Yesterday Deputy De Rossa accused the Minister for Social Welfare, Deputy Woods, of perpetrating a fraud on the Irish people.
Social Welfare Bill, 1994: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
That was true.
No one has contributed greater to perpetrating a fraud on the electorate than Deputy De Rossa and his party. Since the report of the Commission on Social Welfare in 1986 substantial improvements have been made in the rates of social welfare and many other improvements have been introduced to make the system more user friendly. This year the Minister has made further improvements to the system. The general increases are at the rate of 3 per cent, which is above the rate of inflation. Special increases have been introduced in order to increase the lower benefit rates to a more acceptable level. There has been a 6 per cent increase in the personal rate of short term payments. There has been a flat rate increase of £2.10 in the weekly rate of disability benefit, unemployment benefit and injury benefit. There has been an increase of £8.50 in the personal rate of invalidity pension for those over 66 years of age to raise their benefits to a level equal to that of the old age contributory pension. Those increases show that the Government is intent on bringing benefits up to a level sufficient to help those in receipt of various forms of assistance.
Over the years I met many widowers who had to depend on unemployment assistance to raise their children. I welcome the introduction of a survivor's pension which will entitle widowers with the necessary contributions to a contributory pension. This is a most welcome family-orientated amendment. I also welcome the decision to increase the disregard limit in respect of lone parents from £6 to £30. This measure will be psychologically and financially beneficial to those in that position.
The carer's allowance introduced a number of years ago by the Minister, Deputy Woods, was very beneficial to thousands of people who, up to then, had received no benefit or assistance from the State. The Minister has taken this measure a step further by allowing up to £100 to be disregarded for means assessment of applicants for the allowance. As a result many more thousands of people will qualify for assistance. Despite misleading statements over the years by members of the Opposition, the scheme has proved to be an outstanding success and will be more successful as a result of the aforementioned change.
The Bill is jobs-orientated through the provisions aimed at protecting jobs in the labour-intensive sector. Such provisions include a reduction in PRSI payable by employers in respect of employees with weekly earnings of up to £173, the introduction of the new PRSI exemption scheme for employers who take on unemployed people and the increase of £10 in the income limits for eligibility under the family income supplement scheme.
Other provisions I specifically welcome are those that recognise the importance of the family, for example, the increase from £5 to £10 in the minimum rate of unemployment assistance for young people living at home, the extension of the definition of child dependant in the supplementary welfare allowance scheme to enable increases to be paid in respect of children over 18 years who are attending study courses and the decision to allow participants in special schemes to hold onto their entitlements under the supplementary welfare allowance scheme, which is a great improvement on the present system.
Under the free travel scheme a husband or wife of a person with a free travel pass is entitled to a companion pass. However, if the holder of the free travel pass is in hospital the other spouse may have to travel long distances to the hospital but is not entitled to free travel. This can be a very expensive, traumatic time for many people and I would ask the Minister to consider introducing a scheme to alleviate the hardship caused.
I would also ask the Minister to consider the contributory old age pension as it applies to the self-employed sector. There is a provision whereby contributions must be made for ten years before a person qualifies for the pension. In many cases people who reach the age of 66 have only seven or eight years contributions and do not qualify for the pension. In the past a study was undertaken into the possibility of allowing such people to make voluntary contributions. I would like to know whether that study has been concluded and whether there are plans to bring forward a voluntary contribution system, particularly as there are only 4,000 to 5,000 people involved.
This Bill continues in the Fianna Fáil tradition of ensuring that those dependent on the social welfare system are treated with respect and dignity——
That they will stay dependent.
——and that they are provided with the means they need to support themselves and their families. The Minister has given above-inflation increases across the board and special increases have been introduced to help the less well off. He has introduced many sensible amendments to the system and the Bill deserves the full support of the House.
It is recognised that the Minister administers one of the biggest budgets and holds a very responsible Ministry. I would like him to clarify the position of the facilitators who were recently appointed to the social welfare office and also the placement officers currently employed by FÁS. A one-stop-shop concept has been developed in this area and in many cases placement officers and facilitators work within the one building. Is there a separate function for each post or is there an overlap in their work?
Many of the long term unemployed have lost their self-esteem by virtue of being unemployed for many years. The training courses and social employment schemes set up in recent times for these people are a temporary palliative to counteract unemployment. Many people are referred to organisations or to personnel in the social welfare area for consideration for courses and quite often unsatisfactory criteria are used in the selection process — for example, if they do not participate in such a course they are likely to have unemployment assistance withdrawn. Perhaps it would be better if the 120,000 long term unemployed were properly interviewed to find out their interests and desires and see whether the marketplace can cater for their needs. Even though the Minister is improving the social welfare system, the poverty trap still exists. There is no incentive to work for people earning £10,000 to £15,000 who have children; I accept that only 5,000 to 6,000 people come into that category. With average earnings at £8,000 to £10,000 per year there is no incentive for a married man with children to work in those circumstances.
The family income supplement was introduced to reduce the differential between low earnings and social welfare, but statistics show that many people who qualify for the supplement do not claim it. Surely it must be possible, as I suggested previously, to circulate in employers' pay packets a leaflet informing them of the family income supplement. As a public representative, I have been surprised to have to advise employees on occasion of the existence of the family income supplement as a mechanism to provide extra financial support, an inducement to remain in work.
We should do everything possible to encourage the unemployed to get back to work. In the last few years people have been forced into unemployment: a classic example are local authority employees. In all provincial papers the big issue for weeks on end is the condition of public roads. In the past ten years when redundancy packages were announced by successive Governments — I blame all Governments for this — they were usually availed of by outdoor workers. On top of that there was a natural reduction in the workforce, leading to a depleted local authority workforce. While the social employment schemes are very positive from the point of view of local authorities, the work carried out under them is concentrated exclusively in urban areas — for example, the restoration of footpaths, planting trees, etc. This is meaningful work, but at the end of the year when the work is finished there is no incentive for the participants to seek further employment and statistics prove that most participants revert back into the social welfare system. If we are serious about the creation of jobs and giving something back to local authorities, the participants in these schemes must be given full time jobs. A new social employment scheme could act as a type of apprenticeship for these people and would not be a significant burden on the Exchequer.
Our priorities are totally misplaced. This can be seen from the National Development Plan in which major emphasis is placed in training courses. While this is desirable, over the past few years too much emphasis has been placed on training courses, community enterprise development programmes, social employment schemes etc. instead of on sustainable long term jobs. There would be no significant difference between the amount paid to a person on a social employment scheme and the amount he would be paid in a fulltime job. This would send out positive vibes to local authorities and lead to the creation of significant jobs. Years ago people had a sense of pride in their work but that sense of pride no longer exists. Consideration needs to be given to this issue.
FÁS has been in existence in one form or another for approximately 30 years. A quality assessment of the training courses offered by this organisation should be carried out. Very often an applicant is debarred from a job not because of his characteristics but because the course he has pursued has not advanced sufficiently from a technological point of view to meet the advances in the marketplace. This gap needs to be examined. A proper quality assessment should be carried out of all courses to ensure that the participants are able to obtain sustainable jobs. Approximately 28 per cent of the special skills training programmes offered by FÁS have less than a 50 per cent success rate in terms of jobs placement. People who have gone through the education system and spent approximately 18 weeks on a training course find it frustrating when they cannot find a sustainable job in the area they want.
People who are employed often knock the unemployed by saying they do not want to work, that they are happy to draw unemployment benefit. I know many adults and young people on unemployment benefit who have lost their self-esteem and get no kick from receiving benefits from the State. Unemployment is soul destroying for these people. If we try to solve the cancer of unemployment in our society through temporary training courses, without giving serious consideration to the job training aspect, it will simply lead to more frustration, particularly among younger people, who as a result of technological advancements are very intelligent and know what is happening. We need to tackle this issue in a serious way. Instead of talking about an expanded social welfare bill each year we should be looking at ways of reducing this bill and creating employment. I do not think enough has been done in this regard.
I understand the Minister for Enterprise and Employment, Deputy Ruairí Quinn, is going to Brussels today in an effort to maintain our budget for training. While this is desirable, more consideration needs to be given to the concept of training courses. We are inclined to regard training courses as a quick fix for the problems which exist in our society instead of regarding them as a temporary solution.
Much reference is made to the creation of enterprises and assistance for budding entrepreneurs. Is the Minister aware that during the past week instructions were issued to FÁS that the enterprise allowance scheme as we know it is being suspended? This scheme was a positive inducement to a person on social welfare to create a viable business. The amount of money involved was not significant — it amounted to approximately £3,000 per annum — but it gave younger people and budding entrepreneurs the incentive to set up businesses; it gave them some support during the vital first year. The suspension of this scheme is sending out the wrong signals to these people.
We still do not have a proper climate for the creation of jobs. The UK Minister for the Environment has instructed all British local authorities to ensure that people who want to set up a business in a garage or room in their house, not causing any problems for neighbours, should not have to apply for planning permission. The opposite is the case in Ireland. For example, last week I heard of a young person who set up a panel-beating business in a garage which is 20 years old and who, in order to benefit for the enterprise allowance scheme, had to prove that he did not require planning permission for the garage. However, he has now been told that he requires planning permission even though the garage is 20 years old and is not near any residential property. Very often, the system here acts as a disincentive to the creation of jobs. We have to give serious consideration to the removal of those barriers. We have to be innovative in our thinking if we want to help people and give them the incentive to create jobs.
