Dáil Éireann debate -
Wednesday, 25 Mar 1992

Vol. 417 No. 6

Social Welfare Bill, 1992: Committee Stage (Resumed).

Question again proposed: "That section 3 stand part of the Bill."

Mr. Byrne

The Minister got a warm welcome to the House and was congratulated on his promotion by many Deputies, including me. However, I will be standing well back from the warm welcome this Bill seems to be getting from all sides of the House. This is an outrageous Bill. It is a direct attack on social insurance and the Minister should be ashamed to have moved so far from the recommendations in the report of the Commission on Social Welfare.

My Labour Party colleague, Deputy Bell, congratulated the Minister on providing an excellent information service for TDs. Deputy Bell said that because of the excellence of the service fewer parliamentary questions were being asked of the Minister because we are now able to have our queries adequately handled by the Department. That is the sort of respect which should be afforded to a Member of Parliament. Would the Minister not agree that that type of service should also be delivered to the general public who are inquiring about their benefits and entitlements? It is due to the lack of facilities, unfortunately, that so many people find their way to TD's clinics. The Members of Parliament should legislate and should not have to try to present themselves as people with a cure for all ills, at their clinics.

While congratulating the Minister's staff on providing TDs with an excellent service I congratulate the NSSB for the excellence of their service to those of us who are prepared to pay for it. If the Minister is genuine in wishing to let the public know about their entitlements the information which the NSSB provides to TDs for a fee of £300 a year should be made available from the Department to, for instance, party spokespersons on social welfare. Without the filing system and constant updating of the system in the NSSB we would be lost. The Minister has admitted that this is an extremely complex area and he has made it ten times more complex as a result of the introduction of more means testing in this Bill. Politicians need the service provided by the NSSB to prepare a case to argue with the Minister and to accommodate constituents who wish to make inquiries. Would the Minister at least consider giving the service to party spokespersons as a service from the Department?

Under section 3, I sought an increase in the minimum rate of benefit and assistance in line with the figures recommended by the Commission on Social Welfare. In support of my case I cited the report of the Commission on Social Welfare and figures produced from the Comptroller and Auditor General's report, which showed that there are millions of pounds outstanding in uncollected taxes which could be directed towards upgrading the minimum social welfare payments. The Justice Commission of The Conference of Major Religious Superiors in "A Question of Choices" alleged that the Department are losing out badly at Cabinet level and that the reason the Minister does not come anywhere near the figures recommended by the Commission on Social Welfare is that the social welfare budget as a proportion of the overall budget has been declining. Does the Minister accept that? Expenditure on social welfare as a percentage of GDP has been declining and the Exchequer contribution as distinct from the social insurance contribution to social welfare has been declining. Does the Minister not accept that it is a combination of all three things——

An Leas-Cheann Comhairle

Could I encourage Deputy Byrne to refer directly to what is in section 3? Section 3 refers to the dates on which new rates will become operable.

Mr. Byrne

It does, but we are also addressing those amendments that were ruled out of order.

An Leas-Cheann Comhairle

If they are out of order we cannot address them.

Mr. Byrne

I am making a passing reference to them. Would the Minister not accept that it is a combination of all three factors which I outlined which is the major cause of the low rates recommended in this Bill today?

An Leas-Cheann Comhairle

We know that the Minister is courteous and cooperative, but I hope he will not respond too generously to that invitation because the Minister would be out of order on section 3 in references to anything other than dates on which these rates will become operable.

Mr. Callely

The previous speaker referred to the National Social Services Board. I heartily endorse what has been said in relation to the NSSB and the service they provide.

The Minister referred to the complexity of the social welfare system. The Department published an information booklet but it is comprehensive and bulky and it is not as easy to assimilate as the booklet produced by the NSSB. A large number of voluntary groups also publish information booklets on a whole range of social welfare services. The Minister should look favourably at funding local groups and the National Social Service Board for their work in providing information and booklets for the community.

An Leas-Cheann Comhairle

So that we can make progress. I again appeal to Deputies to confine themselves on Committee Stage to what is in the section and not to ramble too far away from it.

Minister for Social Welfare (Mr. McCreevy)

I thank speakers who have contributed. The debate on section 3 has been more like a Second Stage debate in that it has ranged over everything from income tax to information services and dates of payment.

Section 3 provides for the increases in the weekly rates of social insurance payments announced in the budget. Many speakers referred to the dates on which the increases will become payable. Increases have been paid from July for a number of years and speakers have been asking that we bring forward dates of payment. Clearly there would be cost implications. It would cost an extra £30 million if the increases were to be payable from 6 April. I do not have the money to bring forward the payment dates. July has been the date for some time and I see no reason to change it. Last year people got increases in July and it is hardly reasonable that they should be given another increase after only nine months.

Deputies also referred to the Commission on Social Welfare. We have achieved the priority rates recommended by the commission in many areas. The total annual cost of achieving the commission's rates of payments in 1992 terms would be £340 million. The commission's report is excellent, but I have not the means to put another £340 million into the social welfare system.

Other speakers referred to percentage increases. Deputy Bell rightly said that 4 per cent of £50 is a small amount of money. A friend of mine used to say that 60 per cent of nothing is still nothing. That is self-evident. I recognise that people on basic unemployment assistance and unemployment benefit are not living in the lap of luxury. Over the past couple of years we have at least reached the priority rates recommended by the commission in many respects.

The full implementation of the commission's recommendations in relation to the rates of payment present serious problems of resources which can only be resolved as the economy grows. To reach the priority rates in 1992 would cost an additional £15 million in 1992 and £33.5 million in a full year over and above the existing 1992 budget allocation.

The commission recognised these difficulties and identified priority increases as the first step in bringing the rates of payment to minimum acceptable levels. The Government have committed themselves under the Programme for Economic and Social Progress“to move by 1993 to the priority level of rates recommended by the Commission on Social Welfare and thereafter, to increase social welfare rates further and progressively, in accordance with the commission's recommendations, as the resources of the economy grow”.

The commission recommended their rates in 1985 terms. In 1985 terms the priority rates would have been £45; in 1992 terms that is the equivalent of £56.50. In regard to social insurance, the priority rates recommended by the Commission on Social Welfare have already been achieved in the case of old age contributory pensions, retirement, invalidity and widow's contributory pension schemes, deserted wife's benefit, the maternity allowance scheme for women in employment and the occupational injuries benefits schemes.

The disability benefit and unemployment benefit schemes are the only social insurance payments which are not yet at the commission's priority level. Of approximately 397,000 persons in receipt of the various social insurance payments, over 266,000 — almost 67 per cent — are receiving payment at a higher level than the commission's priority rates.

Regarding social assistance payments, of the total of approximately 777,000 social welfare recipients, over 587,000 — 75 per cent — are receiving payments at a higher level than the commission's priority rates.

We have done what the commission asked us to do. To bring up the rates in one year would have very serious cost implications for the Exchequer and they recommended as an interim step that we should achieve the priority rates. In 1993 we will have achieved priority rates in all areas. That will be welcomed by everybody. We have gone some of the way to meet the objectives set out in the report of the Commission on Social Welfare.

Section 3 provides for a general increase of 4 per cent in the personal, adult and child dependant rates, with a special increase of 6 per cent in short term payments, including disability benefit and unemployment benefit. The personal rates of disability and unemployment benefits are being increased to a new weekly rate of £53. The adult and child dependant increases payable with these benefits are being increased by 4 per cent to £34.30 and £12.50 per week respectively.

The personal rates of old age (contributory) and retirement pensions are being increased by £2.60 a week to £66.60. The rates of widow's (contributory) pension and deserted wife's benefit are being increased by £2.30 a week to £60.50. The rates of invalidity pension and of pensions and lump sum gratuities under the occupational injuries benefits schemes are also being increased.

The new rates of social insurance payments are set out in Schedule A to the Bill. These improvements in the rates of payment which are in excess of the rate of inflation represent an increase in real terms for social welfare recipients and clearly demonstrate the commitment contained in the Programme for Economic and Social Progress“to ensure that social welfare recipients are protected against inflation and their living standards are maintained and, where possible, improved”.

These increases go a long way towards alleviating the hardship of people on minimum levels of social welfare. The Government in successive budgets have matched and bettered the inflation rate in the social welfare increases. I recognise that people on the basic levels are not in luxurious circumstances but we are doing the best we can.

Deputy Kavanagh referred to the family income supplement and the possibility of losing the medical card. We have made a special arrangement with the Department of Health so that people in receipt of the family income supplement will not as a result lose their entitlement to a medical card. This is clearly stated in a leaflet which explains the family income supplement.

Mr. Kavanagh

There is a slight overlap for a month or so until all this is accepted and passed. At Eastern Health Board level I have some experience of this. It takes a little time when rates are changed to get the message through.

Mr. McCreevy

If the Deputy brings these problems to my attention we will certainly notify the health board.

