Dáil Éireann debate -
Thursday, 21 Mar 1991

Vol. 406 No. 8

Social Welfare Bill, 1991: Committee Stage (Resumed).

Question again proposed: "That section 4 stand part of the Bill."

Minister for Social Welfare (Dr. Woods)

Deputy Fennell raised a specific complaint which we will take up with the Eastern Health Board. Deputy Byrne raised the matter of the Department of Social Welfare taking over the administration of the supplementary welfare allowance scheme. This has a lot of different implications. As we develop the localisation of services we are in a better position to operate the scheme locally. We have been taking a number of steps to facilitate and regularise payments of supplementary welfare allowance. The Deputy asked about rents and mortgages. We have revised the relevant guidelines and unified them throughout the country. The exceptional needs payments are being considered. It is a more difficult matter to unify these on a nationwide basis but they are being standardised as far as possible.

Deputies Stagg and Byrne would like to see greater increases, as would most people. The increases being given are, however, very substantial. Deputy Stagg mentioned an increase of 4 per cent. In many instances rates of assistance are being increased by far more than 4 per cent. The supplementary welfare allowance, which is a basic fall-back allowance, is being increased by 11 per cent, bringing the personal rate up to £50. I would point out that the adult dependant and child dependant rates of supplementary welfare allowance are at the full rate of £33 for an adult and £12 for a child. The increased supplementary welfare allowance of £50, plus £33 for a dependent spouse, gives £83 for a married couple, an increase of £7. A husband and wife with three children on supplementary welfare allowance receive an extra £10 a week. We are closing the gap in relation to the priority rates recommended by the commission, which in 1991 terms would be £54.60. We are raising the personal rate to £50, but the combined rate is much closer to the priority rate because the adult dependant rates are unified, except for some few which are much higher. The administration of the supplementary welfare allowance scheme will be further considered in the development of the whole system and arrangements for payment.

In the area of assistance, the increases are in most cases above 4 per cent. The increase in short term unemployment assistance, supplementary welfare allowance and carer's allowance is 11 per cent. The increase in long term unemployment assistance, pre-retirement allowance and single woman's allowance is 6 per cent. They went up by 11 per cent in each of the last three years. The lowest rates now are the supplementary welfare allowance and short term unemployment assistance. The allowance for an adult dependant which is payable with unemployment assistance, the pre-retirement allowance and the supplementary welfare allowance is being increased by 6.5 per cent. The increase in respect of a spouse of an old aged pensioner is 5.7 per cent. The child dependant allowance is going up by 9 per cent. The new rates are set out in Schedule B to the Bill. In almost all cases the increases are well above 4 per cent, which is the general rate of increase. That is consistent with applying additional resources to those on the lowest payments.

As a result of those increases, a couple with two children on long term unemployment assistance will get £112 per week, giving them an increase of £7 or 6.7 per cent; a couple with five children on short term unemployment assistance or supplementary welfare allowance will get £143 per week, which will make them £12 a week better off, an increase of 9 per cent. The recipients of the carer's allowance will receive an 11 per cent increase. In the Schedule we see the changes in relation to the payments: almost all the payments are now above £50 and all the long term payments are above £55. The rate for those with an adult dependant are £86.70 and £88 and a person on supplementary welfare allowance with an adult dependant will receive £83. Those in receipt of a lone parent's allowance will receive an additional £14 for each child. A family with three children in receipt of the old age or blind pension will get an extra £36. Those in receipt of unemployment assistance or other allowance will receive £12 per child.

Taken together, considerable increases have been given in each of these areas. The number of beneficiaries of means tested payments is estimated at 349,000, and they will benefit from the increased payments. Their dependants account for a further 329,800 people, giving a total of 679,000 people who will benefit from these measures. With regard to the points made by Deputies Stagg and Byrne that the increases were only 4 per cent, it is very hard to find an example in this section where the increase was only 4 per cent. The increases are mainly above 4 per cent. Therefore their argument does not hold. I want to make that very clear at this stage before they decide to vote against the increases in this section, which by any standard are very good.

Deputy Brennan raised the matter that wives of persons in receipt of the disabled person's maintenance allowance were being directed to sign on. I will follow the matter up.

Mr. Byrne

There is no doubt that the Minister is capable of provoking me today. Whether he knows it or not, he is doing his best to put it across that everything is rosy in the garden. He denies our claims that the increases in certain areas are miserable. He presents the increases in terms of percentage increases. He argues that he has given percentage increases of 4 per cent, 9 per cent and 11 per cent in certain cases; but when you bring this down to figures, both widows and old age pensioners will get an increase of £2 per week. They will get a £2 increase on £53, which brings their payment up to £55, and this puts it more clearly in context. In the Programme for Economic and Social Progress the trade union movement negotiated a 4 per cent increase; but a 4 per cent increase for somebody on the average industrial wage, perhaps it is £200 or £250 per week, the officials might know——

Dr. Woods

The average male industrial wage is £240 per week.

Mr. Byrne

I was not too far out. Let us take the example of the 4 per cent increase for a man in receipt of the average industrial wage and compare it with the increase for old age pensioners, a third of whom at least are male. We are singing the praises of a 4 per cent increase for old age pensioners, which is 1 per cent above the rate of inflation, but the workforce got the same percentage increase on a much bigger base. We are creating a society where the gap between those in receipt of welfare and those who are lucky enough to be at work and in receipt of a wage is getting wider. Four per cent of the average industrial wage of £240 is substantially more than 4 per cent of £53. All things are relative. The income gap between old age pensioners, those in receipt of welfare and those trapped in poverty and those at work is widening as a result of the programme. In criticising that part of the Programme for Economic and Social Progress I was addressing the area of social reform. I felt that the disadvantaged did not get as good a deal as they were entitled to.

Mr. Stagg

Let me set the record straight. I did not say that the increases in the particular section were 4 per cent but that the general payment increases were 4 per cent — that is a fact — and the Minister clarified that earlier on. The Minister seems to be now misinterpreting what I said. The reason I will not support this section is that the Minister continues to make payments in the middle of the year rather than at the beginning of the financial year, which we are seeking. That is the reason I will not be supporting this section. I am not trying to provoke the Minister into another long reply because I am anxious to reach other amendments.

Mr. O'Dea

I will comment on some of the points raised by Deputy Byrne. I do not think anybody is singing the praises of the level of increases in this Bill.

Mr. Byrne

You, Deputy, were not here all morning.

Mr. Stagg

It was like a chorus.

Mr. O'Dea

I was listening to the debate on the monitor. Nobody on this side of the House——

An Leas-Cheann Comhairle

There is a long standing practice that we do not refer to the absence of anybody from the House. He or she is entitled to be absent or present. That will apply both ways. If we hear an accusation from this side, and we did last week, that is the standard procedure.

Mr. Connaughton

We heard it yesterday too.

An Leas-Cheann Comhairle

Deputy O'Dea is entitled to come and go as he likes, as is every Deputy.

Mr. Stagg

That is a club rule I do not subscribe to.

An Leas-Cheann Comhairle

Can the Chair continue to exhort Deputies to address the receptive and sympathetic ear of the Chair rather than elsewhere.

Mr. Browne

(Carlow-Kilkenny): He is bringing an air of reality.

Mr. O'Dea

I have been in this House on many occasions when Deputy Byrne was not here and I did not think it worth my while to refer to that but if he wants to refer to me that is his prerogative.

Mr. Byrne

On a point of order, Sir, the point I was referring to——

An Leas-Cheann Comhairle

That is not a point of order.

Mr. Byrne

For the record, what I said was there were backbenchers here today who embarrassed the Minister by their praise of the programme. The Deputy has come in and said that nobody is singing the praises of the level of increases. I am just correcting it for the Deputy.

An Leas-Cheann Comhairle

The Chair did not hear the Minister reject that alleged embarrassment.

Dr. Woods

The Minister was not embarrassed particularly.

Mr. O'Dea

If Deputy Byrne will allow me to develop my point perhaps he will understand more clearly what I am saying. Nobody on this side of the House believes that people on social welfare are already booking their flights to the South of France because of the increases they have received in this budget. Of course the increases in the Social Welfare Bill are not enough. They are never enough. The reality is that our resources are not infinite. The increases are over and above the projected rate of inflation for the year to which the increases relate. That is real progress. That is a real increase. That is redistribution. I do not know how Deputy Byrne envisages we should redistribute resources within this economy.

Mr. Byrne

I will explain that later.

Mr. O'Dea

His party were adherents in the past of an ideology that has proved to be a failure all over Eastern Europe. The Government are trying to develop the economy and spread the fruits of that economic development around as fairly as possible among all sections of the population. Deputy Byrne said that if we increase the average industrial wage by the same rate as we increase social welfare we are maintaining a gap between the people on social welfare and the people who are lucky enough to be in employment. Deputy Byrne seems to overlook the fact that any increase given to people in employment will attract income tax at the top marginal rate. That is something that does not apply to people on social welfare.

Mr. Connaughton

In some cases.

Mr. O'Dea

Second, Deputy Byrne seems also unaware that various members of his party have joined with all the other parties in this House criticising what we call the poverty trap, the fact that it is sometimes more profitable for people to stay on social welfare than to go out to work. We should be trying to get away from that. We should be trying to give people an incentive to work rather than to remain on social welfare.

Mr. Byrne

The Deputy never heard The Workers' Party make that statement, he never heard us argue that.

Mr. O'Dea

The reality is that the increases are over and above the projected rate of inflation. For instance, there is an increase of 11 per cent, which is 7 per cent above the projected rate of inflation, in the carer's allowance.

Mr. Stagg

The Deputy is being very selective.

Mr. Connaughton

There is 2.5 per cent VAT——

Mr. O'Dea

Long term unemployment assistance has increased by 6 per cent after increases of 11 per cent per annum for the last two years. That is real progress and we should compliment and congratulate the Minister on it. This debate has a certain familiarity. I accept an equal degree of responsibility for this because I too participated in it, but when any party is on the Opposition benches they spend all their time in a debate like this criticising the Government for not providing enough social welfare and the Government reply that resources are not infinite. That was a fact when the Government prior to 1987 were in power. Unfortunately it is still a fact, because of the very successful economic policies pursued since 1987, our resources are not as finite as they were.

There are many other good things in the Bill which I have no doubt we will go on to debate. There is provision for changing the method of payment to people in receipt of unemployment benefit and unemployment assistance. That is something I heartily welcome. We must try to get away from this Dickensian soup kitchen practice where people have to queue up for unemployment benefit and unemployment assistance in full view of everybody else.

This is only one improvement which was overdue and necessary this Minister has made in the administration of social welfare and he is to be congratulated on that. He has not only improved the social welfare benefits in real terms but has made tremendous far reaching changes in the system of administering social welfare. Rome was not built in a day and we will not make all the necessary changes at once, but we are moving gradually in the right direction. I want to thank the Minister for that. He deserves the gratitude of everybody in receipt of social welfare for what he is doing in this regard.

The debate is familiar. The job of the Opposition is to oppose, regardless of how farcical it is to see Deputy Stagg telling us he is committing his party to voting against a provision of £164 million for social welfare. In the present economic context that is not an inconsiderable provision. It is a direct consequence of the successful economic policies being pursued by the Government that we can afford to give this, and that the Minister can provide the finances to go ahead and implement the other very necessary and desirable changes which he has mentioned.

I can think of things in the social welfare system that I could still criticise. Of course in any big administrative system there will be things to criticise. There will always be room for improvement. However, since his accession to the Department of Social Welfare in 1987, Deputy Woods has made considerable improvements. The Government have provided considerable finances over and above the rate of inflation since 1987 as a result of which the lot of people on social welfare has improved in real terms no matter what the Opposition might say.

