Some of my students today complained – softly – about the workings of the Back to Education Allowance. Like many such schemes globally it allows for some mechanism to maintain welfare payments whilst returning to full time education at both second and third level. Laudable enough, although I haven’t seen this evaluated in terms of impact but then again what is new for Irish policy.
Such schemes in other countries when evaluated have been shown to be of moderate impact on the person involved – and there is the so called ‘dead weight’ issues whereby people who would go back to education full time regardless can now go with welfare support.
That latter problem would be less likely where these schemes are aimed at ‘mature’ students. What is odd about the Irish case is that the scheme is generally aimed at folks at a relatively young age – 21 and above, who are out of work for more than nine months (for undergraduate education). In fact, there are eligibility rules for this scheme that would see someone as young as 20 qualifying with respect to third level education. That is young by the standards of these schemes internationally. This could be a good thing in the current climate – maybe some young adults made bad choices at 18, have lost their job, and are now going to try to rectify this. But equally – and this is the thing some undergrads mentioned today – you could have a situation where some students entering their third year of college in September will be joined at University by freshman classmates from the same Leaving Cert cohort coming in with a weekly allowance.
Of course, the ones coming in under the scheme have been unemployed. That won’t have been a pleasant experience. But they won’t have become deskilled in two years since their Leaving Certificate. It is unlikely that we will have scarring effects from the unemployment. The return to education will rescue them – their former School classmates will have a much rougher time if they fall unemployed. And they were smart enough to get in from their Leaving Certificate – although some of these schemes have entry pathways designed by the colleges themselves (which is a whole other story!), the application process is largely the normal one (i.e. CAO). In reality, as my students noted, they could just apply and get in without any support.
The question these inquisitive economics students had was about incentives of course. They wondered if the rules – coupled with rising education costs as tuition fees of a sort are reintroduced – would lead some students to ‘drop out’ at Leaving Certificate stage for a while before returning to third level with funding support. In general, could the deadweight problem increase?
The question these students should have asked is whether the cost of these schemes are justified based on the benefits (we don’t know), or compared to how you might spend the money alternatively (and here they should have a view – a Back to Education allowance may have less of an impact on the economy or the person than an internship scheme aimed at recent graduates, for example).
As an aside another thing that really annoyed these students was the fact that if a Back to Education Allowance recipient failed and had to repeat the year, they kept their allowances as long as they remained full time attendees – a ‘regular’ student would become liable for fees if they repeat leading many to become ‘external’ students for that repeat year! That particular aspect of the programme really drew their wrath.
It does seem to me that the basic aims of this scheme, like many more indirect welfare schemes, are good, but the implementation of this scheme lacks any central guidance or vision, and the potential for confused signals and incentives are very clear.
Anyway, it did set me wondering about the sort of kinks and knots we have in the welfare schedule.
For example, a review of the DSP website shows that on the welfare side of things we have a lot of schemes and means of support that are down to the decision of what was known in my day as the ‘relieving officer’ – that again is largely a good thing, allowing for swift intervention when need arises, but it also masks the actual level of welfare interventions being received – both monetary and nonmonetary – and also possibly promotes a dependency on a welfare infrastructure.
Other schemes – like ones that encourage the renovation of households to deal with the needs of the elderly or disabled – require you to use prescribed suppliers with the Exchequer providing a grant towards some fixed percentage of the cost. I know from experience that it can be cheaper to go to your local hardware superstore, buy a bath for persons with mobility problems, and get it fitted, than go to the prescribed supplier even when you have the Exchequer provided subsidy!
One thing an incoming Government finally has the chance to address is some rewriting of the tax and welfare schedule. It would be good to map some of these more obscure, odd and sometime perverse (in terms of incentives!) welfare and tax issues.