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Dáil Éireann debate -
Wednesday, 9 Mar 1988

Vol. 378 No. 10

Private Members' Business. - Social Welfare Bill, 1988: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

As I was saying before Private Members' Business, the Progressive Democrats' view about extending social insurance to the self-employed is that the case has not been made for it. The party believe that there are huge liabilities now being undertaken which have not yet been quantified and we believe that the argument for equity is not borne out by the way in which the case is being presented.

If the extension of social insurance to the self-employed is the unqualified advantage as it is described by some Government speakers, then it cannot assist in the achievement of equity as claimed by other Government speakers. It seems that the extension of social insurance to the self-employed will have several significant political consequences. The first is that a major liability, which has not been quantified to the House by the Minister for Social Welfare, will be undertaken by the State. The second is that the nature of social insurance will, unconsciously but nonetheless effectively, be undermined. The third is that by damaging the concept of social insurance, which itself is under suspicion in any event, there will be political turmoil and social division created by pitting one interest group against another.

Our view very simply is that if a case was made on the basis of equity to extend the PRSI burden to the self-employed in order to ease the burden on the PAYE sector we would support it but if it is, as we believe, a measure which will not in any sense ease the burden on the PAYE sector but will, in the long run, exacerbate the sense of deprivation and discrimination which they feel at the moment, then the measure must be rejected.

On that account I am indicating to the House that we will be tabling amendments on Committee Stage the purpose of which will be to force the Government, first, to justify their decision to extend the PRSI system to the self-employed and secondly, to get the Government to come down one way or the other on the issue of whether this is being proposed in the interests of equity or in the interests of the self employed and the farming sectors. Thirdly, our amendments will clearly underline the economic consequences of failing to quantify what the House is taking on in terms of liabilities now.

The consequences of the Bill before us are unpredictable in many respects and, in so far as they can be predicted, are unfair. One immediate effect of the Bill being passed will be that for the first time a small holder in the west of Ireland, who at the moment is eligible for what is colloquially referred to as the farmers dole will, when he reaches the qualifying age, be entitled to a social insurance pension on the contributory level. He will have, due to circumstances beyond his control, contributed nothing to the system. I understand that 55,000 small holders are to benefit. Am I wrong about that figure? Has the Minister changed that?

The figure is 15,000 and they are not in.

Have they been excluded?

I commend the Minister for that decision. Originally the Minister proposed to extend to 55,000 farmers the benefits of the system. At least he has retracted from that position and I bow to his decision in that respect. That is one manifest injustice avoided. However, we are faced with an extension of the PRSI system in an unfunded way. Pay-as-you-go social welfare is to be extended to a group who do not need the benefits of that extension. Pay-as-you-go social welfare is to be extended to cover people who at the moment are providing for their own pensions in some cases and in other cases do not wish to do so because of their net capital position going into their retirement. In those circumstances it appears that the net effect of the extension is to dissipate the redistributional arm of Government and to extend benefits to those who cannot make out a case based on need.

Our chief objection to the Bill is that it is extending benefit to those who cannot make out a case based on need. It is extending it on a diffuse and self-contradictory logic, that it is somehow demanded by equity and, at the same time, is an unqualified advantage to those to whom it is extended. Those two arguments do not stand up; they contradict each other and in the last analysis the mathematics are not satisfactorily established or made out by the Government. My view is that we are undertaking liabilities today which we have not quantified and cannot justify in terms of social need. At some time in the future there will be a reckoning in relation to the liabilities we are undertaking. Some group of politicians, whether us or a different group, will have to contend with the results of what is being done today. The fact that it may be ten or 11 years down the line is irrelevant because somebody will have to clear up the mess we are creating today. That mess was born of political motives, not motives based on social justice. It is a mess which was created by a confusion of thought, not clarity of thought, not a desire to focus redistribution but, on the contrary, a desire to diffuse social redistribution. The consequences will be political ones for our successors in this House.

It is my view, and that of the Progressive Democrats, that the measure as proposed is likely in the last analysis to lead to a weakening of the social will to redistribute resources, is likely to increase the level of taxation on work and effort, is likely to work in the wrong direction in focusing redistribution of resources on those who do not need in our society rather than on those who do need. For those simple but pressing reasons we oppose this measure.

I compliment the Minister on his caring and concerned attitude towards the poor and the less well off. This Bill shows that he fought and won a battle at the Cabinet table to ensure that people in this sector will be protected, despite the overall financial constraints.

The increases are on the lines proposed in the Programme for National Recovery, the greater increases being given to those on the lowest income. There is a 3 per cent increase in widow's and old age pensions, unemployment, disability and other payments but there are much higher increases for those on unemployment assistance and supplementary welfare allowance. The Government have recognised the plight of the lower income group. There is an 11 per cent increase in the personal rate of unemployment assistance and a 6 per cent increase in rates for dependent children. I welcome the streamlining of the rates for child dependants. In future there will be only two rates. These special increases are a major step in the Government's plan to provide additional assistance for those in receipt of the lowest social welfare payments. This is the first time any Government have decided to do something for these people, particularly the single person and the family who are in receipt of unemployment assistance. All of us would like to see the Minister go further but we must admit that in the face of current financial difficulties he has done a reasonable job in ensuring that these people are protected.

The pre-retirement scheme for those aged 60 or more is very welcome. The chances of such people ever getting a job again are remote. In the face of that unfortunate reality, it is unfair to ask such people to make a claim in the local exchange week after week. Many of them will welcome this change as being in their best interests. I hope they will not be continually harassed by social welfare officers trying to find out if they are earning a few pounds extra. These officers have enough to keep them busy without concentrating on people in this category and I would ask the Minister to ensure that they will not be bothered.

