Creidim gurb é an Bille Leasa Shóisialaigh an Bille is tábhachtaí a thagann os comhair na Dála gach bliain. Tá tionchar ag an gcóras leasa shóisialaigh ar gach saoránach, bíodh tú ag íoc isteach sa chóras nó ag fáil airgid amach as. Cuireann sé íontas orm scaití a laghad spéise agus a chuirtear i mion sonraí an Bhille seo ó thráth go chéile ar gach taobh den Teach. Creidim go gcaithfimid athnuachain iomlán a dhéanamh ar an gcóras leasa shóisialaigh féachaint le córas a chur ar fáil atá feiliúnach don aois ina mhairimid agus nach bhfuil bunaithe ar thuairimí a bhí níos feiliúnaí don chéad seo caite ná mar atá siad don chéad ina bhfuilimíd ag maireachtáil. Mar sin fáiltím roimh an díospóireacht seo fiú munar féidir liom mórán fáilte a chuir roimh an Bille féin.
I am disappointed that the Minister for Social Welfare, having introduced his first Social Welfare Bill, is not present for the debate. I had hoped that between the introduction of the Bill and Committee Stage he would have considered some major amendments.
The Social Welfare Bill and the budget, as far as it relates to social welfare, were a big disappointment. The lack of innovation in any direction in social welfare policy is regretted. It would appear that the general feeling in Government was that social welfare recipients were doing too well compared with working people and that the best way to create incentive was to pull back on social welfare increases. I am surprised at this policy from a Minister for Social Welfare from Democratic Left, particularly in view of the statements made in previous years on social welfare increases introduced by Fianna Fáil led Governments.
I express my utter shock and dismay at the low general rise in social welfare rates this year. When compared with the general increase of 3 per cent last year, this year's increase is totally inadequate. In addition to the general increase last year, there were increases of 10 per cent in unemployment and disability benefit and a widower's, or survivor's, pension became payable for the first time. I congratulate the previous Minister for Social Welfare on the major changes he introduced to the means testing system. I will refer to this point in greater detail later.
I do not understand the excuse given by the Government for the low general increase in social welfare this year, that is, it is interested in creating an atmosphere of enterprise. When one looks at the means testing system one will see that this excuse rings very hollow, particularly for the 385,000 pensioners. I presume the Government is not proposing to put pensioners back to work in the near future. The situation is further exacerbated when one realises that there was no increase in the child dependant allowance for social welfare recipients. While there was a major increase in child benefit, this applies to everybody with dependent children. Social welfare recipients would, in the normal way, have expected an increase of 40p per week for each dependant child. The real increase in child benefit for those on social welfare is not £1.61 per week but £1.21. Everybody will receive an increase of £1.61 and one would have expected there to be something extra for those in receipt of social welfare. However, that has not happened this year.
This is particularly interesting when one considers the number of people caught in the poverty trap and about whom we heard so much when Democratic Left was in Opposition. The poverty level is arrived at by ascertaining the number of people earning less than 60 per cent of the national average income. Given the increase in the rates for child dependants, the Government has done nothing to narrow that gap. A person earning a gross salary of £100,000 has received the same increase in child benefit as a person totally dependent on social welfare. I welcome the increase in the number of women in the workforce, but they will also receive the same increase as social welfare recipients. Instead of directing resources towards the alleviation of poverty, the Government has put social welfare recipients at the bottom of the pile. The budget hit hardest the poorest and least vocal in society and gave the lie to all the fine words spoken by Democratic Left in Opposition.
I wish to refer to the payment of child dependent allowances for children in full-time education. I am disappointed that the Minister did not move to remove the anomaly in the social welfare system whereby people in receipt of short term unemployment and disability benefit are not eligible for the child dependant allowance for children between the ages of 18 and 21 years in full-time education. I thought the Minister would continue the progress made by his predecessor and extend child dependant allowances to all child dependants up to 21 years of age in full-time education. Is the Minister trying to convince us that the children of people in receipt of disability or unemployment benefit who are over 18 years of age and in full-time education do not cost their parents money? It is time this anomaly was removed from the social welfare code. I call on the Minister to put down an amendment to the Bill which will ensure that child dependant allowances are paid to all child dependants in full-time education up to 21 years of age. This is particularly important as under the present regulations people can be in receipt of disability benefit for two years, three years or longer without being granted an invalidity pension.
I wish to refer to this point in greater detail. All too frequently we meet people who have been in receipt of disability benefit for long periods. The Department seems very reluctant to grant these people an invalidity pension, even when they have been in receipt of a disability for longer than two to three years. Even if he is not willing to change the eligibility criteria for invalidity pension, the Minister should introduce a system similar to the one for short term unemployment assistance so that a person on disability for a fixed period would be put on long term disability benefit where the rates and privileges enjoyed would be exactly the same as those enjoyed by people on long term unemployment assistance. This would be a small but practical improvement in the present system. We all know people who have been on disability benefit for years and who cannot qualify for an invalidity pension.
Like most Deputies, I welcome the introduction of a PRSI free allowance. I hope this innovative measure is a first step in amalgamating the levies, PRSI and tax systems into one coherent system. However, I find it totally inexplicable as to why this allowance was pitched at £50 rather than £60 per week. It should have been set at £60 per week as there is already an exemption from PRSI for employees earning less than that amount. This anomaly in the system has been created without good reason. A person earning £59.99 per week pays no PRSI but if his income is increased to £60.01 he will have to pay 55p in PRSI, giving him a net reduction in income of 53p per week. This is another inconsistency in the system. Each year we introduce further inconsistencies into the system, yet we wonder why there is a disincentive to work.