I wish to refer to an issue which I think the Minister has addressed in the Bill, the position of casual workers. I have raised on the Adjournment here the position of a meat company in Rathkeale, where the employees are almost on continuous short-time, working one day per week and drawing social welfare for the other days. These employees are caught in a no man's land. They are regarded as fulltime workers and cannot avail of a medical card or any of the other benefits. The serious anomalies which have emerged are a source of frustration for these people and are acting as a disincentive to their remaining in the work environment. Reference has been made in the past to the position of dockers, who do not earn much money during the year. I think the Minister has dealt with the position of these workers in the Bill——
Section 19.
I am glad the Minister has addressed this issue. It is vital that these people remain at work, even for one or two days per week. I do not think any of us would like to see a situation develop wereby people would decide that they are better on social welfare than working.
The Minister is good at PR. He reacted very quickly to the decision to tax widow's contributory pensions. I want to thank my colleague, Deputy Allen, and the Fine Gael Party for highlighting this issue so effectively. These smaller aspects of a budget are often forgotten and, as I said, the Minister reacted swiftly. For a Minister who likes to enjoy good public relations, the reaction he got from the public was not positive. The Minister also met the various widows associations and discussed this issue with them.
Deputy Ahern referred to the fact that when the self-employed pension scheme was introduced in 1988 it was regarded as a laudable measure. However, the sting in the tail was that a person had to have ten years' contributions to qualify for the scheme. Many people who were participating in that scheme were caught in a limbo because of the ten year stipulation and it was not possible for them to get a full or part payment of their contributory pensions. If a person has six years' contributions it should be possible for the person to receive three-fifths of a pension; if a person has two years' contributions he or she should receive one-fifth of a pension and if a person has eight years' contributions he or she should receive four-fifths. It was promised at the time that the difficulty of those who found themselves in that limbo would be considered, but to date that problem has not been addressed. I would like to hear the Minister's views in this regard.
The sting in the tail of the budget and of this Social Welfare Bill will not be felt for some time. Other difficult areas include the taxation of unemployment benefit, but an additional problem will be the loss of pay-related benefit of £16.80 per week. Many people will be shocked when they become aware of this. One of my constituents spoke to me in this regard last Monday. He was receiving unemployment benefit and was also looking for a job. I told him that his situation would worsen in the future because not only will his unemployment benefit be taxed but he will also lose his pay-related benefit concession. My understanding is that people drawing unemployment benefit — I believe the number is approximately 70,000, I may be incorrect in that figure but it represents a significant proportion of the population.
It is less than half of the people who will be getting benefit.
What is the figure?
Approximately 28,000.
Approximately 28,000 would be getting pay-related benefit?
Yes, but all the money that goes onto the basic personal rate.
That is robbing Peter to pay Paul.
That is what the commission recommended.
They made many other recommendations also which the Minister did not introduce.
The commission made other recommendations which have not been introduced. I would like the Minister to elaborate on a problem that has been highlighted, which involves old people who should be entitled to a free telephone or free electricity allowance. In many cases there is a telephone extension connected to another member of the family. If the telephone is in the elderly person's house with an extension in the home of another member of the family, that elderly person does not qualify for a free telephone allowance.
The same often applies in the case of the free electricity allowance. An elderly person may live alone beside a farm house in which other members of the family are living. The electricity bills are sent to the member of the family who is working or farming, as the case may be. Even though the elderly person's lifeline is the telephone or the electricity, that person is not entitled to any of those concessions. I know a woman of 78 years of age who is very concerned about this matter. Extending such entitlement to those people would not require huge resources. Many of them live in their own homes; they do not require to be cared for in nursing homes or other institutions. They are being allowed to live in society near their families. I would ask the Minister to give consideration to this important area.
The Minister will be aware that in recent times new Government offices have opened incorporating large social welfare departments. They are lavish offices with large areas at the front which were originally designed to accommodate people queuing for their social welfare payments. These people are now required to go for these payments to post offices, which are often much smaller premises. We now have nice buildings to accommodate the officials, but the ordinary punter wishing to avail of the services is diverted to another location. What is the Minister going to do about this?
The time available to the Deputy is now exhausted.
The time passed quickly.
In fairness, it did.
Deputy Wallace is about to make his contribution. Since he is so knowledgeable about social welfare matters and since no Labour Party Member has spoken yet, I wish to call a quorum.
I will call Deputy Dan Wallace as soon as a quorum is provided.
Notice taken that 20 Members were not present; House counted and 20 Members being present,
I should like to make some points regarding the problems confronting any Minister for Social Welfare when drafting annual budgetary proposals. It is vital that the acute needs of those in receipt of social welfare support are fully acknowledged and it is taken for granted that the resources made available to the weaker sectors of our society are at least sufficient to compensate for any increase in inflation. The extra financial resources required to cover these minimal requirements can often be quite substantial. A variety of social trends can add to the difficulty of at least maintaining the value of social welfare payments, including an increase in the size of the available labour force, additional numbers of retired people and overall population growth. Consequently, the extent of resources available to the Minister to allow for the enhancement of existing schemes and the introduction of innovation programmes is quite limited.
Despite these realities the proposals of the Minister and his team are welcome on two fronts. First, they allow for an improvement in real terms in a number of important schemes. I shall consider some of the more significant examples of such improvements in a moment.
I should have said that I wish to share my time with Deputy Eamon Ó Cuív with the agreement of the House.
I am sure that is satisfactory. Agreed.
Second, the current budgetary proposals, compared with budgets over recent years, show an increasing level of integrated planning by the Minister which is vital if we are to achieve the goal of decreasing dependency on the social welfare system in the longer term.
The Minister's approach might be summarised as a combination of four main points: first, giving priority to those with the greatest level of need; second, progressively changing the socio-economic climate to maximise job opportunities for the unemployed while facilitating potential employers in the area of job creation; third, encouraging a much greater degree of personal enterprise and fourth, reducing the scope for abuse within the social welfare system. A number of elements in the Minister's proposed measures are consistent with those goals.
I will focus on the various changes designed to increase the level of job creation. While the Bill contains a number of such elements, I should like to mention first the new PRSI exemption proposal allowing employers full exemption from PRSI contributions for a period of up to two years for all extra jobs created in the State in the ensuing fiscal year. The Minister estimated there would be an annual saving of £1,268 in respect of an employee earning £200 per week. In addition to providing a tremendous incentive to employers with the potential to add new employees to their payrolls the measure also has the advantage that the financial benefit to an employer is immediate, involving the minimum of red tape. The proposal to reduce employers' share of PRSI contributions from 12.2 per cent to 9 per cent in respect of employees earning £173 or less per week is equally likely to stimulate employment creation since its net effect is expected to involve a transfer of £46 million per annum to the job creation sector.
A number of changes in regard to the health contribution and employment and training levies are in line with the policy of PRSI reform. For example, employers of medical card holders can benefit to the extent of 2.25 per cent. Similarly, low paid employees without medical card status will benefit directly from these changes. While the Minister increased the ceiling for PRSI contributions that is perhaps a small concession within the overall context of the proposals before us. I fully support his identification of the PRSI system as one capable of being reformed to the direct and immediate benefit of employer and employee. I have no doubt that this Bill will result in a number of extra jobs coming on-stream over the next 12 months.
In addition, a wide range of improved and new social welfare payments are proposed. I particularly welcome two payments, namely, those proposed to be made to widowers and elderly invalids. The so-called survivor's pension is very welcome since it acknowledges for the first time that the loss of a spouse can be as devastating for a man as for a woman. While the cost of this extension is estimated at £27 million in a full year it will provide much needed support for the many men and women who must learn to cope with the greatly changed domestic environment on the loss of their spouse.
The manner in which a society treats its elderly is an excellent indicator of its level of humanity and compassion, the needs of the sick or infirm among the elderly being particularly important. Therefore, I am pleased that the pensions of invalids aged 66 years or over are being increased to the level of the contributory old age pension. The 10 per cent increase in social welfare payments for those in receipt of disability or unemployment benefit is a complementary measure which is to be greatly welcomed and should result in a real improvement in the standard of living of families or individuals in receipt of such payments.
The increase of 6 per cent for those in receipt of short term payments, such as unemployment assistance and supplementary welfare allowance is also needed. It must not be overlooked that a 3 per cent minimum increase has been provided for the vast majority of social welfare recipients and that the abolition of the 1 per cent income levy benefits all taxpayers.
However, a number of other increases will certainly provide welcome supplementary income to a number of family units. I shall mention some of them briefly. First, the proposed increases in child benefit payments will be of particular value to large families. For example, a family with six children will benefit to the extent of £11 per month. The additional payment of £6 per week to almost 10,000 families resulting from improvements in the family income supplement is equally welcome. Following the recent introduction of legislation necessary for the establishment of a register of stillbirths it is appropriate that maternity benefits should be extended to mothers of stillborn infants where the duration of the pregnancy was 24 weeks or more. This is a particularly positive measure, which I warmly welcome.
