New Household Tax - Boycott

Sudsy86

So what % of income would ye suggest we should be paying per annum? (Keeping in mind cost of living)?

djpbarry

Sudsy86 wrote: »

So what % of income would ye suggest we should be paying per annum? (Keeping in mind cost of living)?

I posted this on another thread a while back:

djpbarry wrote: »

Reduce welfare. Drastically. Not only will this immediately reduce public spending, it will also provide a greater incentive for people to get back working, boosting tax revenue. There will also be less incentive for welfare fraud. Reducing all welfare payments by just 5% would save the state €1.5 BILLION. That's a tiny decrease to any one individual (and still leaves them with some of the highest welfare benefits in Europe), but represents big savings to the state. Reduce welfare by 5% every 6 months over 3 years, saving €9 billion, and we're half-way there.

The proposed property tax will bring in another €1.2 billion. Water charges will probably bring that up to about €1.5 billion. So that leaves a hole of about €7.5 billion.

As of Q3 2011, the average annual income in Ireland is just over €36k. Increasing tax on income by an average of 3.5% (applied to everyone) would yield another €2.6 billion, based on a labour force of 2.1 million.

So that leaves about €5 billion. I'm pretty confident that a fair chunk of that could be saved by cutting staff numbers in the public service (it's been estimated that €500 million could be saved by streamlining local authorities, for example), but it's hard to put a figure on it without detailed inside knowledge. Add in your proposed tax increases on tobacco and alcohol and I think we'd come pretty close to breaking even.

I accept that this is back-of-the envelope type stuff and obviously there's going to be complex interplays between these different variables (public sector job losses will mean a larger welfare bill, for example), but you get the idea - drastic cuts are required. But, while public expenditure has to be reduced substantially, it shouldn't be forgotten that we're setting off from a very, very high starting point.

later12

Reduce welfare by 5% every 6 months over 3 years, saving €9 billion, and we're half-way there.

Calculations please?

Are you not taking account of the fact that the principal expenditure will fall y-o-y? I would estimate the savings to be closer to €5 billion.

You're also calculating tax returns on the basis that increasing income tax by 3.5% would not affect compliance or the underground economy, or partially reverse welfare cuts.

It would also be completely un-necessary, of course. The real adjustment being made in the economy is going to be about €8 billion to 2015. Not €16 billion.

K-9

rasper wrote: »

While I agree we need to tackle the sw bill. , emphasis is always put on the ja and jb , reality is this only accounts for 20% of the sw budget of 20 billion I believe.
And something in the region of 1.5 million people receive a sw payment from disability to child benefit to family income support .
It's a very difficult one to tackle and how they let it come to this who knows , what country's model were they comparing to ???

Well there have been cuts to the Jobseekers Benefit and Allowance, Rent Allowance 2 cuts I think, Child Benefit cut a few times and many changes to rules. IIRC, spending on Welfare actually came down last year. Spending over €20 Billion on Welfare with a tax base of about €35 Billion is unsustainable long term, especially with not much net job creation. I assume the Welfare budget includes relevant Public Sector pay.

A lot of the spending cuts so far have been in Capital spending so the €5 Billion planned is going to have to hit Welfare, pay and services. I do think this idea that we should cut our way out of it, and that's the only way, seems rather ideology driven. Cuts to Welfare and pay are going to effect growth and employment as well. The estimate is for every 1% of Government spending removed, growth drops .5/.6%.

later12

K-9 wrote: »

The estimate is for every 1% of Government spending removed, growth drops .5/.6%.

That often quoted statistic came from an IMF world economic outlook report, which also said that the long term output was increased, even if there is a domestic contraction in the short term. It also pointed out that the contractory magnitude of expenditure cuts is smaller than that correlated with revenue increases.

beeftotheheels

K-9 wrote: »

I do think this idea that we should cut our way out of it, and that's the only way, seems rather ideology driven. Cuts to Welfare and pay are going to effect growth and employment as well. The estimate is for every 1% of Government spending removed, growth drops .5/.6%.

