First of all, the data is from the 2004/05 Household Budget Survey, at a time when we had practically full employment in Ireland. While the ‘incentives’ might seem to have made moving from welfare to work unattractive, the fact was that practically everyone was actually working and many people left welfare to take up employment. This somewhat deflates the central argument of the paper.
Dr. Nat O’Connor of TASC has his say on the ESRI working paper on welfare and employment but the quote above pretty much sums up the ability of modern right-wing economics to ignore reality in favour of mathematical models of reality.
The withdrawn ESRI paper is available here as a PDF.