People involved in casual work are vulnerable in a number of ways. First, their work is often uncertain and, as a result, does not provide a sufficient level of security. Second, such an employee may have little or no control over terms and-or conditions of employment. Indeed, in certain instances, they may be open to a degree of exploitation. The proposals in section 19 of this Bill — which allow casual workers easier access to unemployment benefit — demonstrate a welcome sensitivity to a very deserving sector of our workforce. In a modern, rapidly changing society it is vital that our numerous laws and financial provisions demonstrate an openness to acceptance of change. For example, sections 24, 25 and 31 of this Bill provide excellent examples of the Legislature reacting to the changed needs of our citizens. Sections 24 and 25, for example, allow for the retention of secondary social welfare benefits for unemployed people participating in various approved community and education schemes. As companies attempt to retain their profitability in an increasingly competitive workplace a trend has developed of subcontracting work to former employees. A lorry driver with a large company might be encouraged to lease or purchase his vehicle and accept a contract in place of permanent employment. In such instances an employee may feel that he has little option but to agree to the proposed new arrangements. In addition, the new work status of such an employee can result in the loss of occupational injury benefits. The provisions of section 31 of the Bill are designed as a response to such developments within the modern industrial sector.
Sections 28 and 29 form a necessary part of continuous efforts to eliminate abuses of the social welfare system in that, where necessary, they allow access by social welfare inspectors to employment records held by contractors and subcontractors.
I shall conclude my comments on specific provisions of the Bill by referring to some of the improvements vis-á-vis means-testing. While means tests are necessary for the proper implementation of social welfare systems they have often proved to be a source of extreme annoyance, their specific terms excessive and unnecessary. Sections 15 and 16 of this Bill relax means test regulations in two particularly sensitive areas. First, the changes result in substantial improvements for people benefiting from the lone parent's allowance. The Minister gave an example of a lone parent earning £80 per week who will benefit to the extent of £18.90. The increased relief for those in receipt of the carer's allowance is equally welcome since very often such people are the unsung heroes within our community.
I am very happy to support the various provisions of this Bill since their overall direction is toward a more streamlined set of measures drafted with particular attention paid to the needs of those suffering particular disadvantage. I congratulate the Minister and his staff on their well balanced, sensitive policies.
A certain degree of complexity cannot be avoided in drafting social welfare provisions because of the range and diversity of support structures vital to the well-being of all citizens. Unfortunately, sometimes those most in need of the benefits to be derived from such provisions may not be fully conversant with their specific entitlements. I strongly urge that every effort be made to ensure that all citizens are made fully aware of their social welfare rights. While the Minister and his staff have published a wide range of excellent brochures of assistance in this respect, our formal educational system must play an increasing role in fully informing citizens of both their rights and responsibilities.
Cuireann sé an-áthas orm labhairt ar an mBille seo. Ní don chéad uair atá an tAire tar éis athruithe suntasacha a thabhairt isteach chun feabhais a chur ar an gcóras leasa shóisialaigh. Tá cúpla bliain anois ó thug sé isteach rialacha agus socruithe maidir le hoibrithe páirt-aimsearacha, céim mhór nár tugadh dóthain aitheantais dó ag an am ach gur mhór an tairbhe í do na daoine sin nach raibh aon chearta acu faoin gcóras.
I mbliana is é cás na mbaintreach atá á phlé ag an Aire agus déanaim comhgháirdeas leis as scéim speisialta a thabhairt isteach faoin a bhfhaighidh baintreach fir na cearta céanna agus a bhí á bhfáil ag baintreacha go dtí seo. Is áthas liom freisin gur éirigh leis é sin a dhéanamh gan aon teora ioncaim a chur leis. Is mór an dul chun cinn é seo mar sa lá atá inniú ann is é an brú céanna atá ar fhir agus mhná má fhágtar in a mbain-treacha iad.
I welcome the Bill and compliment the Minister for further improving the social welfare system and the delivery of the service to the customer. It is hard to imagine that a few years ago it was a terrible ordeal for people and it was considered that information about entitlements and so on was privileged. That has all changed. A person now has a right to information and technological advances, etc. have made for a fair and customer friendly delivery of the service. It would not matter how good the service was if it were not delivered in an efficient, friendly and open manner. It is an example to other Departments of how a complex and complicated system can be delivered to the public in an efficient manner. There is the odd hiccup, but when one considers that everyone in the State is involved with the social welfare system, either making payments or benefiting from it, this is not surprising.
The thorny issue of means testing has been tackled. When I was elected to the Seanad for the first time, the biggest issue was testing small farmers, fishermen and mná tí. The rules which applied to means testing were severe and acted as a disincentive to people taking up any form of employment. As resources permitted, the Minister tackled this problem. I welcome the changes he made.
An chéad bhliain go raibh mise i mo Sheanadóir d'athaíodh na rialacha a bhai-neann le mná tí a choinníonn scoláirí Gaeilge faoi scéim na bhfoghlaimeoirí Gaeilge. Baineadh amach as an gcóras leasa shóisialaigh ar fad an maoin a shaothraíonn siad as an ngníomhaíocht sin. Ba mhór an spreagadh é sin do mhuintir na Gaeltachta agus tá sé le sonrú i mbliana go bhfuil go leor mná tí breise ag coinneáil Gaelgeoirí i ngeall ar na hathruithe sin.
Ag an am sin freisin bhaintí airgead leasa shóisialaigh ó dhaoine i ngeall ar fataí agus glasraí a fhás agus ar mhóin a bhaint. Arís d'athruigh an tAire é seo agus dúirt nach gcuirfí in áireamh é nuair a bheadh scrúdú maoine a chur i bhfeidhm. Fáiltím go mór roimh na cumhachtaí sa Bhille gníomhaíochtaí traidisiúnta ar chósta an iarthair mar bailiú feamainne agus mar sin de a fhágáil saor ón scrúdú maoine as seo amach. Tréaslaím leis an Aire i leith an dul chun cinn seo a thabharfaidh spreagadh do dhaoine cur ar a son féin, agus tá buí-ochas mhuintir an iarthair tuillte aige. Fáiltím freisin faoi na hathruithe ar scrúdú maoine ar dhreamanna atá ag dhéanamh cúraim ar dhaoine eile.
The carers allowance scheme has often been derided because of the obvious restrictions which had to be placed on the scheme on its inception. I welcome the change in the system of means testing for this allowance. The scheme has been extended to a greater number of people. When first introduced it mainly benefited those who had a dependent spouse. With the dramatic change which has been made, those on low incomes whose spouses are full time carers will be able to benefit from the scheme. We all look forward to the day when resources permit the scheme to be extended still further.
The changes in means testing of the lone parent's allowance is significant. A system should be devised whereby the rent allowance could be taken into account and gradually decreased. At present the Department is willing to reduce the lone parent's allowance on a phased basis, but there is no similar system in relation to rented accommodation. A large number of lone parents live in such accommodation.
I compliment the Minister for the changes made to the RSI scheme. Many people did not know that if they possessed a medical card they were exempt from paying the levies. As a result they have paid more RSI than was necessary. The fact that there is a minimum of £173 per week and that employers are exempt from paying the levies is a great step forward. I would hope that in the future these benefits would relate more to income than to medical cards, because relating them to medical cards creates its own problems.
Fáiltím go mór roimh an mBille. Tá an oiread ann agus go bhféadfaimis bheith ag caint faoi go deo. Nuair a bheidh Céim an Choiste ar siúil creidim go mbeidh go leor rudaí á bplé go mion agus go bhfeicfear go leor tairbhí eile sa reacht-aíocht seo.
This is the first time I have spoken in the Dáil under your chairmanship, Sir. As long as I am here I am somewhat nervous every time I speak. Today I am speaking under your protection and guidance, which greatly assuages any fears I may have about speaking.
Having listened to the Deputy previously, I know he will not be nervous.
With the agreement of the House, I wish to share my time with my colleague, Deputy Bradford.
Acting Chairman
Is that agreed? Agreed.
I do not intend to rehash what has been said about the Social Welfare Bill, because Government speakers take a certain line in relation to praising it and Opposition spokespersons take the line of finding fault. I would rather address myself to problems I see in the general social welfare schemes, which I have often addressed in this House by means of parliamentary questions. What I am about to say today will be similar to what I said in this House a year ago when speaking on the Social Welfare Bill. At that time I referred to a number of short-comings and injustices that exist. I am sorry to say they have not been addressed in this Social Welfare Bill.
Deputy Ó Cuív referred to the progressive relaxation of the means test during the past number of years. I acknowledge the fact that there have been relaxations in the means test, but I would remind both the Deputy and the Minister that the means test, as it operates is still restrictive and frequently is unjust and unfair. Last year I dealt with the means testing of a small farmer who makes application for a non-contributory benefit, such as unemployment assistance — some people call it the small farmer's dole — or the old age pension. This assessment is done on the basis of expenses and gross income to the farm.
In 1986 means testing was changed from the notional system — until then it was based on poor law evaluation of land — to the factual or the actual system, a change I welcome. A former Minister for Social Welfare, Mrs. Hussey, clearly pointed out when responding to much criticism of the means testing system at that time, that it would be factual and that the idea of notionality would be gone from the system. Alas, that has not happened.