Mr. Kavanagh

The Minister is arguing that he will get it right eventually. However, I assure him that there is a difference between what he says and what actually happens.

Mr. McCreevy

If that is the case the Department will issue a further diktat on the operation of the system. Deputy Bell mentioned the bank-link method of payment at post offices. We are in discussion with An Post and will be entering a new arrangement with them shortly to improve the current system. As Deputies are aware, with the growth in technology and computerisation people will very shortly have the option of alternative payment methods, some of which have been introduced on a pilot basis. I will bear in mind the points made by Deputy Bell. We hope that, with the growth in computerisation and so on, improvements will be made in the not too distant future.

I took note of all the points made but many of them apply to other sections of the Bill and we will deal with them when we come to those sections. Deputies referred to a wide range of areas covering all sections of the Bill but I will deal only with section 3 now. Otherwise we would make no progress on Committee Stage. I want to co-operate with the Leas-Cheann Comhairle. If he had been in the House this morning he would not have allowed such a wide-ranging debate and Deputies would not have been allowed to wander over the broad spectrum of welfare taxation and so on. Now that he is ensconced again in the Chair I will bow to his superior knowledge of the rules of the House.

Mr. Byrne

The Minister seems to be happy with the presence of the Leas-Cheann Comhairle but the Chair is supposed to be fair to all, not only to the Minister.

An Leas-Cheann Comhairle

I thank the Minister for his comments. I am sure that all Deputies would prefer to approach the matter in a workmanlike fashion. I hope that the complexities that have been dealt with heretofore will not be repeated when we reach the relevant sections. In that event we will have saved much time.

Question put: "That section 3 stand part of the Bill."

The Committee divided: Tá, 68; Níl, 20.

Tá

• Ahern, Dermot.
• Ahern, Michael.
• Barnes, Monica.
• Brennan, Mattie.
• Brennan, Séamus.
• Coughlan, Mary Theresa.
• Cowen, Brian.
• Cullimore, Séamus.
• Daly, Brendan.
• Davern, Noel.
• Dempsey, Noel.
• de Valera, Síle.
• Ellis, John.
• Fahey, Frank.
• Fitzgerald, Liam Joseph.
• Fitzpatrick, Dermot.
• Flood, Chris.
• Flynn, Pádraig.
• Gallagher, Pat the Cope.
• Harney, Mary.
• Hillery, Brian.
• Hilliard, Colm.
• Hyland, Liam.
• Jacob, Joe.
• Kelly, Laurence.
• Kenneally, Brendan.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Martin, Micheál.
• Briscoe, Ben.
• Browne, John (Wexford).
• Callely, Ivor.
• Clohessy, Peadar.
• Connolly, Ger.
• McCreevy, Charlie.
• McDaid, Jim.
• McEllistrim, Tom.
• Molloy, Robert.
• Morley, P.J.
• Nolan, M.J.
• Noonan, Michael J. (Limerick West).
• O'Connell, John.
• O'Dea, Willie.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Ned.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Toole, Martin Joe.
• Power, Seán.
• Quill, Máirín.
• Reynolds, Albert.
• Roche, Dick.
• Smith, Michael.
• Stafford, John.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Joe.
• Wilson, John P.
• Woods, Michael.
• Wyse, Pearse.

Níl

• Bell, Michael.
• Byrne, Eric.
• De Rossa, Proinsias.
• Ferris, Michael.
• Foxe, Tom.
• Garland, Roger.
• Higgins, Michael D.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Moynihan, Michael.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• Pattison, Séamus.
• Quinn, Ruairí.
• Ryan, Seán.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.

Tellers: Tá, Deputies Dempsey and Clohessy; Níl, Deputies Howlin and Sherlock.

Question declared carried.

SECTION 4.

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

Mr. Connaughton

Section 4 is in many respects similar to section 3 so I shall just remark on one or two of the comments made by the Minister in his final contribution on section 3.

I am a little concerned about the Minister's explanations for payments being made in July every year. I certainly shall not waste the time of the House on this issue because I have to accept that the decision has been made this year and there is no more to be said about it, but I am slightly bemused at the position, which is very similar to that of a company selling the same product in a different wrapping. The Government announced on budget day that there is to be a 6 per cent or a 4 per cent increase but that it will not be made until July of that year. In keeping with the spirit of the Commission on Social Welfare, I should have thought that the Government would try to give real increases to those who need them most.

By and large, I should have thought that what we should be endeavouring to do is get those dates back, even over a five-year period, so that that could be taken into account, if necessary, in the actual percentage increase itself. That would mean that at least the elderly, those who are ill, invalided or whatever, would know that the actual increase meant what it said. I know the Minister has made the case that he has not got the £30 million to enable him to do so; I know that only too well. It is true to say that the hallmark of a Christian society, in good or bad times, is that they do the best they can to look after their underprivileged. I am somewhat worried that the Minister appears to be saying there is nothing he can do about it, or perhaps there is nothing he wants to do about it, that that is the system and that is the way it will remain.

Mr. McCreevy

If Deputy Connaughton examines the logic of what he is saying he will find it will not withstand chronological examination. I appreciate that he is not making the point in a party political or contentious manner. What he and the other Members appear to be saying about these dates is that, when the Government of the day announce those increases at budget time, the fact that they are not implemented for some considerable time later creates an anomaly whereas I contend none is created. However, an anomaly would arise if we were to say we would not pay such increases until, say, next September, whereas, as of now they are paid in each July; that would be unfair. Governments are forced at budget time, usually in January, to say what will be their expenditure on social welfare. I accept that for any party in power introducing their budget there is, if you like, a political negative in people or recipients contending that they will not receive such increases until July. But if such increases are paid in July, or on a given date every year, there is no disadvantage for anybody. Members are really asking me to grant social welfare beneficiaries a retrospective payment.

Many Members particularly Deputy Bell, will have been involved in trade union negotiations over the years with regard to rates of pay and so on, agreement being reached on the payment of, say 2 per cent or 8 per cent from a certain date. So long as those dates comply with what happened in preceding years I do not perceive any disadvantage. Nonetheless, I realise there are political negatives for the Government caused by the delay in payment from the budgetary announcement of such social welfare increases. But if recipients are paid those increases in July every year then there is no disadvantage. If people follow the logic of what I am saying they will find they can agree with me. I have heard this argument advanced before and never went along with it whether in Opposition or in Government. If there is a consistant date annually for the payment of such increases there is no disadvantage for anybody, whereas there would be if any Minister for Finance or Social Welfare were to say, "in 1992 I will not grant these increases until September or October". I contend that the arguments advanced do not withstand rational examination. That is my belief anyway.

Mr. Byrne

I do not want to repeat the same arguments. We will be opposing this section on the same grounds as I advanced earlier. The Minister is wrong to say no problem arises if these social welfare increases are paid consistently annually in the same month. This is not being done. As I pointed out, the rot seemed to set in around 1982 when the payment of such increases was delayed until the end of June, whereas prior to 1982 they were effected in the month of April. The logic of the slippage of successive Governments — those increases now being effected in July whereas they had been paid in April, May or June — is that they will meet themselves at the other end. Whereas those increases are announced annually at budget time, usually January or February, their payment is delayed for six months. If that slippage continues they will be overlapping into the succeeding year's budget which would be totally unacceptable.

One may take the Minister's point that he does not have the £30 million to date those increases back to April, but rather than put their payment in abeyance until, say, August next year or September the year after, it has to be said that the Minister faces a crisis in that payments cannot be paid so much later than their announcement in the budget. It is clearly dishonest on the part of the Government to do so since they encounter no problem whatsoever striking and introducing PAYE rates, collectable as and from March. Since the money is collected in March there appears to me to be no reason the Government cannot effect social welfare increases in April.

Mr. Bell

As I said on section 3, if circumstances obtained in which it was negotiated with the trade union congress — in accordance with Programme for Economic and Social Progress 1 or Programme for Economic and Social Progress 2— that the phases of social welfare increases would comply with the phased salary increases to workers generally then a date would be fixed by negotiation each year which would be a more acceptable manner of dealing with the matter. Certainly I will be suggesting that strongly to the trade union movement in discussions on any new agreement.

What concerns me most are the provisions of section 4 (2) (b) dealing with unemployment assistance. I do not know whether we will be given an opportunity to deal with this on other sections or whether we will reach them. The biggest bone of contention vis-à-vis social welfare nationwide at present is the non-payment of unemployment assistance to young people who are being penalised if they live with their families. They are being forced to leave home and live elsewhere in order to qualify at all. We are here talking about a payment date of 29 July but for very many young people there will be no payment date at all. In the case of a father working in a local authority bringing home, say, £130 per week, if his son of 20 is living in the home he will receive no unemployment assistance at all. He must seek accommodation in a flat when not alone is he then paid the benefit in full but the relevant community welfare officer must pay him £35 towards his rent. It is not logical. It is a crazy system. In addition, any such young person must wait eight weeks to be assessed only to be informed he will not get benefit anyway. On that basis alone the provisions of that subsection warrant close scrutiny. I am sure the Minister is aware that that is a nationwide problem.