It is only right to expect that people who are to receive pensions should pay some contribution towards them. Naturally the self-employed are not too happy with the new scheme but they must recognise that the PAYE worker has been carrying the tax burden for far too long. I hope the self employed will pay in the right spirit. Payments are being phased in over a number of years and I would ask the farming organisations and those representing the self employed to accept this decision in the knowledge that they will be given a pension regardless of their means. This will give them a certain degree of independence. I do not think the PAYE sector are prepared to accept that they should have to pay £331 million this year alone for non-contributory pensions. At present approximately 70 per cent of formerly self-employed people qualify for social assistance pensions for which they have not contributed. I welcome this decision and I hope the Minister will ensure that the contributions are collected.

The timelag between the submission of a claim for unemployment assistance and the issuing of a decision is far too long, sometimes lasting several months. Delays of this kind in my county are a disgrace. The attitude of some social welfare officers is deplorable in that they treat the individual in an unacceptable manner. In the past few years a number of people who had been self employed have been obliged to apply for unemployment assistance. Because they were assessed on the basis of the previous year's income many of them were told that their means for the period disqualified their claim for unemployment assistance. These decisions were appealed and in most cases they were successful. It is ridiculous to assess a person on a previous year's income because that money will have been spent on supporting a family. The Minister should consider streamlining these procedures. It takes several months for an appeal to be heard, during which time the applicant is dependent on supplementary welfare allowance at a reduced rate. It is very difficult in such circumstances to live above the poverty line.

I welcomed last year the introduction of dental and optical treatment for spouses of insured people. The majority of women have benefited from this scheme but unfortunately dentists in Wexford have refused to operate it. This amounts to discrimination against Wexford women. The Minister should intervene to resolve the matter and I appeal to dentists in the area to co-operate. There is an open invitation to any unemployed dentist to set up in Wexford, where he would undoubtedly make plenty of money. A large number of people have applied for treatment under this scheme but they cannot be catered for.

While I was in Opposition I criticised the fact that widowers are not properly looked after. In many cases a man has to give up work to look after his family and all he can claim is unemployment assistance. A widower with two children receives £57.30, while an unmarried mother with one child receives £57.80. That man is expected to look after the extra child for nothing. A family in such position are living below the poverty line. While I recognise the scarcity of money, the Minister should consider this point to see if something can be done next year. Where it can be shown that a widower is looking after his family on his own he should receive a special allowance. There is no way that a widower at present can look after his family and provide them with a decent standard of living on such a small income. I have nothing against unmarried mothers or widows but inequality exists on the man's side. That is an area which should be seriously looked at by the Department of Social Welfare as it is a source of serious concern at present.

The public have expressed concern at the number claiming unmarried mother's allowance. In 1973, 1,633 people claimed unmarried mother's allowance while in 1987 the figure had gone up to 14,000. I will not say that there is a certain amount of fraud in this area but it is an area which should be seriously looked at. At present the unmarried mother's allowance is £57.80 while unemployment assistance is £37.80, making a total of £95.60. In the case of a married couple with one child, the unemployment assistance would be £74. Therefore, so far as that part is concerned, there is no incentive for couples to get married. This is an area where a lot of money is being spent which need not be spent. I accept that there are many genuine cases but there are many other cases which I would be rather sceptical about.

Fraud was mentioned earlier in the debate. The Minister has certainly started a war on the abuses within the social welfare system. This is to be welcomed because at the end of the day those who will pay for the fraud in unemployment assistance and unemployment benefit are the taxpayers who are, as I have already said, overburdened. At present unfair competition exists in the workplace because of the abuses which are taking place in the social welfare system. I know of many businesses which paid full wages to their employees, which paid PRSI and all of the other levies and yet were forced out of business while at the same time cowboy operators who employ people who are claiming the dole do not have to pay any such contributions. For that reason I welcome the Minister's attack on this area. I also welcomed his decision before Christmas to impose substantial fines on employers who were found to be employing such people. I hope the Minister will continue to try to get rid of the abuses in the social welfare system. I have no hang-ups about a person working an odd day but what is unacceptable is a carpenter or a bricklayer working on a full time basis while at the same time drawing unemployment assistance.

Another source of grave concern in my own county is moneylending. I do not think that any Minister or the Garda Síochána have come to grips with this problem. In many ways moneylending amounts to legalised robbery. The moneylenders hound people. They give loans at special interest rates and when the borrowers, who are usually from the least well off sector, are not able to meet their repayments they will be given further loans which causes even more problems. I would like to see a link up between the Department of Social Welfare and the credit unions so as to ensure that loans can be made available to people in the lower income groups who need them. The moneylenders should be put out of existence.

The Bill provides for an increase in the income limit for the family income supplement in line with the increases in the rates of unemployment benefit. Over 5,000 people now avail of this scheme. I believe that more people should be brought within this scheme. Perhaps for reasons unknown to us, people are not applying. I would like to see those who are barely over the income limit included in the scheme. Rather than to increase the amount of money which they are getting at present I would be inclined to bring them into the scheme. There are many people who are barely above the income limit who are finding it very difficult to make ends meet. It is important that we bring as many of those people as possible into the scheme.

I would like again to compliment the Minister for the work he has done in the area of social welfare. Since returning to that Department he has done an excellent job. He has concerned himself with the poor, the least well off, those who are unable to find jobs but who need a decent standard of living so that they can look after their families. I hope that the Minister next year will be able to give an even more substantial increase to those who need the moneys.

