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Dáil Éireann debate -
Wednesday, 25 Mar 1992

Vol. 417 No. 6

Social Welfare Bill, 1992: Committee Stage.

Question proposed: "That section 1 stand part of the Bill."

This will be a long debate and I propose dividing time in relation to sections. I propose that today we should deal with sections 1 to 34 and that we deal with section 35 and the remaining sections tomorrow. It would be a fair way of allowing most sections to be debated, with the permission of the House. I have no reason for making this suggestion except that it would give every Deputy a chance to have a say on all the sections.

Acting Chairman

I agree with the Deputy but he should have formally put forward this proposal so that it could have been adopted.

I have been speaking to Deputy Connaughton in relation to this matter and I understand that Deputy Boylan was also consulted. We will certainly co-operate, as far as possible, to ensure that we will debate the maximum number of sections. Of course we must keep in mind that this is Committee Stage and that we cannot restrict anyone who wishes to speak on a section.

Acting Chairman

As I said, such a proposal should have been dealt with sooner.

Question put and agreed to.
Section 2 agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill."

Acting Chairman

The amendments tabled in relation to this section have been ruled out of order.

The first amendment would have been in my name. I received a list this morning and all my amendments seem to be out of order. Is there another list detailing all the amendments which have been ruled out of order?

A number of amendments have been deemed to be out of order.

Is there a single list of amendments which have been ruled out of order?

Acting Chairman

We will supply you with such a list later. All the amendments to section 3 have been ruled out of order.

On a point of order, in some amendments more than one Deputy is listed and perhaps the Bills Office or the Office of the Ceann Comhairle could say which amendments are out of order because, otherwise, it will be very confusing.

Acting Chairman

I will endeavour to get such a list for the Deputy as he is entitled to it. As I understand it, the amendments in relation to section 3 cannot be moved because they have been ruled out of order but obviously they may be discussed.

I should like to facilitate the Chair and the rest of the Deputies who wish to contribute so I will not take up too much time. We submitted an amendment which states that, (1) the minimum rate of benefit or assistance payable to an adult in respect of the periodic benefits or social assistance, specified in the Schedules, shall be not less than £66 per week; (2) the minimum rate payable in respect of each dependent child shall — (a) in the case of each dependent child under 15, be not less than 40 per cent of the adult rate, (b) in the case of each dependent child between 15 and 17, be not less than 55 per cent of the adult rate, and (c) in the case of each dependent child aged 18 or over, who is living at home and in full-time education or training, be not less than 70 per cent of the adult rate.

A number of suggested amendments also deal with bringing forward the payment dates but they have been ruled out of order. A classic example is that we tried to delete "30th day of July" and substitute "2nd of April", for obvious reasons, to bring forward the payment dates to what they were in the past. I also attempted to have the miserable £5 basic social assistance payment increased to £10. There is a common thread running through all these amendments because social welfare payments are far too low. Clearly, one requires a basic minimum income. I was disturbed by the Minister's speech yesterday as he seemed to be throwing up his hands in dispair in saying how complex the social welfare code is. He seemed to panic, to some degree, in relation to unemployment and the demands on his Department because of the Government's failure to create employment.

I appeal to the Minister not to panic. He should slow down and look at the report of the Commission on Social Welfare and use it as the bible for moving forward in the social welfare area. In one of the amendments ruled out of order there was a suggestion that a sum of £66 should be the basic minimum payment. This figure did not fall out of the sky but was derived from the report of the Commission on Social Welfare, who arrived at their figure after a great deal of consideration. They issued the report in 1985, and if successive Governments had taken their recommendations on board a single person would now receive a minimum payment of £66 per week and a married couple would receive £109 per week, that is if the 1985 figures were adjusted to comparable figures today. Their figures represent the mid point minimum figures. When one compares their recommendation with what a single person on unemploment benefit receives, a miserable £53, there is a substantial difference, because £13 is a substantial amount of money to an unemployed person.