Mr. Connaughton

I want to put on the record again that because Governments have got into the habit of paying social welfare increases on a given date in July then within the overall context it basically means that social welfare recipients are now £30 million worse off than they might have been otherwise. I am not making a political point. We did the very same. It is almost parallel with the arrangement in respect of a person and his family in receipt of unemployment assistance. It is not good enough that parents with four children must live on £136 unemployment assistance. In a society like ours that is grossly inadequate. I know we could engage in a full scale discussion on how that figure is struck.

In so far as the provisions of this section are concerned, the fact that payment was effected on a given date over a certain number of years does not mean it is correct to continue that practice if we believe that social welfare recipients are not receiving sufficient money. If we as a society genuinely believe that the unemployed and poor are not being treated as well as they should be then this Bill represents the vehicle by which we could grant them extra benefit. That is the point I am making. If the Minister is still in office this time next year I have no doubt that there will be only a small change, for reasons I understand only too well. The Government should make it a priority to bring forward those dates as quickly as possible. It may not be possible to do this for two or three years but I should like to think that the Minister and Government of the day will make this a priority.

It would be wonderful if we had a fairy godmother who could provide jobs for 50,000 people so that our economy could tick over better. The current procedures were built into the system because it was perceived that finance was not available. One could talk about this issue all day but I believe we have debated it adequately at this stage. It would be very easy to turn the argument around and say that several people will manage to bend the system. I will not mention any names but we have had plenty of examples of this over the past 12 months. It appears that the old, the sick and the poor have to wait at the end of the line for everything. They seem to be the only groups in our society who have to wait for up to six months before they can receive the benefits which are given to them. That is the point I am making. I hope the Government will have the political will to rectify this anomaly as resources permit. An extra £30 million would make a huge difference to those people.

Mr. McCreevy

Deputy Connaughton is asking me to give a once-off payment backdated from July to April. This would become the operative date in future. I accept that people can feel hard done by when the changes announced in the budget do not apply until July. If the fairy godmother to whom Deputy Connaughton referred gave me £30 million it would be possible to backdate the payment to the start of April. The cost in future years would be the same.

The point I am making is that there is no disadvantage to people when they get the increase on the same day every year. As I said, people get confused when the increases announced in the budget do not apply until July. If I had an extra £30 million I would gladly give this once-off payment. However, I do not have that money. As long as the dates stay the same every year people will not be hard done by. Governments who are short of money naturally extend the dates until later in the year in the hope that they will save money. I accept that this can give rise to hardship. However, this is not being proposed in this Bill — the dates will be more or less the same as they were last year.

Deputy Bell referred to the question of assessment, particularly as it affects young people. I know that this causes some problems. The purpose of this assessment system is to ensure equity between people living at home and those who are not. The abolition of this assessment system would cost the State approximately £25 million. I do not have those resources either. As resources become available, my Department will look at the position of people over 25 who are assessed with benefit and privilege.

Mr. Bell

The Department of Health are paying £25 million to subsidise young people who are living in flats.

Mr. McCreevy

What the Deputy has said is correct — there are certain anomalies in the system. Young people who leave home are paid a supplementary welfare allowance by the health boards, which is a charge on the Department of Social Welfare. This is also a problem. The abolition of this system of assessment would cost the State approximately £25 million, and I cannot do it.

Section 4 provides for increases in the weekly rates of social welfare assistance payments announced in the budget. In view of the fact that we discussed the social insurance provisions under section 3, I do not intend to go into this in detail. If Deputies want to raise any specific questions about the section I will be glad to answer them.

An Leas-Cheann Comhairle

Bearing in mind our resolution to be relatively good boys in the matter of what is appropriate to the section, it would appear we have exhausted any points which are relevant.

Mr. Bell

I had a lapse of memory.

Mr. Browne

(Carlow-Kilkenny): I accept that the point in relation to assessment was out of order but I want to know if the Minister has made it in order.

An Leas-Cheann Comhairle

What we are concerned about here are beneficiaries and not people who are excluded from the system. I do not think you can make a case under this section for anything other than what is provided in it.

Mr. Browne

(Carlow-Kilkenny): If it was in order I would like to have referred to it. However, I may get a chance to do so later.

An Leas-Cheann Comhairle

Níl sé in ordú.

Question put.

The Committee divided: Tá, 65; Níl, 21.

Tá

• Ahern, Dermot.
• Barrett, Michael.
• Brennan, Mattie.
• Brennan, Séamus.
• Briscoe, Ben.
• Browne, John (Wexford).
• Callely, Ivor.
• Clohessy, Peadar.
• Connolly, Ger.
• Coughlan, Mary Theresa.
• Cowen, Brian.
• Cullimore, Séamus.
• Daly, Brendan.
• Davern, Noel.
• Dempsey, Noel.
• de Valera, Síle.
• Ellis, John.
• Fahey, Frank.
• Fitzgerald, Liam Joseph.
• Fitzpatrick, Dermot.
• Flood, Chris.
• Flynn, Pádraig.
• Gallagher, Pat the Cope.
• Harney, Mary.
• Hillery, Brian.
• Hilliard, Colm.
• Hyland, Liam.
• Kelly, Laurence.
• Kenneally, Brendan.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Martin, Micheál.
• McCreevy, Charlie.
• McDaid, Jim.
• McEllistrim, Tom.
• Morley, P.J.
• Nolan, M.J.
• Noonan, Michael J.
• (Limerick West).
• O'Connell, John.
• O'Dea, Willie.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Ned.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Rourke, Mary.
• Power, Seán.
• Quill, Máirín.
• Reynolds, Albert.
• Roche, Dick.
• Smith, Michael.
• Stafford, John.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Joe.
• Wilson, John P.
• Woods, Michael.
• Wyse, Pearse.

Níl

• Bell, Michael.
• Byrne, Eric.
• De Rossa, Proinsias.
• Ferris, Michael.
• Foxe, Tom.
• Garland, Roger.
• Gilmore, Eamon.
• Higgins, Michael D.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Moynihan, Michael.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• Quinn, Ruairí.
• Rabbitte, Pat.
• Ryan, Seán.
• Sherlock, Joe.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.

Tellers: Tá, Deputies Dempsey and Clohessy; Níl, Deputies Howlin and Ferris.

Question declared carried.

Amendment No. 19 not moved.

SECTION 5.

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

Mr. McCreevy

I have a little bit of good news to announce. Subsection (1) provides for the payment of an additional weekly allowance to invalidity pension recipients aged 80 years or over. This extension of the over-80 allowance to these invalidity pensioners brings the invalidity pension into line with other social welfare payments. Subsection (2) provides that the allowance will be payable at the existing rate with effect from 9 April 1992.

Subsections (1) and (4) together with Schedule A provide for an increase in the allowance to £4.40 per week with effect from July 1992. This is in line with the general social welfare increases provided for in section 3. This provision removes an anomaly whereby invalidity pensioners aged 80 years or over were not getting the same amount of money as old age pensioners. There will be a very small cost to the State in removing this anomaly.

Mr. Bell

We obviously welcome this and I am glad that it will take effect from 9 April 1992, because this is what we were arguing about on section 4.

Will the Minister bear in mind the two points I raised, perhaps under the wrong section, that is the question of application forms for invalidity pensions, because a great many older people who would be eligible for invalidity pension would not understand how to apply for invalidity pension. Naturally a very small number of people over 80 would be entitled to invalidity pensions. Could the Minister tell us the number of people who will benefit.

Mr. McCreevy

For the information of the House, it is estimated that about 40 pensioners will benefit from this increase.

Mr. Connaughton

I welcome this change and I am glad to see the elimination of the anomaly, which affected a very small number of people. I must confess that I thought amendment No. 19 would be more relevant to section 4, and although the Chair has ruled it out of order, I am not complaining because it would involve a charge on the Exchequer. However, I wanted to put down a marker because here was no other place I could do so on the Bill. As I said yesterday, this is the first time ever that no increase has been provided in the child benefit scheme and I wanted to ensure that the Dáil would note this. I would like to see mothers getting the same percentage increase through the child benefit scheme as applies to other schemes. The Minister is probably aware that this is one of my hobby horses. Indeed it is not today or yesterday I started to speak on this subject. I genuinely believe that the best way to channel financial help to families is to the mother via the child benefit scheme. The NESC report and the report of the Commission on Social Welfare back up my assertion. I cannot understand why child benefit was not increased in line with other social welfare benefits. The mothers are very angry about this — there is no danger that they will take to the streets because as a category they do not do that.

Mrs. Fennell

You never know.

