Dáil Éireann debate -
Thursday, 21 Nov 1991

Vol. 413 No. 3

Ceisteanna — Questions. Oral Answers. - Small Farmers' Incomes.

John Connor

Question:

9 Mr. Connor asked the Minister for Social Welfare if, in relation to the social welfare response to the drastic fall in small farmers' incomes, he will consider the following changes in the eligibility code for unemployment assistance (1) a disregard of the first £20 weekly income in the means test of an applicant similar to that operating for old age and widows pensions (2) the removal of unfair notional procedures in the determination of applicants farm incomes namely value of average yearly sales and (3) a set of allowances in determination of farm income for social welfare similar to allowances applicable in determination of income for farm income tax purposes.

Mr. Daly

The means test for smallholder's assistance is based on the net income from the holding after allowance is made for expenses actually and necessarily incurred. Allowance is made for stock replacement, feeding costs, electricity and other factors. In determining income for farm income tax purposes, allowances are also made by the Revenue Commissioners for these expenses but special allowances are made in some cases in line with taxation policy generally. In addition the Revenue Commissioners allow the usual personal tax allowances which are available to all taxpayers. The means test operated by my Department is designed to ascertain the actual income position in a particular year.

In determining the income of farm applicants for social assistance the net income received during the year immediately preceding the date of claim is normally taken for the purpose of assessing their means. This is only done after the social welfare officer of my Department is satisfied that similar opportunities for income from the holding will arise in the coming year.

If the social welfare officer is of the opinion that the income from a farm holding will have increased or decreased, the officer will estimate the expected income in the coming 12 months based on the circumstances in each particular case.

While the assessment procedure is kept under review, there are no plans at present to change the rules for assessment of farm incomes for unemployment assistance purposes.

Mr. Connor

The Minister did not address two parts of my question in relation to disregarding the first £20 weekly income which is allowed in the case of old age non-contributory pensioners or widows. The figure in those cases is £7 but recently, in answer to a question in this House, the Minister's predecessor said that, taking cost of living increases into account, it should be about £28 per week. I am surprised the Minister did not answer that question and the other part which refers to unfair notional procedures in the determination of a farmer's income. The Minister used the words "factual" and "actual" but while these notional procedures are in place the process is neither factual nor actual.

An Ceann Comhairle

I appeal for a supplementary question.

Mr. Connor

Will the Minister agree that the system is neither factual nor actual since it has notional procedures in the process of determining the income? We were promised several years ago in this House that this system would be eliminated.

Mr. Daly

The Deputy will be aware that a notional system was in operation for this scheme——

Mr. Connor

There is still a notional scheme in operation.

Mr. Daly

My information is that the notional system has not been operated by the Department since 1982.

Mr. Connor

I have a form prepared by an official in the Minister's Department and it uses the phrase "normal sales" which means they determine that when the sales from a farm were not apparently large enough to satisfy the Department, the Department adjusted them upwards and called them normal, average, annual sales. That is a notional system.

Mr. Daly

The Deputy is probably dealing with a specific case.

Mr. Connor

No.

Mr. Daly

The system which has operated up to now meant that income determining has been made on the basis of what the farmer had for the preceding year. Will the Deputy agree that the system operated that way?

Mr. Connor

I also referred to the procedures in relation to income tax under which a farmer is allowed to write off depreciation of fixed and capital assets.

He also has an allowance for wear and tear, etc.

An Ceann Comhairle

This is becoming very untidy and not in conformity with Question Time.

Mr. Connor

It is relevant to the question.

An Ceann Comhairle

Let us proceed by direct supplementary questions and reply as there is no other way of pursuing matters at Question Time.

Mr. Daly

The system of calculating farmers' income under this scheme has been a notional one for some time; by and large it has not been adhered to since 1982 or 1983. A farmer's income is determined on the basis of income for the previous year. Each case is dealt with by the social welfare officer on its merits and the farmer may appeal if he is not satisfied with the decision. The Deputy seems to have a particular case in mind and if he gives me particulars I will have it thoroughly examined to see if anything can be done about it.

Mr. Connor

Will the Minister comment on the part of the question relating to disregarding £20 per week? He might also comment on the determination of income. Why are farmers not allowed to wear and tear and depreciation allowance similar to that operating under the income tax code?

Mr. Daly

Tax allowances for farm expenses are broadly in line with the allowances of the Department of Social Welfare. However, certain special allowances are made under the tax system for depreciation which would not be appropriate under the social welfare scheme. In addition, there are the usual personal tax allowances which are available to all taxpayers.

Mr. Connor

What about depreciation?

Mr. Garland

Will the Minister agree that this scheme is so complex that the only way the plight of the small farmer can be tackled is by the introduction of a guaranteed basic income for all citizens which should, naturally, also go to the small farmers?

An Ceann Comhairle

That is a separate matter.

Mr. Garland

It is relevant.

An Ceann Comhairle

The Deputy should put down a separate question in that regard.

Mr. Finucane

I am sure the Minister will agree that the farming scene is very volatile at present. I am sure he is aware that the main determinant in many cases is the price the farmer gets for milk. There has to be a degree of flexibility in relation to the preceding year as far as the Department of Social Welfare are concerned. Is the Minister happy with the operation of the present system? Will he take cognisance of the problems in farming at present and show a little more sensitivity? As Deputy Connor said, the notional aspect in the scheme should be removed.

Mr. Daly

The Deputy is adopting a constructive approach and he will be aware that there is a commitment in the Programme for Economic and Social Progress that arrangements will be made to address the problems of low income farming families in consultation with the farm organisations. There have already been discussions between the Department of Social Welfare, the Department of Agriculture and the farm organisations, and possibilities have been discussed. However, no decisions have been taken in relation to changes in the scheme. There are about 14,500 smallholders in receipt of unemployment assistance at present and in July 1990 some improvement was made by providing that home produce would no longer be assessed against smallholders as means. I fully understand the view put forward by Deputy Garland, as I live in an area which is very much dependent on the supplement given to small farmers to help to maintain their families, especially on the small farms in the west.

In any further discussions on this matter I will be taking a very keen interest to ensure that any system put in place is reasonable and fair and that no hardship is suffered by small farm families who need special attention.

Mr. Connor

Will the Minister please comment on the suggestion of a disregard of, say, the first £20 of income in determining means?

Mr. Daly

I will not comment on that matter now. I am not certain what means the Deputy is talking about. Is he asking that we disregard certain notional assessments in relation to farm sales over the coming year?

Mr. Connor

No.

Mr. Daly

I do not think I can deal with the matter in detail here. If the Deputy has specific cases in mind I will take them up, but we cannot deal with the issue in a general way.

An Ceann Comhairle

We have dealt sufficiently long on this question.

Mr. Connor

I wish to ask one further question.

An Ceann Comhairle

Deputy Connor, please do not interrupt the Chair. We have dealt with only nine questions in over three-quarters of an hour and that is not good enough. I am now proceeding to Deputy Stagg's question, No. 10.