I would like to say at the outset that I am happy that the Minister has increased the social welfare payments for the disadvantaged. Since becoming a Member of this House I have heard various compliments being paid to Ministers for Social Welfare for the ways in which they were able to extract from Ministers for Finance increases in the benefits paid to those who are unemployed, sick or unable to look after themselves. However, this Bill is just going to add to the mountain of social welfare legislation which already exists. Those who are badly off will come to realise, such is the complicated language which is being used by the Department of Social Welfare, that they are being deprived. Let me give one example. In the case of two brothers living together and claiming unemployment assistance, one brother will receive the full rate of unemployment assistance while the other will receive a reduced rate because his brother is expected to keep him. I do not know which Minister can claim the legislation which brought this inequity about but that example is only part of the problem in the social welfare code.

During the term of office of the previous Minister for Social Welfare we in the west had a particular problem in regard to the assessment for social assistance of small farmers and smallholders. Some of the reforms brought into the system certainly brought about improvement in so far as the smallholders began to understand exactly why they were being assessed, how they were being assessed and when they would be assessed.

Other speakers criticised social welfare officers but in my experience they are, by and large, very conscientious. In any large organisation such as the Department of Social Welfare there will be people who make mistakes when they visit people especially when there is a means assessment. However, by and large they are very conscientious and they examine the means of the applicant according to the regulations. The real problem relates to getting due notice to the applicants and giving an indication as to exactly how the social welfare officer will question them and as to what documents they should have ready. When they are assessed, applicants do not get back a copy of the document that has been used by the social welfare officer to calculate means. This leads to a lot of aggravation and people claim they do not properly understand what has gone on. I suggested to the previous Minister and I think he got the Department's officers to agree that a photocopy of this document should be sent back to each applicant. Unfortunately, that is still not the practice in the Department. Will the Minister examine the system thoroughly and perhaps social welfare officers will agree to my suggestion. Social welfare officers operate out of offices where somebody is not always in attendance and it is difficult for the applicants to get hold of the material they must have in order to verify the assessment.

Farmers' dole still plays an important part in the west. In some cases it has played a major part in saving families from destitution. It has also assisted in allowing very difficult circumstances to be surmounted. This area should be continuously reviewed. Interest payments on borrowings and other items should get more prominence on the social welfare document sent out for the assessment of means and greater latitude should be given to the officers in making their assessments. I do not agree that two brothers, one with a family on five acres, should have their total social assistance divided in half. They would normally qualify for approximately £34, but generally speaking brothers in those circumstances would get £17 each if there is any means of that nature. There should be a further review in this area.

Other speakers have assessed the background to social welfare and social assistance and many have referred to social insurance. The money being held by the Department of Social Welfare does not cover a social insurance fund. Pay-related social insurance is a misnomer. The claims being made for farmers and the self-employed by Government speakers about the new proposal to extend pay-related social insurance to them are totally wrong. In the case of farmers I cannot see how the mobility of land will be improved by bringing farmers into a pay-related system where when they reach the age of 66 they will qualify for an old age pension. The means test in the non-contributory old age pension was a definite way to get an old man or woman to give up the land and it was a cheap way of insisting on the mobility of land. I am afraid that if this comprehensive proposal of the Minister goes through, groups like Macra na Feirme and the young farmers will be waiting a long time before they get a satisfactory system introduced in the future.

Even accounting for the farmers who are paying into the fund there will be a shortfall in respect of these pensions when they fall due. I do not understand the trade union position that says we will get a small contribution from farmers and the self-employed towards this pay-related social insurance and we will pay them out in excess of what they have contributed. How would the shortfall be made up? Is it not the PAYE people who cannot avoid income tax who will have to pay? Is it not the trade union people who will eventually have to pay the contributory pensions of the farmers and self-employed when they are already paying for non-contributory old age pensions and the like? I see the Minister of State shaking his head. If there is to be a special fund set up to deal with pensions for the farmers and the self-employed and the rate of pension is to be determined by the contributions of the farmers and the self-employed, then I can understand it will not be a burden on the PAYE taxpayer. The pay-related fund has been undersubscribed for a number of years. Now it is only going to meet its targets because the Minister in successive years reduced the payment of pay-related benefits by altering the qualifying percentages.

When the idea of pay-related social insurance was first mooted it was meant to provide individuals with substantial sums to meet the shock of unemployment. It had a social importance, but never lived up to that when a large number became unemployed. There was a shortfall in the fund and as the numbers of unemployed and people on social welfare assistance grow the dependency for more and greater contributions on the PAYE sector will become more marked. The figure used from the Government side of £300 million for non-contributory old age pensions takes into account people who have for the last ten years been unemployed and have made no contribution whatsoever to the fund. They will reach the age of 65 in due course and are unlikely to contribute any increase to the Exchequer because the projected unemployment figures for 1988 in the Budget Statement by the Minister for Finance allow for at least the same number of people unemployed. If the matter were assessed accurately many more should be provided for especially when even the optimistic Taoiseach agrees that zero growth rate is his forecast for 1988.

The extension of PRSI to the self-employed and the farmers is a great mistake, setting up another quango, another cost factor which will in the long run lead to greater demands on and cost to the State. I cannot understand the rate of payment expected from farmers. When the Programme for National Recovery was being discussed by the Taoiseach and the various sectors of the economy including the farmers, no percentage or idea of assessment was discussed. I could not understand, for instance, how the former president of the IFA, Mr. Joe Rea, came out from a meeting with the Minister for Finance and the Taoiseach not knowing what figure was to be charged for PRSI or levies on farmers' income. It is unbelievable that he would make an agreement without knowing the figure. If a charge was being imposed on him and he did not know what it was he would be the very man to kick up about it. I would understand that the president of the IFA sees great benefits accruing to the farmers and the farming community as a result of their inclusion in this new scheme for PRSI.