Those on welfare excluding pensions - Tax the rich, and the oil companies etc
Those on State Pensions - I earned it, slash the rest of the welfare budget and get those lazy good for nothings back to work
Public sector - cut welfare and tax rich people, leave the middle classes alone
Private sector middle classes - cut PS pay and slash welfare, we're already struggling with our mortgage and we don't have their job security
All - tax the rich people
Rich people - not me, the richer people, I'm not really rich.

How am I doing?

Somehow, little by little, the Gov have to balance the budget in a manner that every one actually understands to be fair and equitable. I really struggle to see how they made such a **** up of a relatively minor property tax, I mean I don't, I saw as many Phil Hogan interviews as the next person but...

And this has to be done while preserving the social contract and preventing the sort of civil unrest which could actually impact on investment.

Quite a challenge.

Sudsy86

djpbarry wrote: »

Reduce welfare. Drastically. Not only will this immediately reduce public spending, it will also provide a greater incentive for people to get back working, boosting tax revenue. There will also be less incentive for welfare fraud. Reducing all welfare payments by just 5% would save the state €1.5 BILLION. That's a tiny decrease to any one individual (and still leaves them with some of the highest welfare benefits in Europe), but represents big savings to the state. Reduce welfare by 5% every 6 months over 3 years, saving €9 billion, and we're half-way there.

The proposed property tax will bring in another €1.2 billion. Water charges will probably bring that up to about €1.5 billion. So that leaves a hole of about €7.5 billion.

As of Q3 2011, the average annual income in Ireland is just over €36k. Increasing tax on income by an average of 3.5% (applied to everyone) would yield another €2.6 billion, based on a labour force of 2.1 million.

So that leaves about €5 billion. I'm pretty confident that a fair chunk of that could be saved by cutting staff numbers in the public service (it's been estimated that €500 million could be saved by streamlining local authorities, for example), but it's hard to put a figure on it without detailed inside knowledge. Add in your proposed tax increases on tobacco and alcohol and I think we'd come pretty close to breaking even.

I accept that this is back-of-the envelope type stuff and obviously there's going to be complex interplays between these different variables (public sector job losses will mean a larger welfare bill, for example), but you get the idea - drastic cuts are required. But, while public expenditure has to be reduced substantially, it shouldn't be forgotten that we're setting off from a very, very high starting point.
:

So would you not agree that these changes would be more productive than a €100 tax on the household, would the governments time have been better spent looking at these options?

I agree with the property tax (as long as it pays towards MY local services and not the contries)(not trying to be mean but we spent alot of tax as it is to help run th country), I don't agree with a water tax as this should be included in a local services bill, but that is just my oppinion...If the water tax was added to the property tax and again the property tax went to MY local authorities then again I would be fine with this...

The Idea of implenting stealth taxes and taxes on a home owners property are beyond my thinking...

Call it a local authority tax and make it payable to the county council (might sound far fetched but again it's just my opinion)

Peanut2011

Sudsy86 wrote: »

I agree with the property tax (as long as it pays towards MY local services and not the contries)(not trying to be mean but we spent alot of tax as it is to help run th country), I don't agree with a water tax as this should be included in a local services bill, but that is just my oppinion...If the water tax was added to the property tax and again the property tax went to MY local authorities then again I would be fine with this...


Call it a local authority tax and make it payable to the county council (might sound far fetched but again it's just my opinion)

Do you believe you are getting value for money out of YOUR local council?

I am sure you have seen the wasteful spending that many of the councils have done. With the introductions of the Management Companies and estates being run by them, the value the local Council was providing started declining rapidly.

The basic services they used to provide have stopped or been outsourced...

The amount of "Board Members" each council has to the amount of times you have seen they "patch up" things instead of fixing them which in long run cost them more is unbelievable.