Mr. Connaughton

Try living on it.

An Leas-Cheann Comhairle

I suggest the House might agree that we would have satisfied the requirements of Standing Orders in the matter of having exhausted anything and everything that could be usefully said about section 4.

Question put and declared carried.

SECTION 5.

Amendments Nos. 18 to 25, inclusive, not moved.

Question proposed: "That section 5 stand part of the Bill".

Mr. Stagg

On a point of order, I tabled two related amendments. One has been ruled out of order by the Ceann Comhairle's office and the other has been allowed. I think if they were viewed together there would be no longer a reason for just allowing the first one. In other words, there would not be a charge on the Exchequer if the two were viewed together.

An Leas-Cheann Comhairle

The Deputy will appreciate that the decision has already been made in respect of the amendment which has been disallowed and we cannot depart from that on the presumption that, having debated the one that is in order, something might have occurred which would make the one that has been disallowed acceptable.

Mr. Stagg

I do not wish to debate it with you, but the point is that the amendment which is allowed is nonsense on its own. It would be extremely foolish of the House or of the Deputy to propose it on its own without the other one which is disallowed. They were a package and would not involve a charge on the Exchequer.

An Leas-Cheann Comhairle

They have not been adjudicated upon in that fashion. The Deputy should be happy that one has remained and is in order and will be discussed at the appropriate time.

Mr. Connaughton

I am sorry that my amendments were not acceptable. We have had a long discussion on various aspects of social welfare since 10.30 a.m. today and a great deal of relevant information has passed across the floor of the House. The Minister has certainly made progress in the budget. However, one of three black spots is the child benefit scheme. For some strange reason the Minister has discriminated against children. For my money, the child benefit scheme is the most direct way to help families financially. I know of no better way. With the exception of one at the higher income levels it avoids all the traps, and all the studies have shown that it is couples with families who are most likely to be below the poverty line. Anybody charged with the responsibility of raising children understands that, but it is reasonable that we would state it on the floor of the Dáil.

It is necessary to restate the importance of the child benefit scheme, which has been in existence for a long time and has been the subject of attack by one section of the community or another from time to time. This scheme has many advantages. Its first and most important one is that it is easily targeted, going to the people who have an immediate use for it. I can think of hardly any household — because it is paid principally to the mother — that it does not benefit in a real way. Unfortunately, because of the way our society is organised, a great number of the problems of rearing families, whether we like it or not, fall on women's shoulders. Even though I speak against my own sex in that respect I have to say I know of no other allowance better used. Nationwide, and particularly in the area I represent, it has kept body and soul together in many a family over many years. I would not like anybody to dream of touching the child benefit scheme because it can be targeted where it is most needed and gives greatest benefit. In addition, because of the many problems encountered by children in our society today, the scheme has many advantages for them.

In deciding how to implement budgetary increases the Minister came up with two crazy proposals. For some strange reason — which must be of a budgetary nature — he decided that the first three children would not attract the extra £7.10 child benefit. In other words, he was saying: hard luck on a family with three children only, we will intervene only where there are four or more children. Many studies undertaken have shown that families with two and three children are experiencing dire poverty although I freely admit that the greater the number of children the greater will be the degree of poverty experienced.

It is an insult to the women and children of Ireland that the Minister decided to implement the relevant increase at a level which would debar, on my calculations, three out of every five families. We are all aware there has been a dramatic reduction in the numbers of families with four or more children. Therefore, I contend that the demarcation line with regard to the increase is cynical. I believed that the increase should have been given in respect of the second and additional children. On the basis of any analysis one cares to use, no money paid by the Minister's Department does so much good for so many people.

I have a real bee in my bonnet about the next point. We spoke at length over the past two hours on the reasons, good and bad, various payments could not be effected until July next. We were all of one mind that they should be paid earlier. The Minister made a reasonable shot at explaining to us why they could not be paid earlier. But the increase in respect of child benefit will not be implemented until October next so that almost the entire year will have passed before that increase will be paid. How can the Minister turn to the women and children of Ireland, say he believes in this scheme, and decide that their increase — which should be paid in tandem with all others — will not be paid for several additional months? Whatever are the Minister's views, I contend it is a slight on the women and children of Ireland. If, as I heard the Minister say on a number of occasions, child benefit is so important, then this is a very ham-fisted way of showing that concern.

It is well to make the point that child benefit beats almost all the poverty traps. It is a straight monthly cash payment paid principally to mothers. It is paid to all families, whether in receipt of social welfare, those on low incomes, where taxation does not count, or those in receipt of higher incomes liable to taxation; it does not matter, the mother receives that payment. I contend that it is one of the most eagerly awaited payments from the Department of Social Welfare, particularly on the part of women. I am terribly disappointed — because of the way the Minister has pitched the increase — he has excluded families with two and three children from reasonable benefit. When replying perhaps the Minister would give us some indication of the numbers of families he has excluded which, on my calculations, are three out of every five. The Minister will have the most up-to-date figures available to him. I should be glad if he would let us have them.

No matter how one views it, I contend it is an attack on the women and children of Ireland. Unless I hear something very different — I cannot understand how the Minister would have allowed it happen — I will be putting this to a vote. I believe we owe it to the most important sector of our society, women, because, as a group, they shoulder 80 per cent of the problems of rearing families.

I am particularly dissatisfied with this section. I and my party will be putting it to a vote.

Mr. Stagg

The Commission on Social Welfare recommended that the child allowances, as they were then, should be improved and differentiated according to the ages of children with higher payments for older children and larger families. The child benefit allowance has been increased from £15.05 in 1986 to £15.80 in 1991. I would be grateful to Deputy O'Dea, an expert on figures, if he would work out the relevant annual percentage increase that has led to an increase of 75p over that five-year period. Perhaps he would inform the Minister, his officials, the House and the public at large of his calculations. In effect, there has been no increase whatever but rather a decrease in real value in child benefit between the years 1986 and 1991 with higher payments for the fifth and subsequent child to date, now being granted to the fourth child.

Like the previous speaker I believe that a non-means tested payment to mothers on behalf of children probably constitutes the best method of targeting money where it is most needed. I will go further and say I regret my proposal on the matter has been ruled out of order for the reason outlined earlier. I proposed a combination of the child benefit allowance and family income supplement, effectively abolishing the family income supplement, since 30 per cent only of those entitled to it actually receive it. Only 30 per cent of those who are entitled to the family income supplement receive it according to figures from the Department.

Dr. Woods

It is nearer to 50 per cent.

Mr. Stagg

I will take the maximum of up to 50 per cent, but in any case the scheme only half works so that it is a bad scheme and it does not get to where it is needed. There is a resultant marginal tax rate of 100 per cent for people who claim family income supplement — in other words, if they receive an increase of £1 in their wages they will lose £1. There is a marginal tax rate of 100 per cent for people in receipt of family income supplement. It is a very bad scheme and creates poverty traps all over the place. I propose that that scheme be abolished. That amendment is still on the amendments list and is in order and we will deal with it when we come to it. I was combining that amendment in a package with the child benefit scheme.

I propose, without charge to the Exchequer, that the child benefit scheme be increased from £15.80 per month per child to £43.50 per month per child and that there would be a special additional payment of £15 per month for each child over the age of 12 years. Taking the cost of the family income supplement, if it operated properly at 100 per cent, and the cost of the present scheme into account and if the child benefit payment was taxable, which was my proposal, there would be no cost to the Exchequer and we would direct a huge amount of money where it is most needed. We would direct it in a way that it would be untouchable by Governments of the future. Governments can always take away from the poor because the poor are not organised in any sense, but if they touch child benefit the well-organised and often well-heeled lobbyists would go after them. To get the strength of the rich on the side of the poor in this type of scheme would be to the eternal benefit of the poor. That is why child benefit is sacrosanct and the reason Governments do not touch it. For that reason I propose that it be used to a greater extent to end poverty traps, to direct the money where it is needed and to claw it back to where it is not needed through a tax system.

The child benefit scheme has been increased by 75p in five years. We pay £3.65 per week per child through this scheme and we rely on a failed scheme called family income supplement. It is a perfect mechanism for creating poverty traps. This is a system whereby people are judged on an ongoing basis as to their entitlements — six weeks is the time span allowed — and, for every increase of £1 they receive, £1 is taken from them. There is absolutely no incentive to receive an increase in wages because you gain nothing; and sometimes you lose because family income supplement is not taken into account, at least in my local authority, for the purpose of local authority rents. An increase of £1 would be taken into account and it could well mean that one would lose £2 as a result of receiving £1 in wages. That type of system should be scrapped. It was introduced as a temporary measure and the commission recommended that it should not be used any longer.

We recognise that increases in child benefit, without any compensatory mechanisms, would be extremely expensive. For that reason we suggest to the Minister — we cannot formally propose it now because my amendment has been disallowed — that he look carefully at the idea of combining the two systems, possibly talking to his colleague, the Minister for Finance, take the child tax exemptions into account also and combine them in a package where they would be taxable and paid directly to the mother. There is no hint or sign of the Minister moving in that direction. We are still left with the situation where the child benefit is now £15.80, given that it was only £15.05 five years ago. There has been a massive increase of 75p in that period.

Taxing child benefit as I propose would clawback, it was estimated by the Revenue Commissioners when I asked them to examine it, 30 per cent of the total cost. Taking the two schemes into account, the family income supplement and the child benefit scheme, there would be no loss to the Exchequer; and, as Deputy Connaughton has said, this scheme directs money to where it is most needed. Everybody agrees with that. There is no way in which anybody can get at this money except the mother of the children concerned.

Children are the group of people most liable to be at risk from poverty. The Combat Poverty Agency and the ESRI estimate that 40 per cent of all children are at high risk from poverty and that about that number live at or below the poverty line. I would like to have seen the poverty line rejected by the Minister earlier today accepted and put into the legislation as a guideline for himself and for future Governments. I would ask the Minister to look at my suggestions to see whether he can move along those lines. His proposal to give nothing in this budget to the vast majority of children and simply move on to the fourth child is not acceptable and I will not be supporting this section.

Deputy Fennell rose.

Mr. Byrne

Like the previous speaker's amendment, unfortunately our amendment was also ruled out of order. Our amendment asked that the amount for each of the first three children be increased from £15.80 to £30 and the amount for each child in excess of three from the existing £22.90 to £40. That amendment has been ruled out of order because it would incur a cost on the Exchequer. Deputy O'Dea went on to suggest that The Workers' Party are always ranting and raving about spending more and more money and where was it to come from. We heard those arguments before when it was alleged that The Workers' Party was being alarmist when we said there was a massive untapped pool of uncollected and unpaid taxes in the hands of the self-employed. We as a party estimated that sum to be in the region of £250 million. That estimate was treated by those in Fianna Fáil as an incredible big joke and a figment of the imagination of The Workers' Party.

Mr. O'Dea

We got it.

Mr. Byrne

Then we discovered, as a result of an amnesty — when the towel was thrown in because of political pressure when millions of workers had marched for greater tax reform and a wider tax base — that, low and behold, these gentlemen in big cars and big brief cases——

Mr. Connaughton

They always have big cars.

Mr. Byrne

——were able to queue up and meet the date of the amnesty. Some are reputed to have carried in hard cash as much as £1 million and paid it over happily. To everybody's surprise, including our own, £500 million was miraculously produced from friends of——

Mr. O'Dea

The Deputy's party was wrong again.

