Does the South now have a better welfare state than the North?

Growing up as a Northern Irish and British boy in the 1950s and 1960s, it was an article of faith that the wealthy United Kingdom had the best welfare state in the world and the Republic of Ireland was a backward and impoverished place that couldn’t afford such a socially advanced system. Even after nearly 40 years of living off and on in Dublin, I find it difficult to rid myself of the notion that  – despite all the Republic’s huge progress – when it comes to the social protection of the most vulnerable in society, the North is still ahead.

I was finally disabused of that notion at a seminar organised in Derry on 20 May by Joe Shiels and Annmarie O’Kane, the highly effective duo who run the Border People mobility information website (www.borderpeople.info) for the Centre. One of the main speakers was Michael Carr, who until a few weeks ago was the coordinator of the EURES Cross-Border Partnership, the Irish branch of the Europe-wide network which provides vital information for cross-border workers, job-seekers and employers. Michael is one of those very rare people who carries around in his head a wealth of information about job and training opportunities, the recognition of qualifications, taxes, welfare payments, medical cards, pension rights, transport links and half a dozen other areas of information vital for people crossing the Irish border to live and work (the kind of information we ordinary mortals have to consult the Border People website to find). Gary McIntyre, the greatly missed Enniskillen-based former cross-border Citizens Advice worker – who I wrote about last autumn – is another. They should pay such people the kind of princely salaries that would tie them to this vital work for decades.

In his address to the Derry seminar – entitled ‘The Frontier Worker’ – Michael Carr talked about the disincentives facing unemployed people in the South who might want to seek work across the border. The example he gave was of an unemployed single man in Donegal receiving €196 per week in social welfare (plus other allowances such as a free medical card and rent allowance) compared to his counterpart on the minimum wage in the North who gets £231 for working. He pointed out that even at this time of high unemployment, this means that there is not much incentive for the Donegal man to look for a job in Northern Ireland.

Other welfare payments are also much higher in the South. The non-contributory Old Age Pension is €219 per week in the Republic (and €144.70 for a spouse) compared to £97.65 (and £58.50 for a spouse) in Northern Ireland. The One Parent Family Allowance in the Republic is €196 per week plus €29.80 per child (the first €146.50 of earnings do not affect this allowance). The equivalent allowance in Northern Ireland is not much more than a third of this: £65.45 plus a means-tested Child Tax Credit of £20.30 for a first child and £13.40 for children after this.

Across a range of indicators a low income person in the Republic now appears to be better off than her or his counterpart in Northern Ireland, although I am not taking into account the higher cost of living in the  South and elements of the ‘social wage’ in the North, such as the UK’s cheaper cost of health and education (although even here the South has some advantages: for example, a cross-border worker living in the Republic, regardless of his or her income, is entitled to a medical card, with free GP visits, free public hospital services and free medication).

So the next time you hear somebody like me (until this month!) warning that one reason a united Ireland is off the cards is because the South couldn’t afford to pay the cost of covering the gap in welfare payments, remember these telling financial facts. It’s no coincidence that one of the main issues officials in the two government departments dealing with social welfare talk about when they meet on an annual basis to discuss matters of common concern is cross-border ‘welfare tourism’, the bulk of it now consisting of Northerners making fraudulent claims in the South.

However given the current desperate state of the public finances in the South (soon to be mirrored in the North), it’s another question as to how long the Republic’s current generous welfare payments can continue. I noticed as May ended that the Irish government was proposing greatly reduced eligibility for one parent families claiming for children aged 13-18, and the Minister for Social Protection, Eamon O Cuív, was refusing to rule out pension cuts in this year’s budget.

Andy Pollak

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  • Colm

    I’m astounded that for such a small island journalists would not be aware of the facts stated above. Its not a secret for god sake. In saying that there is better protection for workers in the north. But in the south social welfare in general is more than double that of the north

  • Drumlin Rock

    Andy, when did the South catch up with and overtake the UK welfare payments?

  • slug

    Higher isn’t necessarily better-in fact it could be worse. After all we have the highest INACTIVITY rate in the UK and the highest level of uptake of sickness benefit. That inactivity problem could be worse if we had higher levels.

  • madraj55

    Acording to many economists in Brussels and further afield, the Republic is already starting it’s recoverythanks to it’s early and drastic cuts for which Lenihan was astute enough to initiate, and much earlier than UK and other Eurozone states have grasped the nettle.

  • IJP

    Define “better”.

    If another system discourages people from working even more than ours, I do not define that as “better”.

    A system which encourages people not to work is doing them a disservice, and is not sustainable in times of high unemployment in any case.

  • jon the raver

    Mentioned here is the United Ireland and the south not affording the unification.
    It has has to be seen that of the thousands who claim some sort of benefit and don’t work – be it job seekers, disability/ housing benefit in NI – there is also another 300,000 getting a wage for working for the government in the public sector.
    This would present a huge financial strain on the south’s economy.