The amount of times I have seen any government funded agency rack up spending just before the budgets are out, in order to spend any left over, so they would not be seen as not using it all in incredible.

I have no problem paying my way, however I want to see the wasting the money down the drain stopped.

Once they get their house in order and rain in the mad spending they can ask people to help. As we have seen from FF era, throwing more money at the problem will not fix it, otherwise our hospitals would be running the best in the world. Trying to figure out why so much money is needed and rectifying that is the solution.

Same as any household, if you can't live with what you bring in, you don't go to your employer and tell them they are to pay you extra amount.. You reduce all your outgoings......

When I see these early bumper pensions given out for retiring 6-7 years early stopped, when I see ministers only receiving one pension, instead of two or three just cos they held different positions (after all, they were all in public office), the lump sum payments at retiring date and enormous pensions after and the expenses they claim made receipt based only, than they can talk about it.

Also, anyone found out of using the public office for personal gain, should have all the benefits being given to them, as a result of that employment, stopped.

How many TD's or senators have we heard of lately with "questionable" behaviour... What has happened to any of them??

Until I see leadership address these issues and clean up their own house, they can not expect any cooperation from me. I do not trust anything that comes out of their mouth to be for the good of the people, unless "people" in their dictionary is explained as "you and your close friends and family".

Rojomcdojo

Rojomcdojo wrote: »

Hmmm. Define 'middle earner' to give us a clearer idea of where you're coming from. I would imagine middle earners to be getting off quite lightly, of course that would be assuming that we were saying middle earners were in and around the average industrial wage.

I would define middle earners to be about 10-20k or more in excess of the average industrial wage, roughly speaking. Average industrial wage would make you an "average earner" in my book.

My post wasn't necessarily a reflection of my personal situation or where i'm coming from, or any kind of self-serving rant. It was just an observation on what i see as a very skewed and unbalanced system of taxation in ireland.

I see a system at the moment which:

A) at the lower end, seems to punitively tax people who have a drive and genuine wish to work to the point where it is financially impractical to do so and any who do are working for the "honour" of doing so, rather than any meaningful monetary gain

in the middle creates a system where working beyond a certain point is disincentivised due to exponentially increased taxes

C) at the top (higher earners, well into six & seven figure territory) where you pay very little or even no tax, and certainly less proportionally than many who are less well off than you.

I see a public sector and social welfare system that is so rife with ongoing, tolerated inefficiency and fraud, and where successive governments have failed to grasp the nettle purely for political reasons, where receipt of state benefit is actually a respite, or a positive development versus employment at or near minimum wage.

When combined with a general public tolerance for the lack of change in the public service, this fosters a national attitude of "ah sure you're better off turning down a minimum wage job, staying on the dole, and doing an odd nixer here and there. Sure you know they'll never catch you, and sure everybody has to keep a bit away from the taxman...".

Politicians can deny that it is the case all they wish, but i know of several real examples of it in practice, and have heard anecdotally of many more.

In addition to that, middle income earners, (as i said, typically earning 10-20k or more in excess of the average industrial wage by my definition) are taxed to the point where it becomes evident that to work beyond a certain point is counterproductive, as you are paying a disproportionate amount of tax on your upper earnings. Further to that, you are likely to be subject to many more stealth, discretionary, and consumption taxes (because you have the means to consume more and buy more things likely to be heavily levied) to the point where you will curb your discretionary spending, and increase saving.

This is particularly the case given the gloomy outlook of the economy which drives such conservative consumer spending amongst those who have means to spend more.

Our tax base for lower and middle income earners is fostering a system that actively discourages work, a crazy situation, and our tax base for higher earners creates a boon for people who pay proportionately less tax than everybody else.

Now, i am not saying which cohort of people i belong to from these three, but regardless, i think the approach we take to all of them is crazy. We should be incentivizing people to work more, consume more, produce more (not less) and contribute actively to the recovery of our state, and in tandem with this having the courage to take on vested interests and ruthlessly rooting out inneficiency and tolerance of waste and fraud at all levels of our society.

