First of all, I would like to congratulate the Minister and the Minister of State on their appointments. I am not sure whether to offer condolences or congratulations. They have an extremely difficult task ahead. This Department has a total budget of £1,780 million. It is the largest Estimate in the Book of Estimates. They are faced with an extremely difficult job in trying to protect the living standards of the needy and the deprived.
There are some anomalies that need to be corrected. When discussing the desirability of expenditure on social welfare the basic problem is the demographic structure of the country. There is a predominance of people over 66 and children under 16. The burden of taxation must obviously be immense because our dependency ratio is the highest in Europe. Over the coming years the Government will have an enormous problem in trying to protect living standards. I would urge that there should be some way at EEC level to enable a review of expenditure through the European Social Fund in such a way as to take account of those governments who have an inability in regard to problems in social welfare budgets. At the moment there is no structure other than training and youth employment and other regional aids and European funds do not move into this area at all. That situation should be reviewed and changed forthwith. We must at all times in relation to such a large amount of money look for value for money. In terms of unemployment benefit and unemployment assistance, which total £473 million—our minimum estimate this year—ways must be found of getting better value for money. Whatever the increase, whether 12 per cent after a pause as in this case or the usual 1 April increase, there must be some formal link between pay increases negotiated in either a national pay agreement or a national understanding so that those at work can see direct parity between the percentage increases for industrial earnings and the percentage increases for social welfare, especially for those who are out of work, who in some cases are available for work but unable to find it and in other cases are sick and incapable of work. Last year there was a 25 per cent social welfare increase and a 12 per cent increase in pay. This whole area must be looked at. All the social partners are at present having talks with the Government, the unions who have a special interest in this area, and the employers, and some formalised relationship should be brought about between increases in pay and increases in social welfare.
I would like to turn to the estimated 193,000 people who will draw either unemployment assistance or unemployment benefit. An extra £31 million has been provided in this respect for this year. It is difficult to predict accurately the outturn but unfortunately one could not say under all predictions at present that this estimate is anything other than conservative. This vast amount of money, £473 million, a quarter of the total budget for social welfare, raises some very fundamental questions about expenditure of this nature. When I was Fine Gael spokesman for employment creation I felt that there was a very important need to review this total expenditure.
That can be done in various ways through direct job creation by the State. First we could say to those on unemployment assistance that for six months' work we could pay them at the rate of benefit, and in that way we would get some return for our money and those participating would get some job satisfaction. Another way would be for someone on unemployment assistance with only a wife and no children drawing £50.50 or someone with five or six children drawing £74 per week would do a certain number of hours' work per week on two or three days, thus overcoming his frustration and getting some fulfilment rather than existing as at present where there is no return from the State and the result is vandalism, frustration and depression among people who have no hope of a job.
I would envisage the Department of Social Welfare having discussions with local authorities and other agencies to bring about in some way flexibility of funds between different State departments. I know of one local authority who within the last 18 months let off 30 men and the cost to the State was more by virtue of the entitlements when they were unemployed than it was to keep them in their jobs. That is not value for money and in some ways it is economic lunacy. The Government must make a determined effort to review the fundamental change that I am speaking about.
I envisage it being done at, say, Enniscorthy employment exchange or any exchange where unemployment would go over, say, 15 per cent of the work force there. You would invoke an emergency scheme there whereby you would set up a local committee made up of employers, unions and district engineers of the local authority who would combine. The people would be available for work if offered jobs after two months in the scheme. It could be a successful recruiting ground. It would mean tangible environmental improvements in each locality.
In regard to individual cases, some people in my constituency wished to set up a bicycle repair shop. Because they were means-tested they found it very difficult to draw their social assistance and still get the type of money they needed to set up this business. The Department of Social Welfare and all other Departments must be anxious at all times to attain a flexibility that will ensure that those who want to work and employ themselves on self-help will be encouraged fully. Conversely if people on full-time social welfare unemployment benefit assistance put a proposal to the Department that they work three days a week and spend the other two days setting up whatever small enterprises they want, they should not be inhibited in any way from collecting their payments and going ahead and getting some opportunity of sustaining their own livelihood.
