Last week I gave the House an undertaking that if employers attempted to reduce hours of work or wages to bring employees' weekly earnings down to exclude employees from full insurance cover, I would not hesitate to take action. Last Friday, strong representations were made to me by both the Irish Congress of Trade Unions, a joint delegation of SIPTU and representatives of the contract cleaning industry. Both delegations indicated that unscrupulous employers were prepared to reduce employees' earnings below the £40 threshold and that, in some cases, this process had already begun. As this will have the effect of excluding from cover part-time employees, who are particularly vulnerable, I have decided to take corrective action. Accordingly, I am reducing the threshold for insurability from £40 to £25 or more per week. I am satisfied that employers who attempt to do so will find it extremely difficult to reduce hours of employment or pay to bring their employees below this reduced level.
As a consequence of this development, the number of part-time employees who will benefit from the full insurance cover will increase from 21,000 to 27,000. I am confident that the £25 threshold will reduce the scope for evasion and the effect of the black economy. There is clear evidence that people are already making preparations to try to evade the £40 threshold which I had set. It is vital that families who live on low incomes and who rely heavily on income from part-time work are given the security of the social welfare system to fall back on at times when they are unable to work. I am satisfied that the £25 threshold will achieve this aim. As a consequence, the number of part-time employees who will benefit will go up to 27,000. For the first time these workers will have access to social security benefits when they are unable to work because of illness, maternity or unemployment. Furthermore, they will be entitled to pensions on retirement.
Part-time workers are the last group to be brought into the protection of the social insurance system. These workers are usually women who work in traditionally low paid and often insecure employment. I am satisfied that the new development in relation to the threshold will succeed in protecting these workers.
Reference was made to incentives to work. One cannot take in isolation the different items in relation to incentives to work. A number of elements in this Bill and the budget are designed specifically to increase the incentive to work on the one hand and, on the other, ensure that there is adequate support for those at work, particularly those on lower pay. The extension of the linking period of unemployment assistance from 20 to 52 weeks will be a major incentive for those on long-term unemployment assistance to seek out job opportunities. In addition, the full social insurance cover which will be extended from 6 April next to part-time workers will also facilitate those who avail of this 52 week break. Apart from directly assisting part-time employees this will also assist those who are unemployed in getting back into employment.
Various Deputies spoke about child benefit in isolation. However, child benefit and child-related tax exemptions have to be taken together. The strategy in the budget was to give the extra money to areas where it would have the greatest impact. It is clear that the increases in the family income supplement and the improvements in the child-related tax exemptions will have the greatest impact on people at work on low pay. The combination of the increased child-related tax incentives, family income supplement and child benefit will make a very significant contribution to the incentive to work. For example, a married person with four children earning £162 per week will get an extra £13.80 per week as a result of the combined effect of child benefit, family income supplement and child-related tax incentives.
The new area-based response to long-term employment set out in the Programme for Economic and Social Progress is a further initiative specifically designed to tackle the problem of long-term unemployment in black spot areas. It will ensure that a range of options will be available to the long-term unemployed resulting in a greater possibility of employment. We have been doing a number of things which fit in with this initiative. As regards the community development programme, Deputy Wallace referred to Knocknaheeney and Mayfield in Cork. There are some very good examples in these areas of how people have made use of this programme which is designed to help people get back into courses of different kinds and start up work projects. We are not confined solely to the new area-based response, details of which will be made available shortly. The community development programme has made a valuable contribution to local groups in helping them tackle their problems at local level. I am delighted that a total allocation of £750,000 has been made available this year for this programme.
A number of Deputies spoke about the need for a more personalised and localised service. That is the way in which we are developing the programme at present. For example, we are improving our buildings and offices and giving greater autonomy to regions and local managers. The increased autonomy which will be devolved to the regions and local managers will enable a number of the other initiatives referred to by Deputies to be introduced. We will continue to introduce one-stop-shops and to improve local information services. On the other side of the coin, we are tackling fraud and abuse, something we believe we must do.
Deputy Gerry Reynolds referred to the external control unit. He was very concerned about this unit and their activities. In this context, I took exception to some of the words he used in regard to public servants. He was not prepared to withdraw his remarks but I hope he will do so in due course. I want to put the record straight in regard to the activities of the external control unit.
The external control unit visit people who are receiving postal payments, who sign on at Garda stations and other signing offices. These people do not sign on weekly and some of them have not seen anyone for years, not to mention weeks or months. The external control unit arrange interviews locally and meet those people who are signing on for unemployment payments. They give these people a simple form to fill in. This was presented in a totally different light by Deputy Gerry Reynolds. I want to refer to the simplicity of the form and how it is related to the legislation. It states:
I understand that I must inform my local employment exchange or office if:
(1) I engage in any work, paid or unpaid, regardless of the duration,
(2) I am unable for any reason to take up employment,
(3) I am accepted on a training course given by FÁS, an Enterprise Allowance Scheme, the Social Employment Scheme, or any other Government sponsored training or work programme,
(4) I apply for any other benefit, assistance or allowance,
(5) I start a course of education,
(6) I am absent from the State for any period, and
(7) there are any changes in family circumstances which might affect my benefits, for example, a spouse taking up employment or dependants going to live elsewhere.
The form is then signed by the person. That is all that is in the form. Those who sign on weekly at employment exchanges or social welfare offices are very much aware of the requirements and from time to time are asked if they are still fulfilling them.
To give an example of how the external control unit operate, I will refer to their activities during 1990. Even though they are a very small unit, they interviewed 19,513 people during 1990. The number of people who, having either seen the form or filled it in, voluntarily signed off was 4,796. The number of people disallowed — the people referred to by Deputy Gerry Reynolds — was 292 out of a total of 19,513. I want to make it very clear that the allegations made by Deputy Reynolds are untrue, unfounded——