I wish to share the remainder of my time with Deputy Ring.
Social Welfare Bill, 1996: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time".
I anticipated that, Deputy.
For the benefit of the Minister of State, Deputy Stagg, who is present, I emphasise that the Minister should examine the position of the middle income groups in relation to social welfare. The manner in which small farms and businesses are being treated is unfair. They are being assessed on grossly exaggerated incomes. That results in people being deprived of their social welfare entitlements which is a serious problem, particularly for small farm owners. If the Minister or his Ministers of State could earn an adequate income from 30 acres of land in Cavan, Teagasc and many agricultural advisers would like to know how it is done. It is not possible and we must become realistic about this problem and ensure people get their social welfare entitlements. Social welfare payments are generous and I do not believe there is any real poverty.
I take this opportunity to congratulate the Minister and the Ministers of State for the excellent job they are doing in social welfare. I thank the staff working in social welfare offices throughout the country for their understanding approach; other Departments should take lessons from the Department of Social Welfare on how to deal with people and their problems. The staff of the Department of Social Welfare are prompt in their replies to queries and are understanding when dealing with public representatives and the general public.
Many people believe social welfare recipients get too much money. That is not my view. People on social welfare are entitled to a fair income from the State and in that regard I welcome the 3 per cent increase this year. Some people are of the opinion that is too large an increase but I believe it was not enough.
The £2 increase in child benefit is welcome also. In the past two years there has been a 45 per cent increase in child benefit which is an indication of the Government's thinking on benefits for women. Child benefit is paid directly to the mother each month but the Minister might consider paying it on a weekly basis. Mothers use this benefit to buy new shoes, school books or uniforms for their children and to increase it by 45 per cent in two years is a record for any Government. I hope there are further increases in this benefit. It is vitally important that we care for women in the home and young children. Child benefit helps women and children and I will support any future increases in it.
I am concerned about the means testing of the carer's allowance which I believe is wrong. A woman who recently returned here from England, where she lives with her husband and two young children, to care for his elderly mother attended my clinic six weeks ago to ask for help and I told her she might be entitled to the carer's allowance. Because her husband's income in England was taken into consideration, her means were assessed at approximately £82 or £83 and she was deemed ineligible.
It is wrong that somebody living outside this State must pay to care for an elderly person living in the State. This problem must be addressed and I ask the Minister and his officials in the Department to examine the whole issue of the carer's allowance. Not subjecting the first £50 of a carer's income to the means test is one way to begin to deal with this problem, but a woman or man who stays at home to care for an elderly relative should not be subjected to a means test. The means test limit is so low, many people are ineligible.
It costs much more for the State to care for an elderly person in a hospital than it does to a relative to care for that person at home. Elderly people prefer to be at home in their own surroundings and, in many cases, they prefer to die at home. Will the Minister and his officials consider this problem and how it can be addressed?
I understand the Minister for Health is proposing co-operation among the health boards on the question of home helps, but to pay home helps in the Western Health Board area at a rate of £1 an hour is a disgrace. It is vital that the Minister meets the chief executives of the health boards and devises a common policy on payment for home help work. The health boards might consider paying more towards the cost of a home help in the case of elderly people living alone. It should pay the home help to clean the house, light the fire and perhaps prepare a meal for the elderly person. To pay a person £1 an hour in 1996 is disgraceful and the Minister should consider paying a reasonable salary to people who do this caring work on behalf of the State.
Both these issues relate to the care of elderly people and I welcome any improvements that can be made in this regard. The least we can do for people who stay at home to care for elderly relatives is pay them a reasonable price for their time. No amount of money, would compensate for the time and effort they put into caring for the elderly and the way they are treated by the Government is wrong.
In the past the health boards were responsible for paying disabled person's maintenance allowance but that will now be the function of the Department of Social Welfare. I take this opportunity to compliment the staff in the health boards who dealt with the payment of this allowance, especially community welfare officers who have been the subject of much bad press over the years, particularly from politicians. There are good and bad people in every organisation. Community welfare officers have a great understanding of what is happening on the ground and I have no doubt they did an excellent job in this scheme. I hope the staff in the Department of Social Welfare will adopt an equally understanding and caring approach.
I welcome the fact that the payment of the supplementary welfare allowance will remain the responsibility of the health boards because when emergencies arise for our constituents, we try to get them immediate assistance. I am glad the payment of this allowance will remain at the discretion of the community welfare officers. I am pleased there will be an independent appeal system, via the social welfare offices, which will have nothing to do with either the health boards or the Department of Social Welfare and will judge cases on their merits. I have no doubt this system will work.
As a public representative I wish to raise a matter that upsets me. I may be leaving myself open to criticism but I do not mind. It concerns the abuse of the rent allowance scheme. This matter has not been dealt with in the Bill before the House. There are two abuses, one by the people who own the property in that if they know a person is seeking a rent allowance from the health board they double the rent; then there are those who ask the landlord to write down more than they are actually charging so that they can recoup it from the health board and have something out of it. This is wrong.
The rent allowance bill has been increasing in every health board and the Minister should examine it. I am not saying to the Minister and the Government that this scheme should not be in place. It is a good scheme but it is being abused. I support the scheme but I ask the Minister to set up a system whereby it can be investigated in an effort to stop the abuse. It is not right that taxpayers should pay for landlords' profits and for some people who are abusing this scheme. The health boards are paying out huge sums of money under the scheme and I ask the Minister to examine it.
In general I welcome this Bill and I compliment the Minister. This is his third social welfare Bill since he became Minister. There is no doubt that the Government has a great understanding of people who are unemployed. I welcome the changes in PRSI and the new regulations whereby unemployed people will be able to take up employment without losing all their benefits.
I welcome also the one-parent family payment. This is particularly beneficial for spouses, particularly wives, who in the past had to prove they were deserted. I am pleased the Minister has taken this out of the Bill. It was very difficult for a husband or a wife to prove desertion. It was degrading, difficult and upsetting. People leave for different reasons. It is not easy for people to say they are deserted. The Minister has a great understanding of the position and he is removing the desertion element. This will prevent much embarrassment for those persons who will be applying for this payment.
In his press release launching this Bill, the Minister for Social Welfare, Deputy De Rossa, as is usual, gave himself a large pat on the back. With warm words and earnest clichés he hailed what he described as a major and radical Bill, adopting much the same tone that the Government's legions of publicly-funded spin doctors had used about this year's budget. What we are supposed to be witnessing in the Social Welfare Bill is a huge effort against unemployment and promoting social solidarity. As with just about everything this Government does, there is a gulf between its rhetoric and the reality of its actions.
Now that the dust has settled on the budget debate, it is possible to see clearly that it fails to meet either of its chief objectives. After adjustments for inflation, the sum total of all budgetary concessions amounts to little more than £100 million. Because of the piecemeal distribution of this injection over various ministerial pet-projects, its only macro-economic effect will be to give the impression of a Government which has no clear fiscal policy. On a more basic level, the social welfare package is representative of a gradualist and essentially conservative approach which is devoid of any originality on any of the major social welfare issues. Deputy Joe Walsh has already dealt with a wide range of issues arising from the Bill. I wish to make a few general remarks about certain aspects and to concentrate on two specific areas which are of particular interest to me, the new disability allowance and the support of in-home carers. I was pleased to hear the previous speaker, Deputy Ring, concentrate on these areas also.
The protection of incomes of the economically weaker sections of our society should always be the central element of any social welfare package. Fianna Fáil has always appreciated this and has never failed to award increases at least in line with projected inflation figures. The Government's decision to reverse its widely condemned precedent of last year and to allow benefits to keep pace with inflation this year is welcome.
During the debate on the Social Welfare (No. 2) Act last year I introduced, with Deputy Joe Walsh, an amendment which sought to remove terms from the social welfare code which were demeaning of women because of the use of words implying dependency. The Minister opposed our amendment saying he would shortly bring forward his own Bill to deal with it. The Bill was included in the list of measures he promised to bring forward last session and he stated in the Dáil that it would be introduced before the end of 1995.
While I welcome the nominal changes which estabish the new one-parent family payment, I ask why it has taken until now to introduce it. The changes involved are simple and could have been introduced any time last year. If the Minister was genuine when he agreed with our contributions during the earlier debate that the terms were demeaning and should be removed speedily, why has it taken a year to produce this Bill? Surely there were enough advisers around to produce a simple technical Bill which could have put this matter straight a long time ago. Deputy Walshe also introduced Bills to deal with the changes to the appeals process which are belatedly proposed in this Bill.
One of the biggest failures of the Irish public sector is that, though motivated by good intentions, it works to accentuate dependency and marginalisation. This is an area that needs to be examined in detail. In particular, I believe this is the case with the treatment of people with disabilities. When they are young they and their parents are denied basic choices and they become used to exclusion and segregation. When they are older, they are faced with widespread and inflexible bureaucracy, an inaccessible environment and frequently inappropriate support services.