The Chair would prefer that no reference was made to persons outside the House. Neither blame nor praise should be attached to them.

I wandered a little in using the former president's name. I will continue without using his name. If the farmers' organisations believe there is a major plus in it for them must the other sectors of the economy, for instance the trade unions, not examine this? If farmers are to get good value for it, the shortfall experienced already in the social fund surely must be made up by people other than farmers. The organisations involved are quite capable of setting up their own pension schemes, and I commend the latest move by the IFA to set up a fund which would insure family farms against inheritance tax and other such problems when they arise. They are organised well enough in FBD and their own insurance schemes to provide proper pensions for themselves. Pension schemes could be of value even to the farmers themselves and — I see the Minister of State for forestry present — let me say pension funds of this nature could be directed towards forestry development which in turn would benefit the farmers. That would be a positive measure for the economy rather than the current proposal which generally most economists see as the wrong move at the wrong time.

Claims were made in this House that a Green Paper was published ten years ago about providing PRSI for the entire economy. Why was it not acted on? Why did Ministers in the famous years between 1978 and 1981, when all the money was being spent, not extend PRSI to those people at that time when this measure could reasonably have been expected to be accepted by the people involved? When we had an increasing standard of living, was that not the right time to introduce such a proposal? Now the Minister is bringing in this item which is going to increase the costs and eventually this factor will go against the competitiveness of Irish goods abroad. It is a multiplying factor. In the long run it will lead to a loss of jobs and employment in this country. The measure is unnecessary and I appeal to the Minister to review the matter and examine the proposals of the Fine Gael spokesman on social welfare, Deputy Jim Mitchell.

This area of social welfare impinges greatly on sick people. As I have said on previous occassions, I am dissatisfied with the medical referee system particularly because when people, even people seriously ill, are assessed if they are able to open their mouths and give their names the medical referee is inclined to designate them fit for work and they are cut off from benefit straight away. Such a person can find himself without income for 15 days at least and because of the new credit system he could be waiting another 15 days for unemployment assistance. Anomalies have arisen. I know people can obtain supplementary welfare, but some people are not made aware of these things and experience a period of distress before being made aware of them.

Candidates should be notified of what documents the medical referee will require prior to the assessment. I have seen cases where people who were supported by senior consultants in the city of Dublin have been turned down by medical referees of the Department of Social Welfare. What seems to give most difficulty to the Department of Social Welfare is the problem of individuals not being able, because of sickness, to travel to the venue appointed to meet the medical referee, and great distress follows the disallowance. Medical certificates given by applicants' general practitioners have been ignored by the medical referee. In calling such people for assessment the Department know from the medical evidence provided by the general practitioner what is wrong with the applicant and they should state that the person is required to prove that he is suffering from this ailment. Some people have had to go to a third medical referee accompanied by their GP to verify that they were seriously ill.

People who suffer from depression are very badly treated by medical referees. Perhaps if the Department made direct contact with the GP in such cases it would be a better system. This may be placing an onus on the GP but after all there is a bond and a trust there when the first claim is made and why should that not continue when the appeal is being examined?

Another aspect is the effect on the 10,000 skilled people being made redundant this year by the Government. I am critical of this proposal to make 50 year olds and, if necessary, 40 year olds, redundant. These skilled people will end up walking around towns like Ennis or Limerick taking up part-time work as petrol pump attendants or driving self-drive cars and pushing the already marginalised people out. I am coming to an end. I would like to see some scheme established between the Department of Social Welfare and FÁS to protect the people who can use these jobs. If these totally skilled people who have been prematurely made redundant flood the market it will be totally unjust to people at present doing part-time work. I appeal to the Minister to rethink his whole attitude to pay-related benefit for farmers and the self-employed.

Last year when I spoke on the Social Welfare Bill I praised the Minister for his approach to the whole question of social welfare, even in the short space of time he had been in office. He had a very fresh approach. At that time my remarks were greeted with a certain amount of cynicism and scepticism by the Opposition but I think my remarks were justified. I have no hesitation this year in reiterating what I said in relation to the Minister. His record in the past year has been an exceptionally good one. This Bill shows that he is going to continue his good work in the coming year. It is obvious that the Minister is very committed and dedicated to the brief he has and is trying to ensure that the people who need to be catered for under the social welfare code will be fully catered for.

I particularly welcome the evidence of the Minister's willingness to try new approaches and to listen to other people's ideas, not just those on his own back-benches but on the Opposition benches as well.

Before going into the details of the Bill it is important to reiterate the financial context in which we are looking at this Bill. We are all very much aware that we have had severe budgetary restraints and many Departments have had to face severe cuts. In social welfare, one of the highest spending Departments, one would have expected severe cuts as well. But again, by his wise approach to the whole area of social welfare, the Minister has managed to maintain, in real terms, the spending in his own Department by improved efficiency and by ensuring that there is less loss of public money through abuse. The Minister is to be commended on the fact that he has cut back on fraud and on various abuses within the social welfare code and has given the money saved back to the people who deserve it, those on social welfare. I will be referring to that later.

The Commission on Social Welfare mentioned among their recommendations four main areas for priority attention. The first was improving the basic payments for those at the lowest payment levels; secondly, improving the level of income support for families; thirdly, a broadening of the social insurance base and, finally, improving the quality of the service being delivered by the Department of Social Welfare. I intend, very briefly, to use those four headings in my short speech on this Bill.

