Update on “Ticket to Work” for the unemployed

Deputy Jim Daly: I thank the Minister for Social Protection for coming to the House to take this Topical Issue matter. The greatest scourge that the country and the economy face are the 190,000 people who have been unemployed for 12 months or more. For some time I have been concerned about the number of measures the Government is taking to address this problem. I first submitted my proposal, called A Ticket to Work, more than 18 months ago. The proposal is modelled on similar schemes implemented in the United States of America and would give a voucher worth approximately €200 to unemployed individuals, which is the equivalent of what they would receive in unemployment benefit. This voucher could be passed on to an employer in return for employment. I am involved in the west Cork jobs initiative and am fortunate to work with 12 employers. We have done considerable research on this scheme, including a survey of the attitude of employers towards it. Eight out of ten employers considered it favourably and expressed an interest in taking people off the live register in return for voucher style contributions towards the cost of employing them. The amount paid would be in the region of 50% of the cost.
When I first submitted this proposal to one of the Minister’s colleagues 18 months ago and I met departmental officials to discuss it, I was told that a similar scheme was already in place, namely, the Revenue assist scheme. However, only 350 people avail of the that scheme per annum. I am not a genius at mathematics but at that rate it would take up to 542 years to deal with the 190,000 long-term unemployed. It is clear that the Government needs to take more action. Our record in helping the long-term unemployed is less than stellar and desperate situations require radical action.
I submitted the A Ticket to Work proposal to the Minister and the Secretary General of her Department, as well as to the Minister for Finance, the Taoiseach, the Minister for Jobs, Enterprise and Innovation and the Economic Management Council. I am aware from discussions at various levels of a proposal to introduce a JobsPlus scheme, which essentially mirrors the spirit of the scheme I have proposed. However, I am concerned that we are half way through the lifetime of this Government. We cannot afford to get it wrong. There are approximately 85,000 SMEs employing 700,000 people in this country. My research indicates that eight out of ten SMEs favour the scheme but even if only one in every two took it up, it would go a long way to giving jobs to the 36,000 persons aged between 20 and 40 who have been unemployed for 12 months or more.
For such a scheme to be successful, it must be focused on the unemployed person rather than the SME. The Government’s proposals to date are admirable but we must refocus our efforts towards the unemployed person by giving him or her the licence and, with it, the opportunity to approach an employer with a voucher worth 50% of his or her salary. If we target the unemployed we will have a better chance of persuading people to be more active in seeking suitable employers and the scheme will sell itself.
Communication is also very important. The name “JobsPlus” is along the lines of JobBridge and would simply cause difficulties with employers. I would prefer to name the scheme A Ticket to Work or a Passport to Work. I hope the Minister takes my suggestions on board.

Minister for Social Protection (Deputy Joan Burton): I thank Deputy Jim Daly for raising this important matter. Support for job creation is central to Government policy at all times, and particularly in times of high unemployment. The employer job PRSI scheme and the Revenue job assist scheme are aimed at incentivising employers. As the Deputy has pointed out, neither of these schemes achieved a high level of utilisation. Both schemes were designed primarily to incentivise job creation with the secondary objective of targeting recruitment of those on the live register. As the Deputy has rightly pointed out, take up has been disappointing low. In 2012 for example, the employer job PRSI scheme was awarded in respect of only 1,072 employees with fewer than 900 businesses applying. The numbers were even lower in 2011, with 923 employees benefiting.
Since coming into office, the Government has been engaged in a persistent and focused series of reviews of all programme and schemes aimed at supporting employment and the unemployed. We have worked to identify improved practices that allow for greater quality outputs. The job assist and PRSI exemption scheme were commonly criticised for being complicated, suffered the perception of having burdensome administrative practices and were viewed as difficult to access. A recent IBEC survey of employers’ sentiment indicated this perception predominantly obtained among employers who had not applied for the schemes, while feedback from employers who benefited from them was positive. Irrespective about whether such accusations are true, the existing schemes did not attract sufficient support and called for a fresh view to be taken. I compliment the Deputy on his own work in bringing forward new proposals.
The Government has decided that a new simplified incentive scheme should be developed. JobsPlus is therefore being introduced on a pilot basis with effect from early July and will replace the existing schemes. JobsPlus has been included as one of the disruptive measures in the action plan for jobs 2013. The plan outlines seven high impact reforms with highly ambitious deadlines. In line with what the Deputy has set out in his proposals for A Ticket to Work, JobsPlus is to provide a simple, easily accessible and understood cash based incentive to get employers to recruit full-time permanent employees from the live register. As it is cash based, it will aid a business’s cash flow by providing a steady flow of payments each month for two years. If a business recruits a person who has been unemployed for 24 months from the live register, the employer will receive a cash grant of €10,000 over two years. If a business recruits a person who has been unemployed for between 12 and 24 months, the employer will receive a cash grant of €7,500 over two years. The initial budget allocation for this scheme is €21.25 million over three years.
If given a chance, and if we can convince business owners and employers to engage, JobsPlus will be successful but we need real engagement and a better connection than we have had heretofore with employers both nationally and locally. Key among our tasks is to target and convince the decision makers within businesses to take notice of the incentives on offer and to look to those they previously may not have considered for employment. I welcome the Deputy’s work in this area and I will be interested in his engagement in monitoring the roll-out and implementation of the JobsPlus during this pilot phase.