People with disabilities and their families encounter a range of extra costs which arise from the nature of their disability. There are obvious costs which can range across areas such as health care, transport, heating, housing and special diets. There are also other areas involved. For example, research has suggested that people with limited mobility spend more on everyday shopping because they frequently cannot get to cheaper stores. All the evidence suggests that, in spite of major State spending, people with disabilities are significantly more likely to be poor than other members of the community.
Some 80 per cent of people with disabilities are unemployed, 63 per cent are obliged to borrow money at some stage to meet a disability-related cost, 56 per cent are sometimes or always in debt, 27 per cent believe their accommodation is unsuitable for their needs and 47 per cent describe their standard of living as poor or very poor. An equally striking figure is that 80 per cent are in receipt of one or more State allowance. In all, the State spends roughly £150 million a year on income support schemes for people with disabilities and their families. In the light of the obvious failure to ensure that their spending assists and promotes individual empowerment, the need for a radical re-evaluation of the running of these schemes should be obvious to all.
The key needs are to recognise the unique cost of disability, to give security to people with disability and to move towards a non-means tested payment. This would slash unnecessary bureaucracy and give a secure financial base to people with disabilities. I do not believe that such a move would be prohibitively expensive. The overwhelming majority of people with disabilities are wholly dependent on State support. Any change which would assist even a small number to gain employment would more than pay fiscally; this is not to mention the many cross-sectoral savings which come from empowering individuals.
During his innovative and productive time as Minister for Social Welfare, Deputy Michael Woods argued for and succeeded in achieving agreement for the transfer of the disabled person's maintenance allowance from the Department of Health to the Department of Social Welfare. This move represented a first tentative stage towards placing the concerns of people with disabilities in appropriate hands and away from the medicalisation of social issues. It was intended that this move would represent the end of its frequently arbitrary and inflexible operation. In particular, it was intended that the move would allow the growth of the type of flexibility which has been developed in the rest of the social welfare code to encourage participation in education, training and, crucially, employment.
Shortly before he came to office, Minister de Rossa presided over the production of a Democratic Left document on disability. This document explicitly called for the establishment of a guaranteed minimum income for people with disabilities of £150 per week so when he was appointed to the Department of Social Welfare much could surely have been expected. Since his first ministerial question time I have repeatedly asked him about the transfer of the scheme and the implementation of the changes. His first response was that it would be transferred shortly but he admitted subsequently there was a delay and then postponed the move. Finally, after ten months in office, he met groups representing people with disabilities but no major action has resulted from these meetings. His current position is that he wants to wait until he has assessed the administrative operation of the scheme before deciding any significant reform.
The Bill finally achieves the transfer of the scheme. Its rechristening as the disability allowance is a welcome replacement of the cumbersome title of its predecessor, the disabled person's maintenance allowance. However, despite some small changes, the Minister is seeking to specifically re-enact the old scheme in its entirety. In addition, the set rate will be £64.50 or only 43 per cent of the rate he proposed shortly before he took office. If the Minister continues to fail to take any radical action to reform the scheme, what has been the benefit of the transfer? Administrative efficiencies are important but all they mean is that the State is now more efficient at administering its scheme while the fact that the scheme is fundmentally flawed is not being addressed.
On a number of occasions the Minister used the excuse that he is awaiting the report of the Commission on the Status of People with Diabilities before taking action. Over the last year, the commission has become the all purpose excuse for inaction on disability issues and this is just another case of it. The commission is there to advise the Government. Its report will be a landmark for people with disabilities and will set out a comprehensive agenda for the future. However, it does not absolve the Government from facing up to decisions. There are many issues where the need for action is apparent and the remedies are obvious. This is one such issue and the least that could be done is to begin necessary quantitative research on the costs of disability which should underpin any new allowance.
To at least prepare for some action, the Minister does not need to wait for the commission to report but can prepare the costings to have the system in place. This is long overdue and we should not have to wait for the commission's report. The Minister should take immediate action on the matter.
The carer's allowance, to which the previous speaker referred was introduced by Deputy Woods as Minister for Social Welfare and was the first recognition of in-home carers. These people, 80 per cent of whom are women, provide a huge service to the community and underpin much of what is best within it. We are all supportive of carers but the allowance is flawed in many ways and the significant majority of people who provide 24 hour care do not qualify for it.
Before the budget, a number of representations were made to Government on areas of concern to carers. The most comprehensive submission was the excellent document from the Carers' Association. Through the work of that group and others, such as the Soroptomists who also concentrate on this area, many innovative ideas and suggestions were put forward to improve the development of a caring community. The areas which need to be addressed include training, income support and respite care. The latter is important. It is disgraceful that last year's respite care fund was administered in a ramshackle manner which seriously undermined the work of the experienced service providers. In fact, I had to raise the issue in the House on four separate occasions.
While the Bill proposes a welcome 8 per cent increase in the allowance as well as some other small measures, a range of fundamental issues have not been addressed. These include problems with social insurance, means testing and the use of the free travel pass. The previous speaker referred to the case of a constituent and there are many such cases where carers through the country are caring for elderly people on a 24 hour basis. These people must be recognised. The savings to the State in terms of the move from institutional care to community care as well as the time, effort and commitment which they provide to elderly people must be recognised.
Before we can accept the Minister's description of his own actions, we need to see some genuine innovation and commitment to change. This is not a simple argument about rates of payment. It involves the very structuring of schemes and the need to focus them on empowering individuals and meeting the most acute needs.
With regard to disability, it is important that we address the issue of how we empower individuals. Instead of restricting young people with disabilities and their parents as they grow up and learn to look after themselves, we must cut out the bureaucracy. Adults as well as children with disabilities — and their parents — must have a greater say in their own lives in future. We must empower them and one way to achieve that is through the disability allowance.
The Bill fails in a number of important regards and demonstrates a cautious, gradualist and ultimately conservative approach to reform. We expected more and are disappointed.
The Social Welfare Bill is one of the most important Bills to come through this House each year but I am sorry that we continue to have debates to which nobody listens. Nobody, not even the Minister, attends. In general, I wonder about the efficacy of this sort of debate. If nobody is here to listen, what point is there in Members spending time preparing for Bills and making known the concerns of their constituents? It is a matter which the House must address.
What is the mission of the Department of Social Welfare? It is supposed to be there to alleviate poverty and help people out of poverty. With regard to the former, the Department has had limited success but it must be deemed to have failed in helping people out of poverty. One of the most common features of schemes presided over by the Department of Social Welfare and analogous schemes in other Departments is the poverty trap. Well intentioned schemes introduced to help alleviate poverty end up trapping people in poverty. This is not an issue I am addressing for the first time, I have preached on it for at least ten years in this House.
On the sensitive and vexed question of unmarried mothers and the escalating number of claimants for unmarried mother's allowance or, as it is now known, lone parent's allowance, in the past three weeks a single parent with three children came to see me at one of my constituency clinics looking for a transfer to larger accommodation. In highlighting her plight she revealed that the father of her three children had been her common law husband for the preceding seven or eight years. She indicated they wanted to get married, but could not because if they did they would lose her unmarried mother's allowance, medical card and differential rent subsidy for her corporation dwelling. She could not, therefore, be honest. Not only is there a poverty trap, but a morality trap. Because of the way the social welfare system is administered, people who want to live honest lives are forced into immorality and to live a lie.
The following day at another clinic in my constituency an unmarried mother with four children who found herself in almost precisely the same situation came to see me. She revealed that no one in the Department of Social Welfare has ever asked the identity of the father of her four children with whom she has been living happily — a responsible, loving and committed father — for more than ten years.
In both cases the father is working. It is not right to do this, but these two specific cases can be used to illustrate a general problem.
I am director of elections for the by-election pending in the constituency of Dublin West. I attended a number of meetings in branches in working class areas there and in my constituency of Dublin Central, at which deep anger was expressed about the social welfare system. The feeling was that politicians must be crazy, stupid or insane not to do something about the absurdities and inanities of the social welfare system which is seen as trapping people in poverty. If people are honest or make an honest effort to find employment, they lose their benefits. Instead of being the main agency in combating poverty, the Department of Social Welfare is the main agency in trapping people in poverty.
When unmarried mother's allowance was introduced, by the late Frank Cluskey, it was seen as a compassionate step and a move in the right direction to help young women in distress. It was designed to help women with unplanned pregnancies, possibly using the rhythm method, but, because of the way it has been administered it now helps women who have planned pregnancies using the social welfare method.
A married person with children, will not receive one extra penny by way of a tax free allowance. This is absurd and one of the root causes of the poverty trap whereby one can be worse off in employment, if one has children. A person on social welfare receives a weekly allowance for each child, but no child allowance is payable under the tax system. Because of the way the means-tested social welfare and tax systems are administered, a person may not be better off in taking up a job. This is one of the main reasons few jobs have resulted from the magnificent economic growth in recent years.
When will we do something about this? We have to be angry. Many Deputies have preached on this subject for many years in this House, but the Department of Social Welfare and politicians on all sides have been ineffective. They have not faced the obvious by changing the system to alleviate poverty.
