I move amendment No. 1:
In page 8, to delete lines 3 to 28.
I am delighted that we have been able to give this Bill a fair amount of public airing in the past week or so. Amendment No. 1, in the names of myself and my colleague, Deputy Browne (Carlow-Kilkenny), covers an important issue to which I wish to refer. It aims to delete section 6, which alters the rates of the family income supplement. The objective in tabling the amendment is to bring to the Floor of the House the importance of the elimination of the poverty trap. As I said on a previous occasion, it is very important to have a basis on which to have that elimination and in my view the family income supplement provides that basis.
When the scheme was introduced in the mid-1980s it was intended for people in a low-paid job who could not aspire to earn a living from the rewards of that job. It was felt that if assistance was necessary to keep a job alive then there was an onus on the State to keep the worker off social welfare.
I must confess that I am somewhat disappointed at the results of the family income supplement to date. Fewer than 7,000 people have made successful application for funds and some of those who have been successful have received so little from the scheme that they would be almost as well off if they were not eligible. In the past couple of weeks I have made the case very strongly — and I reiterate it today — that it is important to change the present system to have calculations made on a worker's net pay rather on than his or her gross pay. It makes very little difference to a wage earner, particularly if that person is married and has a family, to be eligible for family income supplement of, perhaps, £20 or £30 a week, if before that supplement can be claimed the Revenue Commissioners take £20 or £30 a week off his or her pay in tax. The worker is running to a standstill. It is very important that this issue be addressed now.
The Minister did respond to my suggestions when the topic was discussed last week but I am somewhat disappointed that he does not envisage a greater role for the family income supplement. I should like that scheme to have a dual role.
I have examined legislation governing many aspects of the famous poverty trap syndrome that we have in Ireland. There are many matters I cannot go into today because I assume that would be out of order in so far as tax is concerned. So far as social welfare is concerned, it certainly appears to me that there is no better basis upon which to build than the family income supplement.
I think it was Deputy Bell who raised the other side of the coin during previous discussions. I accept that if we are not careful the family income supplement could become an instrument to be used by employers who want cheap labour. In our efforts to strike a balance we have to consider that point.
Under present conditions in Ireland, in which we have 280,000 people out of work a figure that is rising by the month, it should be possible for this scheme to apply to more than 7,000 people. That is my basic principle. For instance, if 12,000 to 15,000 people could be brought into the scheme those people would be saved from going on the dole. Many people decide to sign on for the dole when they realise that they would be better off on the dole than working. This issue hits at the very ethos of our society and that is why I have talked so much about it throughout the debate. I am sure the Minister would agree that it is very important that we get the answer.
I fully accept that all unemployment problems will not be answered through the family income supplement. However, in relation to the objective of the scheme, many previous Ministers for Social Welfare in different Governments have stated that the only reason the scheme did not work was that people did not know about it. I do not accept that argument. Many people go without a medical card simply because they do not know whether they are eligible for one, but that is not the real reason that the family income supplement has not been very successful. On Second Stage we spoke about the importance of providing information to applicants for social welfare and I hope that the Minister will take on board many of the points that were made then. However, there is something deeper behind this issue and I should like to try to tease that out here in the Dáil.
I wish to put before the Minister the importance of getting this issue right this time. No Government have got it right yet. I shall only believe that we have got it right when many more families become eligible for the family income supplement. I do not care how many leaflets the Government send out, there will not be too much of an uptake of the scheme under the present circumstances. From inquiries I have made of the Department, I understand that the figures for 1992 are expected to be no better — perhaps the result will show a difference of a few hundred one way or the other.
If we believe that the scheme is an important weapon in the battle to beat the poverty trap and eliminate it as much as possible — as I believe and as Fine Gael believe — then we will have to stop talking about the issue and do something about it. So far as this overall area is concerned, in our discussions here over the past week, it had been hoped that in the next year or two at least an additional 6,000 to 10,000 families would see it was better for their breadwinner to be working than be on the dole. I imagine there are very few people who would not agree with that contention.