People can criticize household taxes all they want, but implemented properly, and in tandem with improvements in local government efficiency, they are at least a way of taxing wealth and means proportionately in order to fund services which everybody benefits from.

Sudsy86

Peanut2011 wrote: »

Do you believe you are getting value for money out of YOUR local council?

I am sure you have seen the wasteful spending that many of the councils have done. With the introductions of the Management Companies and estates being run by them, the value the local Council was providing started declining rapidly.

The basic services they used to provide have stopped or been outsourced...

The amount of "Board Members" each council has to the amount of times you have seen they "patch up" things instead of fixing them which in long run cost them more is unbelievable.

The amount of times I have seen any government funded agency rack up spending just before the budgets are out, in order to spend any left over, so they would not be seen as not using it all in incredible.

I have no problem paying my way, however I want to see the wasting the money down the drain stopped.

Once they get their house in order and rain in the mad spending they can ask people to help. As we have seen from FF era, throwing more money at the problem will not fix it, otherwise our hospitals would be running the best in the world. Trying to figure out why so much money is needed and rectifying that is the solution.

Same as any household, if you can't live with what you bring in, you don't go to your employer and tell them they are to pay you extra amount.. You reduce all your outgoings......

When I see these early bumper pensions given out for retiring 6-7 years early stopped, when I see ministers only receiving one pension, instead of two or three just cos they held different positions (after all, they were all in public office), the lump sum payments at retiring date and enormous pensions after and the expenses they claim made receipt based only, than they can talk about it.

Also, anyone found out of using the public office for personal gain, should have all the benefits being given to them, as a result of that employment, stopped.

How many TD's or senators have we heard of lately with "questionable" behaviour... What has happened to any of them??

Until I see leadership address these issues and clean up their own house, they can not expect any cooperation from me. I do not trust anything that comes out of their mouth to be for the good of the people, unless "people" in their dictionary is explained as "you and your close friends and family".

I don't even know where to start to respond to your post...Only thing I can say is that I disagree with how you sentenced it...

We need reform, we need to reduce our deficit that is a given...

Million Euro Question is: How to do so in a way that is accepted by the people of ireland and is most effective to reduce our national deficit.

K-9

beeftotheheels wrote: »

Those on welfare excluding pensions - Tax the rich, and the oil companies etc
Those on State Pensions - I earned it, slash the rest of the welfare budget and get those lazy good for nothings back to work
Public sector - cut welfare and tax rich people, leave the middle classes alone
Private sector middle classes - cut PS pay and slash welfare, we're already struggling with our mortgage and we don't have their job security
All - tax the rich people
Rich people - not me, the richer people, I'm not really rich.

How am I doing?

Indeed! We are getting to the stage that everybody will have to pay in some way, Welfare cuts, Public Sector numbers, services and yes, tax increases.

Somehow, little by little, the Gov have to balance the budget in a manner that every one actually understands to be fair and equitable. I really struggle to see how they made such a **** up of a relatively minor property tax, I mean I don't, I saw as many Phil Hogan interviews as the next person but...

Unbelievably handled, it's as if they didn't foresee such opposition to such a poorly planned tax. Their incompetence nearly has me opposing it!

beeftotheheels

K-9 wrote: »

Unbelievably handled, it's as if they didn't foresee such opposition to such a poorly planned tax. Their incompetence nearly has me opposing it!

I'd almost give them a pass on not seeing it coming. Second homes tax went so well an' all.

It is the reaction to the opposition, most notably by PH himself which really got me. I had a tradesman in last week and we were talking about it and he said he wished he hadn't paid as he listened to PH towards the end and I had to agree with him. Not principle, he (and I) had paid on principle, but the handling....

Enda was doing okay expressing his faith in people's patriotism.