I wish to turn now to short-time working. In my constituency in my home town of Enniscorthy three factories are on three-day short-time working and they will be affected severely by the cutbacks in this budget. Sections 5, 6 and 7 of the Bill are relevant to this. I would like to give an example of the effects of the present cuts and the anomalies and the disincentive to work at present. A married man with no children working a five-day or forty-hour week in a bacon factory I have in mind, which is at present on a three-day week, would take home £117.71 per week pay. He would pay PAYE £13.50 and his employee contribution only on PRSI would be £10.64. His gross pay would be £141.85 a week and his take-home pay £117.71 a week. At present what is the situation on short-time working? He works 26 hours, that is three days a week, and his gross pay from the company is £92 a week. His tax out of this is £1.25 a week and his PRSI deduction, employee's only again, is £6.95 per week. This comes to total deductions of over £8 per week. His total social welfare at present for three day's signing is £41.08. Including pay-related this comes to a total of £124.93 a week. I ask anyone in this House how he can justify someone with no children working a five-day week, taking all tax allowances into account, taking home £117 while under the present situation he gets £7 more for working two days fewer.
All sides of the House prior to this election recognised this problem. How can we be less than hypocritical when we make speeches about absenteeism, man-days lost, work ethic and incentive to work if at the same time a man married with no children is £7 a week better off for not going to work? Therefore, I welcome the change whereby workers can draw three days' or 26 hours' earnings in the bacon factory and two days only on social welfare. This would have the net effect of reducing the cut only in terms of the days lost. It would reduce the social welfare payment to £17.38 a week. In other words, they would get £27.38 per week which is a loss of £13.69, an acceptable level whereby he would have an incentive to go back to a five-day week. The pay-related cuts, especially after 147 days, will have the effect of reducing his take-home pay to £101.23. That is now a cut of £23 or, if he is working a full five-day week, £16 a week.
I urge all concerned to ensure that there is a full and proper incentive to work. It is only logical and reasonable that those on a five-day week should be better off than those on three days. If they are making PRSI contributions it is only right that some, at least, of the pay-related benefit should be retained. Perhaps the matter could be reviewed. When the effects are felt, it will be obvious that an improvement in the situation of the five-day week worker will prove an incentive to work. The extent of the abuse has been pointed out. Last year, industrial earnings increased by approximately 12 per cent and social welfare payments by 25 per cent. People were paying PRSI and when out of work they were collecting pay-related benefits. Instead of paying PAYE, they were getting a tax-free allowance to top up their payments. No Member could justify that situation. It is recognised in the Opposition party documentThe Way Forward that that piecemeal approach created such inequity that it had to be stopped. The approach on the five-day week should be rigid, but flexible on pay-related benefit.
I welcome specifically the budget allocation direct to the Department of £½ million for voluntary bodies. Health boards have a total budgetary constraint imposed on them for the year and partnership projects between voluntary and statutory bodies tend first to feel the cold breeze. We must examine the Government attitude in every area to the role of voluntary bodies. The relationship between the Department, the Minister and various voluntary bodies should be formalised to the extent that on a project there would be a rigid pound for pound arrangement — every pound collected through local voluntary contribution would be matched by a pound from the Department, or some other ratio to give an incentive to so many communities with so much goodwill and expertise in raising money.
In Wexford, we have a family centre run by the ISPCC which is caught in the classical squeeze but, through the intervention of the Minister it is now possible that the needed £36,000 will be forthcoming. The health board, with its own social work structure for deprived families and young children, is not the best source. There should be a formal relationship between the Department and the ISPCC and full assistance given. I agree with the Minister that to initiate and aid projects rather than groups is preferable. Too much money in every spending Department is consumed by administration. The more we can channel into projects rather than administration, the better.
