The majority of jobless people would be better off coming off the dole and taking up employment, new research from the Economic and Social Research Institute (ESRI).
A total of 60pc would see their incomes increase.
The ESRI found that most jobseekers – who are mainly young and childless – would be better off in employment rather than signing on, with six out of 10 seeing their income double if they got a full-time job.
More than eight out of 10 jobseekers would earn at least 40pc more if they got a full-time job.
But the situation is slightly different for unemployed families, who are still caught in welfare traps.
Particularly hard hit are families struggling with chronic illnesses, who rely heavily on their medical card. Going back to work would also mean hefty childcare costs and the loss of valuable benefits such as rent supplement. Researchers found that in a small percentage of cases (2.8pc), jobless families would get more by staying on benefits. This is particularly true for unemployed couples with children.
Professor Tim Callan, who co-authored the report ‘Making Work Pay More: Recent Incentives’ published today said unemployed people were largely young, single and childless.
They get lower dole payments, are less likely to use a medical card or to receive welfare payments for children. All these factors mean they will be better off in work.
“They are people who are young, single and childless so they don’t have that big welfare hill to climb over to get into employment,” he said. “For families with children, it is harder to make that jump.”
Researchers examined the role medical cards play in influencing whether people go back to work.
They also looked at the effect of the Back to Work Family Dividend (BTWFD), which was introduced in last year’s Budget and allows a person rejoining the workforce to retain the child element of their jobseeker’s payment. They did not examine issues such as childcare costs.
“The other side was the Back to Work Family Dividend. It looks like it does help and it is worth pursuing that further,” he added,
Under the BTWFD, a person returning to work gets almost €30 a week for each child for one year, followed by a half-rate for the second year. However, Prof Callan said only a few thousand are in receipt of it. He argued if it was “fully utilised” it could lead to improvements in families’ incentive to work.