Well intentioned provision was made for the introduction of the living alone allowance and associated benefits but if one of the children of an elderly parent decides to move in, out of concern for the elderly parent so that he or she does not feel insecure or uncared for, the parent will lose the free television allowance, free telephone allowance, living alone allowance and so on. This is another trap with the result that the elderly are living alone in fear.
On the differential rent subsidy, many houses in my constituency are being transformed into multi-occupied dwellings — there are far too many tenements in some — because the scheme is highly lucrative for landlords. The cost of this subsidy which is paid by the Department of Social Welfare through the health boards has increased from £3 million a year about six or seven years ago to about £55 million this year. Large tracts of the city, particularly in Dublin Central and Dublin South Central, are being destroyed in the process. A subsidy of as much as £60 to £70 per week is being paid in respect of one bedroom tenement flats at a time when young couples can buy a house for around £40 per week. This is incredible stupidity.
Why is the Department of Social Welfare continuing to preside over such a system given that the environment is being destroyed and planning regulations breached? The one question the health boards will not ask landlords is whether they have building by-law approval and planning permission because they believe it is not their function to do so. In the meantime they continue to pay subsidies in respect of hovels, often at twice the cost of a mortgage for a three bedroom house. This is an outrageous waste of public money.
One of the reasons for the increased demand for rent subsidy is that the Minister for Social Welfare will not pay unemployment assistance at the full rate to young unemployed persons living at home, either of whose parents is working. They must leave home and apply for unemployment assistance at the full rate, a medical card and rent subsidy of £50 to £60 per week.
We all know this is happening — the Minister of State, Deputy Stagg, is nodding in agreement. Someone must call a halt. We must do something about this absurd situation which is costing the State a fortune and, has anti-social consequences, the reverse of what the Department of Social Welfare is supposed to be about. I am angry about this because I have been highlighting it for years. The people, particularly those in working class areas, are also angry, and will rebel against the social welfare system because they know it is absurd. They do not want to be caught in a poverty trap. The system must be amended.
When Ray MacSharry was Minister for Finance ten or 12 years ago he told me an interdepartmental committee had been established to consider having one means test for all social welfare benefits. At that time there were 17 different forms of means test and when people became unemployed six or seven means tests, with different criteria applying to each, were carried out before they received their entitlements. Despite raising this matter on numerous occasions since then we still do not have an agreed definition of means. Different criteria apply to means testing for medical card purposes, local authority rent allowances, unemployment assistance and civil legal aid. We are told that the embargo on recruitment in the Civil Service is causing grave difficulties but hundreds of civil and public servants — even in different sections of the Department of Social Welfare and health boards — are duplicating work and inconveniencing and degrading vulnerable people. A form that could be filled in at a local health centre for the purpose of assessing a person's net means should be produced. That would not cost a great deal of money.
Means testing should be a simple matter and should not be centralised. People should be able to go to their local health centres and have their means assessed by a community welfare officer. A person's means is made up of gross pay and benefits-in-kind less tax, PRSI, the cost of travel to and from work and, what might be termed, liabilities-in-kind. We are good at assessing benefits-in-kind, but we ignore those liabilities. People who live in Mulhuddart, Clondalkin or Tallaght are at a disadvantage in terms of transport costs compared to those who live near the city. People who live in Ballina, Navan or Clonmel can walk to the doctor's clinic or the shops whereas people who live, say, five miles outside those towns and do not own a car must hire a hackney car to avail of those facilities. Those liabilities-in-kind should be taken into account by local health centre officials. When a certificate of means is granted it should be acceptable to all statutory authorities for the ensuing year. Why is this not possible? I have been pleading for years for a single definition of means. The system is degrading, inefficient and the opposite to what should be in place. The Department of Social Welfare is degrading those in the anti-social mire rather than lifting them out of it. As the agency with responsibility for helping people get out of the poverty trap, it is a failure and the sooner that is recognised the better.
Members will be aware that I am chairman of the Select Committee on Finance and General Affairs which, following its pre-budget hearings last year, recommended that special consideration be given to widows over 50 years of age. At present many people who are widowed and whose children have left home live on a meagre allowance and, as well as being lonely, are among the poorest sections of our community. Many widows and widowers are waiting anxiously to reach 66 years of age when they will qualify for free travel, a free television licence, the electricity allowance and free telephone rental. Why will the Department not recognise the special plight of such people? I make a special plea for the provision of a supplementary payment in certain circumstances for those who are widowed, especially those over 55.
I wish to raise a matter which is dealt with in the United Kingdom's social welfare system. Far too many people resort to moneylenders. We should introduce a system of supplementary welfare interest free loans so that people who are desperate do not have to resort to them. If they do not qualify for a supplementary welfare grant, they should be able to qualify for an interest free loan which could be deducted from their weekly payments. This would go a long way towards helping the most vulnerable in our society.
Having deemed the Department of Social Welfare a failure in terms of assisting people who live in poverty, I have the utmost respect and admiration for the way the Minister, Deputy De Rossa, conducted himself as Minister for Social Welfare in the past 15 months. He is an intelligent man and he will reform the social welfare system. The Minister of State, Deputy Durkan, is one of the most hard working Members of the House as well as one of the most knowledgeable on this issue. We can expect change from them.
I do not usually address the House on social welfare legislation but I chose to do so on this occasion because I wish to comment on section 12 of the Bill. My party spokesman, Deputy Joe Walsh, and I will address the issue further on Committee Stage by way of amendment. Will the Minister make available to Opposition Deputies the advice given by the Attorney General on section 12 as it applies to Telecom Éireann? Section 12 (2) proposes to amend section 11 (1) of the Principal Act by the insertion of a new paragraph (aa) which states: "in such cases as may be prescribed by persons employed in Bord Telecom Éireann, or". The Government has slipped this major change into this Bill at the last minute instead of dealing with it in separate legislation.
This provision could cost the taxpayer £40 million-£50 million in any one year in the event of Telecom Éireann being partially privatised. It has been publicly stated that the Government has decided to sell off one third of the shares in Telecom Éireann. However, it is not intended to change the rate of PRSI paid by the employer. If, for example, Danish Telecom or Swedish Telecom buy one third of the shares in Telecom Éireann they will be treated to the reduced rate of PRSI. Why should a foreign private company be treated to the lower rate of PRSI at the expense of the taxpayer? This is a very dangerous precedent to create. Despite the presence of Democratic Left in Government, it has been decided to sell 35 per cent of the shares in Telecom Éireann. I do not need to tell the Deputies opposite what the decision to treat foreign companies to the lower rate of PRSI will mean. The standard rate of PRSI for employers is 12.2 per cent while the reduced rate is 2.2 per cent, which represents a 10 per cent gain for whatever company buys the shares in Telecom Éireann.
This provision, which will mean a saving of millions of pounds for whatever private company buys a stake in Telecom Éireann, is buried in section 12. It is devious of the Government to have slipped this provision into social welfare legislation in the hope that Opposition Members and the media who have an interest in it would not spot it. On 21 February last the headline in an article in The Irish Times stated, “Semi-State firms will not have to pay full PRSI” while another headline stated, “Telecom staff in PRSI boost”. The journalists who said that legislative changes were on the way were waiting for the introduction of legislation which would deal with the part privatisation of Telecom Éireann. They were aghast when they discovered that no such legislation would be introduced because the committee dealing with the part privatisation of Telecom Éireann had persuaded the Minister for Social Welfare to include the provision in section 12 of this Bill. No announcement was made, journalists were not informed and the Government hoped that the provision would not be noticed. That is dangerous but, unfortunately, it seems to be the way semi-State companies are dealt with at present — everything is done behind closed doors, there is no public debate and consultants' reports are not made public. The sale of one third of the shares in Telecom Éireann is being done in secret, no Dáil committee is dealing with the matter and no debate has taken place in the House. This change should have been highlighted and a separate debate held in the House.
I ask the Minister to make available to us the Attorney General's advice on this provision which will allow Telecom Éireann to retain its public authority status for PRSI purposes even though it may be part privatised. Regardless of the benefits to the employees, this should not be of benefit to the incoming employer. We may be creating a dangerous precedent. Incoming private employers who take up a stake in State companies should compensate the workers and the State for the reduced rate of PRSI awarded to them. I will table a parliamentary question to ascertain the full cost of this provision. When I did so previously I was told that as legislation was being considered it was not possible to cost it. However, at the time I was given that reply this provision was being slipped into the Social Welfare Bill.
The State will have to pick up a tab of approximately £50 million per year for private companies or investors which buy shares in Telecom Éireann. Why will the incoming companies not be made liable for the costs? Why did the Cabinet subcommittee, made up of four Ministers, not make it a condition of the sale of the shares that the full rate of PRSI should be paid by the employees and employers and that the employees should be compensated by the incoming company? In other words, why are they not required to bring the status of the workers in Telecom Éireann up to that of other employees in the telecommunications industry and give them the full benefits. If the company is moving into the private commercial world then the full rate of PRSI should be paid by the purchaser and the full benefits should be made available to the employees in the same way as they are made available to employees working in competing telecommunications companies. It is disgraceful that this point has not been properly addressed and that the State may have to pick up an extra bill of £50 million per year on the part privatisation of Telecom Éireann. This issue should be urgently addressed.