I have here an IN. 93 form which is used by social welfare officers when making such assessments. A question on the form asks the applicant for the value of his sales or the value of his produce, which he declares. The social welfare officer, under regulations laid down by the Minister for Social Welfare operates a system whereby the total sum of the value of sales of livestock or whatever is made up; and if it is too close for comfort to the value of expenses, then the social welfare officer introduces an element of notionality. This is adverse to the interests of the applicant, because you then have what are called "average annual sales". In 100 per cent of cases the effect is to increase the value of sales from the farm. The basis for this is not explained. As I said in this House a year ago, and in the meantime by way of parliamentary question, it brings back something which was supposed to be abolished in the Social Welfare Bill of 1985 or 1986. I suggest to the Minister that that system is unfair and unjust and I am convinced it is in breach of the Social Welfare Act, which was supposed to get rid of it seven or eight years ago. I ask the Minister to examine that aspect and see it for what it is, an injustice.
I should also like to speak on a topic to which I referred last year, disregards of income. I welcome the fact that the disregard of income for the carers allowance has been increased from £6 per week to £106 per week for a principal earner. Disregards, which were introduced as far back as 1973, operate for old age pensioners and for non-contributory widows pensions at £6 or £7 per week. About two years ago I elicited from the Minister or his predecessor that if you took 1973, or whatever year disregards were introduced, as a base year at £6 per week and took into account all the cost of living increases and rate of inflation indices in the meantime, it would be worth £30 per week today. I ask the Minister to examine that aspect of means testing. Why do we not keep it close to its real value as it was when introduced in the early seventies? Surely ordinary justice demands that that be done. I ask the Minister to examine the possibility of introducing disregards for applicants for unemployment assistance. That is one of the social welfare benefits that do not enjoy the benefit of disregard.
Widows who qualify for a widow's non-contributory pension get a bad deal from the Department. They do not receive any fringe benefits and do not qualify for free fuel allowance, free travel or free telephone allowance.
They qualify for the free fuel unless they have other income.
If their income exceeds their pension by £5 per week they are disqualified from free fuel allowance. Surely that is not something the Minister should defend in this House; rather it is something we ought to be ashamed of. I ask the Minister that when widows reach 60 years of age the fringe benefits applicable to old age pensioners on non-contributory payments be extended to them. Often widows who live alone and in rural areas cannot afford a telephone or to adequately heat their homes. The free electricity allowance would make an enormous difference to them. When the Minister has finished his consultation perhaps he would take that point on board.
The Deputy will be aware that many widows between the ages of 60 and 66 enjoy the benefits their husbands had. That is a big step ahead.
That is a big step ahead, but the Minister should extend, as I request, all these benefits to widows who reach 60 years of age. The Minister would certainly be remembered for his enlightenment if he were to accede to that request. An interesting case on equality payments has been raised by a number of women in my constituency. Thirty women in the Castlerea area are aggrieved by the equality settlement as they were recipients of social welfare, as adult dependants on their husbands, during the time covered by the court decision. These women have made a case to the Department but have not got a positive response, although it was also raised by way of parliamentary question. Will the Minister seriously consider the point made by these ladies? It might have large financial implications but they have made a very good case in ordinary justice. The basis of their case is as good as the basis on which the case was successfully won in the European Court by women who directly received a lower rate of unemployment assistance because they happened to be women.
I thank Deputy Connor for allowing me some time. I recall the speech I made at this time last year and note that a number of the anomalies raised then are still there. I concede that this Bill has brought about certain administrative and financial improvements but difficulties still remain.
The estimate for social welfare is steadily approaching a £4 billion account. That is something the Minister and the Department can be proud of but on the other hand it shows the huge social problems and that unemployment is out of hand. We are attempting to have a debate about Structural Funds and whether the sum will be £6 billion, £7 billion, £8 billion or whatever the Minister for Finance will think up. The social welfare bill for 1994 at approximately £3.8 billion could use up the vast majority of that Euro sum. That shows the dependency culture we have created over the years. Many social welfare payments are necessary and money poured into old age pensions is inadequate for the needs, but in certain ways the payments we are making are creating a poverty trap from which people cannot escape.
I am disappointed that more progress has not been made by the junior Minister, Deputy Burton, in putting together policies to integrate the tax and social welfare systems. The present system has made it impossible for employers to create jobs and for employees to take up jobs on offer.
This Bill contains some improvements but many difficulties need to be addressed. For almost a decade Cork County Council has been pleading on an annual basis for some of the money spent on social welfare payments to be transferred directly to the Department of the Environment to put people back to work. Rural roads were never in such a state of disrepair and every local authority is crying out for money to buy materials and to employ more people. We could use social welfare money in a better fashion by diverting it to this area. It is tragic that money, which by adding another 10 per cent could be used to employ people, is being spent to keep people on the dole. This is warped social policy and it contributes to a breakdown in society. The Minister should set up some sort of task force or commission with the Minister for the Environment to consider transferring funds, even on a pilot basis, to put people back to work. Surely a Minister with a budget of £3.8 billion should use some of it to create employment.
There have been improvements in the means testing system, but the assessment of meagre savings is blatantly unfair. I refer to people applying for unemployment assistance or for old age non-contributory pension. If having worked all his life a person returns from abroad with £4,000, £5,000 or £6,000 in the bank the savings are assessed at 10 per cent and that person is assessed as having an investment income of £500 per annum or almost £10 per week. A bank, building society, post office savings account or even a Swiss bank will not give anybody a return of 10 per cent. When DIRT is taken into account and every other deduction is made, the old age pensioner will have a return of perhaps 4 per cent and will lose £10 a week from his entitlements whereas the loss should be only £3 or £4 a week. A sum of £5 or £6 a week might not seem much to Dáil Deputies but it is quite a sum for an old age pensioner, the price of a bag of coal, the difference between being warm or cold over the weekend. Will the Minister look at that 10 per cent assessment which is totally out of touch with reality?
I concur with what Deputy Connor said about ongoing difficulties with equality payments. There is major concern throughout Cork city and county about equality payments. A huge public meeting took place recently on the matter and another is due to take place along with a march to Dáil Éireann on Tuesday or Wednesday next. I hope the Minister can allay the fears of people about money due to them. There have been frequent clashes between the Minister and Deputy Allen on this issue at Question Time.
I congratulate the Minister on the improvements made to the carer's allowance while acknowledging that further improvements must be made. The Department is being generous in allowing extra people to benefit but we should note that if there was a further relaxation of that scheme many of the people confined to nursing homes because their sons and daughters are financially unable to look after them would be able to remain in their, homes. From a social and economic point of view that would make common sense. Health board subsidies are helping people to stay in nursing homes but I would much prefer if the Department of Social Welfare through a further relaxation of the rules on the carer's allowance enabled people to return home from nursing homes and district hospitals to their families.
That would be preferable and makes economic and social sense. I hope the Minister will make further progress on the carer's allowance scheme in 1994.
With your permission, Sir, I wish to share my time with Deputy Martin.
Acting Chairman
Is that agreed? Agreed.
I welcome this opportunity to contribute to the debate on this excellent Social Welfare Bill. The Bill gives legal effect to the increase in payments announced in the recent budget and provides for other improvements to strengthen the social welfare code for families, workers, carers, lone parents and others who rely on social welfare.
Deputy Bradford referred to the anomalies in the social welfare code, but I will draw attention to the many improvements that have been and will be made by this caring Minister. An additional £157 million has been provided to improve the incomes of those who depend on social welfare, to support families, to strengthen voluntary and community services and to expand social insurance cover.
The proposed widower's pension is a major breakthrough in pension provisions and puts Ireland foremost among our European Union neighbours in providing equal treatment for men and women on the death of their spouse. I understand that over 9,000 widowed men and their families will benefit for the first time under the proposed survivor's pension. The scheme will be introduced in October and men and women will be able to qualify for a contributory survivor's pension on the same basis, that is, on either their own or their late spouse's PRSI record, subject to the same contribution conditions. Public representatives have been calling for the provision of survivor's pension for men and women on an equal basis. According to the National Pensions Board, ten countries in the OECD provide for payment of pensions to both widows and widowers, but generally speaking more stringent conditions for qualification apply to men.
I congratulate the Minister, Deputy Woods, on this progressive initiative, which is a recognition of our family structure. Now that both spouses are participating in the workforce, the surviving spouse, whether a woman or a man, with a young family to rear is likely to need income support. In excess of 85,500 widows receive pensions under the widow's contributory pension scheme at an annual cost of £282 million, but their situation will not be changed in any way by the introduction of this equal treatment measure. Some 1,100 invalidity pensioners who have attained 66 years are to have their weekly pension boosted to the level of the contributory pension. This increase will mean an extra £10.20 per week from July for a single person, bringing his or her new weekly payment to £71. A married couple, who currently receive £100.90, will receive £112.30 from July, an extra £11.40. This is a significant improvement for older invalidity pensioners, who are among the most vulnerable in our society. This is in line with the recommendation of the National Pensions Baord. A couple under the age of 66 will receive the new weekly rate of £103.90, an increase of £3.
I will not call a quorum, but it would be appropriate if Democratic Left, who have expressed such a great interest in social welfare, the Fine Gael Party and the Progressive Democrats would find some member of their party who might come into the Chamber to take an interest in the Bill.
Acting Chairman
That is most appropriate.
The child dependant increase for larger families on invalidity pension has been substantially improved. The rate goes from £14.90 to £15.20 for each of the first two children and from £12.80 to £15.20 for the third and subsequent children. There are approximately 39,000 people under the age of 66 years in receipt of invalidity pension and they are also eligible for extra benefits such as fuel, electricity and telephone allowances as well as free travel.
