The new JobPlus scheme announced recently by the government is probably the most radical initiative we have seen since the unemployment crisis started to develop in 2008. 

By Michelle Murphy, Collins McNicholas

The JobPlus scheme replaces the Revenue Job Assist and Employer Job Exemption Scheme and I feel this scheme could be a catalyst to tackle the growing problem of long term unemployment.

The previous schemes, while they had many positive features were overly complex and very few employers understood them and availed of them.

The beauty of the Job Plus scheme is its simplicity i.e. it offers a direct cash incentive (no tax credits or allowances) to employers to hire the long term unemployed.

The scheme operates by making regular cash payments to employers who hire qualifying candidates therefore significantly reducing the cost of employing an additional member of staff e.g. if a business employs someone who has been unemployed for over two years and pays them a salary of €20,000 per annum they can reclaim €5,000 per annum over two years.

The Incentive is clearly designed to encourage businesses to focus their recruitment efforts on the long term unemployed and this has been identified as the most challenging group to engage with and get back working.

The Incentive will provide two levels of payment: a payment of €7,500 over two years to an employer for each person recruited who has been unemployed for more than twelve but less than 24 months and €10,000 over two years to an employer for each person recruited who has been unemployed for more than 24 months.

All economists will argue about the various factors impinging on our recovering  and there are multiple factors holding back the Irish economy – international economy, uncertainty in the Eurozone, domestic demand for goods and services being extremely weak, lack of finance for working capital etc. 

However all economists will agree on the fact that tackling the long term unemployment crisis is an absolute must as an increase in employment very simply means greater consumer spending, greater tax returns for the government and less spend on social welfare payments”.

For employers who are undecided about hiring additional resources this initiative could be the push they need. Could this initiative be the “disruptive reform” needed to tackle long term unemployment.