Varadkar urges people on welfare to consider starting their own business using State support

Minister for Social Protection Leo Varadkar visited a north Dublin barber shop today which was set up with help from the Back to Work Enterprise Allowance, and met several business people who used the scheme to start their own enterprise while unemployed or claiming benefits.

The Minister announced changes to the qualification period for the Back to Work Enterprise Allowance (BTWEA) to make it much easier for many one parent families, people with disabilities and farmers to participate.

The Minister also used the occasion to publish a review of the scheme which found that it has a high success rate, with participants twice as likely to be off the live register after six months than non-participants.

The Back to Work Enterprise Allowance helps people who are unemployed or claiming welfare to set up their own business and continue receiving State income supports for two years, while getting advice and support for running a new business.

“This is a fantastic programme which allows you to retain your weekly welfare payments while starting your own business. If you’re unemployed, a one-parent family, claiming Disability Allowance or on a scheme like Farm Assist, the Back to Work Enterprise Allowance gives you ongoing financial support as well as expert advice.

“The review which I’m publishing here is really encouraging. This compared people who had stayed on the BTWEA for the full two years, with those who did not participate. It found that those who completed it were twice as likely to be off the live register six months later, than those who didn’t take part. This trend was also evident more than 18 months later.

“And we’ve also made it much easier for many more people to avail of the allowance. We have reduced the qualification period from 12 months to just nine months for more people on welfare, not just for Jobseekers, but also reduced those on other schemes like One-Parent Family Payment, Jobseekers Transitional Payment, Disability Allowance, and Farm Assist, and other welfare payments.”

The Minister met the BTWEA participants at HIM Barbershop on the Mobihi Road in Dublin, which is run by Robert Giffney who finished the scheme in early 2016. He has also developed his own HIM branded merchandise.

Also present was Holly Perreira, an illustrator and animator based in Dublin. She set up Hyper Pictures in 2015, where she works on a wide variety of projects, ranging from murals to editorial illustration, traditional sign painting to animation for music videos. And the third participant was Eoin Kernan from Dublin's northside. He is the founder and creative producer behind Slick, a leading commercial and corporate film production company. Slick develops and produces digital content for organisations to promote their brand.

Minister Varadkar said: “It’s great to meet these participants. I want to commend Robert Giffney, Holly Perreira and Eoin Kernan for taking the initiative and availing of the Back to Work Enterprise Allowance. Entrepreneurs are vital for local economies, our economic future and for job creation. That’s why my Department will implement the review’s recommendations in the coming months to ensure that the scheme remains effective.”

The Allowance was also praised by Evanne Kilmurray of Inner City Enterprises, or ICE. “As CEO of ICE, an organisation that assists unemployed individuals in Dublin’s inner city to establish their own businesses, the Back to Work Enterprise Allowance is a very valuable support which lessens the risk of starting a new business. The Allowance is often that much-needed incentive to give a budding entrepreneur that extra push towards establishing their own start-up,” she said.

Further information

Since early 2009, the Allowance is paid on a reducing scale over a two year period i.e. 100% of a person's social welfare payment in year one and 75% in year two. In December 2016, there were approx. 11,400 participants on the BTWEA which is broadly similar to the previous 5 years. Expenditure on the Allowance in 2016 was €126.2m. A steering group, chaired by the Department of Social Protection (DSP), undertook a review of the BTWEA in 2016.

Overall, the Review found that the scheme offers effective support for people who are long-term unemployed and who are interested in self-employment as a route to entering, or re-entering, the labour market and therefore should continue.

The review found that:

• BTWEA supported businesses tend to be sole traders or small employers (averaging 1-2 employees)
• 91% of participants were on a jobseeker’s payment prior to commencing their new business, with illness and one-parent family payments accounting for approx. 4% each
• 75% of participants are male & 25% are female. This compares with 59% and 41% on the Live Register
• the average age of participants at their time of commencement on the scheme is 39 years
• 33% of participants are aged 25-35 and 66% are aged over 35. This compares with 26% and 61% on the Live Register
• almost 50% of participants have adult and/or child dependents, compared with 29% of the general Live Register population
• the average length of time a BTWEA participant has spent on the Live Register prior to going on the Allowance is 4 years, and
• based on Pobal data for 2015 and 2016, the highest number of businesses commenced were in the construction sector