I am disappointed that the Chair has ruled out of order my amendments Nos. 5, 7, 9, 11, 13, 14, 16, 18, 20, 22, 24, 28 and 29 as they involved a potential charge on the revenue. I respect the ruling and appreciate that Standing Orders preclude the Chair from allowing these amendments. However, it is about time we changed Standing Orders. If one every wishes to question things relating to social welfare or the Finance Bill, if an amendment even suggests increased charges on the Exchequer it is ruled out of order. In relation to amendments Nos. 5, 7, 9, 11, 13, 14, 16, 18, 20 and 22 had the actual percentage increase been presented honestly, giving the true percentage increases from April rather than——
Social Welfare Bill, 1986: Committee Stage.
Question proposed: "That section 1 stand part of the Bill".
I do not want to interrupt the Deputy but he may not be aware that he may raise these matters on the section. Only the amendments to the Bill have been ruled out of order. The Deputy is quite in order in suggesting that something should be in the Bill instead of something else. The Deputy will find opportunities as we go along to present his point.
Question put and agreed to.
SECTION 2.
Amendments Nos. 1 to 13, inclusive, not moved.
Question proposed: "That section 2 stand part of the Bill."
I regret that every single amendment tabled in my name and in the name of Deputy Mac Giolla has been ruled out of order on the basis that they would involved a charge on the Exchequer. It is difficult to comprehend this practice of the House. This section relates to the dates on which payments will be made in relation to unemployment benefit, the deserted wife's allowance and so on, and it relates to the elimination of lower rates of payment to women. The date fixed in May for the implementation of that reform is wrong. Since 1983 the dates for the payment of increases given in the budget have been delayed later each year so that now increases are applied in the third week of July. This date has moved from April to the third week in July. Last year it was the second week in July and the year before it was the first week in July.
This section eliminates the lower rates paid to women, starting from May. Apart from cost, there is no reason why that could not have been done in April. Will the Minister explain where is the money which was set aside in last year's budget which would give equal treatment to women in social welfare payments? This equal treatment was to have been introduced last year. A part of it is now being introduced in this Bill from May. The Government seem to be trying to pull the wool over our eyes in this matter. The Minister will say that it would cost more to introduce this equal treatment in April rather than in May, but can he say where is the money which was set aside last year under the equality legislation for women? For what has that money been used? Even though our amendments have been ruled out of order I would urge the Minister to accept our amendments Nos. 1, 2, 3, 4, 6, 7, 8, 9, 10 and 12.
I am disappointed that a large number of amendments which I tabled to many sections of the Bill have been ruled out of order because they involve a charge on the Exchequer. Had the actual increases of 4 per cent for social welfare payments and 5 per cent for long term unemployment payments been granted from 1 April the Government could honestly say that they had done as the Minister for Finance in his budget speech said, that they kept payments in line with inflation. Since there is a precedent set by this Government to delay increases of payments each year until July, the percentage increases are only operative for nine months of the year, so that the 4 per cent increase, which is apparent rather than real, is effectively little more than 3.7 per cent and the 5 per cent is little more than 3.4 per cent. It is estimated that inflation for the year will be something in the region of 4.5 per cent so it is obvious that social welfare recipients are being led astray by being given the impression that they are getting increases which compare favourably with the inflation rate. I would appreciate the Minister's observations on that.
In reply to the point made by Deputy De Rossa about the whereabouts of the money provided last year for the implementation of equal treatment, as the Deputy is aware, only a few months ago I had to bring in a Supplementary Estimate to make provision for an additional £50 million to meet the total outgoings of the Department last year because the numbers of those claiming unemployment benefit and assistance were up and also to provide for the Christmas bonus. All that money was used to pay benefits in 1985.
Section 2 provides, first, for the implementation of the first phase of the equal treatment provisions with effect from mid May. Secondly, it provides for the abolition of reduced rates of benefit for persons under 18 years of age. Thirdly, it provides for the increases of 4 per cent in the weekly personal and adult dependent rates for social insurance benefits and occupational injury benefits from the third week in July. About 390,000 claimants and their 110,000 adult dependants will benefit from the increases at a cost of over £20 million.
Subsection (1) is designed to implement the first phase of the equal treatment provisions for men and women in matters of social security with effect from mid May 1986. It was not possible hitherto to introduce the equal treatment provisions because one of the staff unions concerned refused to implement the provisions pending agreement on certain staffing issues, as the Minister said during the Second Stage debate. However agreement has now been reached with the staff union in question to implement on a phased basis from mid May next those measures which do not require additional staffing. These are the abolition of reduced rates of benefit for married women which is provided for in subsection (1) and Schedule A of the Bill and the extension of the duration of unemployment benefit from 312 to 390 days for such women. This will be effected by regulations which will be made separately. It is expected that about 46,000 married women in total will benefit from these increases at a cost in 1986 of £10.5 million. Some 2,300 women will benefit from the extended duration of unemployment benefit.
Hitherto reduced rates of benefit applied to married women and persons under the age of 18 years without dependants. The Bill provides for the abolition of the reduced rates for this category from mid May 1986. In view of the fact that persons become insurable at age 16 and are liable for the same rates of PRSI as other contributors, it is considered that they should also be entitled to the same levels of benefit while sick and unemployed. Some 1,000 such persons will benefit from this increase. The abolition of this rate involves an amendment to the schedule of rates. There is a consequential amendment provided in section 21 for occupational injury benefit purposes. In future, persons under 18 years of age will receive the same rate of benefit as all other persons.
The level of increases has been mentioned by Deputy McCarthy. Subsection (2) provides for increases in the weekly personal and adult dependent rates of social insurance and occupational injury benefits. The new rates of payment are set out in Schedule B. These levels of increases are designed to ensure that the Government's commitment to protect the living standards of those dependent on social welfare will again be honoured this year. If one looks back at the past three budgets of this Government, one will see that the level of increases given has exceeded the following year's increase in the cost of living and this gives real increases to recipients.
As the Minister pointed out during the Second Stage debate, since 1983 short term benefits have been increased by 30 per cent, long term payments by 33 per cent and the long term unemployed received the highest increase of all, 40 per cent. In the period 1983 to 1987 the increase in the cost of living is expected to be of the order of 23 per cent and the indicators are that it will be reduced to its lowest level for many years by the end of 1986.
