Means-Test Central

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The Troika is at it again – putting pressure on the Government to do something.  This time the ‘something‘ is to introduce more means-testing.

 ‘The Irish Times understands that the Government is under pressure from the EU-IMF-ECB troika to reduce the duration for which the means-tested jobseeker’s benefit is paid.  At present the payment – worth up to €188 a week – is paid for up to 12 months to people who are out of work and covered by social insurance. However, this would be reduced to nine months under proposals to be considered by the Cabinet.  As a result, those on the benefit would face moving on to means-tested jobseeker’s payments much earlier. This would see thousands of people receiving lower rates. The move is aimed at encouraging people to seek work, or what policymakers call a “labour activation measure”’

The report above is somewhat confused – Jobseekers’ Benefit is not means-tested (this could be a typo).  But you get the point:  increase means-testing.

This is being presented as a ‘work incentive’ measure but in truth it is cost-cutting measure – for many households, once their Benefit runs out they will either be excluded from Assistance (e.g. if their partner is working) or have the payment cut because they have savings, etc.

Or it is an attempt to drive people back into the labour market at lower wages; more people competing for fewer jobs has that effect.  Whichever, it will represent one more step in degrading an already enfeebled social insurance system.

But let’s take a step back and look at the wider picture.  To what extent does Ireland means-test its social protection payments compared to other EU countries?  There is a powerful lobby calling for more means-testing in order to ‘direct money to those who most need it’.  How do we compare now?

Ireland already means-test more than any other country – by country miles.  Ireland is means-test central.

If means-testing delivers resources to those most in need, then we should have seen this in Ireland.  Have we?

  • According to the means-test mantra we must focus resources on those who ‘need’ them, the most ‘vulnerable’, etc.  If this works, it must be working in Ireland.   Is it?
  • One million people suffer multiple deprivation experiences – nearly one in four; nearly 350,000 of these are children.
  • Deprivation has grown dramatically since the start of the crisis – 65 percent overall between 2008 and 2010 (the last year we have data for); for children, the growth rate has been nearly 75 percent.
  • One in ten now suffer from food poverty – that is, hunger

According to the means-test mantra we must focus resources on those who ‘need’ them, the most ‘vulnerable’, etc.  This is exactly what the Irish social protection does through extensive means-testing. It does this more than any other country.  And, yet, it has failed to stem the tide of rising deprivation in society.

But true to form, we have calls for even more means-testing, just as have calls for more austerity, more spending cuts, more wage cuts.

I’m afraid the paraphrase of the old saying might be true – you can’t teach a broken economy the right tricks.

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