The Minister outlined in his speech time and again that the Department were succeeding in bringing social welfare rates up to the levels recommended by the Commission on Social Welfare. This is not the case. I am sure the Minister will have read the excellent submission from the Conference of Major Religious Superiors. They supply the research to back up the commission's figures. In fairness, I do not think it is too much to ask that a person trying to keep body and soul together in our society in 1992 should receive an income of £66 per week. I am sure the Minister or his friends would not blink an eyelid when they would place a bet of £66 or £53 on a horse. It is easy to place bets of this size when one has a substantial income, but we must recognise that thousands upon thousands live in dire poverty. The very least the State owes them is a standard of living in line with the recommendations of the Commission on Social Welfare.

I want to comment on the minimum rates for each child dependent. Yesterday it was pointed out that expenditure on children varies with the age of the child. An infant does not make the same demands on the financial resources of a family as a teenager. When young people reach the 17 and 18 age bracket they are extremely demanding because they need to be clothed and educated if they are still at school, which is a massive drain, and they need pocket money in order to socialise — indeed, their social activities can be extremely costly on parents. It appears logical to us that the rate should vary in line with the age of the child and that young adults should receive a percentage of the adult rate.

We requested an increase from £5 to £10 in the minimum payment made to those eligible for social assistance. The Commission on Social Welfare recommended in their report in 1985-86:

In assessing means of single adults living at home, board and lodging should not be counted except for people under 25.

Single people aged 18-25 should be assessed with board and lodging but they should all be entitled to at least £10 a week regardless of their parents income.

Obviously, £10 would be substantially more in today's figures and I ask the Minister to take that on board. Unfortunately, the amendment was ruled out of order because it incurs a cost on the Exchequer.

I cannot let that pass without commenting. It is not as if Members pick figures out of the air, because we have done the background research and have suggested alternative ways of financing the increases. A cursory glance at the Annual Report for 1990 of the Comptroller and Auditor General shows that we are living in a two tier society. The Minister referred to self assessment for income tax, but the report states:

Since the introduction of self assessment to income tax, 4,500 cases have been selected for detailed screening of which 1,923 had been or were in the process of being audited at 30 June 1991....

Out of the 1,324 cases examined.

The value of the present additional liability established was £11.6 million or an average of £11,143 per case.

When one considers the paltry number of cases examined it gives a flavour of what the Comptroller and Auditor General is saying, that there are still massive amounts of unpaid tax remaining to be collected from business companies and the self employed. It is important that something be done about this.

Generally speaking, people in receipt of social welfare assistance are poor; and, were those on social insurance are not on the bottom rung, they are certainly not at the top rung. It is important to draw attention to the fact that since the introduction of self assessment only 4,500 cases were selected for detailed screening and that approximately 1,900 had been or were in the process of being audited, yet the outcome is alarming. The report states:

The fact that 80 per cent of cases which have been finalised have resulted in or are likely to result in additional revenue being collected is a clear indication that devising and implementing a representative and focused programme of audits is critical to ensuring the effectiveness and reliability of the self assessment system.

The Revenue Commissioners informed the Comptroller and Auditor General that their inspection-audit visits under all programmes "impacted on 9 per cent of the taxpayer base in 1990." The Comptroller and Auditor General states:

Nevertheless, the fact that less than 1 per cent of cases have been subjected to a full self assessment audit to date must call into question the present capacity of the Revenue Commissioners to implement fully and promptly this review process which is crucial to creating confidence in the self assessment system.

That puts my point in a nutshell; the Revenue Commissioners are either under financed, understaffed or are not getting the political direction they badly need to go after those who have the money and can pay but who are not making their fair contribution to society. In that report their is an equally astounding figure which puts into context our arguments and our reasonsing for increasing the rates in the Bill. The amount due from employers under the PRSI scheme shows outstanding arrears at 31 May 1991 a massive £137 million. The report goes on to show that the estimate of the amount likely to be collected is a miserably £29 million, a substantial shortfall in what should have been taken in.

