A NEW report warns that the new "back-to-work" Social Welfare benefits may encourage some employers to continue to offer low rates of pay, particularly to unskilled workers.

In its third report issued yesterday, the joint Oireachtas committees on small business and services states that its members have "some reservations" about the merits of the recently-introduced scheme which aims to encourage the long-term unemployed to take up jobs.

The Small Firms Association, however, in a statement said many small companies would be "outraged" at the suggestion that low pay was the main reason why the long-term unemployed found it difficult to take up work.