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Time to equalise Jobseekers rates for young people
With significant fiscal space projected for October’s budget, Minister for Finance Paschal Donohoe and his counterpart in Employment Affairs and Social Protection Regina Doherty will have plenty of scope for tackling some of the many issues related to their portfolios.
With so much resources available, Budget 2019 is an opportunity to fix, or begin to fix, many of the unjust policy moves implemented during the financial crisis. Several policy changes were enacted during that time which were arbitrary in nature: unfair, unjustifiable, and purely for the purpose of saving money.
One such policy move was the reduction of the Jobseekers Allowance payment for younger people. Those under the age of 26 saw their payment reduced; in some cases almost halved.
While the payment is currently €198 per week for individuals aged 26 and over, the maximum rate for those aged 25 is €152.80, and the maximum rate for those aged between 18 and 24 is €107.70.
There is a correspondingly reduced rate for qualified adults: the full rate is €131.40 (this rate is also payable for the qualified adult of a 25 year old), but for the qualified adult of an 18-24 year old, it is €107.70 per week.
The choice of age bands for this tiered approach to a payment that was previously paid on the same basis to all was arbitrary. There is no research or evidence to suggest that such a move would incentivise employment, or even that lack of incentive was the problem. Indeed it was implemented at a time when Ireland was experiencing record-levels of joblessness.
The amount required for an unemployed young adult, living in the family home, to achieve the Minimum Essential Standard of Living (MESL) is €151 per week. This is almost 1.5 times the Jobseekers Allowance payment to an 18-24 year old at present. This reduced payment is likely a cause of increased rates of poverty, homelessness and emigration among young people in Ireland. Indeed, between 2007 and 2015, the rate of severe deprivation among 18-24 year olds increased twice as fast as it did for the general population. There can be no doubt but that reduced welfare payments contributed to this.
Many young people are not living in the family home, and are therefore even more at risk of poverty. This fact is not accounted for in the Jobseekers payment.
In our recent Budget Choices document – a fully costed summary of our proposals for Budget 2019 – we called on Government to equalise Jobseekers Allowance rates at a new increased rate of €204.50 per week. The Qualified Adult payment should also be increased proportionately and should be the same for all age-groups. We estimate that this would cost approximately €92m in 2019. With a projected fiscal space in excess of €3bn, there is adequate resources available to address this unjust state of affairs.