I presume I am confined to speaking on those amendments in my name which were ruled out. Having said those few words as an initial contribution I should like to read into the record a case in support of highlighting the dishonest delays in the implementation of payment dates. One aspect of this Bill which has received little attention is that the dates for the implementation of the meagre increases being granted to those on social welfare have been pushed even further back. Some of the increases will not be paid this year until 31 July, which is a full six months after they were announced in the budget.

It is interesting to compare the Government attitude to the collection of VAT increases which were imposed from 1 March. There was a time when social welfare increases were paid in April; in 1982 they were delayed until the end of June and year by year they were pushed back a little further; in 1984 the increases were paid between 5 and 6 July; in 1987 between 15 and 24 July; in 1989 between 19 and 27 July; and this year some increases will not be paid until 31 July. Presumably, next year it will be announced in the budget statement the payments will be made in the month of August. This is a despicable practice and I would ask the Minister to use his influence in the Department of Social Welfare to bring forward the payment date to April. Those who are most in need of increases are having their income diminished each year because payments are pushed back further. While the Minister prides himself on a 4 per cent across-the-board increase in payments, he fails to make the point that by July inflation will probably be 4 per cent, so that there will be no real increase but rather an increase just keeping pace with inflation.

It is extremely dishonest and a mean political formula to exploit media attention for the Minister when the Budget Statement indicates that increases are due, whereas by the time they are inserted in the pension books of old age pensioners and children's allowance books inflation has already eaten into them because six months has gone by and the stated rate of increase is devalued in that period. I would ask the Minister, instead of pushing forward the payment date to August of next year and to September in future years, that he revert back to April.

I will be very brief. I want to highlight more or less what has been said by Deputy Byrne and I do so with my tongue in my cheek because I have seen all Governments do it, so I am not singling out the Minister on this issue. However because all Governments have engaged in this practice does not mean it is correct. I meet many elderly people who say they heard on budget night they would receive either a 4 per cent or 6 per cent increase and they realise they will not get it for another six months. As all Governments in recent years have more or less extended the date of payment — prolonging the evil day, as they see it, for paying those increases — there should be a planned clawback on the dates of payment. Can the Minister tell us what it would cost the Exchequer to pay the increases three months earlier? I appreciate that payment cannot be made immediately but, perhaps, provision could be made over three or four years to have payment made earlier so that as soon as it is administratively possible after the budget, payment will be made. The tax on new cars was implemented much quicker than the payment of the social welfare increases. We must compare like with like but I appreciate there are administrative difficulties in the Department and that payment could not be made the following morning.

The cost would be about £30 million.

That is a substantial figure. The point I am making is that it is relevant to the recipient. So far as they are concerned they are £30 million worse off under present circumstances. If you take inflation at 3.6 or 3.7 per cent there is no doubt that by the time they receive those increases next July they will be no better off. We are talking about what social welfare payments mean to recipients. One can juggle the figures around whatever way one wishes and probably many previous Ministers had to do it because of budget constraints, but there is no point in saying social welfare recipients are to be given a certain percentage increase. Obviously, the Department of Social Welfare, the Government and previous governments, believed old age pensioners were entitled to receive a maximum rate of X pounds. That decision is taken on the basis that the recipient will not receive that increase for four to six months. A year ago I recall debating in this Chamber the child benefit scheme under which the increase was paid in October of that year. There is an element of sleight of hand in the sense that the increase is announced but the benefits will not flow for some time.

I want to put down the marker and ask that a policy be adopted that over the next two, three or four years the payment date will be brought forward so that we can genuinely say to people on budget night: "yes, we meant what we said, we decided to give you an extra 4 or 5 per cent and that is what it will mean to you". In reality the 4 per cent or 6 per cent which has been announced in the budget will not amount to a 4 per cent or 6 per cent increase in the financial year because recipients received it for only six months of that year.

I am sure the Minister knows better than I do that people ask how is it that Social Welfare recipients are about the only group who have to wait longer than anyone else for an increase. National wage increases are sometimes backdated; social welfare recipients always have to wait between four to six months. While I appreciate that £30 million has to be found somewhere and would not for one moment suggest to the Minister that it would be possible to do this overnight, he should in the future, as a matter of Government policy, rather than extend the period recipients have to wait before they get what is rightfully theirs, bring the payment date much closer to budget day to ensure that it amounts to a real increase.