In the area of improving the basic payments for those at the lowest payment levels, it is very clear that the Minister in this Bill is carefully following that recommendation. We all know that inflation is now running at approximately 2.5 per cent to 2.75 per cent but in this Bill the Minister has given across-the-board increases of 3 per cent. It is the first time in many years that the Minister for Social Welfare has exceeded the level of inflation, even when we take into account some of the high increases of 20 per cent and so on that were granted earlier in the eighties. Inflation was running higher at that time.

In addition, as he did last year, the Minister has set the date for implementing the various increases in July. Deputies will recall that last year in the Fine Gael budget a November start-up date was proposed which would have meant severe difficulties for many people on social welfare. I have no doubt that critics of this Government and of the Minister will cry that this is not enough. They will look for a higher percentage increase and an earlier date. Some of them might even go so far as to say that it should be back-dated but we are living in the real world and we have to work within the real parameters that are set for us by the economic constraints we are faced with. The Minister has done extremely well to increase all these benefits by 3 per cent.

The Minister went even further in relation to the child dependant rates. He increased some of those payments by 6 per cent and this is very welcome. A side-effect of this increase is a lessening of the bureaucracy involved in the social welfare code. At present there are 36 different rates of payments for child dependants. With the way this increase is being implemented, that number will be halved and there will be now only 18 rates of payment for child dependants. Even 18 is too many but it is a step in the right direction and I hope that figure will be reduced even further next year.

Perhaps the greatest evidence of the Minister's commitment to the recommendation of the Commission on Social Welfare is the fact that he has increased some social welfare payments by 11 per cent— those on the lowest level of social assistance will get an 11 per cent increase. That is a very welcome move and one which I have not heard anybody criticise — or anybody from the Opposition praise — and the Minister should be commended for it. There was little dignity for a single man living alone trying to live on unemployment assistance of £34 or £35 per week. It was evident that many of these people had to go to the health board for supplementary welfare allowance which was also paid by the State. I hope the move that has been made this year will be continued next year. The size of the increase in this case was as unexpected as it was welcome. The Minister has done a good job. Overall, the fact that the Minister has allocated an extra £101 million to social welfare for a full year will be welcomed by all.

The second area I want to speak about is that of improving the level of income support for families. In this regard I refer again to the family income supplement. Last year I said this was a very worthwhile scheme. It had been introduced by the previous Government and I commend them for that. I commend the Minister for continuing it and I hope it will be improved during the coming year. It is the only scheme that I know of, whether in the tax code or the social welfare code, where there seems to be some form of positive discrimination in favour of the family. We always claim to hold the family in very high regard but over the past decade or so the family, as the basic unit of society, has not been given the recognition it deserves by the State. I hope the family income supplement, as one of the positive measures to assist the family, will be improved in the coming years.

I am disappointed that, again, this year the take-up in this area has been very low and I hope that something can be done to improve it. I am sure that more than the 5,000 families or so who are benefiting from this scheme could and should be benefiting from it. I know from the remarks made by the Minister that a review is to take place on the family income supplement. Like Deputy Browne, I suggest to the Minister that, instead of increasing the amounts to be paid, he should try to expand the scheme so that more people would qualify under it. That would be more beneficial. It is a welcome boost to the families who are already in receipt of the benefit. I also suggest that perhaps the Minister would consider taking more than six children into account in his calculations for family income supplement. I know it is tied, to a certain extent, to the average industrial wage and where there is a larger family involved perhaps this could be dispensed with. Everybody knows how difficult it is to rear a family, with all the additional expenses that are put to them.

With regard to broadening the social insurance base, there has been quite a considerable number of contributions regarding the introduction of the new insurance scheme for the self-employed. Undoubtedly, this is the most important change in the Social Welfare Bill and probably the most controversial. Many of the Opposition speakers have condemned it. All of them seem to be working on the same set of figures by the same gentleman who was mentioned by Deputy McDowell earlier. The Minister has, on a number of occasions, corrected that. The person who first challenged the Minister's figures in relation to this matter has not come back to deny that the Minister was right. The previous speakers came in here today with this notion and tried to grasp at some kind of straw, at something with which to criticise this move. They used the same set of figures which the Minister had disproved many times over the past couple of weeks. They insist on advancing the same arguments. I would suggest that, before any other Opposition speaker talks about the cost of this to the State and the fact that the PAYE taxpayer will be paying for the farmer again — they take a good, hard look at the figures when they will find that the Minister is correct.

Deputy O'Keeffe claimed that the Government introduced this without careful consideration. He claimed more or less that the Government rushed into it without taking anything into consideration. I think Deputy O'Keeffe was wrong. He was wrong to criticise the National Pensions Board who did a fine job in drawing up their report.

One other Deputy talked about the £2 flat rate breaking small farmers. The reaction I have had on the part of small farmers around County Meath, is quite the opposite. They welcome the chance to draw an old age contributory pension for which they will be eligible when they reach the age of 66 — there may be changes effected in that figure — when they will not have to satisfy any means test. That is a more realistic attitude than that of some Opposition spokespersons.

Some people have advocated what might be described as an opting-out clause. It should be remembered that the basis of any insurance scheme is that one takes on the good and bad risks together, overall evening out the cost; people cannot be allowed to opt out. For example, if an individual's circumstances change and he or she decides to opt out early on and their circumstances change again in, say, ten or 15 years time, when they would like to have the opportunity of opting in again, it could be too late to do so.