Will the Minister explain how this provision is consistent with our membership of the EU and competition legislation? There is a very strict barrier — when I was on the other side of the House I experienced this on many occasions — to the provision of State aid to public companies. The granting of the reduced rate of PRSI to a company which buys shares in Telecom Éireann will be deemed by the EU to be a State aid. I predict that the EU will question this issue when the shares are being purchased. What legal advice has been given on the EU aspect? How is this provision consistent with competition law? No Deputy holds a brief for any company but what will be the position of other telecommunications or electronics companies which compete directly with Telecom Éireann? Phone-watch, which Telecom Éireann operates, has direct competition in the market at present.
Section 12 must be amended because it contravenes not only EU law but Irish competition law. This could happen once someone buys a share in Telecom Éireann, for example, and another company decides to operate in the telecommunications business. A company was recently given a licence in the mobile telephone area. A company could take a case to the Competition Authority or to the High Court which it would win on the basis that different PRSI rates applied in the private and public sectors. This section could be unconstitutional. I am not a lawyer but I was involved in the competition law area when I was in Government and I know when a basic principle is breached. A private company could own a substantial slice of Telecom Éireann, which would make it a part private company, yet there could be different rates of PRSI for private companies. No court would stand over a different rate of PRSI for companies in the same business, all of which have private sector involvement.
I ask the Minister and the Department officials to examine this section again, to consider any amendments which are tabled and to ask the Attorney General if what they are doing is right. It might solve a political problem but this section will be a headache for the Department officials long after this Minister has gone. This anomaly, particularly in relation to other private players in the business, will leave the State open to legal actions.
This solves a problem for Telecom Éireann but what happens in relation to An Post or other non-commercial State companies? I am aware that commercial State companies pay the full rate of PRSI. Will the same type of situation arise if, as has been recommended, part of Bord Fáilte is sold? A journalist in The Irish Times on 21 February said that the change will save semi-State companies, such as Telecom Éireann, the ESB and Aer Lingus, hundreds of millions of pounds. This suggests that anyone who owns a part of those companies will also save. Why should we save the purchasers of parts of these companies millions of pounds? We should think this measure through properly because such a precedent will cause a lot of trouble in the future.
The workers in Telecom Éireann are entitled to the full benefits, therefore any incoming company should make up the difference in their PRSI. We should not allow a second-class PRSI situation to continue in that company. Perhaps the Minister could tell us what discussions have taken place in Brussels on this matter.
What is the position in Irish Steel and in Greencore in this regard? As Greencore was a commercial State company before it was privatised, it probably had the same rate of PRSI. Did Irish Steel pay the full rate of PRSI before privatisation and what is the position now? I would like to know if this is part of the now failed Telecom Éireann strategy. The Minister for Transport, Energy and Communications, in a reply to my parliamentary question on PRSI, stated that "the question of changing the current PRSI status of other companies operating in the telecommunications sector does not arise". How will other telecommunications companies respond to that? The Minister is saying that one telecommunications company can have one rate but its competitors must have another rate. We are introducing legislation to ensure that the purchaser of one third of Telecom Éireann does not have to pay the difference. This is a handout to the incoming purchaser which is unnecessary and sloppy. This decision was not thought through like a number of other decisions in the Department of Transport, Energy and Communications.
I ask that the Attorney General's advice is made available, the Brussels discussions are unveiled, separate legislation on PRSI is introduced, an assessment of the constitutionality of the section is undertaken and a full costing of the implications of this decision for Telecom Éireann and for future disposals of parts of State companies is carried out.
Most of the issues raised by the previous speaker are more appropriate to Question Time or to another debate. I gave a comprehensive reply last night on Telecom Éireann, therefore the Deputy's continued reference to the failed procedures in that company do not arise now.
I am pleased to have the opportunity to contribute to the debate on the Social Welfare Bill, 1996. This is wide-ranging legislation which reflects the twin aims of the Government in the area of social welfare. It gives effect to the general increases in social welfare rates announced in the budget which ensure that the standard of living of those dependent on the social welfare system for some or all of their income is maintained and improved; and, second, it introduces a range of positive measures designed to assist in the transition from unemployment to employment, with particular emphasis on meeting the special needs of the long-term unemployed.
In introducing the Bill, the Minister for Social Welfare, Deputy De Rossa said he believed that it contains some of the most significant changes ever proposed to our social welfare system. I agree fully with his assessment. While the various measures contained in the budget are given a legislative basis in the Bill, other far-reaching reforms of the social welfare system are also included. The timely introduction of two new payments — the disability allowance and the one parent family payment — is indicative of the extent of the reforms being carried through. The budget introduced earlier this year was widely welcomed for its emphasis on the development of an integrated approach. across a range of Government Departments and agencies, which sets out to address effectively the most pressing social and economic problem facing us today, that of long-term unemployment.
That budget was framed against a background of a successful, thriving and well managed economy, with an increased level of job creation, low inflation rates, low interest rates, and a newly confident business sector.
I would like to look first at the general increases in social welfare which are contained in the Bill — in section 3 to 5.
The Bill provides for improvements, in real terms, for all weekly payments and all adult dependant allowances. While inflation this year is projected to be 2.25 per cent, all payments will go up by more than this — on average, by about 3 per cent. In practical terms, there will be at least an extra £2 per week on all personal rates and at least £1 extra on adult dependant rates.
These increases represent real progress towards achieving the target rate set some ten years ago by the Commission on Social Welfare. That target rate, updated from 1986, is now £68.10 per cent week. The increases provided for in this Bill bring more groups up to that target rate. Indeed, for the first time, widows, widowers and deserted wives have reached the target rate; while contributory pensioners continue to be well ahead of it. Carers and invalidity pensioners are now on 99 per cent and 97 per cent of the rate, respectively; this is in contrast to references made by Opposition speakers last evening and all other groups are either at 92 per cent or 95 per cent of the target rate. These improvements represent real progress and will ensure that the standard of living of all social welfare recipients will increase in 1996. This does not, of course, give grounds for complacency and I share the hope that it will be possible next year to complete the process of bringing all groups up to the target rate of the Commission on Social Welfare.
In the interim, the Minister for Social Welfare, in line with the commitment in the Programme for Government, has commissioned the ESRI to review the minimum adequate income rates that were recommended by the Commission on Social Welfare and I look forward to examining its views on what the new target rates should be in the light of all the changes since the commission first reported.
Section 5 provides for further substantial increases in child benefit, consolidating and further developing the policy direction initiated last year, which aims to tackle poverty effectively by targeting resources at those families most in need. Child benefit this year is being increased by £2 per child per month from next September, bringing the monthly payment to £29 for the first two children and to £34 for the third and subsequent children. Taking the last two years together, a 45 per cent increase has been provided in respect of the first two children and a 36 per cent increase for other children.
The effectiveness of child benefit as a means of tackling poverty is beyond question. The advantages of the payment are manifold. It is a universal payment; it is not taxable; it is not withdrawn when an unemployed parent takes up employment; and it is not assessed as means for other secondary benefits such as differential rents and medical cards. It cannot, therefore, act as a disincentive to taking up employment or improving wages. On the contrary, it provides a secure and well-targeted income support to those rearing children.
The last speaker and others seem, over the past couple of days, to be proposing an attack on child benefit which I am sure will be watched very carefully by women.
Section 5 of the Bill also contains another innovative measure which is to be welcomed — I refer to the increase in allowances for the parents of twins. This recognises the significant extra costs involved for the parents of twins. The current grant of £200 payable on the birth of twins is being increased to £500 and a new grant of £500 is being introduced which will be payable on the twins reaching the age of four and the age of 12. These new grants recognise the particular financial pressures which arise for parents of twins when the twins enter primary and secondary school.
I am particularly pleased that the Bill, in section 4, provides for a substantial further increase, over and above the general increase for all social welfare recipients, for those in receipt of the carer's allowance. The weekly personal rate will now amount to £67.50 which represents an 8 per cent increase on the current rate. Over 8,000 recipients will benefit from this special increase. Allied to the various improvements in the allowance since it was introduced back in 1990, this substantial increase demonstrates the willingness of the Government to recognise the special position of carers on low means who are undertaking what is often an extremely demanding and indeed, in some cases, a lonely role.
Having welcomed the substantial increases in social welfare rates of payment, I would now like to turn to an equally important aspect of the Social Welfare Bill — the strong focus on pro-employment measures.
In recent years, the labour market has undergone significant change with different patterns emerging in terms of both the hours people work and the type of work being undertaken. The challenge for those of us working in the area of social welfare reform is to ensure that the system is sufficiently flexible to accommodate these changes. In short, the system of delivering income supports and social services must ensure that no one can be fearful that they will be worse off as a result of taking up any form of work, however atypical or unorthodox it might be.
