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Dáil Éireann debate -
Thursday, 23 Mar 1995

Vol. 451 No. 1

Social Welfare Bill, 1995: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Ba mhaith liom mo chuid ama a roinnt leis an Teachta Mac Gabhann.

Ag féachaint ar chúlra an Bhille seo agus an phróiséas a chuaigh roimhe tá sé deacair do dhuine a chreidiúint gurb é an tAire seo a chuir an Bille os comhair na Dála.

Bhí an cúlra eacnamaíochta níos fearr ná mar a bhí sé le beagnach 30 bliana anuas. Dá mba Aire de chuid Fhianna Fáil a bhí in oifig bheifí á cháineadh go géar dá mbronfadh sé méadú níos lú ná cuíg nó sé faoin gcéad — nó b'fhéidir ocht faoin gcéad atá sa bhuiséad go ginearálta. Gan dabht bheadh an tAire seo agus a chomh Theachtaí sa Daonlathas Clé chun tosaigh agus an tAire bocht á chur faoi bhrú acu. Nach bhféadfaí an tAire seo a shamhlú lasmuigh de Gheataí Shráid Chill Dara agus é ag gearáin faoin ardú náireach a bhí faighte ag daoine bochta agus sa phinsean do shean daoine. Nach iontach na hAirí a bhíonn le fáil ar bhinsí an Fhreasúra agus nach lag an iarracht a dheineann siad nuair a théann siad trasna an tseomra anseo.

The provisions of the Social Welfare Bill, as announced in the budget, were greeted with widespread disbelief and disappointment. There were two main reasons hopes were high that the problems of poverty and social exclusion would be addressed in a meaningful and imaginative manner. On the economic front this budget came after a year in which a current budget surplus was recorded for the first time in 27 years. It is also set against a background of substantial transfer of resources from the EU. Besides this, it had been clearly flagged in advance that this Government was not in the business of controlling current spending as evidenced by the planned deficit of £310 million in 1995 and total Exchequer borrowing of £813 million. Even in the worst years when Fianna Fáil-led Governments were attempting to put the economy back on the rails after the profligacy and incompetence of previous Governments, particularly from 1982 to 1987, provisions of 3 per cent, 4 per cent and 5 per cent were made for social welfare recipients. The successful rebuilding of the economy was achieved without penalising the poorer sections of the economy.

Quite independently of the excellent economic background to this budget, hopes were high that the new Minister for Social Welfare, representing Democratic Left, would ensure that the needs of those in the poverty trap were adequately addressed. People who, for a long time, were conditioned to doubt the credentials of the major parties on this issue looked to Democratic Left to deliver. They remembered the care and concern of Deputy De Rossa in 1989 when he branded the failure to provide adequate increases in social welfare payments as particularly cruel. This was in a year when a general increase of 3 per cent was provided, plus a special increase of 9 per cent for the long term unemployed. Last year he said the miserable increase told its own story. This year, as the Minister with the cheque book in his hand, he has provided a 2.5 per cent increase across the board for which he has rightly been roundly criticised given his record on this matter. The reason there is such a high level of disappointment is that he attacked previous Governments for providing greater increases.

It is worrying that the figure of 2.5 per cent is less than the projected inflation rate of 2.8 per cent and likely to be substantially less than the eventual inflation rate. It, therefore, represents a real drop in income for many social welfare recipients. On a political level it marks a betrayal of those who expected their needs to be catered for in the current financial climate. Do the people caught in poverty traps and in receipt of long term social welfare payments cast their vote less frequently than other sections of society as there is some evidence to suggest they are being left behind, particularly on this occasion?

A mini industry developed in depicting Fianna Fáil politicians as deeply untrustworthy and unreliable. Fianna Fáil Ministers for Social Welfare were subjected to mistreatment in this regard. Because of the smears many people were directed away from the party in the many elections held in recent years. Gradually the creators of this negative image also attracted this image with the result that for many people the idea of a reliable and trustworthy politician is unthinkable. Is it any wonder that this is the case when the transfer from the Opposition benches to the Government side can have such a traumatic effect and the major concern is so infrequently translated into constructive action?

The Minister has a difficult task as the social welfare budget places a major burden on the Exchequer. This year it will be of the order of £4 billion. The difficulty is that a large proportion of the population is dependent on the relatively small number of people who create wealth. Some people make the mistake of thinking that only the short and long term unemployed are dependent on the State; they forget that old age pensioners and a large number of young people also depend on the State. The high unemployment rate adds to the difficulties. As politicians, we would serve the people better by painting the true picture as the many interest groups appear to think the State is a soft touch.

