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ITIA concerned over start up payments

The Irish Tyre Industry Association (ITIA) has voiced its concerns about revelations that the Department of Social Protection is helping to set up social welfare recipients in business in direct competition to established tyre retailers.

TyreTrade.ie revealed last week that the Department of Social Protection is purchasing workshop equipment (workshops lifts, compressors, tyre changers, wheel balancers etc.), for social welfare recipients (all non-nationals) to help set them up in business in direct competition to exisiting businesses in the sector.

A number of reputable workshop equipment suppliers that do not wish to be named have confirmed to TyreTrade.ie that they have been paid by the Department of Social Protection for equipment that was purchased on behalf social welfare recipients, all of whom were non nationals.
It has also been alleged though not confirmed, that some of the equipment which has been purchased with government funds, has been shipped overseas.

ITIA President Kevin Farell commented: “The ITIA feels it is totally unacceptable for the government to be funding new business start ups in an already constricted market.  We wrote to the Minister last year to question the criteria they use in assessing the affect these starts ups have on established and legitimate businesses.”

He continued: “As it stands reputable businesses are being pushed to the wall by the black economy and the government are potentially aggravating this problem by overcrowding the market with unsustainable new tyre outlets.  The problem of unrestricted entry into our industry also raises the safety concern that these new traders can sell and fit tyres without any prior expertise or training.”

In a statement issued to TyreTrade.ie the Department confirmed said: “The Department operates two schemes to assist people on social welfare who wish to become self-employed; namely the Short Term Enterprise Allowance (STEA) and the Back to Work Enterprise Allowance (BTWEA).

The Short Term Enterprise Allowance provides immediate access to support where people who have lost their jobs and qualify for Jobseeker’s Benefit wish to set up a business. Payment under the scheme is at the same rate and for the same duration as their entitlement to Jobseeker’s Benefit.

The Back to Work Enterprise Allowance is designed to provide a monetary incentive for people who are dependent on social welfare payments to develop a business while allowing them to retain a reducing proportion of their qualifying social welfare payment, plus secondary benefits, over two years.

To qualify for these schemes a person must set up a business that has been approved by a Local Integrated Development Company or by a facilitator of the Department of Social Protection. The business venture must be deemed to be viable and sustainable and must not involve displacement of existing business in the same industry. Each application is decided on its merits within the criteria set down for the scheme. In assessing viability, cognisance is taken of the demand for and supply of particular services at local level.

The Department provides further support to people who qualify for these schemes through the Technical Assistance and Training Scheme (TATS) under which a participant may qualify for a grant up to a maximum of €1,000 towards certain business start-up expenses. These include training (in areas such as book-keeping/accounts, preparation of business plans, marketing, literacy and computer training) and the purchase of small items of equipment. The participant must make a minimum contribution of 25% towards the total cost of equipment or other start up business costs supported by TATs.”