    On the benefits there is a huge disencentive to both north and south if you can work the system well.
    I went to a benefits office one time. I was told by a college admissions department that if I was on jobseekers then I would get my course for something like £100 rather than the full whack cost – think it was £800.
    Went to the office, at this time I was working 18 hours a week part time – they told me to cut my hours down and come back, so I decided not to bother and worked more to pay my way through.
    Other people at the college followed this advice and one of my fellow class mates is still on benefits – some 15 years on!
    With his DLA car and rent paid for he earns more money than me after tax – he started on the jobseekers and then collected more and more.

    End result is that he hasn’t worked a day since that foundation course I took – but I’m the happier individual.

    I really do feel sorry for the people on benefits who are ‘earning’ over £20,000 a year – how are they ever going to want to work when the state can provide?

  • Mack

    DR –

    The UK has the lowest welfare payments in the EU (of the advanced economies at least). I would imagine this process started around Margaret Thatcher’s time (with Ireland overtaking the UK due to increased wealth, at some point during the Celtic Tiger boom – probably mid-90’s).

  • Driftwood

    More people are now on the much better paid DLA than Jobseekers Allowance., 3o% of the NI population, 20% on the mainland.
    The vast majority of these con the system with imaginary ‘illnesses’ such as depression and back pain.

    free housing, car etc make here a spongers paradise.

  • Neil

    It’s been the case for at least ten years I’d say. I know folks from the south who’ve been astounded at how low the payments are here. Certainly in the south someone could make a career choice of not working, however up here it wouldn’t be worth considering. Fifty quid a week roughly, wouldn’t keep me for more than a couple of days.

  • Mack

    Saw this as a signature on Politics.ie

    Dutch Unemployment rate 5.5% – Unemployment benefit – 80% of fin. salary for 2 years.

    British Unemployment rate 8% – – Unemployment benefit – £60

    The Dutch crack down on long term spongers, that is the key. Forcing the newly unemployed on the bread line, so they can’t get up or start a new business is dumb.

    The vast bulk of people on the dole in Ireland at the minute are workers. The live register stands at around 14% (unemployed and under-employed). Two years ago it was at 4%. 10% of those workers have paid their dues and are temporarily out of work – in an environment where there is no jobs.

    Is our system better than yours? Unequivocably yes. The Dutch is better still.

  • Neil

    Maximum DLA 131 quid approx. Not to be sneezed at I suppose, certainly better than the 50 quid that job seekers get. The minimum rate is under 19 quid though. As for the 20k a year claim, you’d need to be a single mother with about 10 kids.

    Interesting title though. Does the South have a better welfare state? What does better mean? Some people would say less money and fewer claimants is a better welfare state. So they’re half way there I assume, there’s bound to be more claimants in NI are there not?

  • slug

    Yours seems too high to be honest.

  • slug

    Unemployment is obviously a lot higher in the south.

  • Paddy Matthews

    It’s good to know that our recovery can be seen by economists “in Brussels and further afield”, because it sure as hell isn’t obvious here on the ground.

  • slug

    The real problem in NI is not unemployment, but ECONOMIC INACTIVIY which is appalling in NI.

  • Mack

    Slug –

    For long term unemployed – I agree there is a welfare trap. For workers temporarily unemployed it’s too low if anything.

  • Anonymous

    The South could keep keep employed if it hugely expanded its public sector.

    I never understood why governments didn’t introduce a tapered rate. Or at least shifting the money from cash to training over time.

  • “there is not much incentive for the Donegal man to look for a job in Northern Ireland.”

    A few years ago some building workers in North Antrim were complaining that they could not compete with their counterparts in Donegal who were seeking much lower rates of pay. Might this have been an example of ‘white van’ culture ie benefits plus wages separated by distance?

  • Neil

    Presumably the figures for NI are adjusted? Sitting about 3% behind the Republic in claimants atm, though I’d say if you started to factor in the DLA crew we might hit parity. Though as I say, for 50 quid a week I don’t see the attraction in the bru at all.

  • Driftwood

    Most DLA claimants are on top level, ably assisted in filling in their forms by our local politicos and compliant doctors.
    Add in Housing Benefit, motablility, and a host of free services and it all adds up to a dependency culture in certain areas. A booming black market in tax free cigs and booze, and hey, who wouldn’t be ‘depressed’?

  • jon the raver

    Neil think you’ll find that you can be a single male, claim a number of hard to define medical conditions, such as depression and claim a very good amount of benefits.

    Point is should a sickness equal a financial benefit ?

  • so would that be the equivocation you’re unequivocating about?

  • interesting point Nevin. I often wonder how those cross-border quangos manage to stay so rooted in their ivory tower theories.

  • btw the Dutch model sounds interesting.

  • Mack

    The definition of better 🙂

  • White Horse

    Those who mention DLA are hitting the nail on the head. Is there a comparable benefit in the south? Those on DLA get Incapacity Benefit, which means often they take in over £200 a week. This is where the south cannot compete, I think.

  • Driftwood

    Don’t forget to factor in the tens of thousands of very highly paid people in the Northern Ireland Civil Service. None of whom could remotely be described as ‘working’.

  • Eire32

    Before the recession hit, they had almost no Unemployment.

  • Tochais Síoraí

    Driftwood, I hope you’re not logged on to Slugger while you’re at work.