The level of increases provided by the Government have been compared with those given in the years 1981 and 1982. What must be taken into account when making comparisons between different years is the level of inflation during those years. Rates of increase in excess of 20 per cent are all very well and are necessary when inflation is also at that level, but comparisons between years are valid only when they are put into proper perspective. Since this Government took office they have succeeded in reducing the level of inflation to an expected rate of around 4 per cent for this year. There are even recent predictions that the yearto-year rate of inflation could be between zero and 1 per cent by the year end. With this drop in inflation the rate of increase which is necessary to protect the real value of such payments is also reduced.
When one compares the rates of social welfare payments in 1983 with those which will apply from July next and with the rate of inflation from then until mid 1987, it emerges that there will be real increases of around 5.5 per cent for short term recipients, that is, disability and unemployment beneficiaries, about 80 per cent for the long term recipients, that is, pensioners, and over 13 per cent for the long term unemployed. This can only be regarded as a significant improvement for people dependent on social welfare and represents a considerable achievement for the Government who are faced with the task of bringing order to the public finances.
The effective date of the increase has also been mentioned by Deputies opposite. The increases will come into effect from the third week in July 1986. This has been the practice since 1983. Naturally the Government would have preferred to bring in these increases from an earlier date but this would have involved an additional cost. The estimated cost in 1986 of the increases in both social insurance and social assistance will be £35 million. The extra cost of bringing in these increases from April 1986 would be an extra £22 million; to have brought the 1985 increases into effect in April of that year would have cost an extra £32 million, and in 1984 it would have cost an extra £34 million. In 1983 if increases had come into effect from April the additional cost would have been £39 million. These are very significant figures.
In deciding on the increases for social welfare in the budget the Government had to be mindful of the overall situation in the public finances for 1986. At the end of the day the Government decided to apply the available resources in the most equitable and efficient way possible, in the best interest of those concerned. To provide the 1986 increase from April would have meant intolerable cutbacks in other areas of social welfare. The resources available for increases in social welfare were extremely limited this year. Given this limitation, the choice was either to give a lower increase over a longer period of time or a higher weekly percentage increase from a slightly later date. The second option was chosen which is clearly more to the advantage of recipients over the 1986-87 year as a whole and, indeed, in subsequent years. If a lower percentage increase was given from an earlier date, involving the same overall expenditure, this would have meant that social welfare recipients would have been less well off at the end of the period and in the years ahead. This choice of higher rates increases from a later date was also in keeping with the Government's commitment to maintaining payments at least in line with prices. The increases given each year are intended to protect recipients against inflation over the following 12 months.
Since 1983 the end of June or beginning of July has become the standard time for the implementation of rate increases. The 1985 increases matched inflation fully up to the middle of 1986. The 1986 increases are expected to do the same up to mid-1987. The increases in social insurance payments will be of benefit to some 387,000 recipients and 110,000 adult dependants. Together with the social assistance payments being provided in section 3 this means that over 891,000 persons will benefit from the increases, that is 699,000 recipients and 192,000 adult dependants. It should be noted that the increases resulting from the introduction of the child benefit scheme come into effect from April, which is provided for in section 17.
I appreciate that the Minister of State is doing his best to put a good face on what is a paltry increase for the old and least well off sections of our community. I am glad he told us why these increases were put back to July, conceding that that saved the Government £22 million this year. It appears that they saved £32 million in 1985, £34 million in 1984 and £39 million in 1983, again on account of delaying the implementation of these increases until July in those years. It is clear that these enormous savings have been effected at the expenses of the less well off sections of our community.
It is quite appalling that the Government should adopt this type of fiscal policy. Some of us may have noted various aspects of the budget introduced in the United Kingdom yesterday. When one hears of the paltry increases of the order of £1 per week there, one is reminded of how Thatcherism has affected their people. Here the Government adopt a light type of fiscal policy. Indeed this Government, more than any of their predecessors, seem to be obsessed with following the British line in every way. It would appear that there is no difference at all between Garretism here and Thatcherism in England in relation to fiscal policies. One could even throw in Reaganomic's as well because the economic pattern in the United States is in serious trouble also. Our economic problems are very serious because of the policies adopted and because the Government have avoided dealing with the root causes of much of the charges on our revenue. The real basic increase the Exchequer has had to bear has been occasioned by the huge increase in numbers unemployed, which the Government have done nothing to arrest. If anything they have ensured that the unemployment queues rose almost on a monthly basis. With the exception of a paltry reduction last month — when I think there were something like 1,200 fewer unemployed——
One thousand eight hundred to be exact.
I can assure Deputy O'Brien that I did not intend to mislead the House. With due respect to the Minister of State — he is a very nice man with whom I enjoy a debate — perhaps he would tell me if the new Minister will be here today. He might let us know where she is. This is the most important Bill she will have had an opportunity of presenting to this House this year, affecting almost one million people. I do hope Committee Stage will be brought to a conclusion by an order of the House at 6 o'clock this evening. Before going any further, perhaps the Minister of State would say whether the Minister will be present to answer my questions.
Like Deputy McCarthy, I too, would be happier if the increases granted this year had been higher. But, when one takes into account those granted in Northern Ireland and the United Kingdom, one realises that we are not doing too badly. When I hear people on the opposite side of the House talk about how we look after our underprivileged I cannot but recollect that a Coalition Government came into power in the mid-seventies and Fianna Fáil had been in Government for 16 years during which time the old age pension eligibility limit was 70 years and in all that time there was not one day's reduction. However, in four years the Coalition Government reduced the eligibility age to 66 years. The Opposition talk as though nobody other than they had any interest in the underprivileged. Indeed, I can recollect the days when there was the old half-crown increase——
One can go back and remember when there was a shilling taken off and who did that?
I can assure the Deputy that I can recollect the position many years ago. Of course we would all like to see higher increases being granted but I am delighted to be able to say that old age pensioners are faring reasonably well at present. Of course we must be careful in the unemployment area because often it is contended that one is as well off unemployed as working. The Minister pointed out what was wrong. He was not ashamed to say that it was not possible to grant higher increases because of the cost. It can be contended that the Minister gave the maximum increase possible out of the limited resources available and for that I congratulate him.