The Minister recently confirmed that no earnings limit will apply to the survivor's pension. The position of all working widows with families is to be protected in the new survivor's pension scheme to be introduced in October. This scheme, announced in the budget, will for the first time provide a contributory pension for widowers, a move which will benefit 4,500 widowed men from October. A sum of £60 million has been provided so that the survivor's pension will be paid automatically to all qualified widows and widowers for the first year of bereavement and thereafter an earnings requirement in line with the recommendations of the National Pensions Board was proposed. Fewer than 300 widows would have earnings in excess of £16,000 per annum, the figure proposed in the budget for qualification. The Minister, however, expressed his concern to ensure that the position of widows with young families be safeguarded. Under the proposed arrangement no earnings requirements will apply and all widows and widowers will receive the pension.
The family income supplement is providing much needed support to low paid workers trying to bring up families. The take up rate has increased on last year and some 96,000 families are getting family income supplement. In excess of 30,000 children benefit from this payment. The very substantial improvements last year are beginning to have an impact on the rate of take up. Building on last year's improvements, the weekly income thresholds are again being adjusted to take account of the tax measures announced in the budget. The thresholds are being increased by £10 and families will get an increase of £6 per week. In order to improve the position of young mothers who wish to take up work, the means test for the lone parent's allowance is being eased. The current earnings disregard of £6 for each child is being replaced by a flat rate disregard of £30, with a 15 per cent taper where earnings are over £30 per week. Where earnings exceed the new rate of disregard, the lone parent's allowance payable will be reduced by £1 for each £2 earned instead of the £1 for £1 rate currently applying. I believe that a lone parent with one child who is in receipt of this allowance and is earning £80 per week will be better off by £18.90 per week.
The carer's allowance is being increased by 3 per cent and, in addition, there will be an earnings disregard of £100 in the means test. Most criticism of the carer's allowance has focused on the means test, in particular where the spouse of the carer is working. I am pleased that the Minister has eased the means test in this situation. From the figures available I understand that a further 500 carers will now qualify for the allowance and a further 350 existing carers will get an increased allowance. I welcome also the allocation of £500,000 to the respite care fund this year as this enables very valuable work to be done.
A number of changes has been announced in the free schemes and this will benefit the weaker sections of our community. A pensioner being cared for by a recipient of the carer's allowance will in future retain the free telephone rental allowance. This was previously discontinued, because the living alone condition ceased to be satisfied. A pensioner aged 75 years or over who no longer lives alone will retain entitlement to the free telephone rental allowance. The age requirement of 80 years which applies to the retention of the free electricity allowance will be reduced to 75 years. Widows between the age of 60 and 65, whose late husbands had entitlements to the free schemes, will retain their entitlements notwithstanding their age.
The free electricity allowance scheme is being extended to include night storage electricity. This will allow unused day-time units to be offset against the cost of night units and will enable pensioners with night storage heating to maximise their units.
The free travel companion pass is being extended to all wheelchair users currently entitled to avail of free travel. The payment of dependant allowance is being continued for six weeks after the death of an adult dependant. In the case of a retirement pension, old age contributory and old age non-contributory pensions, pre-retirement allowance and invalidity pension, social welfare payments will be provided for six weeks after death.
Moneylending is a major problem, especially at Christmas and other holiday periods. An additional £250,000 is being provided to combat the problem of illegal moneylending, bringing the total allocation to £750,000. This is most welcome. Such a scheme was introduced in Tralee and it certainly helped to break the back of illegal moneylending and that applies in many areas.
The Social Welfare Bill also includes a new provision whereby the income unemployed people get from traditional activities, such as seaweed collection along the western seaboard, will be exempted from the means test. Gathering seaweed has been part and parcel of life for generations along the sea coast. This new provision means that unemployed people can help to maintain an age old tradition in many communities and still keep their weekly payments. I welcome also the new PRSI package which is aimed at generating new jobs and helping labour intensive industries to compete and boost take home pay for low paid workers.
I compliment the Minister, Deputy Woods, who has shown that he is a caring Minister and has a special interest in the weaker sections of the community. I appeal to him to continue in this vein as they need all the assistance they can get. Many of them are finding it had to make ends meet.
I welcome the introduction of this Bill and pay tribute to the Minister for Social Welfare, Deputy Woods, who by any criteria has been the most reforming Minister in recent years. He has, in a consistent manner, progressively reformed the social welfare system and introduced innovative schemes.
Did the Deputy back him in the leadership campaign?
He is a most effective administrator. This Bill is not an exception in terms of the new measures introduced in a number of areas. In recent years extraordinary sums of money have been spent on social welfare. The figure amounts to approximately £3.8 billion or £3.9 billion. There is a need for greater integration between the Departments of Social Welfare, Enterprise and Employment and Education. This has been happening to some extent and there is now greater flexibility, particularly in the Department of Social Welfare, in relation to those who wish to pursue third level educational opportunities or the VTOS. In addition, those who take part in the social employment or community employment schemes are allowed to retain secondary benefits. This is welcome.
The first experience of any young school leaver should not be the dole. It must be very demoralising for them having spent many years in school to have to sign on at the labour exchange. The system should intervene to prevent this happening as it may have detrimental consequences. Ideally, young people who cannot find sustainable employment immediately or who do not intend to pursue third level options should be facilitated either on a community employment scheme, an educational course or a training scheme.
These schemes have been condemned recently but those who condemn them fail to take into account the positive psychological impact they can have on many young people. The Department of Social Welfare is playing its role by allowing those who take part in these schemes to retain their secondary benefits such as a medical card. I was delighted yesterday when the Minister for Enterprise and Employment announced at the Select Committee on Finance and General Affairs the commencement of the youth start programme, which is linked to the Department of Social Welfare, to provide meaningful opportunities for young people.
In the area of education many innovative measures have been introduced in recent years. I pay tribute to the Minister for responding to Deputies who pointed out that people of all ages wanted to pursue second chance education. Because they were on social welfare their prospects of participating were hindered. The VTOS, for example, has been an extraordinary success with up to 3,000 people participating. In Cork city hundreds of students at schools such as Scoil Stiofan Naofa, Scoil Eoin Naofa and the College of Commerce are participating in VTOS courses enabling them to reach their full potential, to do the leaving certificate or other specific courses under vocational programmes.
There is room for further improvement. I know of a case where a young person who, when they found themselves unemployed, took part in a specific course under the VTOS and then pursued a further course at a third level institution but because they had received ESF funding several years ago they could not receive any further funding in respect of the third level course. There is a need for greater integration, given that some of those who will take part in the VTOS will go on to pursue other courses at third level to obtain a diploma or degree. There is little point in whetting appetites if we do not, in consultation with the Department of Education, enable people to progress through the system to obtain a degree and provide them with the income support they require.
The Social Welfare Bill and unemployment are linked. The reduction in employer's PRSI from 12.2 per cent to 9 per cent where an employee earns per week £173 or less represents the most significant breakthrough in a long time. I hope this will lead not alone to the preservation of existing jobs but also to job creation in labour intensive industries. For many years employer organisations have been arguing that the high rate of employer's PRSI is a major obstacle to employment creation. We hope to see the benefits accruing from this reduction in employer's PRSI.
A new two year employer's PRSI exemption scheme has been launched. The original scheme was not as successful as we had hoped. This new scheme should be pursued vigorously by employers who should give it a chance. In theory, it should prove to be a significant incentive particularly for small businesses to recruit more people on to the payroll.
The increases in lone parent allowances are significant. We commend the Minister who, despite the difficult economic conditions, has still managed to make improvements in many schemes. The survivor's pension, which is aimed at widowers and is an innovative measure, and the increases in invalidity pension, which now stands at the same rate as old age contributory pension, and child benefit are evidence of the Minister's commitment to increase household income for families on social welfare.
This Bill is pro-family. The Minister has always adopted a caring and compassionate philosophy towards large families in particular. On the question of equality treatment, there has been much talk about the payment of arrears.
The Deputy is putting the boot in.
I have spoken to the Minister and the Deputy on a number of occasions about this matter.
We agreed that the Minister should do something about it.
That issue needs to be resolved. It is always difficult to reach agreement with the Deputy but he is an able person and we wish him well on the hustings during the European election campaign.
Will the Deputy give me his No. 2?
The Deputy will exploit every opportunity on every issue to increase his vote and we wish him well.
Acting Chairman
That is not relevant, Deputy.
But it is accurate.
I congratulate the Minister and thank you, Acting Chairman, for showing tolerance.
I thank the Deputy for the plug.
Deputy Woods has been Minister for Social Welfare for some time and is better versed than most in the intricacies of social welfare legislation and schemes.
The social welfare system is a complex web of information about aspects of social welfare legislation and social welfare schemes, and is very confusing. The Minister made genuine attempts to inform the public by producing clear leaflets on many of the schemes, which is helpful. However, it is regrettable that there is such a range of social welfare schemes. The Minister referred to a new survivor's pension, even the terms are confusing.
I want to mention a number of anomalies I often come up against. A line of an old song ran: "Maids when you're young never wed an old man". The implications of the free telephone rental scheme are that one should marry only people within a certain age limit. Unless a person is incapacitated, he cannot avail of the free telephone rental scheme if his spouse is not eligible for an old age pension. People resort to going to a medical doctor for certification that they are incapacitated when they are not. If a couple have lived together for years, and one has reached pension age and the other has not, and it is obvious that the marriage will continue, they should be entitled to avail of the free telephone rental scheme. The scheme is beneficial because the telephone is a means of contact with others. People appreciate their telephone rental being paid by the State. However, some are ruled out on the grounds of age of a spouse. The Minister should look at this question and consider making the age of the spouse irrelevant.