A previous Government attempted to resolve some of the problems in the social welfare code by taxing social welfare benefit. As the Minister of State, Deputy Durkan, pointed out, in some instances this caused even greater difficulties. He also indicated it is his intention, and that of the Minister, to try to resolve them and a slight move has been made in this direction. However, he must not have been listening very carefully as virtually every speaker on this side of the House welcomed certain sections of the Bill which mark a move in the right direction but he failed to acknowledge this. He attempted to suggest that my colleague, Deputy Ó Cuív, proposed the taxation of child benefit. I listened to Deputy Ó Cuív's contribution and he did not propose this. He made the point that child benefit is paid to everybody, regardless of means, and not confined to those in a poverty trap.

The justice office of the Conference of Religious of Ireland issues an annual report which tends to become the bible for the Opposition parties. It argues that a radical overhaul of the social welfare system is required and is scathing in its criticism of this Bill. What value do the Minister and the Department put on this suggestion? There is a need to increase the basic payment as a matter of urgency.

I welcome this opportunity to speak on the Bill, containing provisions which I welcome. Deputy Woods, when Minister for Social Welfare, ensured that substantial improvements were effected each year. His initiatives will long be remembered, particularly in regard to the streamlining of services provided by the Department, the provision of work options for the unemployed and a better Department-customer relationship.

The Government had an unprecedented opportunity to provide worthwhile increases for the 40 per cent of the community in receipt of social welfare payments. Prudent management of the economy by Fianna Fáil in Government meant that for the first time in many years the healthy state of the public finances provided the opportunity to provide worthwhile increases for all social welfare recipients. Unfortunately, the Government decided to give a general increase of only 2.5 per cent which will not even match the rate of inflation. This increase, the lowest in 30 years, demonstrates beyond all doubt the uncaring attitude of the Government.

The support payments for senior citizens are not adequate and, unfortunately, 1995 will see their standard of living lowered further. The miserable increase in pension payments has been the source of concern at all Fianna Fáil meetings in my constituency. The development of a proper and adequate system of payment for pensioners has always been and will continue to be a central policy of the Fianna Fáil Party.

One issue which arises constantly at constituency clinics is the anomaly in regard to the self-employed who commenced paying PRSI contributions in 1988. They entered the scheme on the clear understanding that the paid contributions would be reckonable for pension age. It is my understanding that they will only be entitled to a partial refund of the contributions paid if they do not qualify for a pension payment. The position needs to be regularised and the individuals who contacted me indicated their willingness to purchase the necessary additional PRSI contributions if this would enable them to qualify for a contributory pension.

The typical application for this scheme is the person who has worked hard all his life to improve a small land holding, who has never been a burden on the State and who made a conscious decision to contribute towards the cost of a pension. Last month the Minister gave a commitment at Question Time that the regulations dealing with refunds would be reviewed by his Department. I ask him to leave this matter, with the regulations dealing with the scheme and the contribution conditions, reviewed and amended at the earliest possible date. It should also be borne in mind that the self-employed were not allowed to pay contributions between 1961 and 1988. I presume that within the vast members availing of their rightful entitlements to social welfare payments, the category to which I have referred would constitute a very small percentage.

The mortgage supplement scheme is important to many households. My understanding is that supplement is payable in respect of the interest element of the mortgage repayments. I ask the Minister to consider an extension of this scheme in exceptional circumstances. My query arises because I know of one young lady who, with her husband, negotiated a relatively small mortgage on a new house but did not take out a mortgage protection policy. Subsequently, and unfortunately, the husband died at a rather young age and, on his death, the family's only source of income was no longer available. This lady is now totally dependent on a widow's pension to care for her family and herself and the health contribution to her mortgage payments is exceptionally small. In cases where extreme hardship can be imposed on a household, I ask the Minister to introduce adequate safeguards in the scheme to provide additional help in those exceptional circumstances.

Many small holders are unhappy with the assessment of their means in regard to unemployment assistance. This is self-evident when most of the cases we receive representations on in relation to the social welfare appeals office concern unemployment assistance claims rather than pensions or other type's of social welfare payments. My experience suggests there is far less discontent with assessments made by officials of other Departments, be it health board officials in relation to medical care applicants or even tax assessment. There seems to be an unanswerable case for a general means testing system.