I thought the Minister would put his money where his mouth was last year when there was severe criticism about the liability threshold for the health and employment levies. I welcome the marginal increase in the threshold but there are still faults in the system. The Government did not address the obvious problems the threshold creates. A person earning £177 per week pays no health or unemployment levy while a person earning £178 per week — £1 more — will have £4 extra taken out of his wages as he is liable for the full health and employment levies. I thought the Minister would have the courage to rationalise the system through the introduction of an employee's PRSI allowance of £60 per week and two rates so that a person pays nothing on the first £60, 6 per cent on the next £120 and 9 per cent on the balance of his income. By adjusting the upper ceiling, such a system can be made revenue neutral. The health and youth employment levies could be incorporated in those figures, thus simplifying the system. It would then be easy for the State to decide what proportion of the PRSI collected should be given to health or youth employment. In that way we would have a coherent, simple and effective system that everybody could understand. Instead we create complicated systems.
The Minister professes to be a friend of the poor. I, therefore, hoped he would have grasped the nettle and introduced radical reform in the means testing system so that people on social welfare could better their position. Instead, only marginal changes were introduced to improve their lot. The means testing system is riddled with inconsistencies, anomalies and irrational contradictions and it is time that the concept of means testing as we know it changed. It derives from a Victorian attitude towards social welfare, that such payments are something for which the recipient should be grateful and that any conditions can be imposed by the State rather than considering it a right to a basic income, as most progressive people see it. As it would take far too long to cover all the complications associated with means testing, I will highlight merely a few.
I represent a large number of small farmers, currach fishermen and people involved in small craft industry and seasonal tourism and one of their greatest difficulties is the penal system of means testing. I pay tribute to Deputy Woods who, as Minister for Social Welfare, took some small steps towards improving the lot of those on means tested payments. I compliment him, in particular, for exempting from the system the Mná Tí and seaweed gatherers and for doing away with the concept of "own produce consumed". Under the iniquitous system if, for example, a small farmer in Connemara sowed a field of potatoes, his social welfare payments were reduced by £50 or £100 per annum for his efforts. The system needs to be radically overhauled.
Out of a total population of 20,000 in Connemara, there are 5,000 herd owners. If one takes account of spouses and children, approximately 85 per cent of households in Connemara own cattle, that is typical all along the west coast. Many of those depend on means tested payment from the Department of Social Welfare. Does the Minister honestly believe that anyone in Connemara could make a viable living from agriculture? The number could be counted on one hand. The majority of herd-owners are either pensioners or people on unemployment or small farm holders' assistance and they are means tested pound for pound for their State payments. They pay the highest rate of tax in the State. For example, if a married person with three or four children in receipt of unemployment assistance earns £1,000 from farming, bed and breakfast facility, craft work or fishing his or her income will be reduced by that amount. If that person increases his or her income by, say, £500 social welfare payments will be decreased by £500. It is like being on a merry-go-round, they are caught in the ultimate poverty trap. For a Government that claims to encourage enterprise, this is a totally anti-enterprise culture.
We frequently hear city dwellers complain about the large premia payments paid to farmers. The greatest beneficiary of headage payments in the west, from Donegal to Cork, is the Department of Social Welfare. Under our system, for every £1 increase in headage payments and premia, the Department of Social Welfare claws back £1 in social welfare. In this context, the Department of Social Welfare is the ultimate beneficiary in the largesse from Europe. The system needs to be changed radically.
The Government appears to believe that the banks pay 10 per cent interest to small deposit holders. If a person on unemployment assistance has, say £2,000 on deposit in a bank, under the means testing system, the Department, with the exception of a few hundred pounds, assesses that amount at a rate of 10 per cent. Can the Minister tell me what high street bank pays 10 per cent interest on small deposits? For some reason widowers are assessed at only 5 per cent. While we talk about encouraging thrift and getting people out of the clutches of moneylenders, in reality, we penalise honest people at a rate of 10 per cent per annum. Furthermore, if a person receives a lump sum in a redundancy payment, for unemployment benefit purposes that lump sum will be means tested at 10 per cent per annum. I call on the Minister to exempt redundancy lump sum payments from means testing. This was done previously for pensioners in the case of spouses' houses. I also suggest that capital under £5,000 should be exempt from means testing and any higher amount should be assessed at 50 per cent of the bank interest earned by the recipient of social welfare. We should encourage saving.
I now want to address the anomaly in the way a dependent spouse is means tested when the husband or wife gets a job. Let us take the example of a person in receipt of unemployment assistance whose dependent spouse earns £59 a week and has £5 travelling expenses. The person in receipt of unemployment assistance would be entitled to £92 per week. Therefore, the household income would be approximately £147 per week. If the person's income increases to £150 per week — an increase of £90 per week — the household income will increase by less than £2. The Minister can check those facts for himself. That is the way the system works. That is the penalty imposed on people who better their position under the present code. I could highlight many more crazy anomalies of where the more one earns the less one gets. The system must be radically overhauled, but this Bill does nothing in that regard.
Bhéadh súil agam go mbreathnófaí arís ar an mBille seo agus go dtiocfaí isteach le leasaithe air. Muna ndéanfar é seo imbliana ag an Rialtas seo le cúnamh Dé beidh Rialtas ina mbeidh Fianna Fáil páirteach ann an bhliain seo chugainn leis na leasaithe seo a thabhairt isteach.