Various anomalies exist under the present social welfare code. This is the first social welfare Bill on which I have spoken and my first opportunity to speak in the House on these matters other than by parliamentary questions. I will deal with these matters concisely and in detail. In regard to deserted wife's benefits and allowances I know of genuine cases of married women with three, four or five children being beaten up by their husbands, beaten out of the house and openly degraded by the husbands bringing other women into the house, ensuring that the wife can do nothing else but leave the house. If they return to the family home it will not be long before they have to leave it again. These women have to find refuge, with their children, with in-laws who will not accept them for very long, or live in mobile homes. They apply for whatever assistance is available. They are, in real terms, deserted wives because their husbands have given them no other option. What do we find? They are refused the deserted wife's benefit or allowance, regardless of their contributions, simply because they left their husbands of their own volition. This is inequitable. There is need for a new scheme of a separated woman's allowance or a single parent's allowance for these people. When the deciding and appeals officers come to the family home for evidence the husband's deliberately do all they possible can to stop their wives and children from having a reasonable livelihood. These women are not favourably considered for housing and are in desperate circumstances. They are as deprived as anyone under the social welfare code. Their only recourse is to supplementary welfare assistance. They are degraded and condemned by society and we need urgent review in this area.
Another anomaly relates to widowers. There are many well organised pressure groups in our society, no doubt doing great work to ease the plight of widows and I will come to that aspect later. Young widowers with two or three small children, whether at work or unemployed, receive no allowance for them. The State gives no recognition to the fact that nine times out of ten the widower must employ a housekeeper or babysitter to look after his children. Some discretionary payment must be made through unemployment assistance when these widowers are unemployed. They should not have to sign for work because they are not really available to work, not being able to afford to pay somebody to mind the children. They are engaged full-time in minding the children. Widows get 10 or 12 per cent more, but because these people are male they are discriminated against. That is inequitable and anomalous.
Another small anomaly which would not cost much to cure relates to the free telephone rental allowance. A clause in the legislation says that in order to obtain the free rental allowance you have to be living with another person who is so permanently incapacitated that he or she needs constant care and attention. There is an example in my constituency of a totally iniquitous case in relation to this clause. A man with muscular dystrophy is in a wheelchair. He is married, with three children and they have a phone which is needed. They applied for a free telephone rental allowance and were refused. I made further representations on their behalf, but they were refused again. This was because the woman of the house did not require constant care and attention. If they were both incapacitated, they could not look after each other. Quite clearly, from the results of representations to the Department, the only way they would receive this allowance would be for both to be incapacitated. That is both anomalous and illogical. A change in that clause should be considered.
In relation to the free travel pass, anyone on the disabled person's maintenance allowance who is totally mentally and physically handicapped and 15 or 16 years of age is entitled to a free travel pass, and rightly so. The difficulty, however, is that families dependent on social welfare allowance who have such a child cannot put this child on the train for Dublin or Cork simply because he or she could not look after himself or herself. It seems only reasonable that if there is a free travel card issued to such a person it would be ensured simultaneously that somebody would accompany them because their card is rendered totally meaningless unless they have somebody to accompany them. Therefore I might suggest that the present blue card be replaced by a red one for people who are physically or mentally handicapped and which would allow one person to accompany them. It would entail a very small cost and it would be only reasonable and logical to do so.
One other area which might cost money but is worthy of consideration — and in respect of which there have been repeated representations by their association — is that of all social welfare widows pensions. They should be entitled to a free travel pass. I do not think the cost would be exorbitant. Quite often such people are lonely and they like to visit their families who have obtained employment far away from their original residences. Regardless of the fact that they could be under 66, these people should be given a free travel pass.
There is one final area in respect of which I should like some clarification. When someone makes a claim for disability benefit their contributions record governs that claim. Very often I come across the case of someone who had been working for, say, two years in a factory, became unemployed, signed on, used up their 12 to 18 months stamps and then went on unemployment assistance for one, two or three years. Let us suppose such a person is 62 or 63 years of age. Very often claimants for disability benefit —people who are genuine because they cannot work and are genuinely sick— because they do not have any contributions but only credits, are sent around in a circle trying to obtain that benefit. I can never ascertain from the Department whether or not they are entitled to disability benefit. Perhaps someone some time could clarify that for me.