Other gov ministers demonstrating public dissent while not achieving anything didn't help, it could only have increased the perception that the Gov would back down.

Why on earth, come early March, they didn't come out and say there's been an issue with information dissemination, we now appreciate that OAPs mightn't have internet access etc so we'll extend the deadline to April, allow on Post process claims, and allow An Post collect the tax monthly from people who collect benefits frequently from their local post offices etc

Joan Burton had the right idea, but presumably she couldn't convince Big Phil so then took to the airwaves which made the Gov look a mess.

Why they couldn't come out and acknowledge that people are angry, and yet have been tempering that anger, why they couldn't better explain to people that local services need to be paid for locally and that while the flat tax is not ideal it is a first step.

I'm currently imagining Phil singing

"What do I do to make you want me, what have I gotta do to be heard, what do I say when its all over..."

Sudsy86

beeftotheheels wrote: »

I'd almost give them a pass on not seeing it coming. Second homes tax went so well an' all.

It is the reaction to the opposition, most notably by PH himself which really got me. I had a tradesman in last week and we were talking about it and he said he wished he hadn't paid as he listened to PH towards the end and I had to agree with him. Not principle, he (and I) had paid on principle, but the handling....

Enda was doing okay expressing his faith in people's patriotism.

Other gov ministers demonstrating public dissent while not achieving anything didn't help, it could only have increased the perception that the Gov would back down.

Why on earth, come early March, they didn't come out and say there's been an issue with information dissemination, we now appreciate that OAPs mightn't have internet access etc so we'll extend the deadline to April, allow on Post process claims, and allow An Post collect the tax monthly from people who collect benefits frequently from their local post offices etc

Joan Burton had the right idea, but presumably she couldn't convince Big Phil so then took to the airwaves which made the Gov look a mess.

Why they couldn't come out and acknowledge that people are angry, and yet have been tempering that anger, why they couldn't better explain to people that local services need to be paid for locally and that while the flat tax is not ideal it is a first step.

I'm currently imagining Phil singing

"What do I do to make you want me, what have I gotta do to be heard, what do I say when its all over..."

I dont think the last line of you song will play out...

Peanut2011

Sudsy86 wrote: »

I don't even know where to start to respond to your post...Only thing I can say is that I disagree with how you sentenced it...

If that is all we disagree on that so be it!

beeftotheheels

beeftotheheels wrote: »

Why on earth, come early March, they didn't come out and say there's been an issue with information dissemination, we now appreciate that OAPs mightn't have internet access etc so we'll extend the deadline to April, allow on Post process claims, and allow An Post collect the tax monthly from people who collect benefits frequently from their local post offices etc

I heard someone from the department responsible for the logistics of collecting the charge on the radio recently, before the deadline day had arrived. He was involved with the operations side of making it happen, and seemed to know what he was talking about. You could tell by the way he was giving direct, succinct answers to the questions being put to him by the presenter, instead of going around in circles, talking sh*te, and waffling down the clock like most of the politicians who were wheeled out during the campaign.

On the subject of why people weren't able to pay the charge in the post office, he mentioned that that had been the initial plan early on, but in order to process a payment over the counter, an post require an invoice, and in order to issue invoices, you need a database of adresses. Since the primary reason for creating the €100 charge in the first place was to create that same database (for future use by the property tax) because it didn't exist, the only option was to require people to self-declare and pay, and inform them via media, and latterly, leaflet drops, and just "see what info they got".

beeftotheheels

Deleted User wrote: »

On the subject of why people weren't able to pay the charge in the post office, he mentioned that that had been the initial plan early on, but in order to process a payment over the counter, an post require an invoice, and in order to issue invoices, you need a database of adresses. Since the primary reason for creating the €100 charge in the first place was to create that same database (for future use by the property tax) because it didn't exist, the only option was to require people to self-declare and pay, and inform them via media) and latterly, leaflet drops) and just "see what info they got".

If only we had some kind of magic machine that was capable of changing the applicable rules to prevent things like that causing unnecessary difficulties.