In replying to some points I raised, the Minister referred to the fact that the money set aside last year for the implementation of equality legislation, or part of it, had been utilised to pay for portion of a Supplementary Estimate he introduced late last year. He made the point that portion of it had been used to pay the Christmas bonus. For quite a number of years now the practice has been to pay a Christmas bonus. Despite that, that bonus was not included in the budget or the Estimates last year and is not included in the budget or the Estimates this year. The question further arises, where is the Minister to get the money to pay the bonus this Christmas? Who is going to suffer loss in order that that payment will be made at Christmas? The Minister made the point that the bonus costs £20.4 million or £21 million, something in that area now. I did a calculation when that debate was going on in this House last year in relation to the Supplementary Estimate, and it was clear that the real cost of the bonus last year was less than the real cost of it the previous year. If the 5 per cent increase which had been applied during last year had been applied to the bonus it would have cost the Government in the region of £0.5 million more than they paid out in the Christmas bonus. A certain amount of dallamullóg is going on here. The money which was set aside to implement equality legislation in relation to women under the social welfare code has been used simply to get the Minister off the hook in regard to the Christmas bonus. I ask the Minister again, who is to be robbed this year in order to pay the Christmas bonus? Where is the money to come from? Are other allocation which have been make in this budget going to be hived off to pay for the Christmas bonus?
I seek further information from the Minister. He indicated that something like 3,000 women would benefit from the extension of the unemployment days they would be entitled to. He went on to say that people between the ages of 16 and 18 would now get the same benefit, that theirs would no longer be a reduced benefit. Will the Minister indicate how many young people will benefit as a result of this change? Will he indicate the cost that that change will involve the Minister in?
I would have thought that we would know at this stage why money was not included in the budget for the Christmas bonus. The Minister read his brief on the budget and I noted that not one penny was included in the budget for that Christmas bonus. Is the Minister prepared at this stage — rather than waiting for December when representations will be coming from all over the country asking public representatives to ask the Minister to include the Christmas bonus — to give some undertaking that the Christmas bonus will be introduced again this year? We come in here year after year with social welfare amendments adding and deleting. It is about time that the Government set about the formation of a whole new structure on social welfare. Things are becoming so confused now that I do not think the officials in the Department really understand the whole structure of social welfare.
Having said that, I ask the Minister if he will speak on social assistance between the ages of 16 and 18? That category at the moment suffer from widespread unemployment. Many of those young people are anxious to continue their education.
Deputy, social assistance is in section 3; we are on section 2 at the moment.
The Minister mentioned it a while ago in his brief.
Social assistance comes under section 3 of the Bill. We can deal with that in due course.
I will hold it until then.
In reply to Deputy De Rossa, I understand that about 1,000 young people will benefit. The cost, again roughly, would be about £50,000. The Christmas bonus which has been mentioned has never been a part of social welfare legislation or the Social Welfare Bill. It has never been provided for in any budget. Since it was first started it is always a decision made by the Government of the day in the weeks preceding Christmas. We can only assume that this matter will be considered by the Government towards the end of the year and that a decision will be made on it then in accordance with established practice in relation to that.
As I said originally in relation to figures and what has been saved by implementing the increases from July, we could argue that the Government have saved £X million by not giving a 10 per cent or 5 per cent increase. We could argue that they have saved so much by not giving it from 1 January. That argument is endless. In any respect we are talking about the most effective way of paying out available resources to the recipients. As I pointed out when I replied to this question a few minutes ago, it is far more beneficial for the recipients to get a higher increase from a later date than to get a lower increase from an earlier date because a higher increase is a higher rate and further percentage increase are, therefore, greater for having a higher base rate. A good argument could be made that instead of the Government giving, say 4 per cent from mid-July if they gave 8 per cent from mid-September or October it would give — speaking very generally — about the same amount of money this year but the recipients would have a higher base rate and future percentage increase would be much better and yield a higher rate. Therefore, the date of implementation and the rates are calculated in a way that will ensure that the rates of benefits will keep pace with price increases and inflation increases and these rates by the end of the year will exceed the rate of inflation. There is really no saving by doing this; it is just the most effective way of doing it rather than by a lower percentage increase from an earlier date.
I note that the Minister of State did not tell me whether the new Minister for Social Welfare would be here today.
I did not realise how obsessed the Deputy is about the absence of the Minister.
I am missing her; I am getting lonely.
The Minister is on official Government business, I understand, and I wish to assure the Deputy, and the House, that I will do my best to take her place today. I hope my performance will not be too big of a disappointment for the Deputy.
I can assure the Minister of State that I have the utmost respect for him and I accept that he always puts up an excellent performance. I hope the Minister has beautiful weather in Miami; I believe it is gorgeous there at the moment. I hope she enjoys her little holiday.
The Deputy knew where the Minister was?
No, my intelligence bureau told me just now. The Minister has been trying to convince us that the savings of £22 million this year, £32 million in 1985, £34 million in 1984 and £39 million in 1983, made at the expense of social welfare recipients by putting back the dates, has not affected their disposable income. That is quite ridiculous because if such huge amounts of money are saved in any year those who should have benefited from them will be worse off. Will the Minister tell the House the year the precedent of delaying the payment of the increases was established? Was it 1983? Before that such increases operated from early April. The new policy was adopted by the Coalition in order to make huge savings at the expense of the underprivileged.
The Minister, and the Minister for Finance, have made a lot of play about how the percentage increases more than compensated for increases cost arising out of the increase in the rate of inflation. This year the increase will amount to 5 per cent in general and 4 per cent for the long term unemployed, while last year the increases amounted to 6½ per cent and 6 per cent. In 1984 the figures were 7 per cent and 8 per cent while in 1983 they were 10 per cent and 12 per cent. In 1980, when Fianna Fáil were in power, the figures were 25 per cent for the long term and 20 per cent for all others, while in 1981 they were 25 per cent and 20 per cent. In 1982 an increase of 25 per cent across the board was granted. Inflation at that time was running at a high rate due to extraneous factors.
It was more than 20 per cent.
As a small open economy, we suffered in the same way that other countries did at the time of the world recession. Nevertheless, the increases granted then more than compensated the underprivileged, the old, the sick and the unemployed. We are all aware that there were not that many unemployed at that time.
