Benefits tapering cuts spending by €24 million
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Benefits tapering cuts spending by €24 million

40% fewer people relying on social benefits - JobsPlus head

Spending on social benefits has dropped by €24 million since the introduction of the benefits tapering scheme four years ago, according to government figures.

Around €55.5 million was spent last year on social benefits, compared to €79.6 million in 2014, a drop from 0.94 per cent of the GDP to 0.45 per cent.

The benefit tapering scheme provides support to people who enter the employment market after having been on unemployment assistance, social assistance or single parent benefits.

New employees receive 65 per cent of their previous benefits in their first year on the job, which tapers down gradually over three years.

Jobsplus executive chairman Clyde Caruana said that in the four years since the scheme was introduced, the number of people relying on social benefits had dropped by around 39 per cent overall.

These figures, he said, were close to what had been achieved in the UK over a much longer time-frame, since the introduction of similar measures back in 1999.Society is facing new risks that the welfare system is not equipped to care for

Mr Caruana said the scheme’s introduction followed research into what would constitute a so-called reservation wage, the minimum that a person would accept to take up a job.

For a 30-year old with one child, the research found that this amounted to €10,921, which is €1,600 higher than the national minimum wage.

Mr Caruana added, however, that society was facing new risks that the welfare system was not equipped to care for, such as technological change, social exclusion and the rise of single-parent households.

“Welfare change must be ongoing to prevent unnecessary hardship,” he said.

Social solidarity minister Michael Falzon said the scheme had led to tangible benefits in people’s lives, with those receiving unemployment benefits down from around 4,000 to 800.

Women made up more than two-thirds of those benefitting from the tapering scheme, he said.

Education and employment minister Evarist Bartolo said the research opened doors for further study, including the scheme’s effects on children’s school performance and aspirations.

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