Perhaps the most important reform in this area contained in the Social Welfare Bill relates to the fundamental changes in the assessment of means for unemployment assistance. Hitherto, this has been a hugely complex area, both for the staff of my Department and, most notably, for the people in receipt of the payment.
The reform of the unemployment assessment scheme set out in section 22 of the Bill will have two immediate consequences. First, it will greatly simplify the system, thus making it far easier to calculate the real value of any earnings gained from casual or part-time work. Second, it will provide a positive incentive to take up any opportunities which may arise for casual or part-time work by ensuring that people will be better off if they do.
This reform arises directly from the work of the Expert Group on the Integration of Tax and Social Welfare, which has been working intensively over the last couple of years to find the best way of removing unemployment and poverty traps arising from the interaction of the two systems. The work of that group is now nearing conclusion and I understand that it will submit its final report to the Minister for Social Welfare within the next few months. In the meantime, the group made a number of valuable recommendations in advance of the 1996 budget which were adopted and which are now being implemented through this Bill. I pay tribute to the integration group for the long hours they gave to their task in the past few years, and particularly during the past 12 months when I had an opportunity to observe them more closely.
A further vital area of reform is set out in section 7 of the Bill. This section provides for the retention of child dependant allowances for up to 13 weeks for people in receipt of full-rate social welfare payments and who have been unemployed for 12 months or more when they take up full-time employment which is expected to last for a minimum of four weeks. This reform will remove a significant disincentive to taking up employment opportunities for the long-term unemployed with families who would previously have faced the immediate loss of these allowances. This reform is precisely the type of thing I was speaking of earlier when I referred to the need for the social welfare system to be flexible enough to facilitate the transition from unemployment to employment.
The reforms of the PRSI system, as set out in section 8 to 12 of the Bill provide more evidence of the Government's desire that employers should be assisted to make jobs and the unemployed should be assisted to take jobs. Most notably, the Bill provides for a substantial increase, from £50 to £80, in the weekly PRSI-free allowance for employees. It also introduces a reduction in both the lower rate of employers' PRSI — from 9 per cent to 8.5 per cent — and in the higher rate — from 12.2 per cent to 12 per cent.
As Minister of State with specific responsibility for customer relations, I welcome in particular the provisions in sections 30 to 32 of the Bill which deal with appeals procedures.
Section 30 makes provision for an independent appeals system for people whose claims for supplementary welfare allowance have been turned down by the health boards. I have been aware of the criticisms of the existing supplementary welfare allowance appeals system for some time now — and many Deputies will have heard complaints from their constituents about the adequacy of the current arrangements. I am delighted, therefore, that people who have appealed unsuccessfully to the health board against an adverse decision on a claim for a social welfare allowance will now have a further avenue of appeal through the Social Welfare Appeals Office.
This right of appeal to the Social Welfare Appeals Office will be provided initially in respect of claims for basic social welfare payments and for the rent, mortgage and other supplements available under the scheme. When we have ensured that the administrative arrangements for appeals against adverse decisions in respect of the basic social welfare payments and supplements are working efficiently and satisfactorily, the question of extending the right of appeal to include the main remaining entitlement under the SWA scheme — the exceptional needs payment — can then be considered. Because of its discretionary nature, the exceptional needs payment is quite different from the other SWA payments.
Section 31 provides for regulatory powers to specify the procedures to be followed on appeals decisions relating to claims for both social welfare payments generally and for supplementary welfare allowance. Regulations will be made under these powers which will require that claimants will receive in writing the reason or reasons for an adverse decision. That is in keeping with our policy to provide as much information as possible.
These provisions will significantly strengthen the rights of those who are in contact with the social welfare system. They will ensure that people have a clear understanding of the basis of adverse decisions and assuage any fears that decisions are being made in an arbitrary fashion.
A further amendment to the existing provisions which must be warmly welcomed is contained in section 32. This amendment relates to revised decisions by deciding officers, appeals officers and officers of the health board in the case of supplementary welfare allowance where a new fact comes to light which results in a revised decision being made which reduces a person's entitlement. Under the revised provisions the deciding officer will have discretion to decide that the reduction in entitlement should only take effect from a current date where, for example, he or she concludes that the person concerned could not reasonably have been expected to know the relevance of the fact. This measure is designed to improve and strengthen the rights of those who have contact with the social welfare system.
During the debate the Department received some bouquets and some brickbats. I listened with interest to my colleague, Deputy Mitchell, who raised the issue of standardisation of means tests. That matter must be viewed in the context of the integration of the social welfare and taxation codes. That was a recommendation of the Committee of Public Accounts which the Deputy chaired and of which I was a member. If we adopt a sticking plaster approach to amending the system further difficulties will be created.
Deputy Mitchell suggested that there should be a check on lone parents and deserted wives. Such a measure is already in place. I have as much experience as any Deputy of dealing with queries and I know there are two sides to every story. The system must be caring and compassionate but we must also ensure that everybody complies with the law. People will try to circumvent the system but that is not peculiar to the social welfare code. However, applications will be received from vulnerable people who have no resources and little advice available to them.
Widows and widowers under the age of 66 years do not benefit from free schemes and so on and that matter must be examined. As regards the UK system and the activities of moneylenders our system is considerably more compassionate that that in the UK. The Department has made every effort to ensure that advice on money lending is made available to as many people as possible thus obviating the need for recourse to moneylenders. That service is being extended throughout the country. Before Christmas the Minister made a special award to the Society of St. Vincent de Paul. While the amount may not have been as great as people would wish it was a recognition of the difficulties faced by voluntary agencies.
The pro-employment approach adopted by the Department is fully supported by the parties in Government. The Department operates the back-to-work scheme which resulted in 6,000 new businesses, employing 10,000 people, being created in 19 months. The enterprise magazine of Forbairt stated that the success of the scheme was nothing short of outstanding and the fact that more than 6,000 businesses in the self-employment sector were created indicates the enormous potential that exists for further job creation. That accolate is well deserved by the Minister and the Department.
We owe a debt of gratitude to the officials in the Department, especially those who serve in the Minister's office and the Minister of State's office, for their tremendous work in pursuing the schemes operated by the Department, the benefits of which are enjoyed by the people.
The social welfare system is a major achievement of modern society designed to provide support and assistance for the weakest and most disadvantaged. It is essential to look at the structure of the system as we approach the year 2000. Social welfare accounts for one-third of Government spending. In 1996 more than £4,000 million will be spent on the system.
The changing role and status of women in society presents a challenge which the system has to meet. Married women participate to a greater extent in the labour force and the system must be adapted to take account of this. It must recognise women's independence and move away from the concept of dependency. Wives should be entitled to half of their husband's entitlements, particularly if they have families. Equality for women, the disabled and other disadvantaged groups must be a key objective of Government policy. This was emphasised in a report published by the National Economic and Social Forum last week. It sets out a range of sensible measures to ensure equality for women, people with disabilities, travellers and others. The sooner its main recommendations are implemented the better.
How does this Bill measure up to tackling the problem of unemployment? In fairness to the Minister for Social Welfare, the cuts in PRSI contributions are positive and are welcomed by employers who wish to take on staff. There are proposals to change the means test for those on unemployment assistance who take up part-time work. The details have yet to be announced but presumably it will be an improvement on the current chaotic system. Unemployment is rising rapidly in areas where one would least expect. For example the number on the live register increased dramatically in the past six months in Killarney. In early February, the figure was 1,900 whereas at this time last year it was only 1,400. This is a matter of serious concern not only to the local community. The additional cost to the Exchequer should be of concern to the Minister.
The Government's response to the unemployment crisis is not correct. The Department of Social Welfare, FÁS and the local employment service are supposed to provide information, advice and assistance directly to people seeking work. Other bodies including IDA, Forfás, Forbairt, county enterprise boards are involved in job creation. One may ask how does an employer or someone seeking work find his way around this maze? Instead of adopting a coherent plan to tackle unemployment the Government is relying an old structures that need to be modified.
How did the Bill respond to the recommendations of the most recent task force report on unemployment? The task force recommended that a range of schemes operated by the Department of Social Welfare, including the back to work allowance and the part-time job incentive scheme should be examined in the context of other income supports for people on low pay such as family income supplement and PRSI exemptions and other measures to address the interface of tax and social welfare. Its report outlined the complexity in the range of income support measures in place for those in low paid employment. It considered that the roles and objectives of individual measures need to be clarified and streamlined to ensure they complement one another. There is nothing specific in the Bill that provides for the implementation of the proposals in the task force report. I would like to see a special task force being set up by other Ministers in towns such as Killarney where unemployment is increasing, and there is a corresponding drop in the numbers employed in manufacturing industry.
A range of measures to assist the elderly should have been introduced in this Bill but the Government introduced a totally inadequate proposal to grant tax relief in respect of the installation of burglar alarms for those aged 65 and over who live alone and pay tax. The vast majority of people over 65 years in receipt of social welfare do not pay tax. The response from a wide range of bodies indicated the need for a much wider level of support for elderly people.