Is the Minister in a position to tell the House the exact number who are unemployed? Is he in a position to tell us how the unemployment rates relate to the different age groups? Those figures will enable us to compare the rates being paid now with those paid four or five years ago and one will then see that the number of young people unemployed has trebled. I have no doubt that some of those people never had a job. In the infamous document produced in 1984, Building on Reality— it would be better described as “Building on Unreality” because all the predictions turned out to be false — it was predicted that in 1986, 210,000 people would be unemployed but the correct figure is nearer to 240,000. Will the Minister tell us the number of people who are employed on temporary employment schemes and the number who emigrated in 1985? If one adds up those figures I am sure one will discover that there are more than 300,000 people unemployed. The work is not there for them because of the economic policies being pursued by the Government.
The Government should realise that for every 1,000 people they put on the dole queues it will cost the State £2.7 million in 1986. The figure for last year was £2.6 million. If the Government are going to cry about the heavy cost on the one hand and on the other hand crow about what they are giving, despite the heavy charges on the Exchequer, they should have a look at their economic policies. Will the Minister give us some idea of the predicted rate of unemployment for this year? Is he satisfied that the amount allocated in the budget for unemployment assistance will be sufficient?
I will address the section in a similar vein to the manner in which the Deputy opposite addressed it. I must say that the longer I am in this House the more nauseating I find the ritualistic debates that take place on this Stage of a Social Welfare Bill. The offering of the Deputy opposite was a classic example of this parliamentary ritualism that we are subjected to, that we waste our time on in the House far too often. The crocodile tears being shed by the Deputy opposite at the increases in social welfare payments in the budget and the comparisons he makes are ludicrous. The fact that a national Parliament should have to spend time listening to an Opposition Deputy bemoaning the percentage increases in the area of social welfare payments in 1986, a year when inflation might be as low as 1½ or 2 per cent, is ludicrous.
The percentage social welfare increases are clearly in excess of the projected inflation rate this year but the Deputy is bemoaning the fact that we are not offering a 20 or 25 per cent level of increase such as was offered by Fianna Fáil when in Government in 1979 but when inflation was in excess of 20 per cent. That type of comment would be seen for the nonsense it is by even the most basically numerate child wet off the potty. It is profoundly depressing that parliamentary time is taken up with this political ritualism when there are so many other matters we should be dealing with.
There are one million people who would not agree.
Of course there is a gigantic unemployment problem but the party opposite think that if they articulate the existence of any problem they can con people into believing they have a solution. The unemployment problem is the gift bestowed on us by the Fianna Fáil Government of 1979-1981.
There was one interesting question that the Deputy opposite failed to put to the Minister of State. Deputy McCarthy did not ask how much in interest payments this State will be making this year on loans entered into during the lifetime of the party who were in office between 1977 and 1981. The money that is going out of the country to foreign bankers could be better utilised to create jobs but we have to pay off the debts incurred by an intellectually bankrupt party while in Government.
The Deputy is wandering from the section.
He does not seem to know that the national debt has increased from £12.8 billion to £20.5 billion.
I am addressing section 2 just as the Deputy opposite treated us to what I would describe as a general economic review and during which he sought statistics on various selective items of general interest with a view to taking up more of the time of the House and to score more ritual political points that he may regard as valuable. The way the people opposite take up the time of this House reflects no credit on the way we do our business here. We had the recitation that a Fianna Fáil Government in the past provided social welfare increases in excess of 20 per cent. Let us cut through the nonsense of that type of discussion. Is the Deputy opposite suggesting that social welfare payments this year should be increased by 20 or 25 per cent? He has made the comparison for some reason and I am anxious to hear what that reason is. Was it merely to fill up parliamentary time and to have attributed to him an extra few columns in the Official Report, or was there some intellectual policy or intent behind his suggestion?
If he is proposing that we increase social welfare payments by 20 per cent or more, can he tell us who is to foot the bill? As one who is familiar with the difficulties experienced by people who are dependent on social welfare payments and as one who would very much like to be able to tell them that the Government might be in a position to grant the levels of increase sought by Deputy McCarthy, I know that that is not possible because we do not have the money to pay such increases. The taxpayer must foot the bill for every £1 paid to social welfare recipients.
Is the Deputy suggesting that we increase taxation, that, for instance, the standard rate of income tax be increased from 35 to 40 per cent as would be required to meet the type of increase in social welfare payments which he is proposing, or is he suggesting that we borrow more money? It is very easy for us to engage in a game of party political shuttlecock where someone throws the shuttlecock into the air, someone else bats if back over the net, while another hits it back from the other side and everyone is trying to bat the ball across the net in a way that leaves the other fellow floundering. Politically this House is floundering by way of a ritualistic debate on a social welfare Bill.
Anyone outside the House would regard this procedure not only as profoundly depressing but as totally irrelevant to their problems. Can we not extricate ourselves from this type of approach to legislation? This is an important Bill, one that will have an impact on the lives of a large number of people. It will determine largely what their standard of living this year will be. Why must we engage day after day in this ritualistic nonsense of the Opposition saying something merely because they are in Opposition with a Government spokesman batting back the ball? What is the point in making a comparison between the social welfare increases in 1980 when inflation was more than 20 per cent and the increases being granted this year?
Perhaps I should not have disgressed into making a speech of this nature. It was not my intention to do so. However, perhaps we should agree that for the rest of the day we will deal with the specifics of the Bill. It is a simple social welfare measure that proposes increases for social welfare recipients. This will help these people to maintain their standard of living and perhaps allow for a very slight increase in that respect as a result of the inflation rate continuing to fall. It has been falling to a greater extent than seemed possible when the budget figures were announced. Let us not continue to engage in this nonsense of debating the Bill in ritualistic party political terms.
I trust that my few words will not be embarrassing to Deputy Shatter who happens also to be a colleague on Dublin County Council. I share the views expressed by Deputy McCarthy. I am disappointed that the amendments he tabled were not accepted and, consequently, could not be discussed here.
Deputy Shatter talked of wasting the time of the House in discussing this Bill. The Deputy is fortunate in that he represents a nice constituency in which there are probably very few problems relating to social welfare. The only problems of that kind that may be experienced in that constituency would have arisen in the past few years as a result of the policies pursued by the Coalition. If the Deputy wishes to contradict me in that respect I shall be willing to hear him.
I represent the constituency of Dublin South-West which includes Clondalkin and part of Tallaght. As I have said here many times before, apart from the inner city, there is a record number of unemployed, many of them in very poor circumstances, in the Tallaght area. I had the honour to represent part of Deputy Shatter's constituency for a number of years. At least I am entitled to offer some words here on behalf of the people I represent now.