In the case of young people applying for unemployment assistance, board and lodgings are assessed against them and they are told that if they move out of their parents' house and into a two-bit flat or a kitchenette they will get their social welfare benefits and rent allowance. This means that family units are being dissipated. Of course there is a value in living in one's parents' house, but it is not really a monetary value; it is a family value, a sign of solidarity, a social value, an Irish value. Young people should not be forced to break up families and move into a flat which may be damp and lead to all sorts of other consequences. This assessment against board and lodgings is wrong.
The carer's allowance scheme has great potential. It is called a carer's allowance because the allowance is paid to the person who cares for somebody in need of care and attention. Changes in this have benefited people but I know of one case that was turned down on the basis of the husband's income. The wife is caring on a full-time basis for an elderly lady who is doubly incontinent and confined to a wheelchair. The wife cares for this elderly patient on a 24-hour basis with no assistance but, because her husband is a PAYE worker earning over the limit, no allowance can be paid to her. If it was not for the love these people have for that elderly person, she would be shoved into an institution. There might be a subvention paid under the new regulations but the natural bond of caring for our elderly folk would then be broken.
The carer's allowance scheme does not recognise the value of the love of one's kith and kin. Why should an elderly person not be looked after in the home of a son or daughter and given the care that can be supplied there? Surely the person who does the caring deserves an allowance irrespective of what the husband earns? Such care is provided not just on a one-hourly basis or two or three times a day, it is a 24-hour service. The pain one sees in such an elderly person's eyes is caused in part by the fact that the State does not give an allowance to the son or daughter doing the caring. Obviously, the carer's allowance is a cost on the State but one cannot put a cost on human care and concern for kith and kin. Several thousands such families may watch this on "Oireachtas Report" and agree I am making a valid point. If the carer's allowance was intended for people looking after patients in a caring capacity those people should be given an appropriate allowance, some recognition of the love, care, effort and toil they expend. I know of instances where people have to buy incontinence pads, bandages, etc., because they have been taken off the health board roll.
The health boards do the best they can by providing home helps who call in for an hour or two but the point is that the people doing the caring do not get recognition for the genuine efforts they make to provide love, comfort, care and consolation for the elderly in the last years of their lives when they most need it.
While nursing homes and long stay institutions provide good care the sad faces of elderly people tell the real story. Most of them are removed from their homes because they do not have anyone to care for them. If the carer's allowance scheme was implemented to its full potential most of those people could be taken care of in their homes and as a result would be happier.
Some years ago we discussed the robberies that were taking place on a big scale in rural Ireland. Recently a constituent of mine sought my advice on his application for an old age pension. In the course of our discussion I asked him if he had any money in the bank because he would be asked a similar question when being assessed for his pension. He produced an old style sugar bag containing £9,000 which he kept in his house. He wanted to know if he would qualify for an old age pension with that amount of money "under his oxter", as they say in the country. I will not tell the Minister the result of his application but I want to make the point that a great deal of cash is still kept in jugs, dressers and boxes in houses around the country. People need to be frequently reminded of how much money they can have in the bank or post office without their old age pension being reduced. The limit is approximately £6,000 for a married couple.
As thousands of people still keep large amounts of money in their houses there is a possibility of a recurrence of the type of robberies to which I referred. In many cases elderly people were beaten up during those robberies and others were inveigled into giving money to bogus charities, salespersons and so on. People should be informed of the 10 per cent incentive proposal in the budget. It means a great deal to people to have a nest egg on deposit in a financial institution for a rainy day or to cover the cost of burial and they need the comfort of the Minister's authorisation to allay their fears.
Recently an undertaker produced £900 in cash to me and said it was given to him by a person to cover the cost of a funeral. The cash was made up of the old £10 and £20 notes which were dated between the years 1950 and 1954. That undertaker told me that in his locality a large number of elderly people keep that type of what is called dry cash in boxes in their houses. The Bishop's Crusade for Survival identified that up to £30 million was kept on deposit or in "dry cash" by the residents of a small town in the north-west region. That is a colossal amount of money in an area deemed to be impoverished and disadvantaged. With our increasing elderly population people's savings and their money generally should be safeguarded and the elderly should not be fearful that if they place it on deposit in a post office, bank or other financial institution their old age pension will be reduced by, say, £10 or £15 per week because their means has increased. Our elderly people should be encouraged in that regard. Will the Minister indicate why the level was set at 10 per cent?
The proposal to means test widow's contributory pensions would have had serious consequences. I do not know which element of the Government proposed that measure. I am glad to say that following pressure from the Fine Gael Party and other organisations the proposal was withdrawn, but when such an issue is voiced once, particularly in Government circles, there is a tendency to introduce it at some future date. Many women will be widowed and if introduced such means testing would have had serious consequences for hundreds of thousands of people in the future and would probably have been the thin end of the wedge in respect of taxing and means testing other benefits.
I am glad the Government recognised the folly of what it was trying to do because the savings which would have accrued from it would not have been worth the distress, pressure and deep sense of outrage people would have felt in regard to it. It is outrageous to think that people might pay into a contributory pension scheme during their working years and at the stroke of a pen or as a result of a Government decision would be means tested on that pension. Such people would see that as a real injustice inflicted on them by the State and in this case by a Government with the largest majority in the history of the State. I would describe it as a vampire tax, driving a stake through the heart of people's right to save money for later years. That measure would have been a grave injustice.
The Minister of State described those benefits as perks, but she can answer for herself. I hope the Minister, Deputy Woods, will tell us that the "dirty dozen" have been finally interred or cremated. Reference was made to the dirty dozen and the nasty nine and I am sure some people are at a loss to know what they are. The Minister should settle the issue once and for all and categorically state that the dirty dozen have been abolished, and, unlike Lazarus, will never rise again.
Many of the social welfare schemes are beneficial, but it is regrettable that they had to be introduced in the first place. It is sad that the number out of work is heading for 400,000 and that we have such high social welfare expenditure. If our economic situation improved to the extent that jobs were being created and the tax position was such that employers found it easy to recruit people, there would be an inflow of immigrants from the United States and England who would keep the level of unemployment in the range of the present level.
I hope the Minister will address the points I raised on some aspects of social welfare schemes which grate on people's minds and prove a hindrance.
I welcome the Bill. My colleague, Deputy Kenny, referred to the dirty dozen social welfare cuts. The package of 34 measures contained in the Bill outlined by the Minister in his speech last night not only buries the dirty dozen but restores the status quo that prevailed before those cuts or in many cases improves the position. I am sure we will have an opportunity to discuss this on Committee Stage which will be dealt with by the Select Committee on Social Affairs. There will be time to examine the various proposals in detail.
The package of social welfare proposals contained in the Bill is the best I have seen during my 12 years in the House. They probably represent the greatest move forward in social welfare legislation since the time my former colleague and Leader of the Labour Party, Mr. Cluskey, was Minister for Social Welfare. I am pleased those measures have been brought forward at a time when my party is a partner in Government. Those measures reflect the influence of my party and are ones for which we argued in the House——
The Deputy's party was not very influenced in getting rid of the dirty dozen, which are still there.
——when I had the privilege of being Opposition spokesperson on social welfare for approximately seven years.
Last year we were concerned about the introduction of the 1 per cent levy. My party leader, Deputy Spring, indicated that the Labour Party viewed it as a temporary measure and that it should be a once off proposition. I welcome the decision of the Government and the Minister to remove the levy. The Bill proposes not only removing that levy but removing the training and health levies for lower paid workers and that is a bonus. Levies tend to be introduced on a so-called temporary basis, but they become permanent fixtures and become part of the overall tax take, of which the PAYE sector pay the bulk. If such levies are introduced in the future for a specific purpose they should be removed when they have completed their function. The proposals in the Bill are a serious attempt to deal with levies in such a manner.
The main problem in respect of certain categories of social welfare recipients has yet to be tackled. It can be dealt with under regulations. I appeal to the Minister to address the problems faced by various workers, such as casual, short-time and part-time workers. There is much confusion regarding the social welfare code. It has become complicated and very few Members, not to mention the public, understand the system. Many times when I spoke as Opposition spokesperson on social welfare very few, if any, members of the media understood the system. The most complicated section of the social welfare system relates to the categories of casual, short-time and part-time workers. The Minister will deal with this matter by the introduction of regulations. He might indicate on Committee Stage how he will tackle some of the problems facing those workers.
In the last few weeks 20 young workers in a large store in my town were working two hours a day. Their employer told them there was no point in taking them off short-time working because they would not qualify for social welfare benefit. I began work in the footwear industry and at the time the industry was subject to seasonal influences and a shortage of work between seasons. It was generally accepted by the unions and the employers that the system would be arranged so that some workers would work three days and sign on for social welfare benefits for the other days. That work sharing measure in regard to which the Department of Social Welfare contributed ensured that people were not taken out of work on a permanent basis which would have reduced the labour force or contributed to the creation of casual and temporary workers. It was better for people to work three days and sign on for social welfare benefits rather than be taken out of work and lose their social welfare benefits. Those employees continued to pay their social welfare contribution. If their earnings were higher than their tax free allowances they paid a small amount of tax. There was a balance within the system.