The Minister set up a task force to examine this issue. The solution is clear, there should be a social welfare payment to assist elderly people to make their homes secure. This would cut out many obvious problems. A problem created by the social welfare system is where a son or daughter lives at home and applies for unemployment assistance or benefit and the family income is taken into account. If he or she rented accommodation he or she would get a rent subsidy from the health board. These subsidies cost a considerable amount of money. Another problem created by the system is that at a time when interest rates are at their lowest in living memory, the Department of Social Welfare assesses capital at the rate of 10 per cent in estimating the means of elderly people and it is proposed in this Bill to assess it at 15 per cent for some claimants. Does the Minister intend to extend this to old age pensioners? Does he realise it is totally counterproductive as people will be afraid to lodge their money with the credit union or any other financial institution. Now is the time to reduce this percentage to reflect the current interest rates. The interest on deposit accounts is low and in addition DIRT and service charges are deducted. Pensioners are really afraid to lodge their money with financial institutions and this gives rise to other problems.
In April 1988 the PRSI system was extended to the self-employed but those aged 56 and over when the scheme was introduced, find they are ineligible for the old age contributory pension although they are required to pay PRSI contributions up the age of 66. This qualification criterion is totally inflexible and penalises many thousands of self-employed people, including farmers. Surely the Minister could have introduced flexibility into the scheme, for example by allowing these people to buy additional contributions, to continue to pay contributions beyond the age of 66 years in order to meet the qualification requirements or to provide a pro rata pension payment based on their contributions. I received a great many complaints and requests for information on this matter from farmers aged over 66 years who are very concerned about it. Will the Minister be prepared to introduce a scheme whereby retired farmers could make additional payments so that they would qualify for a contributory pension? Those who were 63 and over when they joined the scheme in 1988 do not qualify for a pension.
The extension of the PRSI system to the self-employed with effect from 6 April 1988 brought in £91 million to the Exchequer in 1994. Having regard to that large amount of revenue collected, the Minister should address the plight of farmers and other self-employed people.
This Bill performs badly in dealing with women. The 1993 report of the Commission on the Status of Women recommended that the term "qualified partner" should be substituted for the term "dependent". It also recommended that social welfare payments should be divided between the recipient and the qualified partner, the dependent spouse. Qualified partners should be issued with their own allowance book and the Government should work towards establishing a system of individual rights and payments under the social welfare and social insurance systems by 1997. None of those recommendations are addressed in the Bill. While the Minister may say he introduced a benefit for lone parents, I hope he will state why that payment will be means tested when more than a year ago he specifically announced such a test would not apply to this scheme.
I wish to raise the question of entitlement to contributory old age pensions of applicants over 66 years of age who paid contributions in their early working life but did not pay any for a long period and later took up insurable employment for say, 16 to 18 years before reaching the qualifying age for a contributory old age pension of 66. The reckonable assessment period for qualification for contributory pension for such applicants is either 1963 or the first date they paid contributions. There is an anomaly in the scheme. I know of a person who paid less than 12 contributions in 1961 and was not in insurable employment until the early 1970s. That person was granted a substantially reduced contributory old age pension in the early 1990s because the period from the date of the earlier contributions to the date of application was taken into account for the purposes of determining the average number of contributions paid. This system is unfair, particularly in regard to people who have a lapse of contribution payments in excess of ten years, and it should be changed. The Minister should take special note of this, given that it does not involve many people. By addressing the matter he would help many people who have given this country good service in insurable employment.
The decision not to give an additional payment to people in residential institutions was a tough measure. How does that fit in with the Government's commitment to equality? As a result of this measure many people with disabilities in residential institutions are expected to live on a weekly pittance. This has been heavily criticised by the Ombudsman and it is time this archaic measure was dropped. I received numerous complaints about it from people with a family member in institutions and from people in institutions.
The Fianna Fáil Party will introduce amendments on the measures I mentioned on Committee Stage. I intend to introduce amendments to give effect to the recommendations of the Commission on Social Welfare and the National and Economic and Social Forum to establish a charter of rights for all claimants. I acknowledge there are many provisions of significance in the Bill which will help the less well off in the community, but much more could and should be done having regard to the large sum of money spent on social welfare annually.
The Social Welfare Bill is one of the most important brought before the House annually. Its provisions impact on a large number of citizens. Approximately one million people, including those totally dependent on it, benefit from social welfare. In most cases those people are among the less well off. I congratulate the Minister for Social Welfare, Deputy De Rossa, on a number of the provisions in this lengthy and detailed Bill. It is impossible in the time allocated to comment on all of them. I will confine my remarks to areas where there has been fundamental change.
The Bill puts on a legal footing many of the changes announced by the Minister for Finance on budget day and it must be considered in that broader context. I welcome the general increase in social welfare insurance and assistance rates. It is also welcome that the 3 per cent increase in benefits is significantly higher than the expected rate of inflation. In conjunction with the package for the long-term unemployed announced in the budget, these provisions will go a long way towards tackling the problem of marginalisation in our society. Despite the remarks of some Opposition speakers about social welfare payments, I do not, and I am pleased the Minister does not, support the concept of a reduction in unemployment assistance or unemployment benefit payments as an incentive to encourage people to return to work. From my experience I am not aware of anyone who does not want to get back to work, even by way of the community employment or CORI schemes.
The Government adopted the correct strategy, that of offering positive inducements in this area. This is a far superior way to address the sensitive issues of dealing with the needs and demands of families. Some of those measures are included in the Bill such as the reduction of employer's and employee's PRSI contributions, the maintenance of child dependant allowance for the long-term unemployed when returning to the labour force and the increase in the income allowed for qualification for family income supplement. Those entitlements are a great incentive for the long-term unemployed to take up employment. For too long because of poverty traps and disincentives the unemployed have been reluctant to take up employment, or even participate in community employment schemes.
I congratulate the Minister on these matters. I pay tribute to the Minister of State, Deputy Durkan who has attempted to unravel some of the complications in the system and has been successful in finding solutions to some of the problems highlighted by our representations.
I welcome the increase in child benefit. That benefit has been increased by more than 85 per cent since my party come to power in 1992. This will help prevent further poverty traps. I am pleased the Bill continues the good work done in this regard in recent years. The increase in the threshold for PRSI payments is particularly welcome. We must continue our efforts to make progress in this area. I have no doubt about the Minister's commitment in this regard. He is aware of the problems that exist, as are many Members of the House.
The social welfare system is very complicated. Not only are there difficulties in operating it but there is lack of awareness of entitlement. Many people do not understand the implications involved, for example, in transferring from long-term unemployment to disability benefit. People whose disability benefit is discontinued following a medical examination often find they are entitled to very little unemployment benefit — payments in some cases are as low as £28 per week. People in those circumstances are forced into the supplementary welfare system, and some are even driven to commit suicide.
Many of these problems are not unique to Ireland. In Britain, for instance, there is an ongoing debate about reform of the social welfare system which was devised about 50 years ago and is no longer deemed to satisfy modern requirements. Fundamental reform must be undertaken. Although this Bill has not been generally accepted by the Opposition, it goes a long way towards bringing in fundamental reforms. However such reforms must not be introduced at the expense of those who depend on the State for their survival.
In the recent report of the Comptroller and Auditor General on means testing there is specific mention of the Departments of Social Welfare, Health and the Environment. The Minister shares my view that means testing is an odious practice. The cost to the State of this unpopular and manifestly, unnecessary system is very high. In his report, the Comptroller and Auditor General indicated that current arrangements in the Department are in many cases costly and unnecessary. Means testing costs the Government £15 million and up to 600,000 people have been investigated. At times false accusations are made against the unemployed as a result of rumours or complaints. I am sure the money spent on means testing could be better spent on those who need it. The report of the Comptroller and Auditor General states that up to 40 per cent of people examined were found to be legitimate or had been already means tested by another agency. For example, where a person, who has been means tested by the Department for social welfare payments, applies for a medical card another means test is undertaken by the health board, thereby incurring further expense.
I accept that the Minister initiated reform in this area. I am aware that this is not a simple matter, but it is a cause of concern that so much money is spent chasing people on the lowest levels of income. I hope the expert committee on the integration of tax and social welfare, which is due to report soon, will address some of the points I made and that the Minister will be in a position to make the changes necessary in this area.
The Bill proposes to simplify some aspects of the system. For example, responsibility for payment of disabled person's maintenance allowance, now called disability allowance, is to be transferred to the Department of Social Welfare. I compliment the Minister on taking this long overdue step. Most Deputies are familiar with the delays surrounding the processing of payments by health boards. I am aware of applicants for disabled person's maintenance allowance who had to wait two or three years for a decision. When I brought these cases to the attention of the then Minister for Health by way of parliamentary question I discovered that there was a go-slow in the offices investigating this matter. The applicants, who were obviously unhealthy and incapable of working — some were mentally handicapped — were in need of payments. I had to resort to the Ombudsman's office to ensure payment was made from the date of application. I welcome the transfer of this scheme from health boards to the Department of Social Welfare which, through the Minister and Minister of State, is accountable to this House. This measure represents the logical transfer of a matter that should always have come within the remit of the Department of Social Welfare.
