distraction from the issue. You have misunderstood the problem, you have misrepresented the solution and made a lot of assumptions - yet again.


It is not a design flaw - it is the essence of what we are discussing (well, trying to). And again, you completely misunderstand the issue.

I did not make any such proposals and you really need to read posts and stop misrepresenting what I am saying, you have repeatedly done this.

If you are talking about Johnny - then surely you can see that this is different? Or can you?
 

No. That isn't "our" discussion. Not at all.
 
ppmeath said:
No. That isn't "our" discussion. Not at all.
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Seriously it isnt? Jeez...I thought I had it, I really did. First you provide a definition;

Definition of Dependency Culture. This refers to asystem of social welfare that encourages people to stay on benefits rather than work.

It suggests the tax and benefit system is designed to give little incentive for getting off benefits and into work.

Then you provide an example of a welfare recipient to demonstrate the definition.

Only I notice that your example actually contains a person who is at work instead of a person who is encouraged to -
stay on benefits rather than work.

But then you move goalposts and offer him another 20hrs a week work, and here I acknowledge the anomaly...sorry, design flaw...sorry, the essence!, of what we are discussing.


And in order to try prove the essence you have had to convolute the most extreme example; family of 4, living in Dublin, with only one earner, working p/t on minimum wage, to demonstrate the essence of what it is you are trying to say.
When in fact, ive edited my comment above, to show that the typical rent supplement payment per week is less than €77 per recipient.
And the galling thing is, is that this payment is only available to people in private rented accommodation, who hitherto losing their jobs, paid their own way in our society, they paid their social insurance, and when times get hard they need a dig out.

Whatever the essence is, it stinks.
 
ppmeath said:
And this is the "culture of welfare dependency" please, please, refer back to the definition. Many, many, many, many families can manage on much, much,much less.
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I
acknowledged many, many times that some people choose a lifestyle of welfare dependency over financial independence. I have acknowledge the essence of what you are talking about (that the system facilitat es that, in some circumstances) . But I contend they are the very thin end of the wedge. Now try move on...

1) how much does it cost the taxpayer?
2) how much does it impact the taxes we pay?
3) how do you intend to dismantle this culture?

I contend, that the savings to be found will only drive people further into poverty. I contend that the costs to our society in driving people further into poverty will cost more than the savings made in any attempt to dismantle the system.
I agree that reform of the system is required, but in essence, this amounts to some tinkering, adjusting, revising etc. which is always required, not dismantling.

It would probably be a good idea if you just got on and answered the questions above. Rather than, accusing me of misrepresenting you (whilst simultaneously misrepresenting me - I never said you labelled welfare recipients as parasites, I said others did), and flapping about "the essence" when its actually straightforward, why dont you tell us how to solve your problems with the system?

And while you are doing that, perhaps if anyone else is bothering to follow this they can explain, in their own words what it is your are trying to say. Because you are spending more time trying to tell me that "I just dont get it", than you are actually in answering any of my questions.

So why dont you pretend you are no longer discussing with me, and instead carry on as if you are discussing with all the other posters who clearly understand you.
 
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TheBigShort said:
If 14,000 had their welfare cut, and after 5yrs, none of them engaged with the system or went and got a job then what does that say about the effectiveness of cutting welfare?
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It's the threat of cutting welfare that should be most effective. The 14,279 are those who absolutely refused despite repeated efforts to get them to engage - there will be many others who did engage under threat of a cut in benefits.

Additionally, while we are not going to let anyone starve, at least we are saving some money on the 14,279.

So - engagement of those who don't want their benefits cut and saving money on those who don't engage - seems worthwhile to me.
 
orka said:
Additionally, while we are not going to let anyone starve,
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Well at least thats a positive.

But your figures still dont factor in those who did decide to re-engage after having their welfare cut. You know the ones, the ones that thought that it wouldn't happen, or the ones who thought their reasons for not engaging were solid or the ones who were genuinely protesting against the requirements being foisted upon them ( for example, living in Sligo with two kids and no car, at mammy and daddys and being told to attend an interview in Galway, true story), only to return to the department to plead an alternative in order to re-establish the full welfare.
Your figures take no account of those who, after having their welfare cut, actually stuck it out for a while on the reduced benefit, until they got the job/training course/college course they actually wanted, rather than the ones Social Protection (although well intended) offered them.
Your figures take no account of those who did not bother to engage any longer due to their impending plans to emigrate, of which there was quite a bit.

Its no different to the people who are caught without car tax and insurance, paying income tax, TV licences, water charges etc... the threat of penalties is what provokes most of us to engage. Some will never engage, but some, once caught and penalised, will see no other option but to engage in the future.

The problem with your figures, and in general, with figures being produced here, is that they all appear to be laid out in black and white. That is, there was a stat that said,

In Ireland 77pc of working households are funding the other 23pc - that's twice the average of other EU countries

Whereas, when you study the actual report from which it came from, the stat was that 23% of 0-59yr olds, live in jobless households. A completely different thing. But it didnt stop the Irish Independent publishing it, fueling the speculation of a large and significantly costly welfare dependency culture.