Mr. Byrne

We were a lot further down the road than the Minister for Finance and the Fianna Fáil people who suggested that we did not have a clue as to what we were talking about.

Mr. O'Dea

We got the money in.

An Leas-Cheann Comhairle

Deputy Byrne must be allowed make his own case.

Mr. Byrne

A sum of £500 million was brought in. Needless to say, Deputy O'Dea will have another smile when I remind him of the total failure to date to bring in that huge sum of money that is still outstanding and which, had it been forthcoming, could make for greater increases in welfare. For example, the stark statistics about where the money is and where it is not coming from was produced in the newspapers only last week. Under the self-assessment scheme where only 694 audits were carried out on approximately 205,000 self-employed people, we brought in £6.8 million, which is equal to £9,800 per person. In the context of self-assessment, the policy of under-staffing the Office of the Revenue Commissioners has meant that wealthy——

An Leas-Cheann Comhairle

Deputy Byrne, this section deals with child benefits and payments. I ask the Deputy to confine himself to what is in the section. I want to remind Deputies on all sides of the House that we must pursue this with some semblance of what is required under Standing Orders. I know that inevitably there will be a passing reference to this, that and the other, but we must confine ourselves to child benefits.

Mr. Byrne

I am talking about child benefits and the amount payable under the child benefit scheme. I have argued that these amounts should be substantially increased. The odds of being caught under the present audit system are 33,300:1. the figures produced by the Revenue Commissioners prove that approximately £9,800 can be collected from each self-employed person. The money should be collected from the 205,000 self-employed people in the country so that children can have a better start in life. If I remember correctly, the increases last year were so pathetic that I was able to argue that the increase per child would not even finance the purchase of an apple a day——

Dr. Woods

The Deputy argued against applying the general increase to them and he was successful.

Mr. D. Wallace

If the Deputy had his way they would have no apple.

Mr. Byrne

As I was saying, the increase given last year was so miserable that it was not sufficient to purchase an apple a day for children.

Dr. Woods

I am beginning to wonder what side the Deputy was on at that stage.

Mr. Byrne

The point is that this year the Minister has not given any increase to the first, second or third child. After all their talk about how fond they are of children of the nation and how they should be treated, the Government have not given an increase to the first, second or third child——

Dr. Woods

Some day the Deputy will become a practical, useful and helpful politician.

Mr. Byrne

This is key area in social welfare legislation. As has been pointed out, this is a very important source of funding for many parents. It is one of the most important social welfare payments for women as it goes straight into their hands. I grew up in a financially deprived background and I know the importance of the children's allowance to women. As I am sure the Leas-Cheann Comhairle is aware, thousands of women celebrate these monthly payments. These women know that they are guaranteed to receive these few bob every month. It is very sad to think that they will not receive any increase this year.

There is a startling amount of deprivation and poverty in our society. The reports on child poverty are frightening. We should hang our heads in shame at the recent reports which state that many children in our society are so under nourished that, in comparison to children in the better off sections of our community, they are undersized physically, and they under-perform in sporting activities and outdoor pursuits. It has been well documented that the children in the poorer sections of our society are not as healthy as those in the better off sections. We should bear in mind that this is happening in Ireland and that it is not just something which happens in the third world, Africa or the Sudan. As legislators we have the power to do something on their behalf.

I want to refer to the changing nature of the Irish family. Many children are now born outside of marriage and are being raised by single parents, be they men or women. The children's allowance has been proven to be of tremendous assistance to parents. I want to record my incredible disappointment at the Minister's decision not to give any further increases this year to the first, second or third child.

Mr. D. Wallace

I found Deputy Byrne's remarks very interesting. It is clear that there is a contradiction in his comments. His party cannot agree to increases of £164 million in social welfare benefits. Yet they want to increase the allowances from £15.80 to £30. The reason my party are on this side of the House is because they have shown concern for the less well off members of our community. Many people may think that I should be sitting on the other side of the House with the Deputy as I too come from a deprived background. I do not know what the Deputy's background is but I want to refer to mine. I have six brothers and three sisters and I can distinctly remember that my father's social welfare cheque amounted to £3 1s per week. I might be grey but I am not that old: I realise the importance of this assistance to people with large families. The Deputies on the other side of the House are not fooling anybody by their hypocrisy——

Mr. Stagg

I worked out the amount and it is 1 per cent.

Mr. D. Wallace

I do not think women who receive this allowance will be happy at Deputy Byrne's remarks about how they celebrate when they receive it. Many of those people look forward to going out but the Deputy implied that they spend the money they receive on their night out. I compliment the Minister on directing the available resources to those most in need.

Mr. Stagg

One per cent.

Mr. D. Wallace

Major changes have taken place in the child benefit area. The reduction in the number of child benefits from 37 to three has eliminated much bureaucracy, reduced the cost of implementing this scheme and benefited in a substantial way those families most in need. I appeal to Deputy Stagg and Deputy Byrne to be more responsible. I understand that they have a job to perform in Opposition, but they should not oppose everything just for the sake of opposition. When they had the opportunity Deputy Stagg's party did very little for the less well off in our community. The Deputy said today that he was not in the House when many budgets were being put through. When it was proposed to cut the alleviation allowance by £20 a week, at the stroke of a pen, only one Deputy, a member of the Deputy's party, stood up to be counted. I compliment him for doing so.

Mr. Stagg

Give him a mention.

Mr. D. Wallace

That is what they will be remembered for. We should cut out the nonsense and remember that we are dealing with a very important matter. Most of those who have benefited from the increases in social welfare payments during the past three years recognise that Deputy Woods is a man who is concerned, has made changes and is prepared to fight his corner at the Cabinet table to ensure that the less well-off in our community benefit from increases in social welfare payments. The 64 sections outline the benefits to be passed on and the improvements he intends to bring about. We should cut out the nonsense and contribute in a more positive and constructive way. I am sure the Minister will look seriously at any amendment worth considering.

Mr. Stagg

Fifteen pence a month?

Mr. D. Wallace

I can assure the Deputies opposite that they are fooling nobody.

Mrs. Fennell

I support the amendment for the reasons outlined by my colleague, Deputy Connaughton. Like Deputy Wallace, I too, can get very emotional whenever the children's allowances are discussed. Indeed, I can recall my mother taking out her book and the ridiculous amount of five shillings sticks in my head. Unfortunately, the Minister has failed dismally to make this a meaningful payment.

I agree with Deputy Connaughton who recommended that the higher amount should be paid in respect of the second child. I would much prefer if the higher amount was paid for all children and if the recommendations in the report of the Commission on Social Welfare were taken seriously. As I pointed out yesterday, that report recommends that the higher rate should be paid in respect of children aged 12 and over. It costs more to care for children as they grow older but this factor has not been taken into account. If I had my way I would give mothers £15.80 per week in respect of the first child and an increased amount for each subsequent child as that is the most direct and realistic way of ensuring that money will be spent on the children.

The issue of the children's allowances was one of the first issues on which I actively campaigned way back in the early seventies. As the House will recall, the allowance at the time was legally paid to the father. One would be surprised by the number of men who, on getting the allowance each month, put it into their pockets.

Mr. Stagg

They drank it.

Mrs. Fennell

I would not say they drank it but they certainly did not give it to their wives. I was horrified — I was involved with an organisation called AIM at the time — when I discovered that what happened in my own home did not apply in other houses. It was pathetic that women hung around in the hope that their husbands would give them the money but a high proportion of them did not get it. However, in 1972-73 women got the legal right for the first time to hold the book and claim the allowance.

The day they go to claim the allowance is the high point in the month for many women. Indeed, when the details of the budget are published in newspapers the majority of women turn first to the section dealing with children's allowance. Unfortunately, they have had no reason to cheer during the past two years as no increases were granted. This shows up the lack of politicisation of Irish women. There has hardly been a peep out of women or a remark from women's organisations and that is regrettable.

Our rates of child benefit are very poor compared with the rates payable in other EC countries. No account is taken of the fact that we have larger families, high unemployment, a greater degree of family deprivation and that a higher proportion of women remain at home. For every women aged over 25 working in the house there are five at home who are dependent on their husbands and are financial cripples. This very often leads to emotional difficulties. In deference to practice and custom many women have decided to say at home to look after their children. They are doing a wonderful job and in many instances this is the best career possible. Unfortunately, the only payment they get is £15 per month. I regret that a more substantial increase has not been granted and that there is not greater recognition of the financial needs of children and mothers.

I am aware that the financial wizards and economic strategists in the Department of Finance would like to get their fingers on that money and it is suggested regularly that this benefit should be taxed. I was horrified to hear Deputy Stagg of the Labour Party suggest that it should be taxed and I wonder if those mothers who support the Labour Party are aware of this.

Mr. Stagg

The Deputy should read her own party's pre-budget submission, in which they made this suggestion.

Mrs. Fennell

I would be opposed to any suggestion that it should be taxed.

Mr. Stagg

The Deputy should tell that to her party spokesperson.

Mrs. Fennell

It should not be taxed. I accept that the Department of Finance find themselves stretched and in difficulty when it comes to balancing the books but the children's allowance should not be considered a soft target. Any interference with it would cause women to demonstrate. I hope it will be safe from the clutches of the Department and will not be considered an easy target.

Mr. Stagg

The Deputy should speak to her party as they beat me to the draw.

Mrs. Fennell

I was very disappointed when I heard Deputy Stagg make that suggestion. In fairness to him, he may not realise that many middle class families live in what one might call working class conditions behind the front door. In many homes, the woman who rears the children and puts the meals on the table is not getting an adequate amount of money from her husband. Rather than go to court she prefers to stay in the home and preserve her marriage.

Mr. Stagg

The Deputy should look at the levels proposed.

Mrs. Fennell

I suggest that a huge amount of money is not involved — in the region of £60 to £80 per month — but it might be enough to ease hardship. We should not assume that women married to men in the high tax bracket should not get this benefit. I suggest to Deputy Stagg and to anybody else who is interested that if we are talking about giving tax relief on this allowance — that is probably not exactly what the Deputy was saying; he was talking about taxing the husband — the husband will take the money back from the wife. That would create an unpleasant atmosphere within a marriage. It is the husband's income that would be taxed because in most instances the wife would not have a taxable income. We should leave the allowance as it is, except to increase it, make it more generous, more worthwhile and more meaningful. We are lagging behind our colleagues in other countries, but maybe there are ulterior motives why they are enticing women to stay at home. I would like to think that this allowance would be given some priority in years to come.

I am absolutely disgusted that the allowance is not being paid until October, the latest of all the payments. Does this suggest the low status or the lack of political clout of these women? Unfortunately, mothers in the home are not like farmers, teachers or groups who have well-funded organisations to look after their interests. Perhaps it should be brought forward and should not be left until two months before the next budget. I support my colleague's amendment.

Mr. O'Dea

I accept the case made by the Opposition about the cut off point, but the Minister has indicated to me that he intends to deal with that. I cannot let the debate pass without referring to some of the remarks made earlier by Deputy Eric Byrne. He referred to the magic pot of gold that is out there to be collected. I have been inundated with complaints, both in a professional and political capacity, from our own supporters and from the self-employed regardless of what party they support about the ruthless methods employed by the Revenue Commissioners to collect taxation. I will give the House one example. I know of ten or 11 dairy farmers who have had attachment orders issued against them for their creamery cheques. As Deputy Connaughton knows well, the creamery cheque represents the dairy farmer's gross income; but he has to incur expenditure to earn that income. These people have come to me — God knows how many have gone to other Deputies in my constituency — because attachment orders have been issued by the Revenue Commissioners against their creamery cheques. If that is not a ruthless and merciless method of collecting income tax I do not know what is.