With a budget of £180 million we can readily see the reason there were no increases granted in children's allowances this year. The present payment at a rate of £11.25 represents a substantial increase on the rate of two or three years ago. I cannot understand why people who have an income in excess of that to qualify for a medical card — an easy way of establishing a cut-off point — should get children's allowance payments. In these hard times we could effect a straightforward saving there. I do not think we can retain a situation in which every child in the State is entitled to children's allowance payments.
In regard to the prescribed relative allowance, one must remember that the average weekly cost of geriatric care in State institutions, especially in my constituency, is £196. I will never understand why we cannot encourage family geriatric care rather than State geriatric care. I would suggest that a number of changes be made in the present system of prescribed relative allowances. First, there should be a clause inserted which would mean that an application is refused if any person other than the prescribed relative is over 18 years of age and resides in the House. I came across an instance recently of a young girl who was working in a paper shop, whose aunt was seriously ill and staying with them at home. That girl was earning £45 a week. She gave up her job because her brother, who is 19 years of age and working, does not give a damn about the aunt in question. There was nobody to care for her other than the girl in question, so she gave up her job, went home to mind the aunt, and was refused the prescribed relative allowance on the basis that her brother who was 19 years of age was living with them. The brother was contributing nothing to the household income. Eventually the aunt went into geriatric care at a cost of £196 per week.
That situation defies logic and does not represent prudent value for money. I would suggest that in a genuine case especially where someone has given up a job to look after a relative, where there is any young person over 18 years of age in the house not contributing to the household income, that situation should be reviewed. I know the South Eastern Health Board, whatever about the others, have stopped payments of home help; it has been abolished for all practical purposes. The prescribed relative allowance must be reviewed. It must be ensured that any money that would have been available for home help could be combined with the prescribed relative allowance, thereby effecting a saving and keeping people out of State geriatric care.
I should like to make some points in relation to the administration of the Department of Social Welfare. Every Member of this House is a full-time social welfare officer and will have a certain amount of experience of the administration of the Department. Of its very nature this Department must deal with applications as a matter of urgency. They deal with bread and butter issues, the question of whether or not somebody has money for the week. These are not like other problems that can be tackled in due course — there is a degree of urgency. Therefore we must seek maximum efficiency in all areas.
The problems encountered at present are many. The whole procedure of deciding officers, appeals officers and so on, especially in cases of unemployment assistance, is extremely protracted. In the last 12 months I have noticed that in cases where a deciding officer decides, in his or her wisdom, that Mr. and Mrs. X have an income from fishing, or farming, or an income from some self-employed activity, or are working with some relation and are assessed to have an income on their qualification certificate of which they know nothing and which they cannot understand, under present procedures the reversal of that departmental decision takes three to four months. There is no saving effected in such cases on the part of the Department because naturally the applicant must live in the interim and cannot live on £5 or £7 a week or even £15 a week unemployment assistance for themselves and family. They go to their community welfare officer and get paid, so there is no saving to the State. This only initiates a whole cycle of paper-pushing between the local social welfare officer, the appeals officer, the deciding officer, the Department and the supplementary welfare officer. When that appeal is decided finally, any rebate due to the social welfare people is paid. I should like to see that matter investigated.
I am glad to report that the problems in relation to the telephones in Store Street and in other central Departments have been greatly alleviated. The position there has improved enormously. However I cannot understand — and this does not apply to the Department of Social Welfare alone — why when individual members of the public write to a Department, if they do not do so by registered post, half of their letters are not replied to within one to two months. I do not have any firm statistics in this regard, but many people tell me they write to Departments and hear nothing. I would not be in this House very long had I the same attitude to my correspondents, nor indeed would any other Deputy. That whole area needs to be sharpened up so that we Deputies will not continue to be social welfare officers.
We must be constructive in this respect. I might make a number of suggestions by way of alleviating these problems. Firstly, there is need, especially in the country, to have one social welfare officer per county. This would take a couple of years to implement but could be done. Certainly in my constituency there are massive waiting lists in every Department, waiting lists for transfers from Dublin to Wexford, to Gorey, to Enniscorthy, to Arklow, Wicklow, wherever. There would be no extra cost in terms of employment to decentralise these offices so that in one centre of a county or large area a person could submit a disability certificate or could apply for an invalidity pension application form — that is a long procedure because application forms are not available at present. In all such instances one could have only humane compassion. There could be old age couples of whom one spouse dies and the book has to be returned. They have the fear that they will not get paid for a particular week. The Department have a sensitive attitude towards it, but still such couples have fear. Decentralisation would alleviate all that because, like a local tax office, their problems could be solved there and then.