One of the major objections to this scheme has been that it will cost the State money. I can only reiterate that that theory is based on a false premise. It is based on the figures given, on a rate of 4.5 per cent on a ceiling of £15,000. But the rate will be 5 per cent and unearned income will be included. The upper limit has been increased already this year from £15,500 to £16,200. Therefore, it will be seen that people are working from a false premise. They should examine the scheme again before voicing any further criticism.

One feature of the scheme which is very welcome is the move to group PRSI contributions, health charges, the youth levy and tax altogether so that they can be collected together by the Revenue Commissioners. My experience on the Committee of Public Accounts has shown me that separate collection leads to more problems. The fact that the Revenue Commissioners will be able to collect all of these charges together will give an impetus to their collection, ensuring a higher collection rate.

I should like to turn now to the Jobsearch programme which "saved" the Government and the Department of Social Welfare £22 million last year. It was contended by Opposition speakers that we would not be able to conduct 140,000 or 150,000 interviews in the course of a year. In fact there were over 141,000 interviews conducted. As a direct result of that programme 4,239 people were placed in jobs and just over 30,000 were placed on AnCO courses with a further 10,000 on Jobsearch courses. That was a remarkable achievement. Some people may criticise it, contending that they were phoney jobs and so on but the people who benefited do not say that. They are glad of having been given an opportunity to do something useful over a certain period.

I might address the charges that people were bounded out of claiming unemployment assistance. Approximately 12,000, in fact nearly 13,000 people left the unemployment register voluntarily; they disappeared from the register. I am sure they had their reasons for so doing; I have a fair idea of what they were and are. In fact anybody in the country would know what they were. A total of 1,951 claims were disallowed as a result of the Jobsearch programme, representing less than 1.5 per cent of the total number of people called under the provisions of that programme. That belies the suggestion on the part of many that people were hounded, that this represented a way of getting them off the unemployment register.

My experience of the Jobsearch programme operated in Navan, County Meath, is that most people there were very satisfied after, I will admit, initial hiccups and problems having been encountered about which I will speak in a moment. They were very satisfied with the attention they received and the approach adopted by those people designated to help them. There was reference to a survey of Jobsearch participants which was conducted following their involvement in the programme. The statistics would seem to bear out what I am saying, in that 75 per cent of those who participated said they found it useful and, more importantly, 72 per cent of them felt more confident in going for a job having participated in the programme. Those figures speak for themselves.

I know there were some problems encountered initially in Navan and, I am sure, in other areas also. Undoubtedly there can be improvements effected in the operations of the scheme. For example, we might be somewhat more selective in the mix of people placed on the Jobsearch programme. Again from my experience of its operations in County Meath I know there were very young people, not long out of school with no work experience, alongside people of 50 or 55 involved in the same programme. It was not easy for the older participants to have to do things that the younger, more educated, felt they could do very easily. At times it was embarrassing for the older participants.

There did not seem to have been any effort made to grade people on the basis of their literacy skills. Let us face it, most people leaving school nowadays have good levels of literacy whereas older people — who had to leave school for various reasons earlier in the forties and fifties — might not have the same level of literacy. There did not seem to be any account taken of that fact. I might reiterate my general point that there should be a more selective approach adopted to the participants on one of these programmes. I might also suggest that participants be involved more in deciding course content. I know this occurred in Navan and was very successful. It may happen in other centres also.

I hope, in future Jobsearch programmes, the anomaly that arose in the course of the year about the entitlements of people on Jobsearch programmes — who were told they would have the same entitlements as if they were in receipt of unemployment assistance — found suddenly around Christmas time that they could have been without fuel vouchers and bonuses. I made representations to the Minister at the time and that problem was ironed out.

I might refer now to the need to improve the quality of service advocated by the Commission on Social Welfare. This is one of the areas where the Minister for Social Welfare has shone. He has provided, and is providing, a much better service for everybody involved. Up to now our exchanges were based mainly on the idea of serving the unemployed only but the Minister clearly intends that the social welfare offices should be geared to all our social welfare needs. I hope that that trend will be speeded up as much as possible during the next four or five years. I also note the Minister's plans for computerisation of local offices that has already been tackled in a number of centres and, as somebody mentioned earlier, that programme will continue during the next 12 months.

There is, and has always been, a case in the Department of Social Welfare, more than in any other Government Department, for a complete localisation of services, not just from the point of view of people having a certain local knowledge but also for combining the work of the Department of Social Welfare and the work of the community section of the health boards. It is ridiculous that a person who is disallowed for unemployment assistance has to go to his community welfare officer and instead of getting his assistance from the Department of Social Welfare he has to get it from the Department of Health. There is a separate means test in both cases. The localisation of services should help to cut down this duplication of services at local level. In this regard the proposal by the Minister for one-stop shops is most welcome.

Deputy Browne mentioned the plight of widowers and I should like to add to that the plight of deserted husbands who are trying to rear families. Some people who have been left in this situation, whether they are deserted husbands with families or widowers, are in a limbo. I ask the Minister to look at this. I realise that there are probably very severe cost implications involved in what I am saying but, in justice, we have to try to end this discrimination against fathers, husbands and widowers who are trying to rear families. I ask the Minister to look at this area and I reiterate what Deputy Browne said.

I should like to refer to the dental scheme which probably is not within the scope of the Social Welfare Bill but which is within the Minister's brief. I regret very much that dentists have not thrown their full weight behind the extension of the treatment scheme which the Minister introduced last year. They are operating their own form of discrimination against married women who work in the home. I appeal to them to end this discrimination immediately. They are responsible for it.