Section 36 provides that the regulatory powers for supplementary welfare allowances be transferred to the Department of Social Welfare, although these payments will continue to be made by health boards through the supplementary welfare officers. I look forward to the day when that scheme will be transferred fully to the Department as that will provide for a much better service. The announcement of the transfer of these schemes to the Department is welcomed by everybody. Whatever we may say about the Department of Social Welfare, it is accountable to this House, unlike health boards that operate with self-structured autonomy.
I am also pleased that those in receipt of supplementary welfare allowance will be given the right to appeal to a departmental appeals officer, a right which has been lacking for too long. Under section 33 the Minister is also correct in providing direct access to the Social Welfare appeals office in the case of workers engaged in a trade dispute without the requirement of having previously appealed a deciding officer's decision. I hope this will eliminate many of the difficulties experienced in industrial disputes, particularly those in the course of the closure of the Irish Press.
Despite much initial criticism the summer jobs scheme for students has been extremely successful. I have already tabled a parliamentary question and discussed some anomalies in the scheme with the Minister of State, particularly an additional payment to students whose families are in receipt of social welfare benefits on termination of their participation in that scheme. I came across one glaring anomaly in the case of a large family where the father earned a few pounds as a shoemaker. The family was in receipt of means tested social welfare benefits. While the father's total income was similar to that of another family in receipt of social welfare benefits, because he had been sufficiently motivated to engage in such work, about which the Department was aware, two of his children were disallowed additional payments under the summer jobs scheme.
The back-to-work scheme providing a minimum weekly payment of £40 should be examined. There should be no embargo placed on those who want to be omitted from the live register and be reinstated in the workplace.
Last November I participated in a delegation from the constituencies of Tipperary North and Tipperary South which discussed with the Minister a major problem which had festered for the past 20 years or so. I refer to the Ballingarry miners who, unfortunately, contracted the dreaded miner's disease leaving them incapacitated. Since they worked for an employer who had become bankrupt at a time when ordinary employment insurance cover was in existence, before the occupational injuries scheme came into operation under which they would have qualified, they were excluded. Many of them have died already but some at least would have qualified for disability benefit or occupational injuries allowance. In this Bill the Minister has wisely provided under the constant attendance allowance that, subject to a medical examination, those remaining men will qualify for additional non-means tested constant attendance allowances which will address their dilemma. I commend the Minister on this.
The Minister of State, Deputy Durkan, mentioned widows, agreeing with other Members that those below the age of 66 are particularly vulnerable. Their late husbands perhaps qualified for free electricity and other allowances, of which they are deprived at a traumatic time. Their level of payment is one of the lowest and warrants examination to ascertain how we can improve their benefits, particularly in the case of those to whom I have just referred.
I might also alert Members to the present currency fluctuations between sterling and the IR£. I am glad the Minister has confirmed that, in the course of reviewing non-contributory payments, he will examine their augmentation.
The announcement of a tax free allowance for old people who instal an alarm has sent the wrong signal since many of them would not feature in our tax code and, therefore, would not benefit unless through such an allowance being transferred to a relative who might incur the cost on their behalf. I am glad the Minister has initiated an inquiry into this issue to ascertain how such installations could be funded by the State, through local authority assistance or whatever.
This Bill represents a major step forward on legislation in this overall area, tackling some unemployment traps which have dogged our system for so long and containing a number of meaningful reforms guided by the need to simplify and clarify the system overall. The Minister is to be congratulated in that he has demonstrated an amount of ingenuity in effecting these necessary changes. For far too long there has been a tendency to effect piecemeal improvements of the system which, while welcome in themselves, merely added to its overall complexity.
I look forward to further improvements in next year's Bill. I have no doubt that some of the legitimate points raised in the course of this debate will be addressed by the Minister when replying. I commend the Bill and have pleasure in supporting it.
Fianna Fáil regards social welfare as one of the most important of our departmental structures. Indeed, Fianna Fáil has a record of social advancement. It is a top priority of our party to give priority to the care of the less well off, deprived and disadvantaged. Our record speaks for itself, one of caring and compassion to ensure all citizens enjoy a reasonable standard of security and comfort in their daily lives.
I am not at all satisfied that this Bill will do much in caring for and showing compassion for those in need and in receipt of social welfare payments. It ignores the real problems of those entirely dependent on social welfare. Despite what the Minister or other Government speakers have said, it does not attempt to come to grips with real poverty traps.
This Bill, which gives effect to the social welfare budgetary provisions, contains no innovative measures. There is continual mention of the one parent family payment and disability allowance. The first represents a step in the right direction but the second merely involves the transfer of administration from health boards to the Department of Social Welfare.
It is important to recognise that this Bill has been introduced against a background of widespread lack of public confidence in the achievement of this Government. We heard much from the three parties when in Opposition on what could and should be done. Even when Fianna Fáil were attaining real aims and objectives in Government——
What were they?
It has a proven record. The then Opposition parties did nothing but criticise. Perhaps Deputy Connor would like me to read from the Official Report as late as 1992, although perhaps the Minister would prefer that I did not read his or his party's contribution to the Social Welfare Bill of that year.
The Deputy is a free agent.
I would be happy to read Deputy Connaughton's contribution. Deputy Connor and most other people know exactly what I could read.
Do it.
If we were to evaluate the success of the Government over the last number of months, not just in the area of social welfare——
Remind me of how good it was.
——there is nothing which warrants a seal of approval. There was an increase of 2.5 per cent in social welfare payments in 1995 and a 3 per cent increase this year. The Minister in Opposition criticised increases of 4 per cent and 5 per cent which were introduced by Fianna Fáil.
What was the rate of inflation at that time?
The year 1995 can only be described as a black one for social welfare recipients. The cruel reality is that, notwithstanding all the promises which were made, nothing has been achieved. The Minister talked freely when in Opposition about what should be done for recipients. He now tells us of his difficulties and the hard decisions he must take as Minister and as a party leader.
On 14 December I asked the Minister about the number of personnel in his office in the Department. He informed me that he has 17 staff in his ministerial office, including a private secretary, a programme manager, three executive officers, seven clerical officers and two clerical assistant typists. He went on to inform me that the staff incur travel and subsistence expenses. He stated that to support his role as party leader in Government a small research unit had been recently established to provide him with advice and analysis on policy proposals which arise on the general Government agenda outside his Department. After he replied to this question we heard about the famous advertisement in the Democratic Left magazine, Forum. If the Minister were in Opposition, what would his reaction be if a Minister for Social Welfare had 17 staff and five additional advisers politically associated with his party? I think he would scream to high Heaven and his colleague, Deputy Rabbitte, would talk about information which would rock the foundations of the State.
What has this to do with the Bill?
The Minister has deserted his principles.
It is something for a Fianna Fáil man to talk about deserting principles.
Even though the Minister had a real opportunity, he failed to bring about any improvements in social welfare. I am a relatively new Member. When I first came to the House I listened to all contributions, particularly the Opposition viewpoint. I heard the Labour Party and Democratic Left say that farmers should be taxed because the PAYE sector is paying too much. I heard soap box lines which sounded good. Improvements in free schemes were advocated.
Since the Minister took office I tabled many questions but I do not think it is appropriate for me to go over them. However, the Minister's answers to questions on developments in the free schemes, such as the minor alteration of hours in the free travel scheme, have been sad. He keeps using the old rhetoric about the financial implications. People expected better from him because of the arguments he made in Opposition. He has allowed himself to be browbeaten by the rhetoric coming from the Department such as "this can only be considered in the budgetary context" and "this cannot be achieved because of the financial implications".
Did Fianna Fáil Ministers never give that kind of reply?
That is the point. The Minister was never satisfied with such replies.
Does the Deputy, therefore, agree with the Minister's answers?
No. Fianna Fáil has a great proven record in the area of social advance for the less well off. I would be happy to debate — perhaps in another forum — with any Member the achievements of Fianna Fáil with regard to social welfare recipients compared to the achievements of other Governments.
What about the dirty dozen?
The pattern of change which reflects modern society and affects over 1.5 million people who benefit from social welfare warrants special focus. As we approach the 21st century, most Members support the view that the existing structures require a radical alteration. There are many challenges facing the social welfare system. I do not have time to deal with all of them but I will touch on a few.
The group referred to as the ageing population is huge and many reports have been published on it. We recognise that this will lead to significant additional expenditure in the years ahead. There are many simple measures which should have been introduced in the Bill but were not. I already dealt with some of them, such as the free schemes. My party spokesman, Deputy Joe Walsh, spoke about the crazy situation with regard to the 10 per cent assessment by the Department of people with nest eggs of a few pounds. I understand that a simple regulatory order or instruction issued by the Minister could result in this matter being assessed.
Deputy Walsh was again shocked.
Successive Ministers have had blinkered visions with regard to the carer's allowance. The Departments of Social Welfare and Health should put their heads together. If Deputy Connor reads my contributions in previous debates on social welfare, he will see that when my party was in Government I also asked for this to be done.
With great success.