Mr. Connaughton

Perhaps, but I know they are terribly angry. They have good reason to be angry. Child benefit is the only income mothers get in their own name from the State. For all the work they do in the home that is the least they can expect. We are not talking about a great deal of money as it is less than £4 per child per week. On any scale of priority one would have imagined that the Minister would try to ensure that money was channelled into the heart of the home. Many mothers have to make tremendous efforts to keep the family together. Mothers know that on the first Tuesday of every month, year in year out, they can collect their child benefit payment and it is amazing what they can do with the family budget. I want to protest in the loudest manner at the failure to increase child benefit. It was a rebuff to every mother in the country that no increase was given on this occasion. It is not enough to say that on other occasions no increase was paid, and I genuinely believe this is the first of the bad mistakes in this Bill. However, we have limited resources and we will have to accept reality. There is just so much that the Minister can dispense, and that is one of the reasons that my party abstained from voting. So far as the increases are concerned we would have preferred if they were higher, but the Minister does not have a golden goose. I am glad to avail of the opportunity today to put on the record of the House that a fundamental mistake has been made in that the child benefit allowance was not increased even to the minimum rate of 4 per cent which would have sent a signal to every mother in the country that we acknowledge the work she does in the home. That goes without saying. The signal that went out as result of this Bill, in which there was no mention of the child benefit scheme, is one which does not reflect well on the Government.

Mrs. Fennell

I support the very eloquent case made by Deputy Connaughton in this matter. The history of this payment goes back a long way. I was one of those people who in the early seventies realised when the children's allowance was first introduced that it was paid to the father.

Mr. McCreevy

Section 5 is not about child benefit. Deputy Connaughton has broadened this debate. Section 5 deals with invalidity pension for those who have attained the age of 80 years.

Mr. Connaughton

I must have my tongue in my cheek somewhat and say that that is where my amendment appeared. We cannot overindulge the Chair.

Mrs. Fennell

In view of the fact that the Minister is new a little insight will not go astray. Initially the childrens' allowance, as it was called, was paid by the State to the father. He had a legal right to it. Many men kept the childrens' allowance book in their pocket and cashed it on the first Tuesday of the month and may or may not have given the money to the women or may have given them something extra in their housekeeping money. When the womens' campaign started in the seventies this became a focal point for agitation by many mothers and I am happy to say a Fianna Fáil Government changed that rule and gave it to the woman. In effect that was the first and, I think, it is still the only social welfare payment the woman receives in her own right. We know the childrens' allowance is for the children, but the woman has the right to keep the book and to go and collect it.

No public funds are better spent than the childrens' allowance. The money is kept in preparation for Holy Communion, Confirmation and is put away to pay for extra educational classes. It is the least wasted money of all the money allocated in the budget. I regret this Bill is silent on increased payments. I appreciate that if the Minister had said we will give a percentage increase he could expect criticism and people would say it was not enough. It is bad form and it is totally inexcusable that they were forgotten. The Minister will not be forgiven and I am sure his constituents have been in contact with him; certainly they have been in contact with me and many of my colleagues to see whether anything can be done. Why can the Social Welfare Bill and the budget not recognise the importance of this benefit. I am aware of the thinking in the Department of Social Welfare, at the Cabinet table and in the Department of Finance because I have been through it all. The thinking is why should money be given to people for children whose surnames are Smurfit or Dunne——

An Ceann Comhairle

I would prefer if there were no references to any particular persons.

Mrs. Fennell

I am just trying to make a point that some people——

An Ceann Comhairle

I am sorry to interupt the Deputy. In fact, the Chair has given quite some latitude in this matter but we seem to be deviating altogether from the section before us. The section before us does not deal with allowances for children; it deals with invalidity pensions and an increase where a pensioner has attained 80 years of age.

Mrs. Fennell

I accept that.

An Ceann Comhairle

The Chair gives some latitude. Let us get back to the section, please.

Mrs. Fennell

The poverty in families is not always apparent. Nobody can really understand the benefit of a direct social welfare payment to a particular person. We do not know the poverty behind a family for whom the payment we are talking about can be the only relief and the only hope.

Mr. Byrne

I beg your indulgence, Sir, for one second, given that the amendment which has been ruled out has been brought in under section 5. I am sure we can promise not to deal with child benefit if you allow us to say a few words on it under the section.

An Ceann Comhairle

A brief reference.

Mr. Byrne

The Fine Gael proposal for a 95p increase in child benefit for the first three children, which works out at approximately £137, is certainly not very demanding. They are not seeking a tremendous amount of money, even if the Minister could find the means to pay it, but the principle is very important. Child benefit has not been increased and it has not even attained the 4 per cent increase. That may be incorrect.

Mr. McCreevy

No.

Mr. Byrne

It has not even attained the 4 per cent which makes it all the more important that the amendment——

An Ceann Comhairle

It is quite removed from the section. This section deals with the invalidity pension increase to one who has attained 80 years or more.

Mr. Byrne

I sum up by saying I hope the Minister is aware that 40 per cent of Ireland's children live in households below the minimum income level identified by the Commission on Social Welfare and that large numbers experience serious deprivation. Much research has been carried out to identify children most at risk in our society. They should be targeted and it is remiss of the Minister not to have allowed any financial increase in child benefit.

Mr. Browne

(Carlow-Kilkenny): I have to claim a plenary indulgence for a few minutes on the basis that we were talking about the child allowance. I think the Minister is carried away with religious fervour; he is paying too much attention to the gospel, to the birds in the air and the trees and the lilies in the field and how they look after themselves. Unfortunately, children have to be fed. We proved earlier that the 4 per cent increase which social welfare recipients received really was not an increase when one took into account the extra taxes and the rate of inflation. We now have a situation where nothing is given, which means that even though the children will be a year older they are supposed to live on less. The mothers of Ireland depend on this income.

An Ceann Comhairle

We had some deviation.

Mr. McCreevy

I presume it is in order to deal with the deviations as well. I presume everybody is accepting the provision in section 5 with regard to invalidity pensions. I dealt with the points regarding child benefit in my closing address on Second Stage last night. I do not necessarily disagree with much of the thinking concerning child benefit put forward by Deputies. There is hardly a better way of directing the resources of the State at those most in need — those living in poverty and the poor. Before she entered this House Deputy Fennell played more than a small part in getting that provision changed on the grounds that child benefit should be paid to the woman. I have learned a little about politics during the years — I have made many mistakes also — and I am aware that all women, be they at the top end of the social scale and living in expensive houses or at the lower end, regard child benefit as their payment. Like Deputy Fennell, I have often said that there is an anomaly in the system in that people with very large incomes are receiving child benefit just like the person at the lower end of the scale living in Clonmel or Newbridge. I realise however that even those people regard child benefit as their payment.

I do not wish to make this an excuse but, as I said last night, having regard to budgetary restraints, hard decisions had to be made in the budget and it did not prove possible to increase the allowance this year. Indeed on the last occasion on which my predecessor in this Department increased child benefit he was run over in the House and had to take some abuse. If I was to grant a 4 per cent increase this would mean that child benefit would be increased by about 95p each month and people would say that this works out at 3p per day. Therefore one cannot win.

When I spoke about this matter last night, when Deputy Fennell was present, I indicated what my thinking is in this regard. I accept that this is a very effective way of targeting resources at a particular area and that they are used to maximum effect. The one thing we can be sure of is that in poor households the woman will spend child benefit on the basic necessities of life. I gave an indication last night of what I may do in this regard if I am still in this position next year. However, there may be a down side also.

I accept many of the economic arguments in regard to child benefit to which Deputy Fennell and I, when an ordinary Deputy, have referred. If it was thought that women would not receive this payment, the Government would find themselves in serious political trouble. Regardless of what my thinking may be in future years the House can rest assured that the woman will still receive child benefit. However, other ways might be found of targeting or redirecting resources. The point has been made that we should be able to target more effectively most of the moneys we pay out.

As the House is aware, child benefit was not increased in the budget. However, for those in receipt of unemployment assistance and benefit etc. the child dependant allowance was increased. As I mentioned last night, there are anomalies in the system in relation to disincentives to work. If we looked on this matter differently and stopped scoring political points — I should say that this debate has been constructive both last night and today — we might be able to make progress. Child benefit will cost £217 million this year at the rate set in 1991. Perhaps we could target these resources a little bit better. If I am still in this hot seat next year, I will consider what can be done in this regard.

Question put and agreed to.

SECTION 6.

Amendment No. 20 not moved.

An Ceann Comhairle

We now come to deal with amendment No. 21. Amendments Nos. 21 and 26 are related and they may be taken together. Is that satisfactory? Agreed.

Mr. Connaughton

I move amendment No. 21:

In page 8, before subsection (2), to insert the following subsection:

"(2) The Minister shall arrange, in association with the Revenue Commissioners, for the issue of an information notice in relation to the family income supplement scheme and which shall be enclosed with each P60 form issued by the Revenue Commissioners.".