Another media report was published that "appears to vindicate the Ministers view that some people choose a lifestyle of welfare dependency"

But an official report from Social Protection, had this from Minister, in relation to 2.2m receiving welfare benefits in 2012

'Commenting on the statistics, Minister Burton said: "The crucial importance of the welfare system is reflected in these figures. The Department of Social Protection plays a role in virtually everyone's life at some stage, whether it is through Child Benefit, Jobseeker's payments, pensions or any of the many other income supports we provide.

"But the figures also demonstrate the emphasis I've placed since becoming Minister on transforming the Department from the passive benefits provider of old to one that is actively assisting people back to work, training and education. Our service does not stop at merely providing a jobseeker's payment to somebody who is out of work. We also provide the employment supports to help that person back into work, training or education. That is why we spent over €950 million last year on schemes such as Community Employment, Tús, JobBridge, and the Back to Work and Back to Education Allowances."'

A wholly different perspective from than media reports of "disturbing" figures, and there needs "to be an investigation", which do nothing but to fuel the speculation of welfare dependency further, oh, and of course sell newspapers.

And like ppmeaths examples, definitions and figures, where he concocts the most extreme examples of welfare payments, and how they compare to the typical working person who has to pay their own way
He completely ignores what is the typical welfare payment.

He wants a system that is fool-proof and universally beneficial to those in need without imposing undue tax burden on working people. Dont we all?
He cites a €1,200 rent supplement for private accommodation for a (working p/t) family of 4, alarming isnt it? But doesnt consider that without it that family face eviction from their home. How much will it cost then? Will the worker continue you his job after being evicted?
And of course their is always going to be incidences of fraud, exploitation, refusing accommodation, refusing work etc. But I contend to you that these are the thin end of the wedge and that the savings to be found in the €20bn annual budget, will be, not insignificant by themselves, but miniscule in the round.
Such as the €8,000,000 saving a year in cutting benefits (unless any of the factors above apply them it will be less)

So rather than go round in circles anymore, wouldnt it be just better if you outlined what needs to be done, that isnt being done already?
Then we can see how the system can encourage people into work rather than remain on benefits as alleged. Then we can see how people are taken out of poverty traps rather than driven further into them.

Im sure you have some ideas, good ones too, lets hear them?
 
Since any semblance of a Welfare State Started
1. We have had a noisy ,normally well-heeled , cohort of those who whilst saying {we must not let people starve }and {people need work} {plenty of work out there} {these people have it too good}who ensure by their yowling that any dependency is well curtailed.
2. Most of us (sense) fairness, and are not adverse to quietly reporting blatant chancers.
3. Quite a few of us have @ some stage had to rely on Welfare , and for those who have, its not a great place to remain in, nor in the scheme of things do that many become dependent.
4.From experience, the Department is quite adept at not permitting a lazy dependency develop.
5.Most Papers do not have Reporters , just headline seekers , so maybe we need a (culture of checks on what papers say )
 
TheBigShort said:
But your figures still dont factor in those who did decide to re-engage after having their welfare cut.
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It sounds reasonable that there would be some re-engagement after benefit cuts (and I'm sure there's bound to be some) but what is strange is that the DSP doesn't seem to produce statistics and/or brag about it. You'd think if an initiative was successful the DSP would want to let everyone know what a great job they are doing. I've looked and can't find any info - so unless you have any numbers, the only thing we know for sure is that 14,279 people had their benefits cut.
TheBigShort said:
Im sure you have some ideas, good ones too, lets hear them?
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None that haven't been mentioned already in this thread. I've popped in and out of this thread with numbers/short comments when something looked really off but in general, this type of discussion (long posts, going around in circles) isn't my sort of thing.
 

I dont really get your point about the successful initiative?

Could you at least post one good idea from this thread? I havent see any.
 
Purple said:
God bless yisser energy lads.
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Ah, Purple, great to see you are still sticking around. There I was thinking you had bailed out, it all getting too much for you.
But looking at your profile, 10yr+ a member and 6,500+ posts, clearly you are here for the long haul when it suits?
 
TheBigShort said:
I dont really get your point about the successful initiative?
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If 3,500 have their benefits cut and 2,000 of them repent the follow year and engage, I would expect the DSP to consider this a success and make a big deal about it. I can't find any stats on how successful or otherwise cutting benefits has been at getting people back on full benefits - so I have my doubts that it has actually been successful (beyond the actual cutting of benefits - which the DSP does publish stats about). If people stay on cut benefits, the numbers keep increasing year on year - as my calcs assumed.
TheBigShort said:
Could you at least post one good idea from this thread? I havent see any.
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You mean apart from your own?

I like the idea of a well-implemented benefits cap. It should never be the case that a family on long-term benefits has easier/better decisions than a working family on issues like where to live (both type of property and location - close to where they grew up etc.), how many children to have, whether they can afford to go to the doctor etc.

[As an aside Deiseblue, what is there to 'like' about BS's post? It's 2 questions... Or is it just general cheerleading? Nothing wrong with the post, I'm just curious - particularly as I'm not a big 'liker' myself]

P.S. 500th post in this thread...
 
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