Some people have suggested to me that we would be far better off — this would be far more honest, although I am not saying that the Minister is operating differently from any other Minister — if we gave a 5 per cent increase instead of 6 per cent and paid it within two or three weeks. I have no doubt that many recipients would much prefer this because they would know what they would be getting and that it would run parallel with the rate of inflation.

Another point I would like to make — as I said, I do not wish to labour the point — is in relation to the minimum payments. I remember that the Minister's predecessor indicated in the House on a number of occasions that it was his intention to move towards the priority rates recommended by the Commission on Social Welfare. While it is true to say that some progress has been made during the past few years in moving towards the rates proposed by the commission — it must be remembered that the rates were very low — we have a long way to go before we implement their complete findings.

I will have much more to say about this later in the day when we come to deal with deserted wife's benefit. However, I do not think it is fair to suggest that we are anywhere near what the commission suggested. It appears that everyone accepts their findings and considers their report to be gospel in relation to social welfare. If that is the case — and I have read the report on a number of occasions — it appears that there are many deficiencies along the line.

Unfortunately, as my amendments have been ruled out of order I cannot move them, but I would like the Minister to indicate if he envisages any changes, however small, being made in the future in relation to the payment dates.

My amendments have also been ruled out of order. I, too, sought to bring the payment dates nearer budget day. Other Deputies have spoken eloquently and mentioned that the fact that the money is not payable immediately must be the source of great annoyance and distress for social welfare recipients. Given the way they operate, the Government are very insensitive to the needs of these people and have shown a meanness of spirit which characterises their attitude in this area. The poor are always picked on and this is yet another example.

I hope the Minister will not give the excuse, when he comes to reply, that it takes time to do these things, because it does not; the matter could be sorted out within a short space of time, given new technology in the computer and printing fields. If we were to accept Deputy Connaughton's suggestion that we try to bring the payment date back by one month each year we would at least achieve something. On the one hand, we make promises today but then do not fulfil them for six months. I am aware of the budgetary constraints — budget deficits do not form part of Green Party policy — but I wonder if the Minister could make any move in this area.

I would like to make a few general comments and repeat a number of suggestions that I have made in the past and which the Minister may not be aware of, although his predecessor would be. I would then like to comment on the motion listed in my name which states that the section is being opposed.

First, when the Department of Social Welfare give examples indicating what increases will mean they tend to select examples at the higher end of the scale. However, a substantial number of people receive increases of approximately only £2.70 per week. I am referring here in particular to single people, who find themselves at the lower end of the scale, and widows, most of whom live in local authority housing and are paying either differential or fixed rent. By a strange coincidence we never hear anything from the local authorities about increases in either differential or fixed rent until after the Social Welfare Bill has been disposed of. Perhaps this is a coincidence, but it always seems to fall that way.

During the past four years the average increase in differential or fixed rent for single people who live alone has been £1.50. Therefore, if we take the increase of £2.70, £1.50 goes immediately. I am sure if the Minister checks with his colleague in the Department of the Environment he will find that he will be able to give him the average increases. It would be far more honest to say that we are giving them an increase of £2.70 from the Department of Social Welfare but that the Department of the Environment will take £1.50 of this, so the net increase is £1.20. Those of us who are members of local authorities will have to take the flak when they notify people during the next few weeks of the rent increases.

Provision was made in the Programme for Economic and Social Progress for an increase of 4 per cent last year and 3 per cent this year. This represents an increase of 7 per cent over two years. However, these increases will mean far more to someone wiih average earnings of £250 per week rather than for someone on social welfare in receipt of £47 or £50 per week. By giving increases of 4 per cent and 3 per cent it sounds as if social welfare recipients are getting the same increase as someone earning £250, £300 or £400 per week, but that is not the case.

I would like to make two suggestions. We consistently come across people who have been in receipt of disability benefit for between ten to 15 years. Indeed, I met a woman last week who has been receiving this benefit for 21 years. Surely, a person who has been in receipt of that benefit for that length of time should automatically be transferred to a pension payment because she is certainly not fit for work any more.