I do not want to delay the House but I would like to comment on a few important matters in relation to the family income supplement and to ask the Minister a number of questions. I should say that I have advocated the concept of family income supplement from the very first day it was introduced for a specific purpose. It is my understanding that only 7,000 people are in receipt of this supplement. I do not have the exact figure, but I think it is around 7,000.

Apart from carer's allowance, this scheme has attracted more publicity than any other scheme that I know of. I recall that this time last year a publicity campaign was undertaken to ensure workers were aware of their entitlements as there was a belief that many people were not aware of the family income supplement or, if they were, they felt for whatever reason that they were better off without it.

We need to look at this scheme. Since I entered this House ten or 11 years ago we have all been trying to eliminate poverty traps. If one wants to speak for an hour to an hour and a half in the House there is no better topic that one could pick. There are reams of newsprint dealing with it. Indeed, I have in my possession a number of studies which clearly show that there are poverty traps.

As the Minister is well aware, it will finally dawn on a person in a low paid job when they arrive home on a Friday evening, having worked a long, hard week, that one of their neighbours is in receipt of more money on the dole. One can put whatever veneer they like on it, but that is what it amounts to. In relation to the work ethos and dedication to duty, the problems start from there.

I fully accept, for historical reasons that I will not go into now, that many people are in receipt of social welfare in the area that I come from; but, as I said earlier, I genuinely believe that families in receipt of social welfare and nothing else are not having a good time. It appears that the job that people on low incomes have is not regarded as being important; it is considered to be a dead end job. In addition it is felt that they are being manipulated.

The Conference of Major Religious Superiors and others make the point, in relation to the concept of work, that there is work available but not enough money to pay for it. I always thought that the family income supplement was designed to supplement a person's income, where a job required to be done but the employer was not able for a variety of reasons to pay a living wage and because it is desirable to keep people in employment. However, something has gone terribly wrong with the system. I would like to know why. All but some 5 or 10 per cent of the population know about their entitlements, so I do not believe that the reason the family income supplement is not taken up is because people do not know about it. However, I agree with the Minister doing anything he can to make the scheme more public. I have an amendment which suggests that when the P60s are sent out every year there should be a note on them from the Revenue Commissioners to tell workers about the family income supplement.

However, the question is more fundamental. The family income supplement together with the income from the low paid job must be less than the social welfare rate. People on the dole have the rent allowance, the medical card and other things. It has often been said that people earning perhaps £160 or £170 per week in a reasonably good job and who might have to drive from Ballinasloe to Galway, for instance, to get work, would be better off on the dole. I am not sure if that is so but it is the perception. What are the Minister's thoughts on this? Obviously, this hits at the centre of much of our unemployment problems. We should disregard a person's gross earnings for the previous year and take only net earnings into account and we might find out why more people are not availing of the family income supplement. It should be highlighted then.

For a few years, I believe people genuinely did not know about the family income supplement because of the complexities involved and that all we needed was a huge publicity campaign to get over the problem. Enough campaigning has been done, but the message is not getting across. If we are to eliminate the poverty trap created in this area, now is the time to use our imagination. I am sure there are thousands of answers to this problem in the Department of Labour and in the Department of Social Welfare. A reliance on publicity only will not sell the family income supplement. The changes proposed here will make people a little better off but not as well off as indicated in the examples which the Minister has given. We have an ideal opoprtunity to try something different. Most people genuinely want to work. It is worth a lot to the country to encourage the work ethic and to keep men and women working.

In the past three or four years it is being said more frequently that it would pay people better to stay at home than to work. It would be out of order for me to go into the area of taxation, but it is one area that could be worked on as a way of maintaining jobs. When replying will the Minister give some indication as to why the family income supplement scheme has failed? Perhaps the Minister will take the line that it has been a success. If it is, and it only affects 7,000 people or even 19,000 people, it is not having the effect we thought it would have, over five years ago.

I do not know how this scheme could be policed, but it is important to extend the family income supplement to other people, for instance, the self-employed and small farmers. The reason initially — it was not to apply to those groups was because there was no clear method of calculation of their income but we got over that with the introduction of the PRSI system in 1988. We know that many small farmers do not have a taxable income, but provided small farmers and self-employed people have a Revenue Certificate of their income, there should be no trouble in bringing them into the family income supplement scheme. It is very important to have a system to keep small business people and small farmers and their families on the land. The jobs they are doing are important for the health of the national economy. There is a whole range of thoughts on the family income supplement. I wonder if the Department or anyone else have made an indepth study of the family income supplement. We must question whether we should continue the scheme if it is not producing the sort of results that were envisaged at the beginning. I will not speak about the increases because unless and until the net pay rather than the gross pay is taken into account we will not know whether the scheme is as successful as it might be.

Mr. Bell

We always welcome any increase in these schemes. Many of the points made by Deputy Connaughton are correct. It is my experience that people are afraid to apply for benefit under this scheme but I do not know why. While I agree with the main thrust of the amendment, the matter could be dealt with in another way, by circulating a notice with the PAYE certificate rather than the P60. More and more employers are not giving their employees a P60, certainly not on 5 April. They might give them in July, August or September. In consultation with the Minister for Finance, the Minister for Social Welfare could arrange that the document be circulated with the PAYE certificate. This would cover a large number of workers, particularly industrial workers and those in service industries.

A second point is that it would be a further check against the non-payment or return of PRSI and PAYE payments by employers. One employer in my constituency owes £400,000 in PAYE and PRSI. I will not name the company because they are not here to defend themselves. It is public knowledge that a substantial number, if not all, of the people working for that company would qualify for the FIS. How can the Department of Social Welfare and the Revenue Commissioners allow a company to run into the red to that extent while at the same time the Department of Social Welfare are subsidising workers because of the low wages paid by the employer? We do not want to create another monster.

This scheme will have to be monitored carefully by the Department. It must not become a vehicle to subsidise bad employers. It must be monitored in such a way that employers will not be able to issue P60s or P45s showing the same level of earnings year after year, while at the same time the Department are subsiding those earnings through the FIS. If, for example, the average level of earnings for a worker in a particular company is £150, it is reasonable to expect that worker to receive an increase of 4 per cent under the terms of the Programme for Economic and Social Progress. If the figure of £150 remains constant for five years, it simply means that the Department are subsidising the employer and paying the national increase on that level of earnings. That monster is likely to emerge. As competition for employment rises, bad employers will seek to exploit workers. Deputy Connaughton should keep that point in mind. It is the reason people believe they would be better off on the dole. If they had to travel from Galway to Ballinasloe and bear the expense of maintaining and taxing a car, naturally they would be better off on the dole than in receipt of very low wages.

We support the main thrust of what the Deputy is trying to achieve. It is a good idea but I suggest that the information document about the FIS should be sent with the PAYE certificate.

Mr. Browne

(Carlow-Kilkenny): I thank Deputy Bell for his intervention. We will be satisfied if the Minister undertakes to notify people through the taxation system. Notices sent out from the Department of Social Welfare are displayed in employment exchanges but the FIS is of no benefit to somebody who is unemployed. The scheme is designed to assist those who are in employment but receiving very low wages. We will be happy to accept a form of notification which is directed at people in employment.

We tabled an amendment, which was ruled out of order, dealing with net income. People paying into pension schemes may gain a long term benefit. If a person has a gross income of £180 and a net income of £150, it does not make any sense to disqualify him from benefit of some kind on the basis of the gross income. It is unfair that people who are paying tax to keep the State going are penalised because the money they pay in tax is considered to be part of their income.

Mr. Byrne

Most of the relevant points have been made. Statistics show that the take-up rate under this scheme is extremely low. Last year only 6,569 families benefited, at a cost of £9 million. At least that money is going into the right hands. One must question this low take-up rate. To be eligible for the FIS people must work a minimum of 20 hours per week. That figure can be made up by combining the hours worked by a spouse. A minimum supplement of £5 is payable. Of the 6,569 people who take up the family income supplement could the Minister give a breakdown of the number who receive the full supplement and the number who receive the minimum supplement of £5? Perhaps tomorrow the Minister would give a breakdown of how the £9 million is spent.

Mr. Allen

I would question the effectiveness of the scheme as it has been implemented over a period. In Cork city, despite publicity about the scheme, many people see it as having little substance. When people applied for the family income supplement they found that because of notional earnings they did not qualify. I listened very carefully to Deputy Connaughton, who made the point that one of the most important units in society is the family unit. The State should do everything possible to ensure that the family unit has the support and encouragement to overcome the problems being experienced at present, especially the unemployment problem. People are caught in poverty traps and many of those who are anxious to work realise that it is not worth their while. I accept what Deputy Bell said in that exploitation is rife. Considering that 90 or 100 people apply for a £40 a week job——

An Leas-Cheann Comhairle

We resolved earlier that in so far as possible we would apply ourselves to what is in the Bill.