In relation to dental treatment, a problem that has arisen in the North Eastern Health Board area is the cost of orthodontic treatment for people whether they have medical cards or hospital services cards. It is practically impossible to get orthodontic treatment within the North Eastern Health Board area on the health board scheme. It is equally impossible for many families, and not just those on social welfare, to pay the cost of orthodontic treatment especially, as happens in some cases, when two or three people in a family need it. I ask the Minister to consider some kind of scheme, even if it is a loan scheme, which would allow people to borrow money either from the Department of Social Welfare or from a fund run by the Department of Social Welfare, so that people and, in particular, children can get the vital dental treatment they need. This is a serious problem and it should be addressed.

I should like to welcome the clearing up of the anomaly in the Social Welfare Bill in relation to pro rata pensions. This is an anomaly which we have all come across at various times and the 1,700 people concerned will welcome the fact that it has been cleared up. I should also like to welcome the fact that the local authority contribution to the cost of unemployment assistance is being dispensed with.

I should like to make a few comments on sections 19 to 22 in Part IV of the Bill. Section 19 is a substantial improvement and will serve as a much better deterrent to those who defraud the social welfare system. Too often after exhaustive investigations people are brought before the courts and charged with defrauding the system only to have the Porbation Act applied to them. Having to refund money before the Probation Act can be applied will make a huge difference in recouping the losses from fraud and in deterring other types of fraud. I welcome the provision for the increased penalties. If the provision for these penalties were implemented many more improvements could be made for those people who live in poverty. If we can get rid of all the abuses within the system we will have a lot more money for those who deserve it.

I congratulate the Minister on his efforts to deal with social welfare abuse whether by employers or by employees. The Minister earlier announced a crackdown on the abuse of the unmarried mother's allowance. This crackdown is on the abuse of the allowance, not on the allowance. When an announcement like this is made it is inevitable that there will be cries from various sectors about harassment of people and so on but I think the voices of the people who are paying for all these services should also be heard. If there is abuse it should be tackled and I commend the Minister for his courage in tackling some of the very serious abuses we have had for many years.

I should like to confine myself to two areas in this debate. First, I should like to speak about the general area of social welfare and, secondly, about the contentious aspect of the Bill — the provisions in relation to the self-employed.

What I want to say might be different from what has been said by other speakers in the House because I do not believe we should indulge in a bout of self-congratulation for barely giving the necessary increases to social welfare recipients. The hallmark of a good social welfare system is that it should reflect the type of society in which we live and that those who are not in need should be able to cough up and look after those who are in need. Any social welfare system must have that fundamental hallmark. I do not believe it is the sign of a great society, nor should we be patting ourselves on the back all the time, when we give minimal increases to those who are in dire need. It is only what they deserve and in any caring and just society — and I believe that is what we are — those who are better off and the Government, through the areas of taxation and the PRSI system, should take from those who have and give to those people who have not. That is the fundamental hallmark that should be looked for in any social welfare system.

However, the social welfare system should not be looked upon as an end in itself. I would love to see fewer unemployment exchanges, fewer schemes, people being able to provide for themselves, sufficient work and a worthwhile standard of living for all our people. I do not look forward to the day when we have bigger, better and more modern social welfare exchanges and bigger, better and more expensive new schemes. I look forward to a society in which a minimal number of people will have to rely on handouts from the State and where the majority will have a worthwhile standard of living and worthwhile employment. Over a long number of years there have been vast improvements in the social welfare system but it is not an end in itself to provide bigger and better schemes and bring more people into them. It is no great credit to our society that we give just the minimal pay increases. However, in these difficult financial times the increases the Minister has been able to provide in this budget are very welcome. Having regard to the dire economic constraints on us, this is a reflection on the fact that we do care about those who are less well off. There are two main categories of people in the social welfare area. There are those who live in real poverty and that represents most of those receiving unemployment benefit or assistance. There is real poverty on the streets of Ireland, whether in County Kildare, Dublin or elsewhere. People are on the breadline, not being able to provide for themselves, having very meagre means. We do not have to go too far to see such real poverty.

On the other hand, there is abuse of the social welfare system and we are fooling ourselves if we do not recognise that. There is large-scale abuse throughout the length and breadth of the country. I commend the Minister and his Department on their intention to do something about that. There are so many different schemes catering for people in receipt of social welfare benefits — unemployment benefit and assistance, maternity allowances, disability benefit, occupational injuries payments — and so many officials have to be employed to administer the schemes that there are not enough investigation processes or sources.

With regard to all schemes, whether in the area of agriculture, industry or whatever else, the original scheme is thought up for a particular purpose but we keep it going, willy-nilly, when everybody has forgotten about its original purpose. That is particularly true of social welfare and the same applies to agencies. I commend the Government on their examination of these agencies to see if they are fulfilling their original purposes.

With regard to abuses of the social welfare system, let me give a few examples. There are small business people here employing two or three people who are officially on the books, but it is nearly impossible to get people to work for them. If people seek employment in large firms such as Guinness they know that they will be on the PAYE and PRSI system but a small businessman in County Kildare who is looking for people to work on a site knows that nobody will work for him under those conditions. People talk about shady employers but what can they do? I know the construction industry has fallen on hard times but I can assure the Minister that even if the C 45 and taxation system are in operation for those who are not employees of registered subcontractors, it has now come to the stage where nobody works under that system. The prospective employees will accept a wage of £150 or £200 a week, but do not want to hear about tax, PRSI, or anything else and that is the plain reality. The small businessman on a construction contract must get his work done somehow. It has become part of the Irish way of life to abuse the social welfare system. It is a reflection on our society that nobody, including myself, likes to inform on these people. That has a stigma attached to it that we are not prepared to face up to. If the Department of Social Welfare and the Revenue Commissioners could tackle that problem that would do away with much abuse of the system.