She is disabled now.

I am talking in particular about women who are being hassled, who feel frustrated and who are called in twice, three times or four times a year to undergo a medical examination. A man with only one leg came into my office in Drogheda last week and he had been certified by a medical examiner as being fit for work. The whole question of long term disability benefit should be looked at. The bulk of long term disability benefit recipients are women and they should automatically go on to a pension. They should have a book which they can bring down to the post office. They should not have to watch for the postman every day and worry that they might not get their certificates if St. Patrick's Day falls in the middle of the week or if there is a bank holiday, or the postman is out sick. One book for the year would do away with a lot of the administration involved and there could be a re-assessment of a person's condition once a year if necessary. There is movement in that direction and it would cut down the expensive administration in the Department and the delays experienced by people.

The same system should apply for invalidity pension. At the moment if a person wants to move from disability benefit onto invalidity pension he must first apply for the application form. One cannot get an application form for invalidity pension without writing to the Department for the application form. The applicant must then wait one or two weeks for the form, complete it and send it back in and he may then be called for a medical examination although the person concerned may have been on disability benefit for anything from five to 15 years having survived perhaps ten medical officers. If the Department do not know that a person is ill, having drawn disability benefit for ten years, I do not know when they will. The largest waste of money occurs due to the messing about in the Department of Social Welfare. There is lack of proper co-ordination and efficient administration in the Department. This is mickey-mouse stuff and we should not have to employ consultants to deal with it. Half a dozen TDs will tell the Minister what needs to be done to save money in the Department. At the moment one section of the Department does not know what the other is doing.

On a complimentary note, the new arrangements for dealing with TD's inquiries is excellent. This is evidenced in the Order Paper every day where we see that the level of parliamentary questions relating to social welfare has been greatly reduced. If every Department was organised in that respect all parliamentary questions would be substantially reduced. There was rationalisation there, because the media highlighted what questions put down by TDs to the Minister for Social Welfare were costing the taxpayer. Social welfare inquiries are now dealt with speedily and efficiently. I compliment the Department on that.

A great amount of time and administration in the Department would be saved with a bank link system in the post office. I raised this five years ago as Labour Party spokesperson for social welfare and I continued to raise it on a yearly basis. I appeal to the Minister now to introduce a bank link system in the post offices to save old men and women having to queue outside post offices from 8.30 a.m. waiting for Securicor to arrive with the money. A bank link system would substantially improve security in post offices and we would not need Army patrols to accompany the money. The money would be in the bank link machine in the post office and people would be able to draw their money any time from 8 a.m. until 12 midnight without having to queue up for it. I asked for that five years ago and was told that it was being investigated; then I was told a survey was being carried out and so on, but we still have not got the technology that the banks have had for the past ten years. That should be looked at.

The main thrust of the social welfare system in relation to increases should be on a planned basis. The Programme for Economic and Social Progress was negotiated on that basis. As part of the Programme for Economic and Social Progress agreement it was agreed that the floor for social welfare recipients should have been at £60 in 1991, £65 in 1992 and £69 in 1993. That was what was agreed in principle. The Minister might say that it is all right to agree with the ICTU and with the employers organisations but that he has not got the money. It is dishonest to agree these figures as part of the Programme for Economic and Social Progress and then for the Minister to say that although he agreed he has not got the money. Workers should not be asked to vote on something they will not get and that is what is happening here.

If the Government and the social partners enter into another agreement covering a period of three years, the social welfare recipients should be dealt with over a three year period as well. My colleague, Deputy Eric Byrne, made this point. He is right. The agreement should set out what people on social welfare will get. Four per cent of £300 is one thing, but four per cent of £48 is quite another. The agreement should spell it out in financial terms. We will be opposing the section.

I would remind Deputies that comment should not relate to what is contained in section 3 of the Bill.

: I am glad the Leas-Cheann Comhairle mentioned that, because I was beginning to wonder if we would ever get to the stage where we would deal with the amendments. We often go through Bills here carried away with loquaciousness in the early stages of the Bill and we tend to forget about the amendments.