Sadly, this was not achieved. It is about time the Ministers for Health and Social Welfare came together, not just to introduce payment of another benefit but to achieve what the carer's allowance was intended to achieve when it was first introduced. The Minister was a member of the Eastern Health Board and he knows the demand for care for the elderly. He is familiar with the cost of providing beds for the elderly and the lack of accommodation in both Eastern Health Board and private residential homes. He knows also that the Eastern Health Board, and the other eight health boards, spend huge amounts of money on nursing home subvention. There are three levels of payment for nursing home care; approximately £75, £90 and £120, depending on assessment, to people who can make a contribution of their own. Health boards around the country have purchased beds in private nursing homes to accommodate people who can no longer remain at home and who require some nursing care. The Minister should inquire from the Meath Hospital, Beaumont Hospital, which serves part of his own catchment area, and James Connolly Memorial Hospital about the number of beds being occupied as a result of social rather than medical problems.
We should introduce a payment to people to allow their relatives to live with them or to encourage others to provide the same level of care as that provided by hospitals and nursing homes. As the Minister is aware, the cost of a bed in a nursing home is approximately £250 per week while the cost of an acute hospital bed is far greater. It is wrong for people to occupy acute hospital or nursing home beds or to avail of subventions simply because of social problems.
The carer's allowance does not go any way towards addressing this issue which is not totally the responsibility of the Minister for Social Welfare. It warrants the involvement of both the Departments of Health and Social Welfare which should devise an innovative package to address the needs of the elderly. When the Tallaght Hospital is up and running in a matter of months, the problem that exists in all other hospitals in the Dublin and other areas will arise there.
Part of this problem relates to other issues such as the 10 per cent assessment of people who have put away a small amount of money as a nest egg to be used by their families for burial and other expenses. That nest egg is crucial to elderly people and often they do not wish to disclose it. As a result, many elderly people have suffered severe beatings in recent months in country areas because the gurriers carrying out these attacks know that money is hidden in the home and not in the local bank or post office.
The problems of carers can be addressed by way of innovative measure and without the need for major resources. The money currently being used for the carer's allowance moneys and the other moneys being spent by the Department of Health and the health boards could be utilised.
Like most people, I am concerned about the increasing unemployment figures. We have had many reports and recommendations, such as that from the task force on unemployment, on how to deal with this problem but I am not satisfied that the Minister took the opportunity in this Bill to implement some of those recommendations.
The Deputy has not read the Bill.
I have read it. The area of the self-employed, which has been referred to by some of my colleagues, is one of great potential. I want to refer also to the army of people involved in the excellent delivery of various services in the voluntary and community sectors. I salute those people who do trojan work for which they are not properly recognised. I tabled questions to the Minister on putting in place a formal structure and we have been promised a White Paper. I look forward with enthusiasm to the publication of the White Paper as quickly as possible.
How does the Deputy reconcile his demands for expenditure with his Leader's demand that we cut social welfare expenditure?
I would be happy to answer that question but the Leas-Cheann Comhairle is about to cut me off. If I were to answer it the equation would work out much more positively than some of the responses given by the Minister in Opposition when he stood on his soap box——
I must ask the Deputy to conclude.
——and spoke about them. I regret I do not have more time.
Which is it to be, increases or cuts in expenditure?
I am delighted to contribute to this major debate on the Social Welfare Bill. I represent a constituency where approximately 60 per cent of the adult population benefits from social welfare payments in one form or another. This is a major political issue, therefore, for me and other politicians who must deal with these issues in our constituency work.
I welcome the Bill with all its reforms and innovation. Our social welfare system is weighed down with regulations, some of which are archaic and do not take account of modern day realities. The Minister for Social Welfare, Deputy De Rossa, has tackled problems in the system which, unfortunately, costs a great deal of money but we applaud him for what he is doing.
I welcome the introduction of the new one parent family allowance and the elimination of the concept of desertion with all the pain and embarrassment it caused for women having to prove desertion. I and others have raised this issue many times in the House and I am delighted this fundamental reform is included in the Bill.
I welcome the introduction of the new disability allowance which replaces the disabled person's maintenance allowance operated by the health boards. Its payment, which will be means tested, will now be the function of the Department of Social Welfare, which is welcome, as I know from my experience of the Western Health Board that health boards were incapable of properly determining the means of an applicant for disabled person's maintenance allowance. One found the Department of Social Welfare had a greater knowledge of means, the proper assessment of means and was able to take all circumstances into account. No two cases are quite the same. Certainly, Department of Social Welfare officials are the most competent to deal with that type of means testing.
I am pleased that reform in the area of unemployment assistance does away with the concept where a person who worked more than four days out of six-consecutive days lost entitlement to unemployment assistance in that week. I am pleased that every day of unemployment in a week, so long as a person qualifies for unemployment assistance, is recognised and a payment is made for it.
I represent many farmers, including a large number of small farmers. In County Roscommon alone about 1,600 small farmers qualify for unemployment assistance or what is called small farmers' assistance. From my reading of the Bill, it does not appear the reforms, disregards for income and so on, extend to them. I have long been a critic of means-testing for unemployment assistance for small farmers. In the mid 1980s means-testing was based on the income arising from the small farm, not on a notional system as it had been up to then. However, we still find in the means test many elements of notionality. Under the law, the social welfare officer is allowed make a notional assessment of livestock sales and can state the amount of gross income in any operational year — it may not necessarily be average — and increase it by applying a notional figure. That is not fair and it operates unjustly against many small farmers. It is fashionable to be critical of farmers and their claims, but small farmers by definition, are well within the poverty trap. We know from all those who have studied their circumstances that their income is well below the national average. As people who have fallen below the poverty line they are among some of the poorest in the country.
In 1988 the Conference of Religious in Ireland examined poverty trends among small farmers and found that as a single economic group they were more pervasively poor than any other. EU interventions may have improved the position since then, but it would make an interesting study. Will the Minister consider extending the reforms of unemployment assistance with provision for disregards and so on, to small farmers where it is applicable, as small farmers' assistance is effectively unemployment assistance? Any objective examination of it should result in additional benefits to small farmers.
The various provisions have been dealt with by all speakers but in my ordinary day to day contact with clients of the Department of Social Welfare I find a number of irritating aspects of the system.
I wish to raise the difficulty with medical referees. Six years ago a man on disability benefit who had been declared fit to work called to me. He suffered from a heart complaint. Three weeks after he had been declared fit for work — his disability benefit was taken from him on the basis of the medical referee's report — he died from a heart attack. Many hundreds of people who are brought before a medical referee are declared fit for work. I understand the most cursory examination is done by the medical referee who, it appears to me, is not a co-operative or helpful person. It appears the medical referee does not have to report in detail the reason he decides a person is fit or unfit for work. There must be included in the system a requirement whereby medical referees are obliged to state to a client the reason he is found medically fit or otherwise, especially where a person will lose benefit in the event of being declared fit for work. The medical referee should be obliged to give the medical reasons — when evidence suggests the contrary — he has found the person fit for work. The appeals officers who deal with these cases afterwards restore benefit in a high proportion of cases. I recall asking a previous Minister for Social Welfare a question in the House about that and was amazed to hear that something of the order of 65 per cent or more of persons who were disqualified for benefit by medical referees had their benefit restored by appeals officers at oral hearings afterwards. That points to major flaws in the system.
The Minister did much to make the operations of the appeals office transparent but we need to do more. Appeals officers conduct oral hearings and so on and make decisions. Some of the constituency work from time to time involves attending oral hearings with constituents and helping to put the case before the appeals officer. It is similar to being with a client in court. Generally speaking, I have found appeals officers fair and well informed but there have been cases where one would disagree with the decision. The difficulty is that the client or the client's advocate or public representative cannot discover from the appeals officer why he ruled against the client when the evidence, in the opinion of the client or in the opinion of the advocate, might be to the contrary and there might be obvious reasons for thinking and saying that.
We need to bring out in the open the decisions of appeals officers. Especially in the case of adverse decisions they should be able to say why they were unable to accept certain arguments at an oral hearing, where evidence may have been presented to strengthen a case being made. Will the Minister introduce something along those lines?
Will he examine the issue of savings which has cost implications? Many Deputies referred to the savings of elderly people. I agree with Deputy Callely that an elderly person's attachment to a saving of £500, £5,000, or £10,000 is very great. He or she sees it as covering their funeral expenses. They worry about the dignity of their burial and provide for it.
When assessing means — this only arises in means-tested or in non-contributory payments — where the value of capital has to be assessed, the Department disregards the first few pounds and assesses the first £500 at a low rate of interest. For sums in excess of £500 interest is calculated at the rate of 10 per cent per annum. There are no savings in any institution here, except some long-term savings, which make anything approaching that amount of interest. It is unfair to determine that a saving of £10,000 in the bank which is not a huge sum of money nowadays, can accrue an income of £1,000 to a social welfare or pension recipient and that that sum can be deducted from the maximum amount to which he or she would be entitled. As the Minister is aware I am referring to means-tested or non-contributory pensions.
Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.