As I represent these people in this House I am entitled to offer a word on their behalf and I am bitterly disappointed that they must wait until May and July for these small increases although the budget was introduced in early February. If, as Deputy Shatter wishes, the Minister visits parts of Tallaght and Clondalkin, he will realise what the increases under this Social Welfare Bill mean to these people. I am completely disappointed that the amendments tabled by Deputy McCarthy have not been accepted.
I want to put on record that many of these people who are now in receipt of demands for water rates, having received threatening letters in that regard, had been hoping that the increases would be sufficient to allow them to pay these demands, but they will not be sufficient. I repeated on many previous occasions that, in parts of my constituency, out of ten houses, seven or eight families have nobody working and in other parts nobody is working in the ten houses. What have these people to look forward to? We are told by Deputy Shatter that we are wasting time discussing this Bill. We would not need to delay the House if Deputy Shatter made his contribution in the party rooms by ensuring a reasonable and just increase in the budget for social welfare recipients. I am sorry to have taken up the time of the House but I consider it my duty to express my views on behalf of those whom I represent. I urge the Minister, even at this late stage, to reconsider the position.
Have the Government any proposals in mind with a view to introducing a complete new social welfare structure? I hope we can get through all sections of this Bill as quickly as possible to give us an opportunity to review the whole matter. On every section the Minister will be mentioning the inflation rate. I have done an exercise during the past three months and, while I applaud the fact that the inflation rate is on the decrease, I know of no food commodity or items such as clothing whose price has been reduced, even in the supermarkets. Who is benefiting from the lower inflation rate? I hope that will be borne in mind when we are discussing each section of this Bill. I suggest that the Minister should ask any old age pensioner or any social welfare recipient how much better off he or she is since the fall in inflation. Someone along the line is making money certainly, but not social welfare recipients.
I assure Deputy Wyse that the whole area of social welfare is under review at the moment, as the House in aware. That review by the Commission on Social Welfare is almost complete and we expect their report very soon. Work on consolidating the regulations under the social welfare code is also progressing and is at an advanced stage. The last time this work was done was nearly five years ago. It is very complicated work, but it is being attended to carefully.
I also wish to correct a rough calculation which I gave to Deputy De Rossa. We have had a few moments in which to make a more accurate calculation. The cost of implementing the full rate of unemployment and disability benefit to the under 18 year olds would be around £200,000 in 1986 and for a full year period £340,000. The amount provided this year for unemployment benefit and unemployment assistance, including smallholders, would be around £650.56 million. This is based on a live register of 237,000 persons.
In regard to section 2 of this Bill, everybody would agree with having larger percentage increases implemented at an earlier date, but unfortunately it is not quite that simple. The resources available have to be used in the best possible way to spread them over the various schemes under the social welfare code. Let me repeat that the unemployed, particularly the long term unemployed, have received and continue to receive additional support. They continue to receive it under the provisions of this section. For the first time ever, the long term unemployed got a Christmas bonus last Christmas. This is an indication of the determination and commitment of this Government to do everything possible to help the long term unemployed.
The date of implementation has been referred to. It is true that the date was brought back from April 1983 but it is also true to say that it was a Coalition Government of 1973-77 who introduced the April implementation date. It is not relevant or useful in a discussion of this kind to go back that far, but I am answering the points which have been made. One will find that the date of implementation of social welfare increases under Fianna Fáil Governments prior to 1973 was in the autumn. I commend section 2 of the 1986 Bill to the House.
The Minister has given a projected unemployment figure for this year of 237,000 persons. The figure at present is in excess of that amount and I am afraid what happened last year in that connection may happen again this year. The Government computed the costings of unemployment payments last year at a certain figure with which we disagreed at the time in the budget debate and the debate on the Social Welfare Bill. Prior to the Christmas recess, the Government had to implement hurriedly a Supplementary Estimate for £50 million, £40 million of which represented unemployment payments which had to be made because the Government did not accurately assess the number of people who would be unemployed. Whether that was done deliberately I do not know. I hope they have their figures right this time. I note that the Minister for Finance made an extra allocation in the budget for extra moneys for unemployment benefit compared with the provisional Estimates for 1986 but I sincerely hope that the numbers unemployed will not be in excess of the projected figure.
The Minister also suggested that the inflation rate is falling and he gave the impression that it was because of Government policies. Let us be quite clear about this: the fall in inflation does not owe anything to Government policies. Indeed, their policies have ensured that inflation has been kept at a higher level than it should be. Take, for example, the enormous addition to the consumer price index which resulted from the Government gobbling up the benefits of the reduction in oil prices, particularly in relation to petrol and diesel which are used by most people and by industries and companies who have to transport goods from one part of the country to another. The reduction in the cost of oil has been quite extraordinary because the cost per barrel is now at the same level as it was before the crisis in the midseventies. The policy of taking more and more in taxation has meant that inflation has stayed at a much higher rate than it would have been otherwise.
Deputy Shatter made some asinine comments without saying anything of importance. He attempted to criticise the Members of this side of the House, particularly me, but there was nothing worthwhile in his speech. He attempted to suggest that I had said that social welfare increases should be of the order of 20 per cent. I made no such suggestion, I said that social welfare increases should be paid from April and kept in line with inflation to compensate the recipients for the extra cost of many items. Deputy Shatter also wandered into the realm of finance which we are not discussing in the Bill. He showed appalling ignorance in asking how high our national debt and borrowings were in the years 1978, 1979 and 1980. He obviously did not know that our national debt this year is £20.5 billion as against £12.8 billion in December 1982. Effectively, the increase has been in the order of 66 per cent and if Deputy Shatter knew what he was talking about he would not have mentioned the subject. The Government are borrowing more and more with less and less to show for it. At least when Fianna Fáil borrowed it was obvious where the money was spent. There were vast improvements in various infrastructural developments and in relation to schools, hospitals, advance factories and so on. I am sorry that Deputy Shatter strayed from the Bill and I should like to correct him——
Dublin North West): The Deputy should not stray from the Bill either.