In regard to the whole supplementary assistance system, I have the utmost regard for the community welfare officers because they are the most compassionate and humane people in the entire Department. They use their discretion fairly and properly. They would have my entire support, but if someone is waiting for payment of disability benefit, having submitted the required certificates, I cannot understand why he should have to go to an official employed by the health board. Surely there is a need to integrate the community welfare officers into the Department of Social Welfare so that any deductions that have to be made out of later payments, delayed payments that will come to the applicants because they are entitled to them, could be expedited. The disabled person's maintenance allowance should also be paid by the Department of Social Welfare. They adjudicate in other payments in which a medical interpretation is involved. This could only do good because it would harmonise the entire work of the Department.
If there is need at all for an ombudsman it exists in the Department of Social Welfare. It might not be necessary to employ a State ombudsman but there could be one or two people who could adjudicate at ministerial level on long term grievances in relation to difficulties with that Department. It could be, possibly, that the Department would not be wrong in all instances, but there would be this final recourse to justice that would be over and above the heads of TDs and Ministers. It could be established at a small cost. It would give greater public confidence in terms of accountability.
I should also like to see integration of employment exchanges, which are, as we know, unemployment exchanges, with the National Manpower Service. I suggest there is agreement across the House on this. It would reduce the number of nixers and would make employment exchanges literally that.
In relation to PLV means testing, following the High Court decision and the abolition of the national system, although it does not affect my county or constitutency, I suggest that the same problem that the Department of Social Welfare will have will be experienced by the Revenue Commissioners. They will have to assess somebody who formerly had £14.30 PLV, or a person with £2.50. All are now liable to tax although most of them are entitled to farmers' dole or unemployment assistance. Whatever two-page simplified document comes out after discussions with the Revenue Commissioners could be used to assess unemployment assistance claims. Automatically and simultaneously that would integrate the two, it would halve the bureaucracy and eliminate the duplication, and the work could be done simply and effectively.
There has been much discussion of late about the witholding of PRSI and PAYE. Deputy Power said that people who withhold such payments should be prosecuted. I would take a stand here that would be different from that of even the Minister and the majority of the House. I know in my home town of three companies and if they had to pay on the dot all outstanding contributions of VAT, PAYE and PRSI over the last financial year, I have no doubt that at least 186 jobs would be gone overnight, and the State is only a preferential creditor.
The Government should tread very catiously here. I do not condone abuse. I welcome sections 17 to 25 of the Bill, which will provide for penalties. But I have always believed that penalties should fit the crime. I have no time for companies that are deliberately making money out of the Government by withholding payments, but in the financial year up to December last how much of the £25 million PRSI outstanding from 11,000 employers would directly cause liquidations? The Minister says that asking to tread warily in this matter is a facile argument. So is the reverse. Recent IDA reports compared the position, as between foreign and indigenous industries. The average cost of a job is somewhere between £7,700 and £14,500. We can see the real cost and we must look at it as positive protection towards employment. There should be an official happy medium in the Department whereby they would assess the liquidity position, the cash flow situation and thereafter determine, but it should not be left to a personality clash between a Revenue Commissioner and an employer as to whether a number of jobs should be lost. In ultimate cost terms of unemployment benefit, pay-related benefit and all the additional costs in terms of unemployment compensation and the status of the State as preferential creditor, there is a percentage advantage in withholding and arranging payment in such a way that would relieve the cash flow of a company.
