‘Making Work Pay’

21 Apr 2004

The Irish National Organisation of the Unemployed has just published a policy paper on the theme of ‘Making Work Pay’. The paper identifies some of the current financial and non-financial disincentives that exist preventing people from taking up employment. As a result of these disincentives unemployed people can end up being financially worse off upon the take up of employment. These disincentives can also affect those distanced from the labour market as well as those in low paid employment.

‘This paper clearly shows that despite various Government policies and recommendations, the presence of these disincentives are contrary to the objective of "making work pay"’, said June Tinsley, Policy Officer INOU. ‘The take up of employment should guarantee an increase in household income but this is not necessarily the case given the lack of balance between the tax and welfare systems.’

The paper proposes policy suggestions to eliminate these disincentives. These include raising the threshold for the retention of secondary benefits, removing all minimum wage earners out of the tax net, examine the possibility of tapering social welfare payments such as rent allowance and increasing the provision of childcare / eldercare services.

Despite the term ‘making work pay’ being used regularly in Irish and EU political circles, the INOU feels it is too pejorative as it shifts the blame of being unemployed onto the individuals rather than addressing the structural causes of unemployment.