Deputy Jim Daly: I thank the Minister for her response. The JobsPlus scheme is a welcome and positive step forward by the Government. In February 2012, responding to a query I raised with him about this issue, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, stated he was considering including in the Action Plan for Jobs a coupon style scheme along the lines I have suggested.
The JobsPlus scheme is being targeted at small and medium sized enterprises. From my extensive research into this issue with the west Cork jobs initiative, in which 12 local employers are involved, I believe the decision to tailor the scheme towards employers rather than employees will mean it will not attract the level of engagement required from employers. The Department and the Department of Jobs, Enterprise and Innovation should reorientate JobsPlus towards unemployed persons by empowering them by means of coupons. I have been informed by officials that it would be difficult to provide unemployed people with coupons because the live register frequently changes. The circumstances of people who have been unemployed for 12 months or more are by and large static and, therefore, unlikely to chop and change. This provides scope to offer the long-term unemployed a coupon which would empower them to seek a match among employers. Such an approach would achieve results much more quickly than giving employers responsibility to find a match among the unemployed because employers are too busy doing what they do best, namely, protecting existing jobs, to seek out people on the live register.
A second difficulty with the JobsPlus scheme is its title. While this may appear to be a minor issue, the term “JobsPlus” is difficult. We must empower people who are sitting at home watching the evening news on television. It would be much more productive to describe the scheme in terms of a “ticket”, “passport” or “coupon” to work. I implore the Minister to use her good offices to review the two aspects of the proposed scheme that I have highlighted.

Deputy Joan Burton: I thank Deputy Jim Daly for the work he has done and the thought he has given to how the Government can improve incentives and target people who are long-term unemployed. We expect to launch JobsPlus in early July and we will see how the scheme goes.
I had an opportunity, as part of the roll-out of the Pathways to Work scheme, to visit eight or nine major locations with a departmental roadshow. Up to 2,500 employers and human resources specialists visited these public events.
Many employers who are seeking to recruit staff do not consider people who are unemployed for positions because they want to recruit people who are in work or coming new to the labour market. A gap on a curriculum vitae indicating that someone has been out of work, through no fault of the person in question, raises queries and questions. If potential recruits are available who have not been out of work, they tend to be preferred. We must overcome this problem, which is one of the reasons I developed JobBridge. It is interesting that more than 18,000 people, including 6,000 people currently on the scheme, have availed of a JobBridge internship. Indecon International Economic Consultants did a study of the scheme and found that within five months of completing JobBridge, 60% of participants had moved into employment.
We have a job to do in convincing employers and human resource specialists that people who are on the live register are a major resource and need to be given a fair opportunity. The JobsPlus initiative will offer employers direct cash incentives. Employers who take on a person who has been unemployed for between one and two years will receive €7,500 over two years, while those who employ a person who has been unemployed for more than two years will receive €10,000 over two years. These are significant cash incentives, particularly if the employer is taking on somebody on a relatively low wage. As I stated, the scheme will be launched in early July and I will bear in mind the proposals the Deputy made for further incentivising persons who are unemployed and employers.