I know other countries have them, I believe that they're called legislatures.

beeftotheheels

beeftotheheels wrote: »

If only we had some kind of magic machine that was capable of changing the applicable rules to prevent things like that causing unnecessary difficulties.......

I agree, and even if you accept that excuse, there was plenty of time in the run up to the due date to use info from databases like the TV license for example to get much of the address info needed and send a letter and copy of the form to a large chunk of the population. I know i generally like to keep my house at the same address where my TV is....:D

I would say the initial reason for not moving the deadline date back was unwillingness to allow any political point-scoring by the opposition parties. Ironically, by failing to do that, the shambolic handling of the process overall gave the opposition far more political capital than they could have ever dreamed of. The media ads and insulting "final reminder" leaflet drops in the dying days of the campaign smacked of panic and last minute emergency planning from big Phil.

djpbarry

later12 wrote: »

Calculations please?

Are you not taking account of the fact that the principal expenditure will fall y-o-y?

No, it was based on the original principal sum of €30 billion.

later12 wrote: »

You're also calculating tax returns on the basis that increasing income tax by 3.5% would not affect compliance or the underground economy, or partially reverse welfare cuts.

I did state at the end of the post it was more-or-less a back-of-the-envelope type calculation that assumed a static macro-economic environment.

djpbarry

Sudsy86 wrote: »

So would you not agree that these changes would be more productive than a €100 tax on the household, would the governments time have been better spent looking at these options?

But I factored in the property tax above?

Sudsy86 wrote: »

...I don't agree with a water tax as this should be included in a local services bill...

Regardless of where the water charge ends up, it offsets the need for central funding of water supply.

djpbarry

Deleted User wrote: »

A) at the lower end, seems to punitively tax people who have a drive and genuine wish to work to the point where it is financially impractical to do so and any who do are working for the "honour" of doing so, rather than any meaningful monetary gain

in the middle creates a system where working beyond a certain point is disincentivised due to exponentially increased taxes

C) at the top (higher earners, well into six & seven figure territory) where you pay very little or even no tax, and certainly less proportionally than many who are less well off than you.

You have that completely backwards. Explain to me how low earners are “punitively taxed”? Explain how there can be a tax disincentive for “middle earners” to work “beyond a certain point”, but that same disincentive does not exist for high earners?

later12

djpbarry wrote: »

No, it was based on the original principal sum of €30 billion.

But that's obviously going to make quite a difference to the calculation.

Also, we spend €20 billion on welfare, not €30 billion. What does the €30 billion figure pertain to?

djpbarry

djpbarry wrote: »

You have that completely backwards. Explain to me how low earners are “punitively taxed”? Explain how there can be a tax disincentive for “middle earners” to work “beyond a certain point”, but that same disincentive does not exist for high earners?

OK, two questions there. I'll take the latter one first. I accept that the same disincentive is there, but it's much more acute to a middle earner, they feel it more than a higher earner, who can afford it more, and to whom it will be of less concern, as the vast majority of their income will always have been taxed at the higher rate of tax anyway.

On the first point, i should probably qualify what i posted, i meant low earners being punitively taxed, relative to the available social welfare alternatives. I take issue with the social welfare payments system here, rather than the lower rates of tax specifically, which i think are broadly fair on their own, but nevertheless, there is still a disincentive to work at lower income rates, part of which is caused by the effect of the bottom end of the tax net.

Low earners (and by low, i mean a 35-39 hour week on minimum wage or just above) are likely to come out with very little, if anything over and above what they could receive at the top rate of social welfare, and rent allowance, once you've factored in income tax, USC, compulsory pension deductions (not a tax, i know, but still a compulsory deduction under law, and thus not an available cashflow) as well as employment costs like transport to place of work, food, etc. Add to this the continued political unwillingness to cut social welfare by as much as employed people are losing annually in extra taxes like USC, etc, and you actually have a situation where the incentive gap between welfare and low paid work is not only not being closed, it is actually increasing year on year, in relative terms.