I respect your ruling but I would not have strayed from the Bill were it not for the fact that Deputy Shatter went off on a tangent and attempted to mislead the House. I wanted to set the record straight. With regard to the provision in section 2 for the operation of the equal treatment legislation of the reduced rates of benefit payable to married women from midMay, the Minister said that 46,000 married women will benefit at a cost of £10.3 million. If I misquoted the figure it was not intentional. He also said that the cost of providing the increases for those under 18 years of age would cost £200,000 this year and £320,000 in a full year. We welcome this development and I know that the Minister on Second Stage explained that there was a problem in relation to the implementation of the European Equality Directive in that regard. However, that is a rather facile explanation for holding up the scheme in its entirety.
This is the first attempt by the Government to implement the legislation passed by both Houses of the Oireachtas prior to the summer recess. We had been given assurances that it would be fully implemented before the end of 1985. Many women have been very upset that it has been delayed for so long. Could the Minister say how many under the age of 18 will benefit from the increased rates? Perhaps he would tell us more precisely when it is intended to implement the rest of the equality directive, now that the inter-union problem has been resolved. Will it be implemented during the first half of this year, by the end of the year, during 1987 or will the Government shy away from its implementation? When that legislation was going through the House I tried very hard to dissuade the Minister from implementing the directive without making allowances for the loss of dependency payments which will result and cause enormous hardship to many families. There could be a loss of £40 or £50 per week in social welfare payments to many families. Is this the real reason the directive has not been implemented and the Government are dragging their heels on it? If that is so, it is a pity. The Minister did not accede to my request to ensure that when implementing the directive no loss of money would result to any social welfare recipients. Perhaps the Minister might provide us with some information on those points.
The Minister has given the projected figure of 237,000 as the projected number of unemployed. Does that figure include all categories of unemployed? Are the numbers of young people who will be leaving school this year included in the figure?
The Government are quite confident that the projected live register of 237,000 is not an underestimate, bearing in mind the fact that the live register is falling and should continue to do so. The figure for January was approximately 240,000 and the approximate figure for February was 238,600. Deputy McCarthy mentioned the implementation of the remaining aspects of equality and the long delay. He referred to the Government shying away from the implementation of equality. I would respectfully submit that nobody shied away from it more than his present Leader when Minister for Social Welfare, with the result that practically nothing was done about the implementation of this equality directive which Deputy Haughey signed in the EC in 1978. Nothing was done about it, apart from the setting up of a working committee, until this Government came into office. We have tackled this problem. The Government are certainly not happy with progress. We have pointed out that there have been difficulties. At least our record in this regard is infinitely better than the record of Deputy Haughey when he was Minister and subsequently leader of a Government which sat on this issue and did nothing about it.
The remaining aspects of equality are that married women will be admitted to the unemployment assistance scheme which at present is not open to them and the same conditions will apply to both men and women in the matter of increases for adult and child dependants. At present a married woman is almost always regarded as her husband's dependant and accordingly he qualifies for an increase in benefit in respect of her, regardless of her employment status. A married woman, on the other hand, can only qualify for an increase for her husband if he is invalided. The definition of dependency in the Act for both men and women is based on the principle that one spouse will be regarded as dependent on the other spouse only if he or she is being wholly or mainly maintained by that spouse. This is a fairer definition but it will mean that certain persons who at present would be regarded as dependants will no longer be so regarded.
The implementation of the dependency aspects of equal treatment entails a considerable amount of additional work in the Department. Initially some 200,000 questionnaires will have to be issued and processed in order to clarify the dependency position of existing claimants and alter existing rates of payment where necessary. The ongoing process of deciding on claims will also be generally made more complicated by the equal treatment measures. There will be a permanent addition of extra work in processing claims, notably in the disability benefit unemployment payments branches. A new range of cross-checks and control procedures will have to be developed to cater for the requirements of the new situation. The admission of married women to unemployment assistance on the same basis as claimants generally will also involve additional work for the unemployment payments branch. It is also linked with the change in the dependency rules because of the way in which entitlements will be calculated in the new situation. These two aspects of equal treatment must therefore be introduced at the same time. Agreement on the staffing issue has not yet been reached with the union. In addition, the issues of staff training and accommodation arise. It is not possible to say when these issues will be resolved.
A small number of households — 20,000 out of 170,000 — will suffer a drop in income as a result of the new concept of adult dependant. In recognition of the drop in household income to some families, the Social Welfare (No. 2) Act made provision for alleviating measures to be drawn up by the Minister in consultation with the Minister for Finance. The measures were announced in the course of the debate on the equal treatment legislation and will be implemented by regulation in conjunction with the second phase. They involve an earnings test in addition to employment to determine dependency. If the spouse is earning £50 per week or less he or she would continue to be regarded as an adult dependant.
A special transitional payment of £10 a week will be made to families on the commencement of the Act if both spouses are independently entitled to social welfare payments. Otherwise they would stand to lose approximately £20 per week. EC Directive 79/7/EEC provides for the elimination of discrimination between men and women in regard to social security matters by December 1984. The Bill before the House provides for the implementation of the first phase from May next.
Deputies will be aware that the general question of equality was the subject of a High Court case and that the matter has been referred to the European Court of Justice. Retrospection will have to be considered in the light of the European Court's decision. It should be noted that, as well as providing increases for certain persons, namely married women, the equality provision involves a reduction of entitlements: a married man claiming benefit will no longer be entitled to an increase in his benefit in respect of his wife if she is working or drawing benefit. Consequently, when discussing the issue of retrospective payments to people who would be entitled to higher payments, we must take into account the fact that some other people have been overpaid, and the question arises as to whether we should set up overpayments in these cases and look for repayments of amounts overpaid. However, retrospection in some cases and not in others would be difficult to justify. I am trying to illustrate that the issue of retrospection is not a simple one. These things will be considered in the light of the decision of the European Court of Justice.
For the first time to my knowledge the increase, which this year is 4 per cent, is not applicable to child dependants. This is appalling and it must be regarded as our anti-family measure, something which will impose great hardship on families who have been deliberately and calculatedly excluded from the increase applying to children. This clearly epitomises the type of policies the Government have continued to pursue since coming to office. I should like to know how much money will be saved this year and in a full year by the deprivation of families of this 4 per cent increase. Will this policy be continued by the Government in the future?
This is a matter of growing concern to many families. One can look at a married couple with two children. The increase they will get of £2.60 per week is miserly. A married man with two children gets only £87.60 in unemployment benefit which is quite appalling. The fact that the 4 per cent increase has not been given in respect of children makes the increases more miserly than they were, bad and all as they were. Perhaps the Minister will tell us how much is being saved and what is the rationale behind this decision to exclude child dependants.