  • joeCanuck

    This catch up and bypassing by the Republic was, presumably, as a result of the “loose” money floating around during the boom years. Mind you, they always did take better care of retired people. But I can recall them stopping all unemployment/welfare payments to young single men and women; in the 70s I think. The message was “emigrate”.
    The big question now, of course, is whether the State assistance can continue at present levels given the economic collapse.

  • IJP

    Hear hear, Slug. Spot on.

    I will be reporting soon on the subject as you know, but one correspondent said to me last week that we should really call inactivity what it is – “worklessness”.

    Work is the route to self-esteem, it is the route out of poverty, it is the route to contribute to our economy. We must re-frame this debate.

  • II suppose ivory towers and junkets can isolate them from the Plain People, st etienne.

  • Watcher

    I know a DLA assessor, who admits that only about 15-20% of claimants she sees are genuine.

    People grow up with their parents on DLA and then they think why should they work – just do what their parents did, didn’t do them any harm after all.

    It is a racket.

    As has also been pointed out there is a major problem of no economic activity in the North. Having worked in consultancy on both sides of the border, the South is light-years ahead in terms of economic activity, ideas, entrepreneurism etc.

    Stick and carrot is needed – incentivise people to work and taper/cut-off those who have no intention of working.

    Eamon O’Cuiv is on the right road – the north should follow – joined up ideas to reduce the real spongers.

  • White Horse

    I bet she doesn’t know which 15-20% is genuine and which is not!

  • Hedley Lamarr

    You can legitimately get DLA whilst you work and it isn’t income based. It’s to help you receive care and help with your mobility. Many disabled people work.

  • kells

    Load of balls talked in above posts.I am talking from hard experience.Both my knees have went through hard graft in construction.£90 quid a week to live on.Applied twice for DLA and knocked back.At the minute I can hardly walk and have been forced to put my home on the market to get money to live on,of course when my home is sold I will not be able to claim any benefit! A lifetimes work for nothing,ask me what I think of fat cat politicans!

  • aquifer

    Our MLAs don’t have to follow GB’s benefits system. They choose to.

  • Watcher

    There should be no problem providing for DLA when people are genuinely entitled. But that is the problem – weeding out the genuine from the bluffers.

    The North has an endemic problem of malingering.

  • Hedley Lamarr

    Try Citizens Advice Bureau for help. They can give advice on filling out the forms, getting another decision-maker to look at your case or an appeal. Some information that you mightn’t think relevant may be crucial. Interpretations of the same information can differ according to the wording. It might be worth a try.

  • Coll Ciotach

    Be aware that unemployment rates are calculated differently between the different areas of Ireland. I believe that Dublin includes part time workers for instance. Has anyone any information on the methods of calculation behind the two figures? It is important to compare like with like.

  • Battle of the Bogside

    Driftwood

    Main land where, do you live on Rathlin?

  • Battle of the Bogside

    Driftwood

    “Most DLA claimants are on top level”

    Have you done a survey?

  • Mack

    They produce two sets of data in the south – the unemployment rate and the live register – the later includes part-timers but is the one most often quoted abroad…

  • jim

    its known round our way as the DAILY LIQUER ALLOWANCE .dla. u just tell them ure an alco

  • joeCanuck

    There’s an ombudsman too. He/she helped a relative of mine to get assistance with transport when unable to walk very far because of knees.

  • NordTrader

    Indeed Nevin. Well thankfully we have a plain béal bocht man like yourself to point out this phenomenon (which no doubt you’ll have the stats to back up). Of course if there wasn’t an arbitrarily drawn border to create these artificial welfare arbitrage situations (not to mention exchange rate lunacy) then that would be the worst of all worlds 😉

  • Cormac Mac Art

    there are ALWAYS gonna be freeloaders. They are a fact of life. But they are only a miniority. For those of us that desperatly need it, the system works, until we can get up on our feet and work again.

  • pinni

    I wonder how this all fits in with the PIGS scenario?

  • Mack

    It doesn’t really.

    Ireland has separate issues from the original PIGS (Portugal, Italy, Greece, Spain).

    Unlike all those countries we have a balance of trade surplus – we export more than we import. The PIGS (origninal line up) all borrow money from abroad to maintain an excess of imports over exports. You can’t run up debt forever and the other PIGS will have to reduces costs significantly (internal devaluation) so as to make their exports competitive again with Germany’s (and ours!). Ireland doesn’t need to leave the Euro – we are competitive.

    On the other hand we’ve got a pretty nasty structural deficit (government finances – by way of comparision when interest payments or excluded Greece would be in surplus). 50% of Irish workers pay no income tax, there is no annual property tax in Ireland, public sector salaries are high, long term unemployment benefits when compared by replacement rates are among the highest in Europe. The government has been pretty pro-active in taking steps to remedy this – even in the downturn.

    The big elephant in the room for Ireland is banking crisis. It may add a huge amount debt to be repaid by the government, or perhaps some of it can be pushed back onto the creditors (bond holders) we shall see. I think this might be the main reason why some are pushing for a real devaluation in Ireland (decrease imports, increase exports = increase in total foreign revenues earnt = more money for debt repayment!)