To give a good example, I know of one household where both potential earners, (an unemployed married couple in rented accommodation) receive full dole payments, as well as various allowances in terms of fuel, clothes, medical, etc, and the state pays all but about €70 of their monthly rent, to the tune of about €600-700 each month. I estimate that they have the spending power and benefits/lifestyle of a couple with a single income, after tax, of about €2000 per month, or roughly equivalent to the take home of someone on a €40k per annum gross salary. To put this in perspective, that's about 15% more than the 2011 average industrial wage, according to CSO figures.

This is before the addition of any cash in hand work, which either of them might pick up on occasion, completely undetected by our oblivious tax or social welfare authorities.

Now, were just one of them to accept an offer of a minimum wage, 40 hour per week job, they would both lose all of these social welfare benefits, allowances, rent reliefs, etc and would also incur the costs i mentioned associated with going to work. There would also be much less time available for "nixers" outside the tax net during the working week, and in effect, both would have to survive on the minimum wage income of the main breadwinner.

As a result of this crazy situation, this couple actively refuse any offers of work which might come their way, and unabashedly proclaim anyone who does not draw the dole in Ireland and chooses to work at a minimum wage job to be "of questionable intelligence" (my words, not theirs).

djpbarry

later12 wrote: »

But that's obviously going to make quite a difference to the calculation.

5% of €30 billion is €1.5 billion, times six is €9 billion.

later12 wrote: »

Also, we spend €20 billion on welfare, not €30 billion. What does the €30 billion figure pertain to?

I think I pulled it from here, but I’ll be honest, I didn’t check the accuracy of the figure:

This week, the largest area of spending is examined: welfare. It accounts for almost 40 per cent of all public spending.

In 2010 €29 billion in entitlements and transfers (excluding bank bailout costs) was paid. That represented a three-fold increase on a decade earlier, the most rapid rise of any main spending area.

http://www.irishtimes.com/newspaper/finance/2011/0729/1224301556678.html

djpbarry

Deleted User wrote: »

This is before the addition of any cash in hand work, which either of them might pick up on occasion, completely undetected by our oblivious tax or social welfare authorities.

“Cash in hand” work is virtually impossible to police.

Deleted User wrote: »

Now, were just one of them to accept an offer of a minimum wage, 40 hour per week job, they would both lose all of these social welfare benefits...

No they wouldn’t – not all welfare payments require that the claimant be unemployed, child benefit being the most obvious example.

djpbarry

djpbarry wrote: »

“Cash in hand” work is virtually impossible to police

Sure. I'm not saying it isn't, but our welfare system makes it particularly easy to do. Regular, scheduled visits to the social welfare office on pre-arranged days, nothing by way of unannounced, drop in inspections at home to verify residence or availability for work, very little consequence (so far) to any refusal or failure to show up for job interviews, and nothing by way of investigation as to why not, nothing by way of social contributionary work, or community assistance work which would not only benefit society at large, but make it more difficult to avail of untaxed employment.

As it is now, our system gives welfare recipients cash (THE most expensive and innefficient form of benefit payment we could possibly give, especially as it's costing us significant interest to borrow it from EU/IMF at the moment) and also leaves recipients pretty much unchecked and scott free to do what they want during the working day, in some cases for weeks on end. There is huge scope to reform this.

djpbarry wrote: »

No they wouldn’t – not all welfare payments require that the claimant be unemployed, child benefit being the most obvious example.

Did i mention child benefit in my example? Or any dependant children?

Please don't presume to tell me the personal situation of people in the example i gave. As i mentioned, i know the couple in question personally, and i can assure you that the details i gave you are entirely correct. Were one of these two people to be suddenly employed in a minimum wage position, for 35-40 hours per week, as a couple, they would be 15-20k worse off than they are on the dole, and were i to introduce you to them, they would tell you the same in person, unabashedly (and trust me, they know the welfare and benefits system and allowances inside out, because it pays them to do so).