There has not been any increase in the child dependant rates of social welfare weekly payments. The reason is that the Government are introducing the new child benefit scheme under which an additional £3 per month per child will be paid to all families, representing a 25 per cent increase in the rates of allowances paid for each of the first five children in all families and an increase of 16 per cent for the sixth and subsequent children. About 1.2 million children in 475,000 families will benefit under this scheme.
The child benefit scheme involves the abolition of the child tax allowance from 1 April next. When fully implemented the scheme will involve the taxation of the benefit. The fact that the benefit will be taxed will bring about a redistribution of resources from families in higher tax brackets to those at the lower end of the scale. It is generally agreed that the child benefit scheme will represent a major improvement in and development of the social welfare system because it will provide a vehicle for channelling child support payments more effectively to families in the greatest need. Child tax allowances obviously provide the greatest level of benefit to higher paid families and the least benefit to lower paid working families.
Furthermore, direct payments to families are the best form of child support to all families in need, including those on social welfare payments and those who are working, including those on low earnings. It is an essential feature of the full child benefit scheme, however, that the benefit will be taxable. There are major administrative difficulties associated with the introduction of a fully taxable child benefit scheme and such a scheme cannot be introduced this year. The Government have decided to introduce the scheme, albeit in limited form, by abolishing child tax allowances, freezing the child dependant increases in social welfare payments and making available a significant increase in children's allowance rates. The Government have put aside for the child benefit scheme this year the resources made available by the abolition of the child tax allowances, £18 million. The resources which would have been available for increasing social welfare child dependant rates, £4.2 million, and an additional £11.1 million from the Exchequer, are the total resources available this year for the child benefit scheme.
We can infer that it is the intention of the Government during the remainder of their term of office to continue not to grant the percentage increases for child dependants in the future.
The new child benefit scheme, as I have said, is revolutionary. It will make more effective use of the moneys available. It will discriminate in favour of low income families and those dependent on social welfare. When it becomes fully implemented it will prove to be a more socially acceptable form of children's allowances. The scheme in existence was never regarded as being quite fair in social justice, and this is a major step forward in bringing equity to child benefit schemes.
Question put and agreed to.
SECTION 3.
Acting Chairman
Amendments Nos. 14 to 22, inclusive, have been ruled out of order.
Amendments Nos. 14 to 22, inclusive, not moved.
Question proposed: "That section 3 stand part of the Bill."
The amendments which Deputy Mac Giolla and I have tabled, Nos. 15, 17, 19 and 21 would have brought the date forward to 1 April in regard to the payment of increases in rates to the categories involved.
Acting Chairman
The Ceann Comhairle's ruling on this section was indicated to the Deputy by letter, I am informed.
I accept that the amendments are out of order, but it is not out of order to refer to the content of the amendments concerned. The categories in section 3 include unemployment assistance, deserted wife's allowance, prisoner's wife's allowance, social assistance, single woman's allowances, old age pension, blind pension, widow's non-contributory pension and the supplementary welfare allowance. In many ways these categories are the most needy in our society. I was astounded to hear the Minister arguing on section 2, as he will probably argue on this section, that it is more beneficial for a person in receipt of social welfare payments to have the increases delayed, and that it would be even better for these people if the payments were delayed until September.
Is this the thinking of the Government and will they push back the payment of increases even further if they get the opportunity? The logic behind this argument escapes me. It could be argued that it would be beneficial if payment were deferred to the end of the year and then given in a single lump sum but that ignores the fact that people on social welfare live from day to day and that they cannot wait until July or September for an increase which will simply attempt to compensate them for increases in inflation and the cost of living. Social Welfare recipients have to pay immediately increases in the cost of supermarket goods, incidentally goods on which the Government recently increased VAT. The Minister's argument is total nonsense.
Earlier Deputy Shatter castigated us for being involved in a ritualistic debate. I agree it is an annual ritual, but that does not devalue the necessity for a debate. It was unfair of Deputy Shatter to castigate us and then leave the rest of us to continue the debate in the interests of those in receipt of social welfare. Section 3 refers to supplementary welfare allowances. Late last year the Minister introduced a Supplementary Estimate and I was angered to hear the Minister announce that they had made a saving of about £3.4 million in supplementary welfare allowances. I was angry because at that time the Society of St. Vincent de Paul announced that they were broke and that they had paid out in that year more money than they had been able to take in.
We must consider that the supplementary welfare allowance is the allowance of last resort. When unemployment was at its height and in winter when expenses are at their greatest the Minister could announce a saving of £3.4 million in supplementary welfare allowances. That indicates a lack of understanding as to how people have to beg or borrow in order to make ends meet. The argument about bringing forward the dates for payment may be ritualistic from the point of view of Deputy Shatter, but it is very much á case of survival for hundreds of thousands of people who have to exist on these allowances from day to day. The question of whether they get an extra £2 this week can mean the difference in having or not having meat on the table for an extra day a week. That is important when considering this Bill.
Unemployment assistance is also covered in this section. I raise this matter every year particularly in relation to the single unemployed living at home. My amendment to section 4 was ruled out of order and I do not propose to go into that now except to make the point that this assistance is for those who have run out of contributions or who have never had contributions. It is a very low level of payment. The date on which an increase in this assistance is paid is very important to those in receipt of it. The benefit as a result of getting these increases later in the year is just theoretical. They should be paid from April and not from July.
I hope the Minister will give some consideration to one aspect of unemployment assistance. In view of the appalling unemployment rate many young people take up part time education. By doing so they automatically disqualify themselves from unemployment assistance. I mentioned this last year to the former Minister for Social Welfare who promised he would have the matter examined. It is vitally important that young people should try to improve their standard of education, especially those who are unemployed for a long period and have little or no chance of getting employment. If they take up a part time education course in the hope of improving their standard of education, they will improve their chances of gaining employment. The Minister said a person could become involved in community work, and once the organisation concerned confirmed this, he would be paid unemployment assistance.
What is wrong with a young person who has little chance of employment returning to a vocational school to enrol in a part time educational course? I realise that there is a statutory provision involved here, but it should be possible for a young person to tell a social welfare officer he will be involved in a part time educational course while still being available for employment. I ask the Minister to give this matter very serious consideration. Many of our young people are walking our streets aimlessly but, if they are ambitious enough to do an educational course, they are deprived of social assistance.