I welcome the proposed improvement in the carer's allowance. The introduction of this scheme some years ago was a most welcome development and full credit is due to the former Minister for Social Welfare, Deputy Woods, in this regard. Last year, the introduction of a £100 disregard was welcomed and I hope there can be further improvements in this scheme. We all recognise the major contribution made by many carers in the diligent and ever constant care and attention given to incapacitated people. Many hospitals and geriatric home beds were made available due to the commitment of a family member, or even a neighbour, to care for people in ill health. The Minister has the opportunity to increase substantially the £100 disregard and a move in this direction would have very beneficial consequences.

The various schemes introduced by Fianna Fáil Ministers to bring more people back into the work-force are worthwhile and have been of great benefit to many individuals and communities. We all know of individuals who have established full-time employment for themselves arising from the help they received initially from the back to work allowance scheme. Prior to its introduction, many people with good employment creation ideas were naturally wary of ceasing to sign on for unemployment assistance with the insecurity that attaches to moving into an unchartered employment area.

One scheme that attracted much adverse comment in 1994 was the students summer jobs scheme. Voluntary organisations in my own constituency have said that it was possible to carry out worthwhile projects in the two counties under this scheme and the participants say they found the work rewarding and satisfactory. In many instances, it related to their educational programmes also. Organisers of the schemes in my county received the utmost co-operation and help from the Department officials both in headquarters and in the regional office in Dundalk. The organisations asked me to put on record their appreciation of the help given by the Department. I hope this scheme will be consolidated and extended in the future.

I thank the Deputies on both sides of the House for the contributions they made to the debate on this Bill. It is always instructive to hear the various views on social welfare. There is not a constituency in the country that does not have substantial numbers of people availing of the services of the Department of Social Welfare and every praise is due to the 4,000 people who work for the Department of Social Welfare. The officials deliver a service in a caring way. They pay out approximately £11 million per day on average with relatively few complaints about the way the service is delivered.

As this is the first Bill I have introduced in this House as a member of Government. I wish to thank also the officials of the Department of Social Welfare who have been unstinting in their efforts to ensure that an effective Bill was put together and that I had all the support I needed in presenting it to this House.

The remarks by the last speaker highlights the obsession Fianna Fáil has developed with the percentage increase in the general social welfare payments. I was amused by the contortions of various Fianna Fáil speakers in portraying a party that is appalled by the fact that people on social welfare are getting an increase in line with the projected rate of inflation. I am particularly interested why they picked the year 1989 as an example of them having done better than I did. One speaker this evening referred to 1989, said they had given an increase of 3 per cent that year and said this compared so badly to the 2.5 per cent increase given this year. The speaker said that they had also given a 9 per cent increase for the long term unemployed but failed to mention, however, that inflation that year was 4 per cent and that Fianna Fáil gave a general increase less than inflation. The increase given to the long term unemployed in that year was certainly significant but it was in the context of having finally to implement — five years late — the priority rates that the Commission on Social Welfare indicated in 1985 should have been paid within 12 months.

Who was in Government in 1985?

I am pointing out the facts to the Deputy.

That is also a fact.

In 1989 Fianna Fáil had been in Government for two years at that stage. I am simply highlighting the fact that this obsession with the 2.5 per cent increase and the attempt to present a distorted picture of the budget is gradually being seen by the general public as so much nonsense and hypocrisy.

The Minister should talk to the pensioners. They do not agree with him.

Every increase that Fianna Fáil has given in social welfare has been at the expense of cutbacks in other areas of social welfare. We have only to recall that when Deputy McCreevy, the current Fianna Fáil spokesperson on Finance, was Minister for Social Welfare he introduced the famous "dirty dozen" social welfare cuts. I am still trying to overcome the effects of those cuts which were felt by workers and married women around this country.

Another sign of the obsession is the reference by the last speaker to the carer's allowance. I am on record ad nauseam in this House praising the former Minister for Social Welfare on the introduction of the carer's allowance. It was an important development in our social welfare system but it is extraordinary that, in speaking about it, Deputy Smith did not seem to be aware — because of his obsession with the 2.5 per cent general increase — that this year I increased the income disregard from £100 to £150.

I welcome that.

Perhaps the Deputy will tell the Cumann members about the social welfare budget this year.

The Minister should not misquote me.

