Department of Finance - Government of Ireland

Social & Family Affairs
Commentary

Overview:
The Estimates proposals submitted by the Department of Social & Family Affairs exceeded the Government Pre-Budget target by €171m, some €70m above their Existing Level of Service figure. The €70m comprised an additional €38m on their administrative budget and €32m on programmes reflecting in particular higher expenditure on Supplementary Welfare Allowance.

The Committee identified savings proposals totalling €140m. However, the Committee also considered that it would be prudent to provide for a Live Register figure of 170,000 during 2003, at a cost of an additional €71m.

Additional comments:
Back to Work Allowance - The Back to Work Allowance Scheme was introduced in 1993. At the time, the rate of long-term unemployment was 8.9%. It is currently of the order of 1.2%. The Committee considers that the validity of paying an individual in paid employment or in self-employment a tapered unemployment payment for 3-4 years in an environment of very low long-term unemployment is open to question. It proposed, therefore, to phase out the Back to Work Allowance schemes by allowing no new claimants to enter the schemes in 2003. This measure will achieve savings of €24.4m in 2003.

Back to Education Allowance - BTEA participants continue to receive payments when their colleges and schools are closed for the Summer break. During this period, they may engage in paid employment. Discontinuation of summer holiday payments is estimated to yield €12.5m savings.

Social & Family Affairs Group
Summary of Committee's proposals
2002 REV (Amended Estimate)				9365.83
Gross ELS figure for Vote Group				9865.63
Gross Pre-Budget target (PBT) for Vote Group				9764.58
Savings below ELS required to reach Pre-Budget target (share of €900m)				101.04
Gross savings proposed by the Committee to contribute to €900m target				-5.65
Proposed Revised Gross Allocation (as per Table 1)				9871.28
Proposed Revised Gross Allocation following administrative budget transfer (as per Table 2)				9869.35

		€m		€m
Estimate bid submitted by Social & Family Affairs (€170.8m above the pre-Budget target)			9935.43	2003 proposed allocation for each subhead

Plus additional pressures which Committee accepts must be met:
	Live Register - increase from 158,000 in ELS figure to 170,000 (€36m UA, €35m UB)	71.00
	Administrative subheads	5.00
	Total additions		76.00

	*Estimate bid including pressures*		*10011.43*

*Less savings* *proposed by the Committee*
Subhead	Department of Social & Family Affairs (Vote 40)
A	Administrative Budget efficiency dividend (E)	4.89
A	Administrative Budget - excess in Department's demand over ELS target	38.36		250.79
E	Unemployment Assistance - speed up exits from Live Register (E)	4.00		552.90
N	Supplementary Welfare Allowance - faster processing of asylum cases (E)	10.00
N	Supplementary Welfare Allowance - increase individual rent contribution to €12 p.w.	11.00		554.80
	Control savings across subheads (E)	11.00
R1	Family Support Agency (E)	3.00		14.25
U (part)	Grants for Community & Voluntary - Money Advice & Budgeting Service (E)	1.00		8.91
G (part)	Employment Support Services - Back to Work Allowance - no new claimants (see text overleaf)	24.40		100.30
G (part)	Employment Support Services - Back to Education - discontinue Summer holiday payments (see text overleaf)	12.50		27.70
	Social Insurance Fund
	Unemployment Benefit - speed up exits from Live Register (E)	6.00		434.60
	Control savings across programmes (E)	4.00
	Disability benefit - more rigorous assessment of claims and more intensive monitoring of existing recipients(E)	10.00		383.70
	Total savings		140.15

	Proposed Revised Gross Allocation		9871.28

	(E) refers to Estimating Savings

Proposed Revised Gross Allocation following decisions of Committee			9871.28

Administrative Budget Adjustments
	Impact of transfer of functions		-1.93

Proposed Revised Gross Allocation post transfer of functions			9869.35