Social welfare benefits are too high in Ireland and need to be revised to encourage people back to work, the International Monetary Fund (IMF) has said.
The organisation warned that dole payments are high by international standards and responsible for “low exit rates” from the Live Register.
As the IMF forecast the economy to grow by just 0.5 per cent this year, it said that certain welfare payments should be means-tested to avoid long-term unemployment.
The organisation - one of three bodies overseeing Ireland’s €85 billion bailout - suggested people out of work should be willing to take jobs regardless of suitability.
“It is also important to ensure that jobseekers are willing and able to fill jobs when they become available,” it said.
IMF Ireland mission chief Craig Beaumont suggested eligibility for child benefits should be narrowed, targeting only families that are “relatively less well-off”.
He described child benefits as an expensive part of the social welfare budget and suggested limiting the number of medical cards issued.
Mr Beaumont pointed out that as people are living longer, the Government will otherwise be forced to hand out more and more of the cards.
“The cost of those medical cards will keep on rising. One way you can contain that is to look to some means-testing on eligibility,” said Mr Beaumont.
Those whose only income is a means tested social welfare allowance currently qualify for a medical card. Individuals are also entitled to a card if the income or means of themselves and their spouse or partner is below the HSE's income guidelines. Means includes any income, property (but not the family home), as well as investments and savings.
The automatic entitlement to a medical card on reaching the age of 70 was ended on January 1st 2009.
The fund repeated its call for further support from Europe for Ireland as the country moves to re-enter the debt markets.
Speaking at the press conference, deputy director of the IMF’s European department Ajai Chopra described the euro group summit statement of June 29, which committed to a reduction of Ireland’s debt burden, as “a welcome path forward”.
Additional reporting: PA