Mr. Allen

With due respects, I am applying myself to the Bill. I am responding along the lines——

An Leas-Cheann Comhairle

The Chair is listening to the Deputy and I am asking him to confine himself in so far as possible to what is in the Bill.

Mr. Allen

I am talking about the family income supplement, which is extremely relevant.

An Leas-Cheann Comhairle

The Official Report will show that the Deputy has strayed beyond that.

Mr. Allen

My view of the family income supplement may be different from that of the Leas-Cheann Comhairle and that is why there is a misunderstanding.

An Leas-Cheann Comhairle

The Chair is concerned that we apply ourselves to the entitlement to family income supplement and the proposed new rates. On Second Stage we can philosophise on the raison d'etre of the scheme, but here we are obligated to refer to the proposed new rates.

Mr. Allen

That is what I am doing. I am talking about the adequacy of the scheme in relation to its rates. The family unit is under pressure at present and the so-called improvements which have been announced are insufficient to deal with the challenges facing the family. Instead of bringing about these superficial changes in the scheme I would ask the Minister to ensure that the Department of Social Welfare and the Department of Labour work together to bring about real support for the family unit. The Minister has announced improvements in the rate of family income supplement while at the same time other Government Departments are eroding the viability of the family. An example is the abolition of the Teamwork schemes in Cork city. In recent days family support projects have been axed by the Department of Labour while on the other hand the Department of Social Welfare are announcing increases to supposedly support the family.

A wide range of organisations dealing with the marginalised have been abolished. I would ask the Minister to do more than just come into the House and give a sop to the family unit. A co-ordinated approach should be taken by the relevant Departments in dealing with family support. As I have said, a whole range of voluntary groups, family support groups and groups dealing with young unemployed people have been axed, with the loss of 200 jobs. How many families will be affected as a result and what comfort will the increases announced in this Bill be to these families? I would ask that a more co-ordinated approach be taken to this matter. This Minister has imagination and has knowledge of the realities of life. I would ask him to apply himself to resolving some of the basic problems not just by offering people a specific amount of money per week or per month but by working in a co-ordinated way with State agencies and other Departments.

Mrs. Fennell

Last evening when the Minister was concluding Second Stage he mentioned that one of his aims in his new job is to come to grips with the carer's allowance. I suggest that the family income supplement should also be seriously considered. It is a crying shame that while £14 million or £15 million per annum is allocated for this scheme there is never a full take-up of the scheme. As the Deputy Byrne has said, only £9 million of the total amount is taken up. There are many families with only one breadwinner and these families have to stretch the income to make ends meet. Yet many of them do not apply for the family income supplement. I accept that the problem is not one of advertising or promotion. I give full credit to the Minister's predecessor, Deputy Woods, for whom I had very high regard as Minister for Social Welfare, who made great efforts to advertise the family income supplement scheme and to ensure that people are aware of it.

Perhaps the scheme is too complex. At one stage I published a newsletter on benefits such as this for an area where I knew there was need for it. When I sat down and tried to figure out the scheme I realised it was very complex. Perhaps the scheme should be revised to allocate the money in a different way. We all accept the principle of this scheme and we certainly cannot presume from the lack of take-up that there are not people who are lowly or inadequately paid. I think every public representative will agree that there are difficulties with this scheme and that it needs in-depth examination. Perhaps some research should be carried out as to why there is not a better take-up of the scheme or how the people concerned feel about it.

An Leas-Cheann Comhairle

I apologise for not calling Deputy Kavanagh sooner. We have heard two Fine Gael speakers consecutively, but I know Deputy Kavanagh does not object.

Mr. Kavanagh

I hope I will be in order. This morning I had a disagreement with the Minister as to why this scheme is not as successful as it should be. A husband and wife with two children on unemployment benefit would receive £112.30. The maximum rate to which they are entitled, including family income supplement, is £175. Therefore, there is a big difference between the amount paid on unemployment benefit and the amount people are entitled to, taking into account family income supplement. In fact, after close examination of the figures, one would have to say that the incentive between being unemployed and what could be received from the family income supplement is considerable and should be attractive.

This morning I asked the Minister why the scheme was not working, and that is really what is being asked now. I do not consider that it is the actual rates of family income supplement suggested here that would be the attraction. For example, I do not think that any man with a wife and two children and earning £160 a week would suddenly give up work if he had the choice and draw the unemployment benefit. On the other hand, why would the same man not want to draw the family income supplement? That is the dilemma. What is suggested in the amendment, with the change suggested by my colleague, Deputy Michael Bell, would be a great improvement and would make the scheme much more attractive. There is a need for explanation and there is also a need to make family income supplement simpler to apply for and collect. Nevertheless, with the financial pressure on people today, it is my belief that if there is money to be gained by applying for family income supplement more people will collect it. As I have said already, a possible reason for the lack of success to date is that every increase one receives — whether through social welfare benefit or other means — first has a bite taken out of it by the local authorities and then has another bite taken out by the tax man.

I mentioned before that the medical card scheme could be in jeopardy. The Minister disagreed with my comments and advised the House that he had distributed leaflets telling people that if they were in receipt of family income supplement they were automatically entitled to a medical card. That is not the case. When I spoke this morning I meant that reasons such as increases in rent and small benefits such as those relating to income tax and medical cards make it less attractive for people to give up social welfare assistance in one form to gain the benefits of another form. I checked the position and I can tell the Minister that a person can claim for family income supplement and retain their medical card but someone in receipt of family income supplement who wants a medical card will be told they are substantially in excess of the limit of eligibility for a medical card. For the Eastern Health Board area the limit of eligibility for a medical card for a husband, wife and one child is £125.50. The same family in receipt of family income supplement would get £155 a week, which does exceed the eligibility unit for a medical card. That is one factor contributing to the lack of success of the family income supplement scheme. I hope that changes will be made and that health boards will be told that from now on a family in receipt of family income supplement is automatically entitled to a medical card.

Mr. D'Arcy

I wish to add my voice to the debate on the family income supplement scheme. Based on my own experience as a TD in Wexford, I have to agree with the point raised by Deputy Kavanagh about medical cards. At the moment all health boards take into consideration the amount received by a family under the family income supplement scheme when deciding whether or not someone is entitled to a medical card, and that is one of the most significant factors inhibiting the success of the family income supplement scheme. I have here a form giving the rates of family income supplement. I am not sure whether the form is up to date, but the rates given are not accurate and they are extremely complicated. The form says: "at £112 if you have one child you are entitled to the family income supplement scheme". What is that entitlement? The entitlement amounts to a benefit of about £7 or £8 per week. I have just seen a person on £120 a week gross who has three children and who under last year's scheme was entitled to about £23. The family income supplement scheme is of very little benefit to that person when one considers that he will automatically lose his medical card. If he had to attend a doctor he would be faced with a bill for £10 to start with and then another bill for £10 when he went down to the chemist. That is the way people look on the scheme and that is why it has not been very successful. If the scheme were properly operated it could be very beneficial. Many low-paid workers would be able to stay in work if in receipt of a reasonable sum in family income supplement.

Another question to be asked is how much money can be received each week. Family income supplement is usually 60 per cent of the difference between the weekly family income and the income limit for the family's size. That system is very complicated and is difficult to explain. I ask the Minister to take up this issue with the senior officials of his Department and to try to make the system a little simpler. When taking into account the circumstances of low-paid workers, the 60 per cent level adds up to a very small sum. That is the reason that the scheme costs the State only £9 million. People say to themselves and to their employers that it is not worth their while to bother with the scheme.

I lend my voice to the comments made by our party spokesman, Deputy Paul Connaughton, and those made by other speakers in the debate that the family income supplement scheme is very useful. It was introduced, after much pressure, by the Fine Gael Coalition Government from 1982 to 1986. If the scheme is to be effective, it has to change.

Mr. Byrne

A Leas-Cheann Comhairle——

An Leas-Cheann Comhairle

Before I call on Deputy Byrne, I have to point out to the House, while not wanting to erode whatever fading embers of popularity the Chair might have, that we are discussing an amendment moved by Deputy Paul Connaughton that would exhort the Minister, in consultation with the Revenue Commissioners, to make information about the scheme available with each P60 form. We are not discussing the merits of the scheme. A second amendment is being discussed in concert with that amendment, which again requires that the Minister, from whatever resources he has, makes information available. They are the two amendments before the House. The section is not before the House. Deputies cannot jump from speaking to the amendments to speak to the section and then go back to the amendments. We should first discuss the two amendments and then, having dealt with the amendments, we can proceed to discuss the section. The debate is extraordinarily disorganised and Deputies will not get the best out of the discussion on the amendments before us. I appeal to Deputies, in making contributions, to address themselves to what is formally before the House, two amendments which refer to the advertising of the virtues of the scheme. In respect of the second amendment, there could also be discussion on the need for information to explain why people did not qualify. That is what should be discussed.

