Back to Work Allowance

Information

The Back to Work Allowance Scheme encourages unemployed people (among others) to take up employment. The Scheme is aimed at people getting a social welfare payment for a certain period of time.  

In the Supplementary Budget April 2009 it was announced that the Back to Work Allowance scheme is closed to new applicants from 1 May 2009.

People participating in this scheme keep a percentage of their social welfare payment along with "secondary benefits" for a period of up to three years. The percentage of your payment you keep is called the Back to Work Allowance. The Back to Work Allowance part of your income is not subject to taxation or social insurance (PRSI). Your employer may also qualify for the Employers PRSI Exemption Scheme (closed from 1 May 2009).

Rules

Conditions you must meet

To qualify for the Back to Work Allowance, you must:

• Be age 23 or over
• Have been unemployed for 2 years

And

• Have an entitlement to Jobseeker's Allowance.

You may also qualify, no matter what age you are, if you are getting one of the following payments for 15 months (or 12 months if you are aged 50 or over): 

• You have been getting Farm Assist, Pre-Retirement Allowance, One-Parent Family Payment, Blind Pension, Disability Allowance, Carer's Allowance (if you are no longer a carer), Invalidity Pension, Deserted Wife's Benefit or Allowance, Prisoner's Wife's Allowance, Incapacity Supplement, Widow's or Widower's (Non-Contributory) Pension or Prisoner's Wife's Allowance. You don't have to be any specific age to qualify in these cases.

Or

• You have been getting Illness Benefit for at least 3 years.

Time spent on FÁS, Failte Ireland, Teagasc, FIT, Community Employment, Job Initiative, 'second chance education courses' (i.e., Back to Education Schemes) and/or time spent in prison are accepted as periods of unemployment.

Also, time spent on Supplementary Welfare Allowance or in Direct Provision can count towards the qualifying period for Back to Work Allowance provided you are entitled to a qualifying payment before starting on the scheme.

Conditions your prospective employer must meet

Only employers who can provide suitable jobs are eligible to participate. The work being offered must:

• Be likely to develop into a lasting job
• Not displace existing employment
• Be a minimum of 20 hours per week
• Be for at least 12 months.

Short-term, seasonal or commissioned/contractual work is not acceptable as employment under the Scheme.

Spousal/partner swap

If you qualify for the Back to Work Allowance Scheme but do not wish to avail of the scheme your spouse or partner may participate instead. You must be getting an increase in your social welfare payment for your spouse or partner for a specific amount of time. It is usually the same amount of time that you would need to be claiming your payment to qualify for the scheme. For example, if you are getting: 

• Jobseeker's Allowance (JA) a spouse or partner must be a qualified adult dependent for two years
• Illness Benefit a spouse or partner must be a qualified adult dependent for three years
• Disability Allowance, Blind Pension, Carer's Allowance (on ceasing caring duties), Farm Assist, Invalidity Pension, Incapacity Supplement, Pre-Retirement Allowance, Widows/Widowers (Non-Contributory) Pension, Deserted Wife's Benefit/Allowance or Prisoners Wife's Allowance a spouse or partner must be a qualified adult dependent for at least 15 months (or 12 months if aged over 50).

In the case of Jobseeker’s Allowance, when your spouse or partner starts on the scheme a separate claim will be set up in his or her name. When your spouse or partner starts on the scheme your JA payment will stop. However, your spouse or partner can now claim for you as a qualified adult. You should sign for credits at your local social welfare office. It is important to sign on for credits to protect any future pension entitlements you may have. This new arrangement should not affect the amount of social welfare payment you get as a family.

If you (the original owner of the social welfare payment) decide to claim another social welfare payment at any time while your spouse or partner is availing of the spousal swap the payment of Back to Work Allowance will stop. 

Rates

If you qualify before 1 May 2009, you will receive support for three years (including adult and child dependent allowances) as follows:

• 75% of your weekly social welfare payment for the first year
• 50% for the second year
• 25% for the third year.

Secondary Benefits

In addition you will keep "secondary benefits" for three years, provided your household income is less than €317.43 gross per week. Household income includes your spouse or partner's income but allows for PRSI and reasonable travelling expenses. Income from Back to Work Allowance and Family Income Supplement are disregarded for the purposes of the €317.43 gross weekly household income limit.

Secondary Benefits include:

• Fuel Allowance
• Medical card (household income limit does not apply)
• Diet Supplement
• Back to School Clothing and Footwear Allowance
• Local Authority Differential Rent.

The Back to Work Allowance is not subject to PRSI or income tax deductions.

Your Rent Supplement or Mortgage Interest Supplement may be affected.

Additional Supports

Financial assistance is available to employees who qualify for the Back to Work Allowance to further their employment potential, for example, help with interviews, literacy or computer skills.

Family Income Supplement may be payable if you have at least one dependant child under the age of 22. This weekly tax free supplement is payable if your income is below a certain limit for your family size. Your Back to Work Allowance and your earnings will be added together when working out your entitlement to Family Income Supplement. Find out more about Family Income Supplement.

Very Long Term Unemployed Programme (VLTU)

The Very Long Term Unemployed Programme is closed from 1 May 2009. Under this programme, if you had been in receipt of a qualifying payment for 5 years or more, you could continue to receive your payment, plus an additional weekly payment of €44.50 per week for up to six weeks while you were getting training from an employer. After this six week period, you transferred to the Back to Work Allowance if you continued to remain in employment. In addition, you also received two payments of €254 when:

• The six week training period is completed
• You have completed six months in employment.

How to apply

The Back to Work Allowance Scheme is closed to new applicants from 1 May 2009.

Further information

Further information is available from the Department of Social Protection: