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Annual Report of the Ombudsman 2008 (text version)

6.2.1 Selected cases - Arrears of €8,600 secured for Back-to-Work Allowance scheme applicant

A man contacted my Office about a decision of the Department of Social & Family Affairs to refuse his application for a Back-to-Work Allowance (BTWA).  If a person is getting certain social welfare payments, the BTWA for employees can provide the person with a financial cushion to help them to return to work. Under the scheme, a person may keep a portion of their social welfare payment for 3 years without having to pay tax and pay-related social insurance (PRSI) on it.

It applies on a percentage basis with 75% of the weekly social welfare payment kept for the first year, 50% for the second year and 25% for the third year. Depending on qualifying income, a person may also keep important secondary benefits for the 3 years, such as a medical card, fuel allowance or differential rents.

My complainant had been in receipt of an invalidity pension, from the department, for a number of years, before making his application for a BTWA.  He completed his application shortly after commencing employment and supplied a letter from his employer setting out the terms of his contract of employment.  This letter stated that he was contracted to work between 18 and 30 hours per week during his probationary period.  The application was refused by the department on the basis that the requirements of the scheme for employers state that they must offer work for a minimum of 20 hours work per week, the job must be lasting and sustainable, with a commitment from the employer that it will last at least one year.

The man requested a review of the decision and submitted additional information in the form of payslips and a copy of his new permanent contract with his employer. He received this contract following the completion of his probationary period.  The department reviewed the case but decided that the decision to refuse the application should stand on the basis that a minimum commitment to work 20 hours each week for one year must be offered to qualify for the scheme.  It accepted that under the terms of his new contract he now met the requirements of the scheme but that it was a condition of the scheme that these should be complied with at the commencement of employment. Further representations were made on his behalf by a public representative but the decision was not revised.

In the course of my examination of the complaint I obtained the department's file.  From my examination I had a concern that the complainant, and other persons applying for the BTWA, who were subject to serving a probationary period at the outset of their contract of employment, could be disadvantaged by the manner in which such periods of employment were being treated by the department.

With this in mind, I asked the complainant for information from his employer setting out the actual hours of employment he completed with them, from the date on which he commenced employment.  The statement was provided and showed that he worked over 20 hours every week, with the exception of one particular week, from the date on which he started employment up to the date on which he was made permanent in his post.  On the basis of this information, I wrote to the department to ascertain whether this new information provided it with sufficient latitude to revise the decision to refuse the man a BTWA.

The department examined my submission and as a result, it again reviewed the man's application and decided that he was entitled to receive the BTWA for a three-year period, from the date on which his employment was made permanent.  The department said that where a claim is disallowed on the basis that it is not a sustainable job, BTWA can be allowed subsequently, if the job materialises into a permanent post.  The man received arrears in excess of  €8,600.

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