If that example is not an indictment of our current system, then i don't know what is. How can we expect to restore competitiveness in our service, hospitality, and other sectors which rely on low wage labour when there is a need to compete with a hugely over-generous social welfare regime in order to even attract people into the workforce in the first place?

djpbarry

Deleted User wrote: »

Did i mention child benefit in my example? Or any dependant children?

Did I say I was referring specifically to your anecdote?

djpbarry

djpbarry wrote: »

Did I say I was referring specifically to your anecdote?

Deleted User wrote: »

Now, were just one of them to accept an offer of a minimum wage, 40 hour per week job, they would both lose all of these social welfare benefits, allowances, rent reliefs, etc

djpbarry wrote: »

No they wouldn’t..........

Actually, it seems pretty obvious to me that you were. Semantics aside though, the point still stands. Our system incentivises unemployment and it's associated benefits over minimum wage or lower paid work.

djpbarry

Deleted User wrote: »

Our system incentivises unemployment and it's associated benefits over minimum wage or lower paid work.

I would contend that this is the general belief, but it's not actually true - the system is not that black and white. In many cases, if someone takes up a low-paid job, they will still have access to some benefits in the short-to-medium term, such as retaining rent allowance and/or a medical card, for example. With this in mind, I find it very hard to believe that there are large numbers of unemployed people who would be worse of were they to return to work.

djpbarry

djpbarry wrote: »

I would contend that this is the general belief, but it's not actually true - the system is not that black and white.

I can only offer you anecdotal evidence, like the example i posted, and i doubt you would find official figures which back it up, because if any such official figures existed, they would be grounds for a national scandal. Figures for the level of fraud and inefficiency in the public sector don't exist, naturally, but those issues make up a major part of the reasons for the problem, as well as our high rates of actual social welfare payments relative to average salaries, which are rather more straightforward to ascertain.

I think we need to look at the entire culture we have created, both through increased spending policy, and through failure to make appropriate cuts in a recession for political reasons, unwillingness to root out fraud and inefficiency, and unwillingness to accept that there's more of an incentive in some cases to be unemployed than to be employed.

In terms of harder evidence, it's hard to deny that our actual benefit rates and allowances are high by any standard. Add to that the fact that the dept of social protection's system of checking and verifying against fraudulent claims is very lax. It's arguable that this allows for a lot of playing the system to go unchecked (exactly how much, we have no idea). Now consider also the fact that our tax base (even at the bottom end) takes quite a lot out of people's pockets at the moment. then look at the cost of things like transport costs and lack of affordable state-run childcare programs etc. Now finally, consider that the actual type of work we're talking about here is frequently unchallenging, with high levels of staff churn and lower levels of morale and career progression (no offense intended to anyone working on minimum wage). There has to be a clear financial incentive and imperative to persuade people to accept this kind of work, and i would argue that the social welfare system as an alternative is often a better option.

djpbarry wrote: »

With this in mind, I find it very hard to believe that there are large numbers of unemployed people who would be worse of were they to return to work.

The example i gave is not a particularly unique or special one. The couple i mentioned are very much typical of a large demographic. From speaking to people who know the system well, you'd be amazed at the level of claim and allowance available legitimately to people who simply take time to research the rules,.

That's not even mentioning people who step outside the rules, declare their names, addresses, habitation status, medical records, single/dual parent family status etc fraudulently, or work off the books, which is easy to do with our public services inefficiency and lack of manpower and spending that's been made available for fraud detection.

oscarBravo

Deleted User wrote: »

Now consider also the fact that our tax base (even at the bottom end) takes quite a lot out of people's pockets at the moment.

While not necessarily disagreeing with your overall point, by my calculations a minimum wage earner pays a total of 4% in all income taxes. It's not exactly a crushing burden.