Mr. Byrne

I take your point, a Leas-Cheann Comhairle, and that is precisely the matter I intend to address. I intend to support both amendments.

I suggest to the Minister that it is very important that he provide information to applicants for and recipients of social welfare benefits. Those people should receive information on the full range of benefits to which they are entitled. Unsuccessful applicants should be informed of the reasons for refusal.

Very often a wide range of people, from the elderly to the young, approach public representatives in this regard and ask: can you tell me what I am entitled to? It is not so easy to answer because one must engage in considerable investigation. But when an applicant has been unsuccessful it would seem only logical that the full range of benefits to which that person might otherwise have been entitled be listed for their information.

I have taken a quick look at the report of the Commission on Social Welfare. Perhaps the Minister would inform us whether at any stage he considered implementing their recommendation concerning the family income supplement. While they recognise that the family income supplement is targeted at low paid workers and were concerned at its low take-up, they went on to argue that if its conditions were modified and the rates of payment increased this might lead to a greater take-up. They contend that could be achieved by using net rather than gross wages for determining eligibility or increasing the ceiling. Has the Minister considered that suggestion — using the net as against the gross figure — because very often there is a substantial difference between that deemed to be net and the actual gross earnings.

Mr. McCreevy

I will deal first with the amendments. When we deal with section 6 I will reply to the various interesting points many Members have made in relation to the family income supplement.

With regard to amendment No. 21, I should point out that the Revenue Commissioners do issue an information leaflet with certificates of tax-free allowances and so on showing the income limits for eligibility for family income supplement in respect of various family sizes and so on and advising potential claimants to contact the Department of Social Welfare. That is the document the Revenue Commissioners have been sending out for the past couple of years; certainly it is also being issued this year.

I know that the reason Deputy Connaughton tabled these amendments was to highlight the range of benefits appertaining to the family income supplement. Another reason may have been to allow a discussion on the overall question of the family income supplement. But legislation would not be needed to give effect to the provisions of amendment No. 21 or amendment No. 26. Therefore, I would have to oppose them since they are not really proper to a Social Welfare Bill. The provision of the type of information service sought could be done in co-operation with other Departments, by way of regulation or good administration. Indeed I might add that the Department have provided quite a good information service in recent years. Nonetheless, I take the point that people may be confused about some benefits. Here the regionalisation of Department of Social Welfare offices nationwide, the so-called one-stop-shops, should facilitate people in gaining easier access to the whole range of benefits and not merely those provided by the Department of Social Welfare. For example, FÁS schemes are becoming nearly as plentiful as Department of Social Welfare schemes, almost warranting another information service.

I will be opposing these two amendments. I shall speak generally about the family income supplement when we come to deal with the section proper.

Mr. Connaughton

I cannot disagree with what the Minister has said in regard to the amendments except to say that I am not at all sure we could not discuss formally in this Chamber the desirability of providing the type of information I contend is needed by social welfare recipients and to which they are entitled. I will give the Minister two or three examples of what I have in mind. There have been major changes effected in the Department over the past couple of years. Some of the Minister's officials present with him today will remember the famous change in criteria for eligibility for small farmer's dole. On that famous occasion, in 1984 or 1985, the position was more like a civil war than anything else; but farmers were entitled to know exactly on what basis they were assessed. In fact that information is now issued to them by the Department — in other words, their assessment on their entire income and expenditure. They are entitled to that information from the Minister's Department and they receive it.

I question why all other recipients do not receive the same information. For example, why would old age pensioners not be entitled to the same information? There is a huge difference between writing to inform an applicant that they have been unsuccessful in their application because they may have exceeded the guidelines, or whatever may be the terminology used, and the alternative proposed in my amendment, which is that they be informed exactly why they were turned down. I consider that it makes a great deal of sense. Like other Members, I see many people each weekend at my clinic when the frequent story is: I have been refused my pension but I do not know why. Such applicants are informed by the Minister's Department that they have exceeded the guidelines. I want to know what were the guidelines and why they exceeded them.

Lest this occasion pass without my referring to it, I should say that generally the Department of Social Welfare provide a good service. As a TD I have to say I get a good service. I may not always get the answers I seek, but that is another story altogether. There are greater problems than that along the line, but I am afraid the Leas Cheann-Comhairle would not allow me stray into that area.

Then there is the reverse side of the coin. I should have thought that clear guidelines would be issued to applicants when they submit their applications. By that I mean that it should be clearly spelled out what are the guidelines applicants must adhere to or comply with on application. That is not quite the case now.

It is all very well for the Minister to make the point that they have an opportunity to appeal. Of course, they have the right to appeal; that is only correct. In this technological age there should be no problem whatsoever in setting up a computer programme — this proposal would relate more particularly to unsuccessful applicants — to ensure that, accompanying the departmental letter informing an applicant that they have been unsuccessful, they should be given the specific reasons their application was turned down. As far as I am aware, most officials in the Department of Social Welfare agree with this proposal. I do not know whether it amounts to an administrative problem for the Department. Certainly the precedent has been well and truly forged over the years, having been highlighted in the mid-eighties. Indeed I was somewhat taken aback to hear the Minister say he will be opposing these amendments. I thought he might have advanced some administrative reasons for not accepting them. If it has to be done by way of ministerial regulation, I say to the Minister do so. I do not care whether it is done as a result of this or any other amendment so long as applicants unsuccessful in their quest for social welfare benefits know the specific reasons their applications have been turned down.

Mr. McCreevy

Deputy Connaughton referred to amendment No. 26, which involves two issues in that one half of the amendment relates to the provision of information to claimants generally. The information service of the Department of Social Welfare is the focal point from which all these services are operated. Over the past few years, Deputies will have noted the presence of this information service at major public events such as the Spring Show. The Aertel service on television also gives information to social welfare recipients. We have made considerable progress in this area. I should like to avail of this opportunity to thank the people in that section of the Department of Social Welfare for their valuable work. These are the people with whom ordinary recipients get in touch.

Deputy Connaughton's amendment proposes that the detailed reasons for the refusal of a claim should be given to an unsuccessful applicant. I agree that this is what should be done. Over the past few years and, in particular, over the past few months, deciding officers have started to give claimants their reasons for refusing a claim. It is intended that the Department of Social Welfare should, if at all possible, give their reasons for refusing claims. I do not know what the views of previous Ministers for Social Welfare were on this issue but I imagine they were similar to mine.

We live in a society in which people want to be given an explanation why certain things are done. We have made great play of the fact that this is an open and transparent Government. If this is the case, surely people should be told by a major State institution such as the Department of Social Welfare why their claims are being refused. We are working towards this end.

In certain parts of the country deciding officers are already telling people why they are being refused unemployment assistance. While this will create further administrative burdens there is nothing to stop us from doing this. In view of the limited resources available to the Department it is not possible to tie up too many staff in this area. Nevertheless, this principle has been established. I am not a lawyer but I am sure that if a case went to court the court would find that people would have to be told why their claim was being refused.

Deciding officers are required to advise claimants why their claims are refused. As I said, my Department are making some progress in this area. Consideration is being given to the appointment of a chief deciding officer with responsibility for reviewing standards and methods, including the type of notifications issued to claimants and dealing with other practical problems affecting the speedy processing of claims. Our main objective is to try to reduce the incidence of appeals and ensure greater transparency in the system. This would get over the problems about which the Deputy is rightly concerned.

I am not opposed to the principle of the Deputy's amendments but it would not be appropriate to include either of them in the Social Welfare Bill. The Bill is complicated enough from a technical point of view without including a provision which would make it more technical. This is the only reason I am opposed to the Deputy's amendment. As I said, I support the principle of the amendment and we are making some progress along this road. We live in a society where people want to know why certain things are done. I do not think it would be appropriate to include such an amendment in the Social Welfare Bill.

Mr. Connaughton

I disagree with what the Minister has said. I thought that the provision of information in regard to the entire range of social welfare benefits would be of the utmost importance. I do not understand why a provision which would require deciding officers to give the precise reasons for refusing a claim cannot be part and parcel of social welfare legislation. Unfortunately, I will have to put my amendment to a vote.

Mr. McCreevy

If I accepted the Deputy's amendment I would not be able to fulfil its requirements this year as I would not have the necessary resources. This is why I have to reject the Deputy's amendment at this time. As I said, I agree with the principle of the amendment.

Mr. Bell

I believe the problem could be resolved very simply. This is the time of year when PAYE certificates are issued but I know of three people who, this week, received PAYE certificates but did not receive the information in question. Obviously the Revenue Commissioners have not got around to circulating the information with all the certificates. These certificates can be taken as application forms for a PAYE exemption limit but they cannot be taken as application forms for family income supplement. It would appear though, that the second part of the certificate is an application form for a family income supplement but it does not say so. An application form for a family income supplement could be attached to the PAYE certificate thereby resolving the problem.