I do not know whether it is that people are afraid of applying for this family income supplement. No doubt the Minister's national network of social welfare officers must have built up a great bank of knowledge as to why this scheme is not working. I would have to say I believe it is not working. I have been in touch with the Department on behalf of many constituents. These would be people not in good financial circumstances but, because of the manner in which the guidelines for our provisions of the scheme are worded, they would need to be very badly off before they would benefit substantially. That indicates to me that it is the framework of the scheme that is wrong or at fault.
Deputy Browne and I have been proposing the idea over the past week or so, indeed for much longer, that if the Department would only revert to the system of assessment based on net rather than gross income that might resolve the problem. I know that all schemes administered by the Department of Social Welfare are paid on the basis of gross income and that to revert to net income would be a substantial change. Nonetheless we here must determine once and for all whether jobs are sufficiently important. That is why I said a week ago I believe that, in many respects, the provisions of this Bill are anti-work, anti-employment, which has been manifested by the threat to redundancy payments and the curtailment of the pay-related social insurance schemes. The family income supplement was a positive scheme designed for a particular purpose within the workforce. To the extent that it has achieved that purpose it has to be welcomed but is totally under-utilised. Nothing I have heard the Minister say by way of reply over the past week would indicate to me that there are any ideas within his Department to change the overall position. If it is that the combined wisdom within the Minister's Department is to allow sleeping dogs lie, then we must assume that whatever benefits the family income supplement may have had have been delivered and the scheme will be of little advantage in the future.
I had always understood that it would be very important that the provisions of the family income supplement be extended to small farmers and others. The Minister replied, in part quite positively, to the effect that he was examining whether, in certain circumstances in the future, its provision might apply to small farmers. At the time I think that proposal carried a price tag of £10 million. Since then I have had discussions with some of the farming organisations, and from my knowledge of this sector I find it extremely difficult to understand how it would cost £10 million. I will tell the House why. If it is that 7,000 people can be eligible under the normal criteria obtaining, which costs something in the region of £9 million, of course there would be many farmers whose incomes, would be such that the benefits of this scheme would be a "top-up". Therefore, as is the case now, many would receive only a small amount of money. Obviously the Minister must be thinking of including about 20,000 farmers.
When one bears in mind that there are approximately 13,000 farmers in receipt of unemployment assistance, that raises two issues, one of which I have been repeating for years, which is that the circumstances in which many farmers find themselves are indeed distressing. However, this is neither the time nor place to speak of farmers' problems. But, as regards the family income supplement I always believed its provisions had a part to play in respect of such farmers. For whatever reason many agencies have engaged in analyses of and research into the eligibility guidelines for unemployment assistance as they relate to farmers, have found that many thousands of farmers do not have anythng like a taxable income and are not entitled to unemployment assistance. It is about such people I am speaking. As the Minister himself will be aware, farmers' dole creates circumstances in which many people become less productive on their farms than they might have been otherwise because it is assessed on an income/expenditure basis. Obviously this means the more one has, or the more income one generates for oneself and one's family the less is the likelihood one will receive the dole.
I spent some time examining this aspect in the eighties and discovered there was no easy answer. That is why I was of the impression that the family income supplement should fill that vacuum perfectly. Obviously this would necessitate the preparation of accounts with the involvement of the Revenue Commissioners. I am not for a moment suggesting that anything other than strict guidelines should apply. This would mean that Members of this House and the Minister could stand over a scheme that would channel Exchequer resources to such people. The Minister's predecessor must have had something like this in mind when, in the 1991 budget, £1 million was earmarked to help farmers at a particular income level. An unusual position arose in that that amount actually went back to the Exchequer because nobody could devise a scheme that would allow that amount be paid. Our amendment No. 1 relates to that, in that the self-employed — and I am not now speaking only of small farmers but of small shopkeepers and many others with a very reasonable level of income — would have had their jobs secured had this money been paid them.
There has been too much glib talk over the past five years in particular about the importance of eliminating the poverty trap without there having been anything done about it. I suggest that this Bill presents an ideal opportunity. We acknowledge that the bed has been made for this year, but we would like the Minister to give us some indication of the direction of the entire scheme and what he envisages the provisions of this scheme might be able to achieve by way of, (a) protecting existing jobs, and (b) reducing the numbers in receipt of the dole, I would very much appreciate the Minister outlining his views, or what he thinks about it, for the benefit of the House. It is a most important concept, something we should examine closely before turning our backs on it and trying out something else.