A group of dockers in my constituency who were casual workers were involved in a High Court case. The High Court ruled in favour of the dockers and the Department had to pay a substantial amount of money in arrears of payment which had accrued over four and a half years. Panic measures were taken and a set of regulations was introduced which was so confusing that the officials in the local and regional employment exchanges did not understand them. A special section had to be set up in the Department to explain to the officials how to operate the new system. A second set of regulations was introduced which was more confusing than the first. Those regulations have been in place since that time. The previous year's earnings of casual and short-time workers are taken into account in means testing. Officials of the Department may say to such workers that they earned £5,000 to £10,000 last year and that they should have enough money to provide for themselves during periods of unemployment.
It is not acceptable that a worker who has done well in his job, earning a couple of hundred pounds a week, and who is let go, whether due to weather or conditions in the plant, is means tested on the basis of his previous year's earnings. There is no logic in that. The whole question of means testing people on casual or part-time work should be considered because of great hardship is caused to these people. The social welfare officers at local level are like FBI agents checking up on what people are doing. This is clogging up the system and creating major problems.
When people look for assistance from community welfare officers they too must carry out similar investigations before making payment. There is much to-ing and fro-ing between the social welfare office and the community welfare office and neither office knows what the other is doing. The Department cannot pay arrears due until it receives a report from the community welfare officer. I cannot understand why temporary payments made by community welfare officers are made through the Department of Health rather than the Department of Social Welfare. This does not make sense. It is a cumbersome system and is very expensive to administer. This whole area needs to be re-examined.
I wish to refer to means testing as it relates to young people who are being forced out of their homes. The Minister said previously he was having this matter investigated. At present houses in urban areas are occupied by young people who would not be entitled to social welfare payment if they stayed at home. Some of these people are renting houses and not living in them. The system is forcing them to become dishonest, leading to all sorts of social problems. The social welfare officer must establish beyond reasonable doubt that the young person is living at the address specified. Not alone are parents investigated, but if the young person goes to live with an uncle, aunt or grandparent, that person has to present information as to their means, whether it be a P60 or P45 form, pension returns or mortgage receipts. This system needs to be improved. The regulations applied by the Department of Social Welfare encourage young people to mix with bad company and to become involved in drugs as it takes them away from parental control in the family home.
I welcome a number of the provisions in the Bill such as the introduction of an additional £10 for single people on unemployment assistance. This measure is long overdue. Single people pay similar overhead costs in running a home as do two people living together. In many cases these people are living on the bread line and find it very difficult to exist. I welcome the provision which brings into line invalidity and old age pension. The increase of £10.20 is very generous and is well above inflation.
I also welcome the reduction in PRSI payments in labour intensive industries. Many industries such as the clothing, footwear and textile industries have suffered substantial job losses. In my town seven clothing and footwear factories and two textile factories closed down and nothing was done to assist them. This is the first positive move to assist these industries and I hope that trend will continue. These indigenous industries employ many young people, male and female, and have made a tremendous contribution.
I welcome the provision for the lower paid in terms of health contributions and training levies. I hope in future budgets that policy will be continued and that payment of these levies will be eliminated altogether. It is unacceptable that training levies must be paid when we are getting a substantial amount of European funds for this purpose. The European Union has stated that we are spending too much money on training, but that is not the case.
The increase of £6 in the family income supplement is welcome. I am always amazed at the number of people who are not aware of this scheme. I suggested previously that the application for family income supplement should be included in the tax return application. Many people on low pay with families are not aware that they qualify for substantial payments from this scheme. Some method should be devised to inform them of their entitlements.
The measure which provides for equal treatment of widows and widowers is a major step forward and is long overdue. I particularly welcome the 10 per cent increase in unemployment benefit and disability benefit which is well ahead of inflation and exceeds many of the increases under the new national agreement. This is the first clear indication that we are serious about improving the lot of the lower paid and disadvantaged. I am pleased the Labour Party in Government has played a part in these improvements.
I compliment the Minister and Minister of State on bringing forward the best package of social welfare proposals that has come before this House since the late Frank Cluskey was Minister for Social Welfare.
The debate on the Social Welfare Bill is a major item in the annual calendar of the Dáil. The huge budget for social welfare is an indication of the times in which we live, rising unemployment and an older population. For every ten people working and contributing to the Exchequer 23 people are dependent on social welfare. It can be seen, therefore, that social welfare is of vital importance to almost every family. In view of the size of the budget which the Minister has to administer every year, it is critically important that social welfare benefits are streamlined and tailored to meet the requirements of those in greatest need. A social welfare system will do nothing for society if it does not alleviate poverty in the areas where it is most harrowing.
I have been a Member of this House for seven years but until now it has never been within my brief to speak on the Social Welfare Bill. There have been vast improvements in the delivery and administration of the service since the Minister, Deputy Woods, took over responsibility for the Department of Social Welfare. I know this from dealings with my constituents in my clinics week after week. Credit must be given to the Minister for the hard work he has put into making the system more streamlined, accessible and transparent.
Despite the best efforts of everybody and the large budget for social welfare, there is still hard and grinding poverty in our society. This has been caused in the main by long term unemployment which has settled over this country like a dark cloud and is refusing to go away. There is a huge level of poverty in many families, particularly in families with a large number of children. I want to refer to the harrowing level of poverty among children and the distress and difficulties this creates for their parents, particularly for women, the managers of budgets and referees between the conflicting demands of the various members of their families. There is enormous poverty in families where the income is too low to meet even the most basic outgoings. I will come back to this point later.
I want to refer to an issue which was raised yesterday and on a number of previous occasions and raised by me by way of a Private Notice Question to the Minister on 18 February 1993, that is, the equality payments due to women. This is one of the most contentious and controversial social welfare issues. Women know from their experience that their entitlements in law are being withheld from them month after month and, at this stage, year after year. I am talking about equality payments, particularly the alleviation payments which remain to be dealt with and disposed of. It is appalling that women are being forced to take expensive legal action and employ solicitors to advance rights and entitlements which they should automatically receive from Government sources. My colleague, Deputy Allen, who has been working on this issue for a long time, knows exactly about what I am speaking. This is a huge issue in Cork city, which I represent, where women are being forced to hire solicitors to establish their entitlements and make a case which will eventually force the Department to make the payments. It is totally unacceptable that women should have to go to this expense to obtain basic information which should automatically be given to them.
The Minister, by sheltering behind the fact that this matter is in the courts, is only prolonging the uncertainty and the day when this matter will have to be confronted. This is generating much mistrust among women. They need this money now. If they were farmers or vintners and were represented by a powerful trade union or pressure group with strong and articulate spokespersons or were part of the Programme for Economic and Social Progress or some other agreement, their needs and demands would have been met by now. Because they do not have this kind of support or the strength which comes from being organised, their claims are being put on the long finger and ignored, thus prolonging their grievance.
The Minister should confront this problem. I am asking him to do two things in this regard. First, he should inform women as to the exact amounts due and, second, set out a schedule of payments. If women were told they would be paid within six, 12 or even 18 months I think they would settle for that. The Minister should tell those thousands of women whose claims are still outstanding that he acknowledges the legitimacy of their claims, that X amount of money is due and he will meet the demands for that money within a specified period. That is the kind of basic information to which these women are entitled. I appeal to the Minister to respond to this request.
Approximately 500 women in Cork city are awaiting payments of this money. If they were farmers, vintners or trade unionists they would not be required to wait this long for payment. Their legitimate claims would have been acknowledged, they would have been informed of the amounts due and told when the payments would be made.
I will respond to that matter this evening. All the moneys approved by this House have now been paid, except for the odd claim which was submitted later.
The Minister is misleading the House again.
Carlow-Kilkenny): I do not want any disorder.
The Deputy should keep out of it for the moment. He has had his turn.
The Minister interrupted first and he is trying to mislead the House.
Acting Chairman
Rather than have this kind of crossfire perhaps the Minister would deal with this issue in his reply.
In case there is any misunderstanding, the Deputy has alleged that I have not paid moneys approved under legislation. I have paid all the moneys approved but some claims were submitted later. People are making further claims and I will deal with that matter later. The Deputy should not accuse the Government of doing anything wrong.
The Minister is giving wrong information.
Acting Chairman
Deputy Quill to continue without interruption. As the House is aware, we cannot have this kind of crossfire.
I did not think you would allow the Minister to interrupt. I asked him to reply at the end of the debate.
Acting Chairman
I also asked him to do that.
I asked him to address the issue of alleviation payments.
I will do that.
That is of crucial importance. Will he also specify the exact number of women whose payments are still outstanding?
There are no payments——
His Department ought to know the number of such women. Even if his Department does not know the number, a number of solicitors know it and are making money out of it. Many women who are awaiting payment know it. This is a very important issue which will simply not go away. Talking around the problem will not solve it. The matter must be addressed; women must be informed of their entitlements and the timeframe for the payments will have to be set out clearly. I look forward to hearing from the Minister in relation to this contentious issue. Women are now more aware of their rights in this area.