Many parents have told me of their young boys or girls sitting around the house who had been doing an educational course in the vocational schools but had to withdraw because their social welfare payments were withdrawn. This is a very human problem. As long as young persons continue in education — and they should be encouraged to do this — their prospects of gaining some kind of employment are improved. I ask the Minister to give this aspect of unemployment assistance very careful consideration and to give young people a chance to improve their standard of education while still in receipt of unemployment assistance. In my view they are legally entitled to these payments.
I accept that my amendments were ruled out of order, although I am disappointed. The same problems arise here as in section 2, that is, the delay in the implementation of increases and the date from which they will become operative. The time is rapidly approaching when this Government will tell us that, if the annual increases are given around Christmas or even the last day in December, they will have achieved their objective because these increases are being paid later each year.
There are very many people in receipt of unemployment assistance — I think about 65 per cent of the total on the live register. Most of these people are long term unemployed, and are no longer in benefit, and their chances of further employment are receding. The outlook for these people is very gloomy. Yet this Government are granting them paltry increases. A married couple with two children will get an increase of £2.20, giving those living in a town a total of £76.10 and £74.40 for those living in the country. It is ridiculous to expect any such family to exist on £74.40 a week. We have heard a lot lately about poverty and its causes, but when the State decides that a paltry £74.40 per week is sufficient for a married couple with two children, then they have set the ground rules for the causes of poverty.
Among those on unemployment assistance there is a growing number under 20 years of age and 25 years of age. This erodes the confidence young people have in the system and that is why many of them are critical of politicians. This Government have had an appalling record in the area of creating employment and the consequence is that growing numbers of young people are unemployed and are paid paltry sums by way of social welfare benefit.
The assessment of eligibility, particularly for young people, can be extremely difficult. First there is an inordinate delay in processing their applications and they are put on what might be called a red tape merry-go-round. They keep on signing and various forms are sent here, there and everywhere. In the interim they try to draw supplementary welfare allowance but, if they reside with their families, they are deemed ineligible. The Minister should ensure that the method of assessing and processing eligibility for unemployment assistance is improved and speeded up. While there has be be a reasonably precise method of determining eligibility, unnecessary interrogation should be eliminated.
There is also the growing problem of young people who live with their parents. Most of such young people who are not employed, who do not have a job at home, are excluded from receiving unemployment assistance or are receiving paltry, insulting sums. It is contended that board and lodgings are provided for them which is a form of means. There is nothing more insulting to the human dignity of young people to have no money with which to buy anything and who, because their parents appear on paper to have a moderate income, are precluded from receiving any payment. It is very sad to have large numbers of young people without a penny to buy anything for themselves. This means they can go nowhere. Many parents, who may appear to have a moderate income, do not give pocket money to 19 year olds, probably because they are finding it sufficiently difficult to meet their cost of living expenses. In the future the Minister might give more discretion to officers in employment exchanges to grant some form of payment to such young people.
I agree with Deputy De Rossa that the saving effected on supplementary welfare allowances last year was an indictment of the system. It should be remembered that generally one is at the end of the road before one applies for supplementary welfare allowance. In an economic climate such as ours the fact that the State was able to effect substantial savings on supplementary welfare allowances is a reflection on the system. There is no doubt that there were sufficient applicants. I am not casting any aspersions on the community welfare officers, they carry out their work conscientiously, but the guidelines laid down for the granting of supplementary welfare allowances are too stringent, ensuring that many people are excluded. Certainly such guidelines ensure that many applicants do not receive sufficient payment.
The Minister made a song and dance about the bonus given last Christmas to the long term unemployed. We all welcome that; it was the least that could have been granted. Indeed, last year I tried very hard to get the Minister to grant a double payment to the long term unemployed but he appeared to think I had gone mad. Certainly he disagreed totally with me. He did not appear to feel they were entitled to it. I am glad that a year later he saw fit to do something. I would remind the Minister of State that the bonus granted last Christmas constituted 75 per cent overall, meaning that there was a 25 per cent cutback because of the miserliness of this Government. This Government appear to be incapable of dealing with people in a fair and honest manner. In granting that 75 per cent bonus they cut back on what had been the accepted standard double payment to old age pensioners, the chronically ill and disabled. Such people had budgeted on receiving a double payment. Yet it transpired that an old age pensioner living alone was short £10 or £12 at Christmas or a married couple, both in receipt of the old age pension, suffered a loss of between £20 and £25. I have no doubt that that policy of granting a bonus to the long term unemployed was effected at the expense of the old, the chronically ill and disabled, something which should be decried.
I should like to know also why there has been such a reduction in the number of applicants for the prescribed relative allowance. There appears to be new, more rigid rules being applied. Perhaps the Minister would elaborate on this matter.
I should like to make one or two points on the section. First, I would criticise the low level of increases being granted to the weakest section of our community. Indeed, the increases are shabby and are an insult to the beneficiaries in these categories.
It would be desirable to have some uniformity in the operative dates of payment of increases, especially under the provisions of this section. I note that there are four different dates of payment — 9th, 17th, 18th and 14th. I might refer also to the differential between persons under and over 80 years of age, for example, an increase of 15 pence per week being granted to those over 80, which is very shabby treatment. I should have thought that the Minister would have availed of the opportunity to give substantially increased payments especially to those over 80. Anybody in touch with the social services in his constituency will be aware of the hardship being experienced by many old people in these categories.
There are other aspects of the provisions of this section which need to be examined. It is no longer desirable to have a differential obtain between people in receipt of unemployment assistance in urban and rural areas. I contend there should be a uniform rate of unemployment assistance for people whether they are living in urban or rural areas. I am not sure what type of expenditure would be involved in this. Perhaps the Minister will indicate the additional expenditure required to bring rural payments to the same level as those in the urban areas.
The Minister will be further aware that there is in some urban areas also, because of the development of urban areas, an overlapping into what were formerly rural districts. Because of this people in what were formerly rural areas are now being paid at a lower rate than people living in adjoining housing estates. This discriminates against people and causes disagreements and annoyance especially between neighbours, because rural areas have been superseded by urban areas and this overlap takes place and there is a differential between the amounts being paid in the urban area and the rural area even though all the people concerned are living in the same estate. Can the Minister indicate what the additional cost will be?
Progress reported; Committee to sit again.