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Better off on dole? That's just a myth...

THE claim that most people are better off financially on the dole than they would be at work, has been debunked by a Government think-tank.

It shows only 3pc of jobless workers gain more by being on welfare payments.

Nearly two thirds of those without work would double their income if they got a job and eight in 10 would be 50pc better off.

The latest report from the ESRI published today says the myth about being better off on the dole has been fuelled by "non-typical examples" which show that benefits are more lucrative than taking up work.

On the income tax front the bad news for those who have jobs is that one in six is effectively paying 10pc more tax than in 2000 and a further quarter of people are paying between 5-10pc more when everything is taken into account.

One of the authors of the report, Tim Callan, said: "Income-related taxes such as the universal social charge have done most of the heavy lifting in raising revenue.

"Future tax policy needs to look at taxes which are less directly linked to income but still have regard to ability to pay." He suggested that a property value tax "could be designed to meet this criterion".

The report shows that while the recession and the crisis in the public finances have led to an increase in both unemployment and taxes this has not lessened the incentive to work.

"There has been concern that this combination may weaken the financial incentive to move from unemployment into employment and selective examples have been used to support this argument," says the report.



IMPACT

The ESRI used its own tax-benefit model to find the impact of staying on the dole or going to work would have on an unemployed person's household income.

This included the potential entitlements to rent and mortgage supplements although the researchers say the latest figures show that only 13pc of those on jobseekers assistance or benefit receive rent or mortgage supplements.

The researchers also took into account the age and education of those without work to calculate potential earnings which they said were likely to be below average.

csheehy@herald.ie