The Deputy also seems to be unaware that I have extented availability of the carer's allowance to people on occupational pensions, people who were previously excluded from this allowance. That will assist substantial numbers of people on relatively low occupational pensions. I ask the Deputy and all Fianna Fáil Deputies to keep their heads down for a while because as soon as the majority of people realise the nonsense they are going on with about the 2.5 per cent increase, they will have to explain why the increases in recent years, which they claim were so marvellous, were lower than inflation. In 1987, the year Fianna Fáil came to power, it gave an increase lower than the inflation rate, as it did in 1989.

This year's social welfare package represents a fundamentally new strategy which avoids the "what did we do last year" approach. I opted for a direct assault on child poverty by allocating more than £100 million to provide a significant increase in child benefit rather than a thin spread of available resources among all social welfare recipients. Deputy Walsh, the Fianna Fáil spokes-person on Social Welfare, referred to the position of a husband and wife with five children whom, he suggested, will receive £160 per week. A family of this size on long term unemployment assistance will receive a new weekly payment equivalent to £200.62, taking account of the new child benefit rates. This amounts to a weekly increase of £10.48 or 5.5 per cent, more than double the general increase. If one child is 21 years of age and still in full-time education the family could benefit from a further £13.20 per week by way of continuation of child dependant allowance up to age 22 years. Similarly, if one child is 18 years of age, child benefit of either £27 per month or £32 per month will be payable from September until the person reaches 19 years of age.

There are significant improvements for beneficiaries without children — for example, the minimum payment for a young person on unemployment assistance whose means are assessed on the basis of parental income is being increased from £10 to £25, a 150 per cent increase. A person on contributory old age or retirement pension with a spouse under 66 years of age, with the additional increase of £1.80 per week, will receive a total increase of £9.70 per week or 8.3 per cent, bringing the new weekly payments to £125.90. This increase includes fuel allowance of £5 per week and they will also benefit from a free colour television licence. All these benefits are way above the 2.5 per cent general increase, by which Fianna Fáil appears to be mesmerised.

There are significant improvements in the carer's allowance, to which I have referred. This will bring 1,000 additional carers into the scheme at a cost of £3 million in a full year. The means test for the allowance is being improved and the earnings disregard of £100 in respect of a working spouse is being increased to £150. This will apply not only to earnings from work but to all types of income such as occupational pensions. This is a significant improvement.

Students participating in the student summer jobs scheme will receive £600 this year compared with £540 last year. This represents an increase not of 2.5 per cent but 11 per cent. In the case of those whose parents are both dependent on social welfare an additional £200 will be payable. The Deputy can work out the percentages on that.

These examples demonstrate that the Opposition's approach in isolating the 2.5 per cent increase does not accurately reflect the wider improvements in the Bill. Furthermore the increases will be paid six weeks earlier this year. This means social welfare recipients will receive more money in 1995 than they would have received if 3 per cent was paid in late July, as apparently is proposed by Fianna Fáil. I hope to give the benefit of future increases at an earlier stage in 1996 so that social welfare recipients will be on a par with taxpayers in terms of annual budget changes. That is a complete reversal of what Fianna Fáil did when in power; it pushed back the payment until late July — budgets took place in late January and social welfare increase were not paid until late July. Perhaps Fianna Fáil Deputies will explain why they remained so silent on that issue in recent years, certainly since 1987.

Much scaremongering has gone on with regard to equality payments and the money I have managed to acquire in order to make those payments. This is an issue on which I thought, in all decency, Fianna Fáil would keep their heads down. I heard the former Minister for Social Welfare in the House this morning ridiculously claiming that he brought the test cases to the High Court. It was the women who forced the Minister for Social Welfare into the courts by refusing to accept the legislation he introduced which, he was warned by me and other Deputies, would not hold water. He continued to deny married women their entitlements under the 1979 European Directive on Equality. The Deputy had the gall to stand up here this morning and say that he took the test cases. He challenged the right of married women to the money to which the High Court decided they are entitled and which this Government has guaranteed it will pay — 75 per cent will be paid the money due to them by the end of this year.

What we hear now from Fianna Fáil are questions on where we got the money and how we will pay for it. That party is spreading false information about the effects of the disposal of a portion of the local loans fund. There will be no effect on the contract between the borrower buying a house by way of a local authority loan and the local authority. It will not change the relationship, the rate of payment, the length of time over which payments may be made or the interest rate on payments. The only difference will be that local authorities, instead of paying the money to the Department of Finance, will pay it to the agency which takes over that portion of the local loans fund which the Government has decided it will dispose of. It is important those facts are put on the record.