Deputy Byrne made the point, if I understood him correctly, that the self-assessment scheme enables people in the self-employed category to avoid paying tax on a wholesale basis. I want to disabuse the Deputy of that notion. The figures show that the net yield from the self-employed sector has increased since the introduction of self-assessment. I know one or two cases where people submitted their own returns and the Revenue Commissioners went through them——

An Ceann Comhairle

What relevance has this to the section we are debating?

Mr. O'Dea

The relevance is that Deputy Byrne was making——

Mr. Connaughton

A fair point.

An Ceann Comhairle

The matter referred to by the Deputy is one for the Minister for Finance.

Mr. O'Dea

You were not here, a Cheann Comhairle——

An Ceann Comhairle

I am here now and I know what is and what is not relevant.

Mr. O'Dea

Deputy Byrne stated that if the Government were more assiduous in collecting outstanding revenues the child benefit could be increased.

An Ceann Comhairle

We must get back to social welfare benefits.

Mr. O'Dea

I have made my point. Deputy Stagg invited me to work out a percentage of the increase in child benefit over the last five or six years. while I was working on that I came up with another figure. I do not know if Deputy Stagg was in this House between 1982 and 1987; but the Labour Party, of which he is a member, were here. If the Government had available to them the interest we are paying on the amount by which the then Government increased the national debt we could increase this year's allocation for social welfare by 800 per cent

Mr. Connaughton

And 1977 on top of that.

Mr. O'Dea

Deputy Stagg should take that figure on board and consider it. I accept that child benefit has not been increased by any substantial extent over the past five or six years; but this is a Social Welfare Bill and child benefit is one small section of the total social welfare budget. Nobody can deny that since 1987, despite straitened financial circumstances which were not of our making and despite the need to contain and control public expenditure which had been let run out of control, the increases in the social welfare allocation by this Government and the Government which preceded them have been very substantial. They represent real increases and real redistribution. To isolate one small element of the social welfare system in which there have been such substantial increases——

Mr. Stagg

That is what the Deputy has been doing all day. The increase is 4 per cent.

Mr. O'Dea

To take one small element——

Mr. Connaughton

The most important one.

Mr. O'Dea

——of the totality and argue that the increase in that area have been inadequate or have not matched inflation is a very distorted and unfair argument.

Mr. Stagg

The Deputy has a way of doing that.

Mr. O'Dea

I have a certain regard for Deputy Stagg and that remark is really unworthy of him.

Mr. Stagg

Thanks for the praise.

Mr. O'Dea

As I have said, we have increased social welfare quite considerably.

Mr. Stagg

By 4 per cent.

Mr. O'Dea

Deputy Stagg and Deputy Byrne, the gentlemen of the Left, claim to represent the majority of people on social welfare; but I dispute that. We have not heard one word of praise, thanks or recognition for what the Minister has done both in the administrative system and in terms of the real increases he has introduced since 1987. If we are to have a logical debate in this House that fact would have to be recognised rather than focusing on small elements of the system. We could all do that. That is a most dishonest method of argument and, as I have said, it is really unworthy of Deputy Stagg to make that argument. As Deputy Wallace rightly said, it is reducing this debate to a farce. If the Opposition have any real points to make or tangible suggestions to put forward——

Mrs. Fennell

An amendment.

Mr. O'Dea

——it is my personal experience that they will find no Minister more receptive than the present incumbent in the Department of Social Welfare.

Mr. Connaughton

We will wait with bated breath.

An Ceann Comhairle

I would expect Members to relate their remarks to the section under discussion. There obviously has been a straying away from this subject into all areas. From now on I would expect Members to confine their remarks to section 5 only.

Mr. Byrne

I will remain strictly within the bounds. I want to make a passing reference to one matter with which the Minister is probably familiar, that is, multiple births and the lack of payments in this area. In 1965 recognition was given to the fact that there are greater financial demands on parents of multiple births, but the legislation was structured in such a way as to restrict the grants and allowances to families with three survivors. The number of families of multiple births — triplets or quads — is not great. There is a strong case to be made for parents of twins. Although not recognised by the legislation these cases would also be regarded as multiple births. Clearly, anything over one is multiple. Would the Minister reconsider the grants available for multiple births, particularly for families in which there is a succession of multiple births, which could constitute up to eight children? They do not get the grants or double allowances applicable where the births are in excess of two. Perhaps the Minister will address that because his Department have noted that multiple births created more financial problems than a succession of single births. I hope it will be recognised that the logic of that means obviously far more financial problems accruing from a succession of multiple births, i.e. twins as against triplets.

Dr. Woods

We have had quite a number of contributions on this section already, the section gets to the root of a very important element in social welfare generally, the support for families. Indeed, at the outset, Deputy Connaughton raised the question of support for families and suggested that there was no better way to direct money to families than through the child benefit — or children's allowances — as people know them. I still have difficulty in regard to child benefit because when I talk about it people do not understand what I mean until you refer to it as children's allowances.

This argument intensified during the period of the Fine Gael-Labour Coalition and it was also considered in the commision's report in which they said they could not agree whether it should be taxable. They were talking about how best to direct resources to families who needed support, especially those who needed it most.

I agree with Deputy Fennell to the extent that I regard the children's allowance as a very important payment which goes directly to the mother, which is a non-selective payment right across the board. From my own experience, I regard that as very important. However, we have become caught up in the argument about the selectivity of these payments and while I agree with Deputy Fennell that those interested in these payments should speak up and make their points clearly——

Mr. Stagg

Is the Minister under pressure?

Dr. Woods

We are always under pressure here. We have nothing to hide in regard to this issue and I have been involved in public argument about it. I have always felt that it is central to our whole policy. The same applies to all countries, there are no simple answers. From my experience as a family man, I regard it as a very important payment. The Taoiseach, I am happy to say, cleared this up in his statement recently at the Árd Fheis when he spoke about families and tackling the problems in relation to them. He said that the children's allowance — note that he called it children's allowance because that is how we always regarded it — supports all the children of the nation. He said that the allowances were paid directly to the mother and will continue to have a central role in our family policy. There have been many questions as to what that role will be. In the case of an Ard Fheis people are inclined to read the important speeches but the fine print is very important. This is a contentious matter at present between parties; we want to find the right solutions as we go on.

The report of the commission highlighted the fact that many families and children were living on very low incomes. That had to be dealt with as a priority and I have been doing so for the past three or four years. I make no apology for directing the resources to where the need was greatest. That was the right policy then but we must look at the whole question again.

Deputy Stagg, Deputy Fennell, Deputy Connaughton and Deputies on my side of the House said that we must again look at the best way to direct these payments and they made different suggestions. The commission could not agree in this regard. On page 296 of the report they state:

Taxation of children's allowance is another possible method of "selectivising" child income support. We have considered this question but did not reach agreement. One point of view was that children's allowance should not, in principle, be assessed as taxable income; the function of children's allowance is to adjust the post-tax incomes of households according to family size and a cash payment, rather than a tax allowance, is the appropriate mechanism to achieve this. This was the approach recommended by the Commission on Taxation. An alternative view was that these payments should, in principle, be assessable for income tax as they form part of the total income of all families; further, taxation of children's allowance could be combined with a higher level of benefit and the net effect of this would be to redistribute resources to lower income families. However, advocates of this view also argue that taxation of children's allowances should only be implemented when:

(i) the taxation of all groups in the community on the basis of income is effectively in force, and (ii) the real level of payments evolves to a level considerably higher than at present.

We agree that the child tax allowance was an indirect and regressive method of child income support. We, therefore, approve of the abolition of the tax allowance and favour a system of cash payments with some element of targeting resources as the most appropriate mechanism of child income support.

Members can see from that that the commission were debating the matters which we are now debating but the problems are somewhat similar to those at that time.

The Leader of the Fine Gael-Labour Coalition Government, Deputy Garret FitzGerald, made disparaging remarks about child benefit, he said that they went to people on higher incomes, which should not be the case. I was concerned about his remarks because there are not all that many people on higher incomes, just a small group in society as a whole. He set about taxing children's allowance and Deputy Spring agreed with him.

If one reads the commission's report carefully, one discovers that they were saying — indirectly — that taxing children's allowance is not feasible in most cases and that even when it is, they are not sure whether it is workable. At that time the Coalition Government set a process in motion between the Department of Social Welfare and the Department of Finance to match the families. We do not know who is paying tax, that is not our direct business; we pay child benefit to each mother directly. If the allowance is to be taxed, the income of the father and any other income must be taken into account——

Mrs. Fennell

Women do not have an income.

Dr. Woods

There is also a problem in regard to whether it is current income or that of last year. The Coalition Government set about trying to match these two sets of data and, when they left office four years ago, they had matched a very small proportion; it was not feasible at the time. That procedure has been continued because, of course, you want the best match possible between social welfare and tax information. At present about 80 per cent match but 20 per cent of the people involved is a very large number and if you cannot match child benefit with 20 per cent of the people, the position is very serious. That is one of the practical difficulties.

In the middle of all of this, what was to be done? Over that period I set about directing the extra resources I could get towards the people who obviously needed it most. We did a number of things. We increased the child dependant rates to £12. We extended the child dependant payments up to age 21 when children are continuing in education. These were priorities. We increased the rates in the FIS which goes directly to families on lower incomes. That must be taken into consideration when you talk about the money going to child benefit and the FIS. We are talking about the same people here, other than the people dependent on social welfare. In this budget £16.5 million is going to child-related tax exemptions at this time and that will benefit a substantial number of people at the lower end of the income spectrum. That is what the Government have been doing.

We have done a good deal of that work. We have increased the child dependant allowances. We are ahead of what the 1991 equivalent would be for basic rates in child dependant allowance for all social welfare groups. We have increased the FIS and various other payments which go to families and to children on lower and lower middle incomes. Across the board we have brought down the higher rate from the sixth to the fifth child and now to the fourth child. It is obvious that as Minister for Social Welfare I would like to go further and I hope to do so in future budgets, but at this stage this whole area needs to be looked at again. I hope these various elements can be considered again in next year's budget and Social Welfare Bill in the light of the developments that have taken place in between. In the light of the Commission's report we have already directed substantial additional resources to those on the lowest incomes and within that context we can look once again at the position of children's allowances within that scheme. In fact, when the taxation was being introduced the child benefit concept was introduced. Child benefit came in then but taxation did not follow because it was not feasible at that time.

I was asked about the number of children on the rates. From the fourth child alone we are talking about 400,000 children, so taking the fourth child plus into consideration the number is considerably higher. That is the number of children as distinct from families who would benefit from the increase provided in this section.

I accept there is more to be done and in the context of the various discussions and recommendations I look forward to more being done in this area in future. I am happy the Taoiseach has emphasised the fact that the children's allowance will continue to be an essential part of our policy.

Mr. Connaughton

Why October?

Dr. Woods

It has been October for the last few years.

Mr. Connaughton

That is a scandal.

Mr. Stagg

Can the Minister confirm that when making subsequent and new applications for child benefit applicants are now required to supply their spouse's PRSI number? What is the purpose of that? Let me say in reply to points directed at me through the Chair that there has been no effective increase in child benefit for five years. The amount was 15p per month. That is less than an increase if inflation is taken into account and that is unacceptable. In reply to the points made by Deputy Fennell and directed through the Chair at me, I wish to clarify that what I am proposing will leave more in everybody's pocket, including the well off, but it will change the system so that the larger part of that "more" goes where it is most needed. That is where the Commission on Social Welfare had difficulty in arriving at a decision as the Minister mentioned.