I have already referred to poverty affecting families, particularly those with young children. The Minister announced an increase of £5 for the third and £2 for each subsequent child. That is little more than a gesture as 60 per cent of all children living in poverty are in families with three children or more. This is where the real pockets of poverty exist; families with three, four or five children on low incomes which it is not possible to stretch to cover the outgoings in any given week. Young people come home every day from school requesting money for books, shoes, games and other extras. The obligation is usually on the mother to meet the cost of food, heating and clothing, the basic necessities, and she must balance the family budget. There is harrowing poverty among large families with resultant pressures on parents, particularly mothers.
I ask the Minister to address this issue, particularly in subsequent budgets, because this is where real poverty exists and where the future of young people is determined. Young people living in homes with this degree of poverty seldom rise above it and are getting a poor start in life. Child benefit should be paid in a graded way because, as young people become adolescents, the cost of caring for them increases. It does not make economic sense to give the same rate of child benefit to an infant and an 11, 12 or 13 year old. There should be a scale where the amount of benefit increases as the child gets older. When young people reach the age of 9, 10 and 11, a time of maximum expense, the amount of child benefit would increase in accordance with the age of the child. The Minister should address himself to this area.
Women with children in that age group are invariably driven to borrowing money for one reason or another. Even the best managers, who balance their budgets in a manner that no Minister could, find it difficult when an illness arises or when there is a First Holy Communion, a Confirmation, a birthday or any other occasion that puts an additional expense on the weekly budget. Such occurrences put the whole budget out of kilter and that is when people are driven to moneylenders. If we are serious about keeping women out of their clutches we must direct more child benefit to poorer homes. It is counter-productive to give money to people at a later stage to help them pay their debts and prevention is the key. We should allocate sufficient money by way of child benefit to these families to enable them to live within their budgets and not drive them into the hands of moneylenders. That is the type of strategy that necessitated the Minister allocating more than £100 million from the social welfare budget this year to health boards because they have not been in a position to balance their budgets for years. That money should have been given to poor families with large numbers of children. I acknowledge that the Minister had little option in this regard but the situation should not have been allowed to develop to that extent. The money should have been spent on trying to eliminate poverty among children but it was used to bail out the health boards and to cover bad management, bad practice and bad accountancy over the years. I resent that and I hope it will not happen again.
No country would allow a large percentage of its children to live in such extreme poverty and give so many of them such a poor start in life. This should not happen; we pay high taxes and our social welfare budget is sufficiently high. I appeal to the Minister to further streamline the system and to provide better benefits for large families. We should aim at least to give all our children a reasonable and fair start in life. We should be more conscious of and sensitive to the anguish of young mothers trying to cope with the demands of raising young children on low incomes. Many of them run up large health bills. It would make good political, economic and social sense to direct more moneys to these families.
In regard to women who are having difficulty obtaining places on the new community employment schemes, what steps will the Minister take to increase access for women to those schemes? In many cases they are not signing on for historical reasons and under the present criteria they appear not to be eligible to participate in community employment schemes. In the recent budget 1,000 places on those schemes were announced. The Minister should examine this issue and see what changes can be made in social welfare terms to enable women to avail of their rightful share of places on those schemes. The kind of exclusion from that and other schemes is a key cause of the build-up of poverty among women and keeping them in continuous poverty. There are now a number of very good self-help groups in every constituency nationwide — especially in my constituency in Cork city. A number of extremely well motivated family support groups and centres have one aim only, to help women to lift themselves out of poverty traps. This would entail very little assistance from the Government, but a change is necessary in the social welfare requirements. Access to such schemes is one way — although there are a number of others — in which women can be aided in helping themselves which is all they seek.
I wish to share my time with Deputies Moffatt and Leonard.
I welcome the opportunity to contribute briefly to this debate. I congratulate the Minister on his continued innovative approach to the administration of our social services. The main provisions of this Bill, namely, the increase in the weekly rates of payment applicable to different schemes, the extension of such schemes and, in particular, the introduction of the new survivor's pension, plus a substantial improvement in the carer's allowance, represent very welcome developments.
The numbers of people in receipt of benefit or payment from the Department of Social Welfare, 822,000, and their 627,000 dependants, indicate in no uncertain terms the wide-ranging nature of the operations of the Department and the amount of families and homes dependent on the administration of the social welfare services in an orderly and customer-friendly manner. Over the years the Minister has striven constantly to streamline the workings of his Department, resulting in substantial improvements in recent years.
The provisions of this Bill demonstrate the Government's commitment to the maintenance and safeguarding of the position of those dependent on social welfare. I welcome a number of initiatives in the Bill that deal with issues constantly brought to our attention by constituents, especially the proposed improvement in the carer's allowance, the reduction in employers' PRSI contributions and the continuation of certain secondary social welfare benefits to people wishing to participate in community employment or educational schemes. In addition, the introduction of the new survivor's contributory pension for widowers represents a major leap in terms of social insurance cover and places Ireland in the forefront of our European Union partners in providing equal treatment for men and women who lose their spouses. The value of this new measure for over 9,000 widowers and their families can be guaged from the fact that it will represent an overall payment of £27.5 million to them and their families at a time of great grief. I am delighted that Fianna Fáil in Government have introduced this vital new scheme, representing a major step towards greater financial security for families where the wife dies. For the first time widowers will be enabled to claim a contributory pension on the same basis as their widow counterparts.
Of course, it is important that the entitlements of the 85,000 widows in receipt of contributory widow's pension are not affected by the introduction of this new survivor's pension. My understanding is that, from October next, all new widows and widowers will qualify for eligibility based either on their own or their late spouse's PRSI record. The automatic payment of a pension to everybody who qualifies will be of enormous benefit to widowers who previously received no financial support on the death of their spouse. I hope the Minister and his Departmental staff will provide the relevant explanatory leaflets and application forms in respect of this important new scheme without delay. The predicament in which a widower and his young family can find themselves was forcefully brought home to me over the weekend when I was approached by a widower whose wife had been tragically killed in a car accident, leaving three school-going children. The man's small farmers' unemployment assistance claim had been approved, awarding him an extremely small payment. Following such heartbreak it should be patently obvious to social welfare officers that a survivor in these circumstances would not be able to derive maximum benefit from such a small holding or farm of poor quality, while caring for his children. I hope that the payment of the survivor's pension will directly address the needs of people experiencing such hardship.
All Members will be aware of the enormous benefits individuals and communities derived from the various social employment schemes. Thankfully, the Government decided to expand their range considerably, combining those and other schemes with the new community employment programme. One of the major drawbacks to the proper development of such social employment schemes in some areas was the feared potential loss of secondary social welfare benefits in the case of people who wished to participate in them. For example, the potential loss of a medical card seemed to be one of the most serious reservations of people who wished to participate in such schemes. The continuation of secondary benefits for people who move from social welfare benefits to participation in a community employment programme is essential and will represent a valued improvement in the administration of FAS schemes.
I welcome the 3 per cent increase in the carer's allowance. The Minister has effected a welcome improvement by means of disregarding earnings of £100 in respect of working spouses. I know that the Minister will continue to work on improving that very valuable allowance.
I thank Deputy Smith for having shared his time with me.
I welcome the provisions of this Bill giving legal effect to increases in social welfare payments announced in the budget. The Bill breaks new ground in many ways in social welfare thinking and dovetails with the Government's objectives of giving greater incentives to people to return to work in addition to the creation of jobs. At the same time it represents a caring attitude to society, especially to those less well off, who may be suffering from illnesses, post-accident symptoms or those generally unable to work.
Section 16 is applicable to the carer's allowance in respect of which the disregarding of the first £100 of earnings by a spouse is greatly welcomed. It constitutes a step in the right direction and will help many families nationwide, affording them the possibility of caring for their elderly relatives at home. I ask the Minister to re-examine this overall area at a future date and consider disregarding all income when deciding eligibility for the allowance. In this respect he may have to consult his colleague, the Minister for Health. I have no doubt that the right place in which the elderly should be cared for is at home with their own people. The provisions of section 18 stipulate a number of improvements in the means test for the purpose of eligibility under social welfare schemes. I especially welcome the exemption of activities such as the collection of seaweed along our western coast——
Now the Deputy is talking.
No doubt Deputy Kenny agrees with me on this occasion.
The Deputy is on the rack now.
——in that it represents an indigenous industry. Anybody who can earn a few extra bob by this means is to be encouraged, representing one method by which people may be able to supplement their incomes.
Hear, hear.
Since we all endeavour to encourage indigenous industry by whatever means, I thank the Minister for this inclusion.
Former Deputy Staunton will be delighted with that seaweed plan.
It will keep him in business.
I am sure it will be an issue in the by-election in Mayo West.
(Interruptions.)
Acting Chairman
Deputy Moffat to continue, without interruption.
We will look after the seaweed in Mayo.
The disregarding of the maintenance element of the higher education grant for the purpose of third-level subsidisation will help all those involved in education which is no longer a luxury but the right of all families. Deputies know of many difficulties experienced by people with two or three children attending third-level institutions and this exemption exemplifies the Minister's forethought which is welcome.
Section 17 deals with maternity benefit, providing for changes in relation to stillbirths, the new definition of stillbirths, at 24 weeks gestation, having been included in the recent Bill passed by this House. This provision is welcome, bringing us into line with EC directives. I am sure the Irish Stillbirth and Neonatal Death Society will be very pleased with the Minister's initiative in this respect, with the granting of maternity benefit to those mothers who give birth to stillborn babies at 24 weeks.
Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.