Deputies Clohessy, Browne and Gallagher raised the issue of the assessment of benefit and privilege in the case of young single people applying for unemployment assistance. The purpose of this assessment is to ensure that by taking account of different household circumstances, available resources are targeted at those most in need. The cost of abolishing this assessment would be in the region of £60 million a year. That is a substantial amount of money. Considering that it is more than the total increase which the former Minister for Social Welfare, Deputy Woods managed to squeeze from the then Fianna Fáil Government in 1993, if we were to abolish it. I wonder where Fianna Fáil would find the money to pay even the 2.5 per cent inflation proofing that has been provided across the board in this budget.

There are many other points I would like to cover and I may well have the opportunity to deal with them on Committee Stage tomorrow. I thank the Deputies who contributed to the debate and I look forward to a further discussion with them on Committee Stage.

Question put.
The Dáil divided: Tá, 65; Níl, 52.

  • Barrett, Seán.
  • Bell, Michael.
  • Boylan, Andrew.
  • Bradford, Paul.
  • Bhreathnach, Niamh.
  • Bree, Declan.
  • Browne, John (Carlow-Kilkenny).
  • Bruton, John.
  • Bruton, Richard.
  • Burton, Joan.
  • Byrne, Eric.
  • Carey, Donal.
  • Connaughton, Paul.
  • Costello, Joe.
  • Coveney, Hugh.
  • Crawford, Seymour.
  • Creed, Michael.
  • Currie, Austin.
  • Deasy, Austin.
  • Deenihan, Jimmy.
  • De Rossa, Proinsias.
  • Doyle, Avril.
  • Dukes, Alan M.
  • Durkan, Bernard J.
  • Finucane, Michael.
  • Fitzgerald, Brian.
  • Fitzgerald, Eithne.
  • Flaherty, Mary.
  • Flanagan, Charles.
  • Gallagher, Pat.
  • Gilmore, Eamon.
  • Hogan, Philip.
  • Howlin, Brendan.
  • Kavanagh, Liam.
  • Kemmy, Jim.
  • Kenny, Enda.
  • Kenny, Seán.
  • Lowry, Michael.
  • Lynch, Kathleen.
  • McDowell, Derek.
  • McGahon, Brendan.
  • McGrath, Paul.
  • McManus, Liz.
  • Mitchell, Jim.
  • Moynihan-Cronin, Breeda.
  • Mulvihill, John.
  • Nealon, Ted.
  • Noonan, Michael. (Limerick East).
  • O'Keeffe, Jim.
  • O'Shea, Brian.
  • O'Sullivan, Toddy.
  • Pattison, Séamus.
  • Penrose, William.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Ring, Michael.
  • Ryan, John.
  • Ryan, Seán.
  • Sheehan, P.J.
  • Shortall, Róisín.
  • Stagg, Emmet.
  • Taylor, Mervyn.
  • Timmins, Godfrey.
  • Walsh, Eamon.
  • Yates, Ivan.

Níl

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Brennan, Matt.
  • Brennan, Séamus.
  • Briscoe, Ben.
  • Browne, John (Wexford).
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Callely, Ivor.
  • Cowen, Brian.
  • Davern, Noel.
  • Dempsey, Noel.
  • de Valera, Síle.
  • Doherty, Seán.
  • Ellis, John.
  • Fitzgerald, Liam.
  • Flood, Chris.
  • Foley, Denis.
  • Geoghegan-Quinn, Máire.
  • Gregory, Tony.
  • Harney, Mary.
  • Haughey, Seán.
  • Hilliard, Colm M.
  • Hughes, Séamus.
  • Kenneally, Brendan.
  • Killeen, Tony.
  • Kirk, Séamus.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Leonard, Jimmy.
  • Martin, Micheál.
  • McCreevy, Charlie.
  • Moffatt, Tom.
  • Molloy, Robert.
  • Morley, P.J.
  • Nolan, M.J.
  • Ó Cuív, Éamon.
  • O'Dea, Willie.
  • O'Donnell, Liz.
  • O'Donoghue, John.
  • O'Hanlon, Rory.
  • O'Keeffe, Batt.
  • O'Malley, Desmond J.
  • O'Rourke, Mary.
  • Power, Seán.
  • Quill, Máirín.
  • Ryan, Eoin.
  • Smith, Brendan.
  • Smith, Michael.
  • Wallace, Dan.
  • Walsh, Joe.
  • Woods, Michael.
Tellers: Tá, Deputies Barrett and B. Fitzgerald; Níl, Deputies D. Ahern and Callely.
Question declared carried.
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