An Ceann Comhairle

May I put the question on section 5?

Mr. Stagg

I am asking a question of the Minister about the PRSI number.

Dr. Woods

The Deputy has proposed that at some stage the rate be increased considerably and taxed. That could not be done at all now because there is no way of relating the two things. Since the tax allowance was removed altogether——

Mr. Stagg

And brought into child benefit.

Dr. Woods

——there is no relationship between the two. By having the PRSI number it will be possible to relate the two things.

Mr. Stagg

I thought the Minister was opposed to that.

Dr. Woods

Whether it is done or not there is no relationship between the two for any purpose whatever. In any step you might take in future one might be related to the other, for instance in the child dependant allowances. In any event it provides a cross-check on where the families are, who they are and in what situation they are. The statistics can be provided when the policy makers and planners are looking for that kind of information.

Mr. Stagg

Maybe that is why the number was not there before.

Dr. Woods

It will not arise in future. We will be issuing the numbers anyway to people who have been on child benefit when they come to over 16. They will be getting their PRSI number automatically and we will have it as their number from then on. It will be related anyhow in that way.

Question put.

The Committee divided: Tá, 66; Níl, 57.

Tá

• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Barrett, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Sémus.
• Browne, John (Wexford).
• Burke, Raphael P.
• Calleary, Seán.
• Callely, Ivor.
• Clohessy, Peadar.
• Connolly, Ger.
• Coughlan, Mary Theresa.
• Cowen, Brian.
• Cullimore, Séamus.
• Davern, Noel.
• Dempsey, Noel.
• Dennehy, John.
• de Valera, Síle.
• Fahey, Frank.
• Fahey, Jackie.
• Fitzpatrick, Dermot.
• Flood, Chris.
• Gallagher, Pat the Cope.
• Geoghegan-Quinn, Máire.
• Harney, Mary.
• Hillery, Brian.
• Hilliard, Colm.
• Hyland, Liam.
• Jacob, Joe.
• Kelly, Laurence.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Lyons, Denis.
• Martin, Micheál.
• McCreevy, Charlie.
• McDaid, Jim.
• McEllistrim, Tom.
• Molloy, Robert.
• Nolan, M.J.
• Noonan, Michael J. (Limerick West).
• O'Connell, John.
• O'Dea, Willie.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Ned.
• O'Leary, John.
• O'Rourke, Mary.
• O'Toole, Martin Joe.
• Power, Seán.
• Quill, Máirín.
• Roche, Dick.
• Smith, Michael.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Joe.
• Woods, Michael.
• Wyse, Pearse.

Níl

• Allen, Bernard.
• Barnes, Monica.
• Barrett, Seán.
• Belton, Louis J.
• Boylan, Andrew.
• Browne, John (Carlow-Kilkenny).
• Bruton, John.
• Byrne, Eric.
• Connaughton, Paul.
• Connor, John.
• Cosgrave, Michael Joe.
• Cotter, Bill.
• Gregory, Tony.
• Higgins, Michael D.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Lowry, Michael.
• McCormack, Pádraic.
• McGahon, Brendan.
• McGinley, Dinny.
• Mac Giolla, Tomás.
• McGrath, Paul.
• Mitchell, Gay.
• Moynihan, Michael.
• Nealon, Ted.
• Noonan, Michael. (Limerick East).
• O'Brien, Fergus.
• Creed, Michael.
• Crowley, Frank.
• Currie, Austin.
• D'Arcy, Michael.
• Deasy, Austin.
• Doyle, Joe.
• Enright, Thomas W.
• Farrelly, John V.
• Fennell, Nuala.
• Ferris, Michael.
• Flaherty, Mary.
• Flanagan, Charles.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• Owen, Nora.
• Pattison, Séamus.
• Quinn, Ruairí.
• Rabbitte, Pat.
• Reynolds, Gerry.
• Ryan, Seán.
• Shatter, Alan.
• Sheehan, Patrick J.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.
• Taylor-Quinn, Madeleine.
• Timmins, Godfrey.
• Yates, Ivan.

Tellers: Tá, Deputies V. Brady and Clohessy; Níl, Deputies Flanagan and Howlin.

Question declared carried.

SECTION 6

Question proposed: "That section 6 stand part of the Bill".

Dr. Woods

This is a very important section which technically deals with the definition of a qualified child. Section 6 completes the process which was initiated in 1989 of progressively raising the age limit up to which child dependant increases may be paid to recipients of long term education. Up until 1989 child dependant increases ceased to be payable when the child reached 18 years of age, except in the case of recipients of widow's pensions and deserted wife's payments where the child dependant increase continued to be paid between the age of 18 and 21 years in respect of children who continued in full-time education.

Subsection (1) of section 6 provides that, from the beginning of June 1991, child dependant increases will be payable to all social welfare recipients in respect of children who are under 18 years of age and will continue to be paid up to 21 years in the case of all long term recipients where the child continues in full time education. That is a major improvement.

Subsection (1) also extends the definition of qualified child for pension purposes and for family income supplement. This means that family income supplement will now continue to be paid in the case of families on low incomes where the child is between the age of 18 and 21 and is in full time education. At present FIS is not payable where the child is over 18 years.

These are two changes which I trust will be welcomed by Members, who will recognise their value to children and families.

Subsection (1) also provides that the circumstances in which a qualified child is to be regarded as being in full time education will be specified in regulations. This regulatory power will be used to provide for the payment of child dependant increases during the summer months for children over 18 years who are in full time education. At present child dependant increases in the case of children over 18 years are discontinued for the summer months. Where the child returns to college the payment re-commences and arrears for the summer months are paid. This arrangement is cumbersome, particularly for the client. Under the revised arrangements the child dependant increase will continue to be paid up to the end of September unless the child qualifies for a social welfare payment in his or her own right.

This is a very important development which so far has gone completely unnoticed by people who have commented on the provisions of the Bill. It will be of great assistance to families during the summer months when children are out of school. Formerly they would lose the child dependant allowance element of the payment. Now we are continuing the payment up to September and the decision will then be taken as to whether the child is continuing in education. Those Deputies who are close to the situation will realise that this will be a considerable easement for the families in question. The only exception would be if the child were in receipt of payment in his or her own right.

The regulatory power provided for in the revised definition of "qualified child" will also be used to expand on the types of educational courses which will be accepted for the purposes of determining whether the child is in full time education. At present the continued payment of child dependant increases is generally confined to children who are pursuing second or third level courses. However, there is now a wide range of other educational and training opportunities available and it is intended that the regulations will cover these where such courses are undertaken on a full-time basis. Provision will be made in the regulations, however, to enable certain courses where payments are made to students to be excluded from the definition of full time education for child dependant increases.

Section 223 (1) of the Social Welfare (Consolidation) Act, 1981, defines a qualified child for the purposes of the child benefit scheme. This definition provides that child benefit is payable in respect of children who are under 16 years and children between the ages of 16 and 18 years who are receiving full-time instruction by day at any university, college, school or other educational establishment.

Subsection (2) provides for a similar regulatory power in the case of child benefit as is being provided for in the case of child dependant increases, so as to expand on the types of educational courses which will be accepted for the purposes of determining whether the child is in full time education.

Subsection (3) provides that the increase in the age limit to 21 years will come into force generally on 1 June 1991 and in the case of recipients of long term unemployment assistance from 19 May 1991. The increased age limit for family income supplement purposes will come into operation from 24 October 1991.

The way in which the provisions in the section are expressed may look fairly technical, but it is a very important development for families. It will mean that more families will have the benefit of both child benefit and child dependant allowances while their children undertake a wide range of courses. Second, during the summer period, the payments will continue to be made and will stop in September only if the child does not continue in education. I trust that the changes in this section will be very much welcomed.

Mr. Connaughton

I welcome the changes that have been made. I have a specific query for the Minister. I have come across the case of a young fellow who regards himself as an external student — he is repeating the leaving certificate but studying at home. I understand the Department of Social Welfare consider that he is not available for work so he cannot get unemployment assistance. Is it correct that his family are not entitled to the family income supplement either, given the Minister's definition of educational courses?

An Ceann Comhairle

Perhaps the Minister might like to intevene in respect of the query from Deputy Connaughton.

Dr. Woods

The power we have here means that we could define the circumstance in which a person is regarded to be continuing in education. It would be possible with this power to bring such a person in if a reasonable definition could be arrived at where it would not have been possible previously.

Mr. Connaughton

Is that a possibility——

Dr. Woods

Yes.

Mr. Stagg

I welcome the very positive and progressive measure contained in this section. The children involved—I have heard them referred to as the "limbo children"— could not gain in any way and were always at a loss. They could not draw any form of social welfare in their own right and their parents could not claim for them either. Children at this stage are probably at their most expensive. I would ask Deputy O'Dea, to take note that when there is something positive, we acknowledge it and we have been doing that all day long. We will continue to do so as we find positive measures in the Bill.

Could the Minister elaborate on when we might expect the regulations, and when the provisions of the section will come into force? Will they be in force this summer, for example? What means will be used to bring the regulations to public notice?

My next point, and we raised this earlier in another context, deals with disability benefit. This is regarded as a category of short term payment which, in effect, is long term; people may be on disability for many years. Since disability benefit is regarded as a short term payment they will not be covered by this measure. When the Minister is making the regulations, will he look at the people who have been in receipt of disability benefit for two years or more to see if they could be considered as being in receipt of a long term payment—without differentiating the size of their payment— simply in order that they qualify for the child dependant allowance and child benefit payment as proposed in this measure? The Minister is aware of the difficulties with the short term disability payments, which continue for many years. These people would be excluded from this measure and they would need this money as much as others.

I regret, that my amendment was disallowed, but I understand why—it would have given rise to a charge on the Exchequer. This measure is a move in the right direction. My amendment sought to expand on this but from what the Minister said, I accept it is his intention to expand on it in future years.

Mrs. Owen

I too welcome the progressiveness of this section and the extension of the provisions to children of 21 years in full time education. However, I would like to ask the Minister a couple of questions on the regulations. More and more there are opportunities for young people to go outside this jurisdiction to be educated, but, by and large, they are still being maintained by their parents. The definition in section 6 (1) states that:

"`qualified child' means a person who is ordinarily resident in the State,..."

Does that cover young people who have gone to Northern Ireland or Britain to pursue third level education? Will their parents still be allowed to claim the dependant allowance for them? Very often it is at great personal cost not just to the parents but to the extended family that young people get the opportunity to go abroad for third level education when they cannot get places here. It would be very detrimental if they were not allowed this allowance. Will the Minister qualify what he means by "ordinarily resident in the State"?

The Minister commented on the regulations defining those students and the courses which would qualify under the section. Was he implying that a student in receipt of an ESF grant would not qualify and their parents would not be entitled to a dependant allowance, albeit the students were in full time third level education? There is a number of one year courses that may not necessarily give these young people more than a certificate or a diploma, and I would like an assurance that all post-leaving certificate and post-inter certificate courses will qualify, even if there is an element of payment in it. I can understand that some account will be taken of the payment, for example, to an apprentice if he is reasonably well paid while doing his apprenticeship, but very often people are disqualified because of the small element of payment they get for the courses they are pursuing.