Mr. McCreevy

My Department are in regular contact with the Revenue Commissioners. A slight change to that certificate, would perhaps get around the problem. I will ask my officials to take up the matter with their counterparts in the Department of Finance and the Revenue Commissioners. A form similar to the one suggested by Deputy Bell might be the solution. These certificates are being issued at present so it is unfortunate the matter was not highlighted earlier.

Mr. Connaughton

Deputy Bell's suggestion makes a great deal of sense. In view of the Minister's commitment to look at this suggestion I will not press my amendment. I presume these certificates have been printed for the past six months.

Mr. McCreevy

They are printed by the Revenue Commissioners.

Mr. Connaughton

Will the Minister bring our suggestions to the attention of the Revenue Commissioners?

Mr. McCreevy

My Department have regular contact with the Revenue Commissioners.

Mr. Kavanagh

We all have.

Mr. Browne

(Carlow-Kilkenny): And the Minister pays his tax properly, no doubt.

Mr. Connaughton

On the basis of Deputy Bell's suggestion, I will not press my amendment. I wanted to highlight a very important aspect of this issue.

Amendment, by leave, withdrawn.

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

Mr. Kavanagh

I believe that the Department of Labour and not the Department of Social Welfare should be responsible for the family income supplement scheme. Family income supplement is of benefit to employers as opposed to recipients. The great problem in relation to the family income supplement is that it has encouraged low wages in certain areas which are not covered by trade union negotiations, the Programme for Economic and Social Progress, the joint labour committees which deal with the clothing trade, the agricultural sector and the restaurant and hotel trade in which very low wages are paid. We could all give examples of other areas where wages are very depressed because people do not have the benefits of the trade union movement to press their case for better conditions and rates of pay.

Money paid under this heading should attract Social Fund money because I do not see any difference between the FÁS schemes and the Department of Labour schemes. Perhaps the Minister for Social Welfare and the Minister for Labour, Deputy Cowen, could exploit the Social Fund to include this scheme. It would mean that FÁS offices would be used to administer the scheme and people could also go there to find out their entitlements. Perhaps there would be greater pressure, if money was coming from the Social Fund, to see that this scheme would be a far greater success.

Mr. Allen

I totally support the comments of Deputy Kavanagh. I may be repeating myself but the Department of Labour and the Department of Social Welfare must synchronise their attitude towards the family, parents and young people. This week the Minister announced improvements in the family income supplement and, at the same time, the other arm of the Government who are supposed to support the family — the Department of Labour — axed essential Teamwork schemes which are a lifeline for voluntary groups working with the unemployed, single parents and young people. When we have finished debating the Bill this evening the Minister for Social Welfare should meet the Minister for Labour to extend a lifeline to the many voluntary groups dealing with the marginalised in society; they deal with these people in family support centres throughout the State.

As I said earlier, there is no point in giving a family a small increase and then cutting the lifeline to the other members of the family, including young people, who are in danger of becoming marginalised. They are already demoralised and the Minister must not marginalise them.

Mr. McCreevy

When amendments Nos. 21 and 26 were being debated Deputies ranged over section 6 so I will take this opportunity to reply to the points raised by them. However, before I reply to those points I should like to reply to a question raised by Deputy Kavanagh. He asked whether people in receipt of family income supplement would lose their medical cards. Last year, we agreed with the Department of Health that it would not be so, the payment of family income supplement will not affect entitlement to a medical card. The Department of Social Welfare issued a document in this regard and there was agreement between them and the Department of Health. However — only cartain types of civil servants could think like this — if you have a medical card and are also in receipt of family income supplement you will not lose the medical card but if you apply for a medical card and you are in receipt of family income supplement you will not get it. Such convoluted thinking is hard to understand but I will certainly take this matter up with the Department of Health because it is mindboggling to put such an interpretation on it. Maybe I have a very small mind but it is certainly beyond my understanding.

Mr. Bell

The Minister will also find that the regulations are different from health board to health board.

Mr. McCreevy

My Department entered into negotiations with the Department of Health some time ago in regard to this matter and that is why we were allowed to refer to this in the explanatory note about the family income supplement. If I confused Deputy Kavanagh earlier it was because I am also confused.

Mrs. Owen

Will the Minister change the situation in regard to the family income supplement?

Mr. McCreevy

Yes, my officials will take it up with the Department of Health to see if it can be changed because it is ridiculous at present. Section 6 provides that the weekly income limits below which families can qualify for family income suplements will be increased by £15 per week for families with up to five children and the limits for families of more than five children will be increased by £18 per week. Many interesting points were raised about the family income supplement and it was asked why the uptake was not higher. Various studies have been done in this regard. Deputies also referred to the poverty trap, to which I will refer later.

The ERSI conducted research into the level of non-take-up of benefits, not just family income supplement. In the report entitled "Poverty, Income and Social Welfare in Ireland", it is estimated that 3.1 per cent of people on social welfare appear to be entitled to some form of payment which they do not claim. The payments they were investigating included unemployment assistance, supplementary welfare allowance and the family income supplement. However, I was advised to treat the report with caution because some of the people which the survey identified as eligible for payments may not in fact be eligible because of different approaches to assessing means.

A private consultant also did a report on the uptake of the family income supplement and he said that a maximum of 20,000 families would be eligible. Allowing for take-up rates experienced internationally in relation to this kind of scheme, the consultant estimated that the maximum achievable number of clients was unlikely to be more than 12,000 families. As Deputies pointed out, 6,568 families benefited from the scheme in 1990 and we estimate that 7,200 families will benefit this year.

This scheme is now uncomplicated, in spite of the best efforts of officialdom. It is now so simple that even I can understand it. It is composed of 60 per cent of the difference between wages and the income threshold. There were many complications in the scheme over the years but I have a list of all the changes made since July 1985 which, as I said, simplified it. It is also calculated on gross wages, I will refer to that later. We would like the uptake to be higher, we are not even at the level to which the independent consultant referred. Nobody seems to know why this is, because it is a particularly good scheme.

In winding up Second Stage last night, I said that the family income supplement was an example of various things wrong with the arms of State and the way they contradict one another. We must have a scheme which will bring people on low wages up to an acceptable level. In the industries Deputy Bell dealt with in his former role that indeed may have been the case. In changing the thresholds we have to guard against ending up with a scenario which would not be in line with the principle behind our thinking.

We have made a great many improvements over the years. A great many anomalies in the system have been removed and we have simplified the system. It is getting easier to understand the system. I do not know why the take-up level for the family income supplement is so low.

In response to Deputy Kavanagh's query on the medical card, I said I would take up the matter with the Department of Health later.

Many Deputies referred to the poverty trap and the disincentives to work, which is a topic close to my heart. Deputy Allen pointed out that one arm of the State is working against the other. What has struck me since I became Minister for Social Welfare is the myriad levels of meanstesting for State support — social welfare, health, education and local authority. The same people have to deal with a variety of different agencies. It is quite possible that one arm of the State does not know what another Government Department are doing. We will have to get a grip on the State support system because I can see it going totally out of control.

A possible solution is the unique identification of the RSI number, and we are making progress on this in the Department. Surely it must be possible to input a person's RSI number and find out what State support the person is receiving, to find out that X has been unemployed for the past five years, that he was sick for part of that period and that he undertook a FÁS course. At present you would need a lorry to collect the files on one person.

Mr. Bell

Even from only the Department of Social Welfare.

Mr. McCreevy

Exactly. I hope to have this implemented as soon as possible in the Department. At present we have responsibility for the RSI number, but it could become one of the important tools in ensuring that State agencies co-operate with each other. It would eliminate the anomalies in the system at present.

Deputies raised a number of points in the course of the debate on the family income supplement. One may have varying views on whether people are abusing the system. Deputy Connaughton said that a great many people say "It is not worth my while going to work. I would be better off on social welfare". We have to accept that a great many people say this, but generally they still keep on working. However, since I came to the Department I have found people who are on the margins, who may be able to get a job and go back to work, even part-time employment, but who are afraid that they will lose the medical card, that perhaps their differential rent would be increased and that they would lose a great many other benefits as well. Therefore they are not inclined to go back into the system. If we are to tackle the employment problem we will have to take a radical new initiative on subsidiary benefits. This is a matter that will have to be considered by the Government and not just by the Minister for Social Welfare. I hope that we would come up with some ideas at Cabinet because these traps and anomalies make people afraid to jump out of the system.

Deputy Connaughton asked how much it would cost to extend family income supplement to the self-employed and to the farmers. We have estimated that it would cost in the region of £10 million to extend the scheme to the farmers and our guesstimate is that it would cost £25 million to extend it to the other self-employed.

An Leas-Cheann Comhairle

I am very sorry to interrupt the Minister but the time has come to put the question deferred from last week.

Progress reported; Committee to sit again.