Dole payments should have been cut this week, not increased

[Steven Barrett]

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

 

[Steven Barrett]

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

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

 

[Steven Barrett]

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

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

 

[Brendan Burgess]

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

 

[Brendan Burgess]

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

 

[Duke of Marmalade]

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.

 

[Protocol]

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

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.

 

[Brendan Burgess]

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.

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.

 

[Gerry Canning]

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.

 

[Purple]

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.

 

[Purple]

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.

 

[Protocol]

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%.

 

[jjm]

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.

 

[Brendan Burgess]

Sorry, I don't really follow your post.

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.

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

 

[Purple]

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.

 

[XMarks]

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.

 

[Purple]

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.

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.

 

[XMarks]

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.

 

[jjm]

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.

 

[Brendan Burgess]

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

Employee PRSI rates in 2010



Employee rates in 2011



And the USC rates