I want to follow Deputy Stagg's point on recipients of disability benefit. More and more I find that disability recipients under the age of 60, or even as low as 55 years, cannot go on invalidity pension, even though it is as clear as the nose on my face they will never work again. They are being denied all the other benefits that go with invalidity pension, which is a long term payment. They do not get the Christmas allowance, the fuel allowance of any other benefits paid to those in receipt of long term benefits. The Minister needs to look at the case of people on disability benefit for more than a year. I am dealing with a number of cases where people are on disability benefit for two or three years but because of their age—they are under 40—they will never get an invalidity pension because it is feared they will be a burden on the State for 40 years. This is an inequity and people are suffering unduly. They feel very hard done by when they cannot get these additional benefits. I endorse what Deputy Stagg said.

Mr. Byrne

I join with the previous speakers who have called on the Minister to explain why people on short term benefit are not included in these provisions. He has specifically and clearly stated that this is a provision for long term social welfare recipients; perhaps he might reconsider this and give us an explanation.

I am particularly interested in the regulations the Minister will be putting forward because section 54—budgeting in relation to social welfare payments— reads:

The Minister may make regulations to provide that where a recipient of any benefit, pension, assistance, allowance or supplement under the Principal Act consents, an amount of such benefit, pension, assistance, allowance or supplement...

In regard to this section and section 54, perhaps the Minister would tell us what his plans are and when we might see the regulations.

Mr. Callely

I welcome this section and in particular the Minister's clarification in relation to the definition of full time education. I look forward to the Minister's clarifying regulations in relation to the definition of full time education. Most of us have come across the individual who is not working and is in some form of training or educational process, maybe at night classes, and is not available for work during the day but who should qualify under this category of over 18s in education. I would ask the Minister to look favourably on the clarification of full time education. On leaving school, I participated in night classes to further my education. A large number of my young friends, some of whom are working and some of whom are not still go to night classes. I would ask the Minister to look favourably on those who are obtaining further education by way of night classes.

Another point that is appropriate to raise at this time is the cost and expense to parents of the 19 or 20 year old availing of further education. I know it is the Minister's desire to widen this area further but there is a case for extending this not alone to long term recipients but to recipients right across the board, even to the working parent who has a 19 or 20 year old availing of further education and not working. There is an area there that we should explore a little and try to give something by way of child benefit to people in that category.

Mr. Browne

(Carlow-Kilkenny): On Deputy Stagg's amendment in regard to net weekly income, it is a principle that will have to come into force. At this stage it may be out of order but I would ask the Minister to consider it for the future. It affects medical card holders. There is a value put on board and lodgings for a teenager staying at home. It would be much fairer if the net salary was taken into account rather than the gross because in the long run it is what one has in one's pocket to spend that makes all the difference. Gross salary gives a distorted picture. I know it would obviously lead to extra money but it is something we will have to face because as it stands at the moment there is inequity.

Mr. D. Wallace

I also welcome this section. The continuation of payment during the summer is very important because we have all come across cases where people have had to reapply after the summer holidays for children continuing their education at third level institutions. The increase in the age limit to 21 years is also welcome. It should be remembered that many of those young people attending third level institutions come from homes that depend on social welfare and any measures that can be taken to eliminate difficulties for these families must be welcomed. In this section the Minister is going along way down the road to ensuring that that is done. As Deputy Callely said, we must also look at the question of parents working part-time whose children are availing of further education to see if such education can be made more accessible for them.

Dr. Woods

I would like to thank the Deputies for welcoming this section. They are right that it will have important practical implications. I have noted that Deputy Stagg has welcomed it as a positive and progressive measure.

Mr. Stagg

I find many of the Minister's actions in that category.

Dr. Woods

Thank you, Deputy. The whole purpose is to have this in force this summer. We will certainly publicise it in the most appropriate way to get the message across to the people affected.

This applies to people in the 18 to 21 category but people on short term payments whose dependants are not in that category will not benefit at present. Deputy Owen raised the question of people going out of the jurisdiction for third level places. I will certainly consider that. "Ordinarily resident" means they are still dependent on parents and I think that is the sort of case the Deputy is talking about. I will have to look at that technically, bearing in mind the point the Deputy made. We would certainly want to cover people who are still dependent on their parents.

In regard to the question of whether the ESF prevents people from receiving payments, I do not think that is so, since it is the income of the parents that is taken into consideration here. It is an allowance given to the parent in respect of that child. There could be cases where the child has gone into a training programme, such as, an apprenticeship, and that would be a different situation.

Mrs. Owen

A lot of diploma courses are ESF funded and the Minister seemed to imply that they might be excluded if they were getting any payment.

Dr. Woods

We would want to ensure, as far as possible, that they can be included because that would not really represent an income in the person's own right. That is all I can say at this stage.

Mrs. Owen

Thank you.

Dr. Woods

We had some discussion about invalidity pensions earlier. The numbers on invalidity pensions have been increasing. I agree to some extent with what has been said about it. There is the problem that some people do not want to go on invalidity pension because it is a pension and is taxable. The question is raised from time to time whether there should be an option at that stage because it means there is other income as well. At present increasing numbers are going on invalidity pensions from disability benefit and we have undertaken this morning to ensure that people know their rights in that regard.

Mrs. Owen

Doctors are not very quick to put a young person from disability to invalidity positions because they are gone for life.

Dr. Woods

I have come across cases like that. It is hard to write people off everything. An example is people with bad backs. I have a bad back myself and have had a lot of things done to it. I may be worse than some of the people who are coming to me. It means I could not be in a steel works or something like that at this stage but there are a lot of other things I could do. That is the kind of question that can arise with younger people but there are quite a few younger people who are on invalidity pensions as well. It means that, as one gets older, there is less likelihood of one getting an alternative job. Certainly we will keep that in mind. Deputy Byrne asked when these payments will become effective. I should stress that the whole purpose is that they be effective this summer.

Deputy Callely raised the question or people participating in night courses and studying by day. The theory is that one is supposed to be in full time education but I can well understand that quite often people will be working by day and studying at night. But if they were participating in courses at night and studying during the day they could possibly be regarded as receiving full time education. I would have a lot of sympathy with the point made by Deputy Callely, which is something that can be examined under the power being given under this section.

Deputy Browne spoke of the net salary. I think he was referring to the next section covering the family income supplement. Deputy Wallace also welcomed this provision for the benefits it will confer. There is no doubt that it is a very useful extra, that arose from some of our previous discussions, which we endeavour to implement at the time of passing the Social Welfare Bill. Many Members referred to the fact that it is a very substantial Bill. The reason for that is we pick up ideas in our discussions and endeavour to implement smaller provisions that do not entail such heavy expenditure as well as the major issues contained in the budget. While one may not necessarily have permission to implement those smaller ones at budget time one manages to get permission for them by the time the Social Welfare Bill is introduced in the House, which is tied in with the drafting of the Bill.

Mr. Stagg

I have been referring to this invaluable document issued by the Department of Social Welfare. I have been doing a quick calculation on the basis of the 1989 figures, the latest available to me. I presume that most of the unemployment assistance beneficiaries would be covered by the proposal before us. They have 159,000 children though naturally not all are in this category. There are 55,000 children of unemployment benefit recipients, 55,000 children of disability benefit recipients giving a total of 269,000 children in those categories. All of the children of the categories included total 85,000 since it is only those in the higher age group in any of the categories who would be involved. Therefore, there is still a huge number of people excluded, some in receipt of the lowest payments. What I am saying is that 85,000 children of people who will qualify for this rate at present receive dependant payments. I would presume that a proportion of them would be included in the category we are not talking about. But there are 269,000, apart from children being paid a dependant allowance, and I presume a proportion of them will be excluded. Therefore, it will clearly be seen that there is a large proportion of people excluded.

Dr. Woods

Anyone currently in the 18 to 21 age group where that benefit applies. The Deputy is confusing himself talking about numbers with regard to disability benefit. The House should not forget that there are up to 60,000 disability claims a week. Most of those come in and out of eligibility, some continue, but the vast majority come in and out of eligibility. The children of all of those people are included in these figures as well in terms of their being short term beneficiaries. In any case in which the 18 to 21 age limit applies—and we have now extended that provision in this section— the new arrangement will be applicable.

Mr. Browne

(Carlow-Kilkenny): The Minister mentioned disability and invalidity payments. Has there been any change of policy in the Minister's Department with regard to these benefits? While I know one case I might cite might not prove my point I am aware of a person in Carlow who had been in receipt of invalidity benefit for seven years, was called for re-examination, was disqualified, appealed the disqualification and was turned down. He then applied for disability benefit and was awarded that benefit on the very same medical grounds on which he had been in receipt of invalidity benefit for seven years. Can it be that there is some policy to disqualify as many as possible from invalidity benefit? There is something very peculiar about it.

Dr. Woods

Not necessarily. First, I would rather have circumstances in which people could go on to invalidity benefit for a period, especially younger people mentioned by Deputy Owen. If at any given time it is quite clear that such a person cannot work for, say, three or four years I would rather have such a person declared eligible for invalidity benefit and re-assessed after a couple of years to ascertain whether their circumstances had changed. And circumstances do change. All that is happening is that the system is becoming more efficient which means that people will be called up at certain intervals. If we were to revert and render it less efficient they would not be called so frequently. Not only that but I might add that one is called in relation to the illness one is suffering. In future people will be categorised more in relation to their type of illness. If it is unlikely that a person will not be better for quite some time then they will not be called within that time. But if the illness is of a type that could mean the person could have improved considerably in the meantime then they could be recalled sooner. The same applies to the overall operation of disability benefit. I am not now talking about the manner in which any medical people carry out their examinations. I am talking merely about the manner in which people are called for examination. There is no doubt but that the system is vastly more efficient and increasingly becoming more so which, at the end of the day, is good for everybody. If there are problems encountered they can be identified and we can deal with them.

Mr. T. Kitt

Though I have not participated I have found this a most interesting debate having listened from my office. I should not like this section to pass without making one or two comments on what the Minister has said. I have been a Member of this House for four years only. It is indeed true to say that the system has become much more efficient. There have been many advances made in a quiet, efficient way. It must be remembered that the Commission on Social Welfare made very many recommendations. The Minister has picked them off, one at a time and implemented them so that we now find that the members of that commission are quite impressed at the advances made. It is easy to throw comments across the floor of the House and criticise but I would defy anybody on the far side of the House to grasp this complex area of social welfare in the efficient manner the Minister has done. It is very difficult to get it all right, to cater adequately for the needy and eliminate abuses. Deputy Browne mentioned the matter of invalidity and disability payments. If you like, we Deputies are at the coal face endeavouring to deal with these huge personal problems. It is a tremendous challenge for any Minister to set up a system to deal with these human problems. I am convinced he has got it right. He has managed to maintain the funding and to increase it steadily.

A Leas-Cheann Comhairle, I hope you do not mind if I make this point as it is not often done on Committee Stage. This has been a fine debate. Across the floor we have had some very constructive comments. Praise has been given where it was deserved. I would encourage the Minister in a general way to continue his efforts to rationalise the system. I would encourage him to use the computer system he has in the Department, to improve on it and to ensure that we have an efficient and positive social welfare system. I will have other things to say later.

Question put and agreed to.

SECTION 7

Mr. Stagg

I wish to withdraw amendment No. 27 which is tied in intrinsically with an earlier disallowed amendment as part of a package of further reform for the child benefit scheme. Amendment No. 28 has been disallowed, which I deeply regret. With your permission, Sir, I will move amendment No. 29, which is in order.