I feel very strongly about the free fuel system. In trying to make commonsense of all these schemes, I cannot understand the difference between the urban and the rural schemes. On top of Shannon Hill in Enniscorthy people were entitled to free fuel because they were in the urban area, but people ten yards across the road were not entitled to it because they were on the wrong side of the boundary. I cannot understand why that should be. There is an urgent need to equate the free fuel system to ensure that urban and rural people will be treated alike. In that scheme there is a list of categories, including contributory pensioners, non-contributory pensioners, widow pensioners and invalidity pensioners who are entitled to free fuel.
I should like to give the House an example of how I see it as being totally unfair. Let us take a single man in receipt of unemployment assistance and a single man with a non-contributory old age pension. The non-contributory old age pensioner gets £34.45 at the maximum rate. A single man on unemployment assistance living alone gets £25.45 a week. He is worse off by £9 a week. Yet he is alleged to be less entitled to free fuel than the man who is £9 better off. I cannot understand that. A married man with no children gets unemployment assistance of £50.50 a week and a pensioner in the same circumstances gets £68.90 a week, a difference of £18. The person who is better off by £18 is deemed to be more entitled to free fuel. People on unemployment assistance who have no other livelihood should be entitled to free fuel. Perhaps it would be better if everyone who had a medical card was entitled to free fuel. If that is too expensive I would encourage the introduction of a means test or some discretionary payment by the local community welfare officer. I am not blaming the Government for this problem. It is a technocratic inequity which should be dealt with.
In the area of the family income supplement £5 million is promised. In overall terms I support the family income supplement. I fully accept the sincerity behind this move; I accept that there is a poverty trap; but this sounds to me like bureaucracy gone mad. In everything they take in revenue and spend, the Government control about 60p in every £1 circulating in this economy. We are now moving into the area where the Government decide that a particular income is too low and should be supplemented and subsidised. That is very valid in itself and I totally agree with that sentiment. It could be interpreted by a neutral observer as the Government underwriting the inability of certain market sectors to pay a reasonable wage.
If we look at this carefully, there are immense implications in it. Under a national pay agreement employers of agricultural labourers or low paid groups like hotel workers could say to the Government: "We are having hard times this year. With your family income supplement you should give them the increase. We cannot give it to them because there would be redundancies." The precedents involved here are very important. We would want to tread very carefully in relation to actually increasing lower paid workers' incomes. That is moving into an area where the Government are discouraging economic activity.
I do not want to be misinterpreted. I fully accept the sincerity behind the move and I fully realise the poverty trap these people are in. I suggest that with different Departments charging for services, there should be some way of giving these people a tangible benefit. Perhaps a certificate could be issued to them and they could be given a rebate against these charges, or perhaps more medical cards could be issued. I would not be in favour of giving them an extra pay packet because that is getting into a very difficult area in which we would have to consider who would get it and how it would affect national pay bargaining. In economic terms it does not make sense that the State should decide what is a desirable wage. I am not speaking about national wage agreements. I mean national minimum wage rates.
I should like to put on record a constituency matter to which I know the Minister of State is sympathetic. I refer to the employment exchange in Enniscorthy, County Wexford. Including the environs and district of Enniscorthy, 17,000 people approximately are signing on there. The office is antiquated. It has been in use for many years. There are queues hundreds of yards long. There is no shelter. Different types of assistance have to be collected in a two-hour session and there is no way queueing can be avoided. The office is in a very public place and this is degrading for those who pass and those who collect. An adjacent shop owner has taken out an injunction. He cannot carry on his business because of the crowds queueing outside. This is a real problem. The administrators in that office are doing their utmost, as I am, to try to find an alternative site. I do not criticise anyone. If it is possible to find an alternative site in the locality, I hope the Department will consent to go a little over the statutory payment per office per year and meet a deputation to try to finalise the arrangements. This is one of the most serious social welfare problems in my home town.
If this allocation of £1,780 million were for education or for the environment or any area other than social welfare, every commentator in the country would be saying it was a public scandal. We must realise this is the biggest spending Department. We must also realise there are limits to our resources. I have mentioned reservations about small aspects of the social welfare code to which I should like favourable consideration to be given. The difficulty we face economically — and this is the tragedy of our whole economic situation — is that no one owes us any guaranteed increase. We can produce it only through external trade. On that realistic note I support and welcome the Bill.