Our black economy is absolutely thriving — perhaps it is good that it is, because it may be the only section that is thriving. However, it is a disincentive for the employer to take on people on high rates of taxation and PRSI and is a disincentive also to the worker. I have always maintained that social welfare payments are not too high but the differential between working and not working is too small. To a single employee on £10,000 a year, a £20 increase into his pocket will cost the employer about £60 a week with taxation, PRSI and everything else, so the cost of the services or goods being supplied increases by that amount. The difference between the gross wage and the take-home pay is far too great.

The reason taxation is so high is that for the past 15 years we have been living in another world, not in the real world. We have been providing ourselves with a level of services which, while they are necessary and very desirable, we cannot afford. I am glad that this Government, for the first time in 15 or 20 years have faced up to the plain reality. I am not talking strictly about social welfare now. Our productivity is such that we cannot afford the services we have granted to ourselves. We are not West Germany, or the United States. We are a small, poor country. For 15 years, successive Governments and the people have accepted that we should have a high level of services. We have made up the difference by borrowing excessive amounts of money but the chickens have now come home to roost. No matter how long this Government last — 24 hours, one month or a few years — thank God they made the effort to put us back on the road to recovery. Indeed, even if we faced the people in the morning and were beaten, it would not bother me because I am proud to be able to say that the Government did the right thing. The people have accepted the realities and I commend the Government and the Minister for their efforts in that regard.

To get rid of abuses in social welfare, there should be an amalgamation of existing agencies to deal with the problem. At present, in many towns, there is an unemployment exchange at one end of the street, people signing on in a Garda station perhaps five miles away and a Manpower office at the other end of the street. It should be possible to have these organisations at least located in one building and there should be a register of all employers in the constituency.

Everyone has the right to refuse employment — I am not in favour of compulsion — but people cannot expect the State to support them if they will not take work which is offered to them. The whole system is being abused, left, right and centre.

The Minister has struck the right balance in regard to pensions for the self-employed. One Opposition party oppose it because of the proposed rates of contribution and another party oppose it because it will cost too much. Obviously, the Minister took these points into consideration when drawing up the scheme and he has got it right. I had reservations about the extension of pensions to the self-employed, not that I am against it in principle but my worry is that the cost in the long term will be astronomical. Perhaps there will be a short term net gain to the Government but in 20 or 30 years it will cost so much that it will be a millstone around the necks of future generations. However, the Minister has said that the scheme will not cost millions in the future and I am happy to accept his assurance.

I have filled up various forms over the years for farmers who wished to claim non-contributory pensions when they transferred their farms to their sons or relatives. These people never contributed towards a pension in their working lives and I know that many small farmers in my constituency will be delighted to contribute to a scheme like this which will avoid means testing at the relevant pension age. We should also put this matter in perspective, the minimum contribution will be £104 per annum which would only pay for a packet of cigarettes and box of matches every week or a pint and a half of Guinness. This indeed will be money well spent. How will the Government collect this new charge? Self-employed people have to pay health and youth levies and, not so long ago, they also had to pay an income levy. The office of the Collector General are up to their eyes in paperwork trying to collect millions of pounds. The Revenue task force are trying to collect more money and the health boards are still trying to collect some of the levies due from farmers. The collection system will have to be strengthened. I have a small amount of experience in this area and I accept that the advent of the Revenue sheriffs has made a considerable difference. It should be collected in the same way as PAYE, etc., but we will have to ensure that the collection is effective.

I praise the Minister for his radical approach to this area. He could have introduced a White Paper or a Green Paper and commissioned all sorts of reports to delay implementing this measure but he has taken the bull by the horns and has introduced pensions for the self-employed.

I am pleased to have the opportunity to speak on this Bill which is one of the most important measures introduced in the social welfare area. The Opposition parties should recognise that it is major legislation providing the most significant increases, in real terms, in social welfare rates for the long term unemployed. It has implemented many of the recommendations of the Commission on Social Welfare for which Opposition parties have been calling.

The Bill highlights the commitment of a caring Fianna Fáil Government to the needs of those on the lowest levels of social welfare payments. At the same time, it extends social insurance to the self-employed, thus bringing about greater equity to the financing of the social welfare system. I should like to congratulate the Minister and the staff of his Department for the tremendous work they put into preparing this major Bill in the short period of time since the budget.

Before dealing with the detailed provisions of this Bill, I propose to say a few general words about social welfare in Cork. For many years now, I have been calling for greater devolution of services to local level. I see Cork developing as a major regional centre for social welfare services in Munster. With modern developments in communications and computer facilities, we need no longer look to Dublin as the only centre from which central services can be provided. We need to bring the services closer to the people and our aim should be to provide a community based and community orientated service for our citizens. I am glad that the Minister for Social Welfare is very much in favour of localisation of social welfare services. Since he took office, I have been pressing him to give special attention to developing the services in the Cork area. I am glad to acknowledge his willingness to co-operate and his interest in visiting Cork on a number of occassions in connection with social welfare developments there.

While the Bill before us provides special major increases for the unemployed I am also concerned to ensure that the quality of the services provided to people who have to rely on social welfare is of an acceptable standard. Even in the present tough budgetary times we must ensure that the least will-off do not suffer any indignity when applying for or collecting social welfare payments.

Debate adjourned.
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