An Leas-Cheann Comhairle

We may not work that way. There is always the difficulty of the Chair appearing to be talking down, but the Chair never wishes to do that except to advise Deputies of the position. Deputy Stagg, since you have not moved amendment No. 27 you do not have to seek permission to withdraw it. We must deal with amendments seriatim; we cannot jump from one to the other. Amendment No. 29 is not in order because it involves a potential charge on the Revenue.

Mr. Stagg

I do not know how it could impose a charge on the Revenue. All the amendment says is that all persons qualified to receive payment under the family income supplement should be automatically paid by reference to their income tax returns.

Dr. Woods

It is automatically paid by reference to the returns. That could increase the amount.

An Leas-Cheann Comhairle

Deputy Stagg should accept that by imposing, neglecting or not making available to the Minister moneys which are provided for, it has been intepreted by the Ceann Comhairle that your amendment would represent, in one way or another, a potential charge. Asking me to adjudicate at short notice makes it difficult for me.

Dr. Woods

It is a net income rather than a gross income.

Mr. Stagg

That was another amendment that was ruled out of order.

An Leas-Cheann Comhairle

The amendment states:

...to receive payment under Family Income Supplement are automatically paid by reference to their income tax returns.

Mr. Stagg

I am not moving the amendment unless I have your permission. All the amendment seeks to do is to ensure that the payments people are entitled to receive on the basis of their income would be paid automatically rather than paid on application. I cannot see how there would be any additional charge to what has been budgeted for. The Minister has told us there has been a 50 per cent take up of the scheme, but surely the Minister must budget for 100 per cent take up of the scheme. There is no additional charge anywhere in the proposal.

Dr. Woods

There is a potential charge.

An Leas-Cheann Comhairle

Would Deputy Stagg bear with me? Because it has been raised now on Committee Stage it would be in order to have an amendment on report Stage. I am reluctant, without having the details on which the original decision was based, to rule it out of order. I am not privy to all of those considerations. There is a lot of merit in the case made by the Deputy. But I have not applied myself to studying it and, therefore, I would be reluctant to challenge the decision already made that it would in some way or another represent a potential charge.

Mr. Stagg

I accept what you say in so far as it is not debarred from being entered as an amendment on Report Stage.

An Leas-Cheann Comhairle

Thank you for your co-operation.

Amendments Nos. 27 to 30 not moved.

Question proposed: "That section 7 stand part of the Bill."

Mr. Connaughton

In relation to section 7 and the family income supplement, I have a different variation on what Deputy Stagg was speaking about. There is a great deal of merit in the proposal from Deputy Stagg, but we will leave that for tomorrow for the Deputy to deal with. I always liked the concept of the family income supplement from the very day the Coalition Government, of which I was a member, introduced it. There is no doubt that it has many warts but a large number of families avail of it. If I heard the Minister correctly this morning, he said that 6,000 or 7,000 people are in receipt of family income supplement. That is a sizeable number, but I would have thought there would have been more. I am sure there are many more families out there who could do with the additional money. At this time of the evening there is no point in going through a whole list of the principal features of the family income supplement because the House would be fully aware of them, except to say that many families who are on low wages find great satisfaction in getting sums as small as £12, £14, £15 or £20 extra on to their wages. That makes a great difference in a household where there is a very low income. I acknowledge that we have to talk about the poverty traps.

I genuinely believed that one way we could eliminate poverty traps and at the time ensure we could promote the work ethic would be through the family income supplement. What has gone wrong with the system that only about 6,000 people in the workforce are in receipt of family income supplement? I am sure the Minister will give us all the information on that scheme.

A matter with which I can never come to terms with is the fact that only PAYE workers qualify for family income supplement. It is no harm to bring to the attention of this House the huge problems which the low income self-employed people have to face. I am talking particularly about local carpenters, JCB drivers and so on. I can assure Deputy Byrne they would not have £1 million in their brief cases; they may be self-employed but they are at the bottom of the ladder.

Mr. Byrne

And small shopkeepers.

Mr. Connaughton

The list is endless, without mentioning farmers. In fact, it was with farmers in mind that I put down the amendment, even though it has been ruled out of order. There are only two ways in which these people can be helped. They can be helped via unemployment assistance. This is not practicable for many of the self-employed because the system adopted is such that if you were in receipt of a reasonable income for the first three or four months of the year you must have earned enough to sustain yourself for the other eight months. The Department of Social Welfare cannot come to grips with that position, perhaps because of lack of proper evidence from the Revenue Commissioners of their income.

I understand that the cut-off point for a family with one child is £140. I know thousands of self-employed people, small farmers and shopkeepers, who would not have an income of £140 over a two week period, not to speak of one week. This can be proven by the Revenue Commissioner's figures. The Revenue Commissioners could not be bothered writing to many self-employed people because it would be like going to the goat's house for wool—they do not have a taxable income. Some Revenue Commissioner inspectors say it is not worthwhile writing to certain groups of people because they would only be wasting the time of their staff going through their accounts.

When the Minister gets a grip on an idea there is no better man to run with it. I do not know whether I have the wrong end of the stick—if I can be proven to be wrong I will accept it— but I cannot see how our social welfare system will come to the aid of the people about whom I am speaking. There are thousands of such people around the country. I do not think our social welfare system is organised in such a way that recognition can be given to their exact position. If the Revenue Commissioners are in a position to give a certificate which proves they know everything about the activities of the self-employed, so that there can be no double dealing, no money under the mattress, that everything is above board, and that they can prove conclusively that those people are living below the poverty line, why would it not be possible for family income supplement to be paid to people living in those conditions?

I think I have made the case as clearly as I can. Every night in pubs and halls people say to me that they cannot understand why they are not entitled to receive family income supplement. I assume there are a thousand reasons why they may not be eligible. However, I believe there should be only two important points taken into consideration in deciding whether people are entitled to family income supplement: first, their yearly earnings should be at such a level that they are entitled to the family income supplement as it applies under section 7 —this is the most important point— and, secondly, how it will be paid. If the Minister says that there is no problem in giving them unemployment assistance, I will buy that; but as a public representative for ten years I do not think, from experience, that that will fit in with the Bill. In a strange way it might fit in with Deputy Stagg's suggestion that this payment should be paid automatically. I assume that that is what the Deputy was getting at in his amendment. I hope I have articulated my point clearly so that the Minister knows what I am getting at, that is many people do not have an income of £140 per week, the cut-off limit for receiving family income supplement.

Mr. D. Wallace

This is a very important section. The family income supplement has been a blessing in disguise for many families. I know the Minister and his Department have made great efforts to ensure that people are aware of their entitlements. This has been very much in evidence over the past two or three years. However, the number of people who avail of the family income supplement is quite low.

I want to take up the point made by Deputy Connaughton in regard to part-time workers. I referred yesterday to taxi drivers in smaller towns who sign on the live register but who are not unemployed in the strictest sense of the word—they may work for two or three days a week. Consideration should be given to providing family income supplement for such people. It would mean a lot to these people to be taken off the live register and given family income supplement.

Some medical card holders were very concerned that the family income supplement was being taken into account in assessing their income. As we all know, the cost of medication is very expensive and it was very unfair to give people a family income supplement and remove their medical cards from them. I am glad that this issue has been cleared up. This was not a problem for people in the Southern Health Board area but it was a problem for people in other areas.

The family income supplement is a great scheme and I welcome the increases being introduced this year. These increases, together with the tax concessions, will be very beneficial to people. Many more families could benefit from this scheme. The family income supplement has made a tremendous difference to the lifestyles of many families.

Mr. Stagg

I am not a great lover of the family income supplement as it automatically builds anomalies into the system, creates poverty traps and discriminates, as it is presently operated, against various people who need an income supplement in addition to what they receive at present. According to the figures I have only about one-third of eligible families avail of this scheme. The Minister said the figure is 50 per cent. Even if this is the case, it is still not an effective system. In the case of the child benefit, which I proposed as an alternative, there is an 99.9 per cent take-up and the money goes directly to where it is needed most. The family income supplement was introduced as a short term measure until such time as the child benefit scheme took off properly. If this scheme is to remain as a permanent feature it will have to be reformed.

I want to draw to the Minister's attention some of our amendments which were disallowed. I will resubmit one of my amendments on Report Stage. When I talk about the self-employed I mean craftsmen, shopkeepers and small enterpreneurs who set up businesses under Department of Labour schemes—for example the enterprise allowance scheme. Many self-employed people have very low incomes and would qualify on a means basis for assistance.

When I was spokesman on Agriculture and Food for my party I became acutely aware of the level of poverty among small farmers in rural areas. I was reared on a small farm in the west. A huge amount of money is given to this country to support farm incomes. The Department of Social Welfare should get their hands on some of that money and direct it, without going through any other source to the kitchen tables of the farmers' wives, the people who usually take care of the money part of the business. I am talking of approximately £1,000 million per year. Even with Commissioner MacSharry's proposed restrictions on it, this amount is growing. This money could best be channelled through the Department of Social Welfare as an income supplement to keep productive farmers producing valuable materials for export and consumption at home rather than forcing them out of existence, as it presently happening. I think this is recognised across the board politically, both at home and in Europe. I regret that my amendment in this regard was disallowed.

Rather than taking gross income as the figure, we proposed that the net income of the person involved should be taken as the base line in assessing their applications. I do not know if a huge cost would be involved but I would ask the Minister to reconsider that.

I raised the question of automation with the Minister on a previous occasion and he indicated that he would look at the matter again. Given that only 50 per cent of families eligible under the scheme, which has been designed to be of assistance to poor families are availing of it an attempt must be made to get the money to them. I suggested what I thought was a simple scheme. One has to fill up a tax form each year; many people do not but it is illegal not to, Consequently, the Revenue Commissioners know of the number of children a person has and they should link their computers with those in the Department of Social Welfare so that the best information is available to enable them give the best possible service. In this way, they would know who is entitled to the payment.

I am not sure if any additional cost would be involved as I take it the Minister did his calculations in drawing up his original proposals for the scheme on the basis that everybody entitled to the payment would avail of the scheme. I am not proposing any change in the rate of payment proposed by the Minister. I would ask him therefore to consider ways of making the payment automatic.

The Minister mentioned yesterday that a notice is included with the P60 of a person whose income is below a certain limit. Perhaps that is not what he said because as I understand it, it is the employer who issues the P60 and not the Revenue Commissioners. When the Revenue Commissioners see on their computers that a person qualifies for the payment they, at the very least, should issue an application form and, if possible, make the payment automatically.

Mr. Byrne

I agree with the sentiments expressed by Deputy Stagg and they tie in with an argument I made here this time last year on a different issue. I argued then that it should be possible in this era of computers to make the payment automatically. I instanced the cases of two unnamed women, representing 44,000 married women, on whose behalf FLAC took a case to the courts. I contended that there should have been no need for those women to submit an application for the money they were owed, roughly £800, and that the Department could have made these payments automatically. It seems Deputy Stagg's amendment would guarantee that the remaining 50 per cent would take up their entitlements.

I would now like to turn to the points made by Deputy Connaughton which received the support of Deputy Stagg. I would have severe reservations about a proposal to extend the family income supplement scheme to cover the self-employed. I do not doubt for one moment that many people, who were formerly in full-time employment and are now, at the instigation of companies, self-employed as milkmen or as drivers for builders providers, are living in poverty. I am sure that many of those individuals, including members of the farming community, would be entitled to receive payments under the family income supplement scheme if it could be verified that they are on low incomes. However, it would be a matter of some concern if we were to rely on the Revenue Commissioners to provide certificates to the self-employed. The stark fact is that there are 205,000 self-employed people and the self-assessment system is open to abuse and is being abused. We are also aware that only 294 audits have been carried out since the introduction of the system. Therefore, it is hard to see how we could rely on the Revenue Commissioners to verify the incomes of the self-employed, unless, of course, the number of staff was greatly increased and they were obliged to go through the books on an annual basis. There is a weakness in the argument but I do accept that some of the self-employed could be eligible to receive payments but a safer method of authenticating their incomes would have to be found.

