Lack of movement on Jobseeker's rates for young people is disappointing

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In advance of Budget 2019, Social Justice Ireland called for the equalisation of the Jobseeker’s Allowance rate for those aged 25 and younger.

Figures from the National Youth Council of Ireland indicate that the consistent poverty rate for people in this cohort is almost double normal rate, and reduced Jobseekers payments inevitably contribute to that.

With significant fiscal space (as it was once known) available in Budget 2019, there was an opportunity to fix, or begin to fix, many of the unjust policy moves implemented during the financial crisis. Several policy changes were enacted during that time which were arbitrary in nature: unfair, unjustifiable, and purely for the purpose of saving money.

The reduction of the Jobseekers Allowance payment for younger people was one such policy move. Those under the age of 26 saw their payment reduced; in some cases almost halved.

From March next year, the payment will be €203 per week for individuals aged 26 and over, while the maximum rate for those aged 25 will be €157.80, and the maximum rate for those aged between 18 and 24 set at €112.70.

The amount required for an unemployed young adult, living in the family home, to achieve the Minimum Essential Standard of Living (MESL) is €151 per week. This is almost 1.5 times the Jobseekers Allowance payment to an 18-24 year old at present. This reduced payment is likely a cause of increased rates of poverty, homelessness and emigration among young people in Ireland. Indeed, between 2007 and 2015, the rate of severe deprivation among 18-24 year olds increased twice as fast as it did for the general population. There can be no doubt but that reduced welfare payments contributed to this.

Many young people are not living in the family home, and are therefore even more at risk of poverty. This fact is not accounted for in the Jobseekers payment.

The choice of age-bands for this tiered approach to a payment that was previously paid on the same basis to all was arbitrary. There is no research or evidence to suggest that such a move would incentivise employment, or even that lack of incentive is the problem. Indeed the move was implemented at a time when Ireland was experiencing significantly increased joblessness.

There is a narrative being forwarded in some quarters that these reduced rates are required to incentivise young people to take up a job, but the statistics do not bear this out. The unemployment rate for younger people has always been greater than that of the general population. However, it is interesting that while 20 to 24 year olds were 50% more likely than the general population to be unemployed at the peak of the Celtic Tiger, they are now twice as likely to be so. The policy move can hardly be claimed to be a success. Looking at comparative unemployment rates since 2010 when these reductions were instituted, it seems that perhaps the only incentive this has provided to young people is the incentive to leave the country altogether.