I support the concept of this Bill. I accept, as the Minister said, that this is a serious matter and that £30 million will be required. I certainly support my colleague in suggesting that this could be brought in in stages. I am sure that if the Minister had £30 million to bring this forward in one year there would be several ways of spending that money which might be of more benefit in the Minister's opinion, but I would certainly ask the Minister to consider bringing this in in stages, retrospective from July. In fairness to social welfare recipients, they have to pay the extra VAT and rent, and if they are lucky enough to have an old "banger" on the road they will be paying the 20 per cent increase in the road tax in April. They have all the extra costs. A 4 per cent increase, with inflation running at 3.7 per cent, amounts to no increase in real terms. They are on a loser. I would ask the Minister to consider this.

I welcome the Minister and wish him well in his Department, to which he will probably bring a totally new approach. We might have seen some changes in this Bill if he had been the author from the beginning.

Our opposition to increases in social welfare payments requires an explanation. It is not possible to amend increases upwards and the only way to signify that the increases are inadequate is to oppose the section. It appears that the Minister was staggered when he saw the total expenditure under this Bill, which amounts to £3.3 billion; but it works out at about £84 on average for each social welfare dependant. Many families have to depend on that kind of sum to get them through every week. The increases are certainly inadequate and the only way to express our disappointment at the level of increase is by opposing the section.

The Minister seemed last night to express disappointment and surprise that only 60 per cent of the amount provided for the family income supplement has been taken up. It is difficult to understand why people do not look for the money when it is available and an exercise should be undertaken to discover the reason. I do not know of anybody in my constituency who earns a low wage and yet would refuse money. The purpose of the FIS is to make up for the inadequacy of payments made by employers to workers in cases where the payments do not reach the level of social welfare benefits. I thought the Minister was about to suggest last night bringing down the level of social welfare benefits to very low wage levels. Perhaps the Minister will decide that a minimum wage is necessary which should not be allowed to fall below social welfare assistance levels.

One of the arguments against the family income supplement was that it would be a hidden subsidy to employers. How do we deal with the fact that people in employment are not properly paid? Perhaps they have not the benefit of trade union membership or they belong to occupations which are not covered by the joint labour committees. The Government decided to encourage them to stick at their jobs and to pay them a financial top-up in the form of the FIS.

There are several possible reasons why people do not claim the supplement. One may be that the joint income from employment plus the FIS might lead to an increase in the rent payable to a local authority for housing. The income might also make the recipient ineligible for a medical card. People have to balance these factors and there are good reasons why they may not be enthusiastic about this scheme. It is designed to help the very worst off in society and they certainly need assistance. The matter deserves the Minister's attention.

I congratulate the Minister on his appointment and wish him well in this difficult Department where great balancing tricks are required. People have very high hopes of the Minister because he has always been a very honest, open and courageous person as a backbencher. The real test is how much of that honesty and courage can be brought where it really matters. It is very difficult to run such a high-spending Department; but it is also an honour, a challenge and an opportunity.

I regret to say that the Minister's first Social Welfare Bill has evoked an incredible response from women. They are saying this is the most anti-woman Social Welfare Bill they have seen. I regret I could not speak on Second Stage due to a family illness, but having listened to the contributions made by Deputies this seems to be the general perception.

With regard to the timing of the increases, I join with my colleagues who have stressed that there is here a classic illustration of the difference between people who are earning and those who are dependent on social welfare. Those in employment will get increases at the beginning of April and will be paying higher car tax and other levies from that time. Increases for people who are dependent on the State are pushed further ahead each year. I grant that a certain time must be allowed to deal with administrative changes, but the payments should be brought forward in order to give people the feeling that they are part of what is happening here, not lepers to be kept at a distance. For a person awaiting an increase of £4.50 a week, a delay of even three or four weeks can really matter. I know the Minister wishes to help these vulnerable people. Let us plan this year to bring forward the date of payment so that we will not have to make similar pleas every year.

Progress reported; Committee to sit again.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
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