Mr. Connaughton

They could go with bag on their backs.

Mr. Byrne

Will the Deputy explain how he proposes to eliminate abuse?

Mrs. Owen

Having regard to the fact that between 6,000 and 7,000 families are availing of this scheme, it is clear that we have got it across to people that this scheme is available and they should avail of it. I appeal to the Minister to simplify the system even more as we seem to have reached the stage when one has to inform the Department that one can do the breaststroke, has brown hair, that two of the children play the tin whistle and so on before one can avail of the scheme.

People find it very difficult to understand the system. For example, section 7 contains the following:

232C.—(1) Subject to this Part, the weekly rate of family income supplement shall be 60 per cent of the amount by which the weekly family income is less than the amount appropriate in the particular case under section 232B.

I have no idea what that means but I am sure it is explained in the leaflets published by the Department. Is there any mechanism by which a person on low income, such as a person who picks vegetables and who might make £170 one week and £50 in another depending on the weather and the availability of fruit and vegetables, can combine income for a number of weeks which would bring their income below the magic figure of £140 per week and allow them claim family income supplement, if they have only one child, or would they be excluded?

Is the system simple enough for people to slot in and out of the family income supplement scheme so that they will receive it for weeks when they are earning less than the required amount? I would appeal to the Minister to consider applying the scheme on a monthly or six monthly basis if a person's income is on average below £140 a week. Can the Minister tell me, for example, how many one parent families are in receipt of this supplement? The vast bulk of one parent families are women and children. Women very often stay in the black market in order to earn money because they are afraid their allowances will be taken from them. They work in black market employment and never apply for the family income supplement because they are afraid that in getting into the system they will lose out in other areas. Perhaps there is a market there which the Minister should target. Is there any evidence that there are fewer one parent families claiming this supplement than should be the case?

I wish to ask the Minister what may be a difficult question. I assume the Minister allows for 100 per cent take-up of the scheme. What does he do with the money that has not been used at the end of the year if there is not a 100 per cent take up? Is there one almighty bash in the Department of Social Welfare, or how is it spent? Can the Minister give an assurance that if all the money allowed in the Estimates is not taken up the remainder will go, as far as possible, towards alleviating poverty for people in low income groups? Perhaps the Minister would give some idea, for example, for the year just past what he has done with the money saved in this area.

Mr. M. Brennan

We all welcome the family income supplement and I congratulate the Minister on increasing it. It is indeed a great scheme which encourages the lower paid to go to work. Some people may ask: why bother going to work when you can get all the benefits as an unemployed person? The family income supplement has changed that attitude and has encouraged more low paid workers to work. It is indeed one of the best schemes that has been introduced, particularly since the increases have been made to it. A number of part-time workers who work for three or four days a week sign for unemployment assistance for the other two or three days. Would the Minister consider giving these people family income supplement for the days they are not working rather than have them on the live register, signing for unemployment assistance?

Mr. Browne

(Carlow-Kilkenny): Without repeating what has been said, we do not want to discourage people from working. On the other hand, we do not want to get carried away with the idea that all unemployed people are sitting around doing nothing. I agree that there are many small farmers who are very badly off at present due simply to their sense of pride and the fact that down through the ages they never looked for help. These people would benefit greatly from this scheme. It may be difficult to bring them within the scheme but I would certainly support it because it is an important area in which help should be given. Deputy Stagg mentioned small shopkeepers and so on. Many of these people are competing against supermarkets and are barely existing. If this scheme was extended to those people it would be of tremendous help.

Mr. O'Dea

I support the sentiments of Deputy Dan Wallace and Deputy Matt Brennan. I support the family income supplement scheme. For many years in this country we agonised about what has been called the poverty trap and how to solve that problem. This is one imaginative scheme that was introduced to solve the problem. Nobody is seeking to suggest that the unemployed are sitting around and do not want to work. We have to recognise that if a person is to gain £5 a week by getting up in the morning to go to work — perhaps in some cases they lose £5 a week or more when you take into account the benefits — there has to be some incentive to encourage that person.

I take the point made by Opposition speakers that there is a communication problem in regard to this scheme. The existence of the scheme and its benefits has not been communicated to a sufficient degree to the people who qualify for it. In the first year of its introduction there was an alarmingly small take-up of the scheme — about 22 or 23 per cent — but I was delighted to hear the Minister say today that the take-up is now 50 per cent. Therefore we are managing to get the message across. Some quite good suggestions were made by Deputies on the other side of the House, but when listening to suggestions from Deputy Owen and others I wonder if they would complicate the scheme to such an extent that it would exacerbate rather than improve the communication problem. I support the principle behind the scheme. The poverty trap is something that I, among others, have been concerned about. Until somebody comes forward with a better solution to the problem I support this scheme and compliment the Minister on the increases he has announced to it.

Mr. Boylan

I support the family income supplement scheme. It is an excellent scheme, as are many of the schemes introduced by the Government, such as the carer's allowance scheme. However, the application of these schemes leaves a lot to be desired. The policy of the Government is: the birds are in the forest, but catch them yourselves. As Deputy Browne has rightly said, there are small farmers, honest, decent people, living in poverty, and that will continue to be the case as long as the Minister and the Department base their assessments on 1988-89 incomes. I would ask the Minister to reconsider the manner in which these assessments are carried out. He should apply this scheme to small farmers and small business people.

I would compliment people on keeping their homes neat and tidy and making an effort to improve them, but they should not be penalised for doing so. Too many people in this country allow their houses to fall down around them and everybody then rushes to support them. People who make some effort in this country are penalised, and that is why the people who deserve it do not receive the family income supplement.

Mr. Stagg

The guillotine is very close to our necks at this stage. I am acutely conscious of the fact that we are about to spend £3 billion while at the same time leaving one million people in poverty — and perhaps even more, by the Minister's own admission. The time allowed to us is totally inadequate. We are about one-third of the way through the Bill, with very many important measures to be dealt with yet. I certainly will not support a measure which not alone does not tackle the poverty issue but ensures that more people will be living in poverty at the end of the year than was the case at the beginning of it.

Dr. Woods

That is the third time Deputy Stagg has spoken without letting me reply. I would like to have said something about the whole question of the self-employed and the farming sector, but I have virtually no time to do so.

Mrs. Owen

The Minister can do so tomorrow.

Dr. Woods

Yes, on Report Stage. With the agreement of the House, I would like to point out two typographical errors. The first is on page ten, line 48, where "or" should read "of". There is a similar typographical error on page, 11, line 40, where again "or" should read "of". The term should be "or in respect of whom". I take it that is agreed.

Mrs. Owen

That makes it a lot clearer.

Dr. Woods

Perhaps on Report Stage I will refer to the matters that have been raised. I am anxious to reply, particularly to Deputy Connaughton. I appreciate what Deputy Stagg has said about integrating matters as far as possible. The Revenue Commissioners do not know the number of children in any family.

Mr. Stagg

Maybe they will not tell us.

Dr. Woods

That is our problem. We deal with the practicalities. The other problem mentioned was that the tax is based on the previous year's income and that we would be using the income of the last two months in our assessments. We are looking at Deputy Connaughton's proposal, but it is much more complex. If you went straight on to the family income supplement the whole structure would have to be changed to suit the self-employed and farmers because some people could lose in comparison with unemployment assistance or benefits paid to smallholders.

Deputy Wallace, Deputy O'Dea and other members also said that the system should be changed, but we must ensure that people do not lose as a result. We considerably increased the benefits in relation to family income supplement and it will extend the number of people who will benefit from it. I agree with the sentiments expressed by the Deputies that we should look at the matter to see how much more widely it can be used. I take the point made by Deputy Byrne——

Mr. Byrne

Thank you very much.

Dr. Woods

There must be balance in relation to this matter which we must achieve.

Mrs. Owen

What did the Minister do with the money he saved?

Dr. Woods

It went into the Christmas bonus this year.

An Leas-Cheann Comhairle

As it is now 7 o'clock I am required to put the following question according to the order of the Dáil today: "That the amendments set down by the Minister for Social Welfare, if not disposed of, are hereby made to the Bill; in respect of each of the sections undisposed of, that that section or, as appropriate, the section as amended, is hereby agreed to; that Schedules A, B, C and Schedule D as amended, and the title, are hereby agreed to, and that the Bill, as amended, is hereby reported to the House."

The Committee divided: Tá, 63; Níl, 52.

Tá

• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Barrett, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Séamus.
• Browne, John (Wexford).
• Burke, Raphael P.
• Calleary, Seán.
• Callely, Ivor.
• Clohessy, Peadar.
• Connolly, Ger.
• Coughlan, Mary Theresa.
• Cowen, Brian.
• Cullimore, Séamus.
• Davern, Noel.
• Dempsey, Noel.
• Dennehy, John.
• de Valera, Síle.
• Fahey, Frank.
• Fahey, Jackie.
• Fitzpatrick, Dermot.
• Flood, Chris.
• Gallagher, Pat the Cope.
• Geoghegan-Quinn, Máire.
• Hillery, Brian.
• Hilliard, Colm.
• Hyland, Liam.
• Jacob, Joe.
• Kelly, Laurence.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Lyons, Denis.
• Martin, Micheál.
• McCreevy, Charlie.
• McDaid, Jim.
• McEllistrim, Tom.
• Molloy, Robert.
• Nolan, M.J.
• O'Connell, John.
• O'Dea, Willie.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Ned.
• O'Leary, John.
• O'Rourke, Mary.
• O'Toole, Martin Joe.
• Power, Seán.
• Quill, Máirín.
• Roche, Dick.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Joe.
• Woods, Michael.
• Wyse, Pearse.

Níl

• Allen, Bernard.
• Barnes, Monica.
• Barrett, Seán.
• Belton, Louis J.
• Boylan, Andrew.
• Browne, John (Carlow-Kilkenny).
• Bruton, John.
• Byrne, Eric.
• Connaughton, Paul.
• Connor, John.
• Cosgrave, Michael Joe.
• Cotter, Bill.
• Creed, Michael.
• Currie, Austin.
• D'Arcy, Michael.
• Deasy, Austin.
• Doyle, Joe.
• Fennell, Nuala.
• Ferris, Michael.
• Flaherty, Mary.
• Flanagan, Charles.
• Gilmore, Eamon.
• Higgins, Michael D.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Lowry, Michael.
• McCormack, Pádraic.
• McGahon, Brendan.
• McGinley, Dinny.
• Mac Giolla, Tomás.
• McGrath, Paul.
• Mitchell, Gay.
• Moynihan, Michael.
• Nealon, Ted.
• Noonan, Michael. (Limerick East)
• O'Brien, Fergus.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• Owen, Nora.
• Rabbitte, Pat.
• Reynolds, Gerry.
• Ryan, Seán.
• Shatter, Alan.
• Sheehan, Patrick J.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.
• Taylor-Quinn, Madeleine.
• Timmins, Godfrey.
• Yates, Ivan.

Tellers: Tá, Deputies V. Brady and Clohessy; Níl, Deputies Flanagan and Howlin.

Question declared carried.

An Ceann Comhairle

When is it proposed to take Fourth Stage?

Dr. Woods

Tomorrow.

Report State ordered for Friday, 22 March 1991.