Joe Walsh
Question:8 Mr. J. Walsh asked the Minister for Social Welfare if he will implement the priority recommendations of the report of the Commission on Social Welfare Report; and if he will make a statement on the matter. [3326/95]
Ceisteanna—Questions. Oral Answers. - Commission on Social Welfare Report.
Eric J. Byrne
Question:26 Mr. E. Byrne asked the Minister for Social Welfare if he intends commissioning the ESRI to review the minimum adequate income rates recommended by the Commission on Social Welfare; the terms of reference of this review; and if he will make a statement on the matter. [3209/95]
Joe Walsh
Question:41 Mr. J. Walsh asked the Minister for Social Welfare if he will implement in full the findings of the Commission on Social Welfare. [3070/95]
I propose to take Questions Nos. 8,26 and 41 together.
The priority rates recommended by the Commission on Social Welfare in 1986 have been implemented. In so far as the main rates recommended by the commission are concerned, the programme for A Government of Renewal contains a commitment to commission the ESRI to review these rates, with a view to recommending new rates in the light of improvements in social welfare and other changes since the report of the commission was published, and taking into account changes agreed in the programme itself.
Initial discussions between officials of my Department and the ESRI have already commenced with a view to drafting the terms of reference for this review.
The ESRI, with a wide variety of published reports, identified families with children as being at greatest risk of poverty.Indeed, the report of the Commission on Social Welfare itself highlighted child income support as one of the areas requiring priority attention.
In this year's budget I have taken a significant step towards addressing this issue. Social welfare and related improvements which I will be implementing will cost £90 million in 1995 and £212 million in a full year. The increase in child benefit will account for 38 per cent of total cost of this year's budget improvements and almost 50 per cent of the full year cost.
This year's budget represents the start of my work towards meeting the commitment in the programme for A Government of Renewal to providing a form of basic income for children, through the creation of a child benefit supplement. The £7 increase in child benefit represents a substantial improvement in the State's contribution toward the cost of rearing children. The child benefit increase is in addition to other child-related measures I have taken, such as extending child benefit to 18 years olds in full-time education and the extension of child dependant allowances in respect of 22 year olds in full-time education.
Having established a good basic child benefit payment this year I now intend to address the issue of the creation of the child benefit supplement which will be payable in addition to child benefit. The supplement will be paid to all families whose income is below a certain level irrespective of whether that income is from social welfare or employment. This base line level of support for children will target resources effectively at families with children who are at greatest risk of poverty.
Will the Minister not agree that an old age pension, disability benefit, unemployment assistance and disabled person's maintenance allowance of £62.50 a week in inadequate and that he had a glorious opportunity in this budget, if he had been able to persuade his Cabinet colleague, to increase the rate to that recommended by the commission, namely £65.40 a week?
Old age contributory and retirement pensions are already at 109 per cent, survivor's contributory pensions are at 99 per cent, lone parent's allowance is at 94 per cent, unemployment benefit and disability benefit are at 94 per cent, long term unemployment assistance is at 94 per cent, short term unemployment assistance is at 91 per cent and supplementary welfare allowances are also at 91 per cent of the main rate recommended by the Commission on Social Welfare. A considerable amount of progress has been made.
I emphasise that we are talking about the lower end of the rate recommended by the Commission on Social Welfare. When it produced its report in 1985 it said there were no absolute criteria on which one could decide what rate to establish but that in its view it should be somewhere between £50 and £60. Based on indexation that would be around £66 — I do not have the exact figure.
To reach the lower end of the recommended rate would cost £139 million in a full year on top of what was provided this year. To reach the top end of the rate recommended by the Commission would cost an additional £698 million. The Deputy will see, therefore, that it is an enormous task to reach the main rates recommended by the Commission. I convinced my Cabinet colleagues that something like 35 per cent more should be spent on social welfare increases this year than was spent last year. About £71 million was provided for increases last year and more than £90 million is being spent on increases this year. I made a deliberate choice — for which I make no apology — to concentrate that increase on child benefit because there is strong evidence to show that the greatest risk and level of poverty is in families with children. Like the Deputy I regard the current rates of social welfare as grossly inadequate, but this is a position I inherited from previous administrations and I intend, in so far as I can from the resources that will be made available to me and for which I will fight over the next two budgets, to redress the lack of progress made by previous administrations in providing adequate income for those on social welfare.
I can only wish that the Minister will do better than he did this year because, however he twists the figures, he only succeeded in convincing his Cabinet colleagues to provide a 2.5 per cent increase, the lowest for 30 years. It is a bit much that the Minister should, in his new-found middle class cosiness where he earns £1,000 a week, expect an old age pensioner to live on £62.50 and if, by any chance, that old age pensioner puts a few pounds aside to have a decent funeral, he is docked——
We must proceed by way of questions.
It is a joke to ask people to put money in a safe place when for doing so they are charged a rate of 10 per cent. One would not get 10 per cent in any institution in the country but that is what unfortunate old age pensioners and people on marginal incomes are charged. Further, is the Minister satisfied that £37.50 for an adult dependant is realistic in 1995?
I have already made it clear that I do not regard the current rates as being adequate in any sense, even those that have reached or are almost at the lower end of the Commission on Social Welfare recommendations.I honestly do not know how people on those rates of payment survive and while I am in office I intend to do what I can to change the situation.
The Deputy is misrepresenting the position of old age non-contributory pensioners, whom he claims are assessed at 10 per cent of their capital. That is not accurate. I gave statistics in an earlier reply: there is a £200 disregard of capital in the first instance before it is assessed. The rate is lower than 10 per cent. I think it is around 5 per cent but I would have to check it and I can convey the information to the Deputy by letter. The 10 per cent rate is only charged on ownership of very substantial capital amounts.
The Deputy is pushing an open door in relation to the adult dependant rate as I happen to believe there is no reason that an adult dependant should not be in receipt of the same amount as the main claimant. I favour the individualisation of social welfare payments. I hope in the course of time the Deputy will support me in trying to move in that direction.
Will the Minister tell the House how he could sit at a Cabinet table that agreed to abolish a bank levy to the tune of £36 million over three years and expect people for whom he is directly responsible — and for whom I have heard him crying day in day out in the last few years — to live on £62.50 or an adult dependant to live on £37.50 per week? It is appalling to expect individuals to live on those meagre amounts.
It was the Deputy's party in coalition with the Progressive Democrats Party that abolished the income from the bank levy when it made an arrangement with the banks to offset the bank levy against corporation profits.
Do not try to wriggle out of it Minister.
I am giving the Deputy accurate information. The Fianna Fáil-Progressive Democrats Government abolished the levy effectively by allowing the banks to offset the money they were liable to pay against corporation tax. What has happened in this budget is entirely revenue neutral: there is no loss to the Exchequer by simply wiping out the levy in name when it had been, in fact, abolished. There is no loss to the Exchequer and there is no gain for the banks as a result of what has been done in the budget.
Try explaining that to the unfortunate unemployed or the old age pensioners.
I am not doing anything other than giving the Deputy the facts so that he does not make a fool of himself.