Dáil Éireann debate -
Thursday, 6 Mar 1997

Vol. 476 No. 1

Social Welfare Bill, 1997: Second Stage (Resumed).

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

Mr. Lenihan

Before the debate was adjourned I referred to the lack of any fundamental thinking on reform of the social welfare system. The Minister said that the provisions in the Social Welfare Acts and this Bill have transformed the social welfare system as we know it. He invited the House to pass judgment on his performance not only in terms of this Bill but over the past three years. When Deputy De Rossa was appointed Minister for Social Welfare people had high expectations that he would transform the social welfare system, having regard to the party of which he is a member. However, this transformation has not taken place and, in line with the budgets introduced by the Government, the Bill proposes a serious of incremental changes which are designed to appease interest groups but which have no underlying coherent philosophy or direction. This policy has characterised the Government's approach to the economy and I am not surprised it has adopted the same policy in the administration of the social welfare system.

Having regard to our economic position and the anticipated demographic trends during the coming decade, fundamental questions arise about the social security system. We have enjoyed a period of rapid economic growth but ESRI studies suggest that long-term unemployment will continue to be a persistent social problem. This will lead to a continued high demand for unemployment payments, notwithstanding rapid economic growth. In this context, radical changes are required. Initiatives such as the family income supplement and the back to work allowance scheme have been introduced but much work still remains to be done. There is no evidence of any fundamental rethinking by the Minister in this area.

During the years leading up to 2031 there will be a continued increase in the number of people in receipt of old age pension. The lack of provision made by the Minister for the social insurance fund is disquieting in view of the increased liability on the State to pay old age pensions in the long-term. Entitlement to contributory pensions has been increased due to the extension of PRSI to self-employed persons. In a few decades there will be a universal entitlement to old age pension and the funding of this will put an enormous burden on the State.

Similar concerns have been expressed about certain pay arrangements for the public sector agreed by the Government and their implications for the public service pensions bill. However, the only ball on which the Government seems to have its eye is the general election. The Minister has displayed a lack of fundamental thinking on this serious question during his time in office.

Another issue of considerable importance in the evolution of the social security system is the integration of the tax and social welfare systems. Reports on this issue have been published and there has also been a great deal of discussion on it. Without making a commitment in regard to basic income, a guaranteed minimum income or negative income tax, there is a need to approximate the tax and social welfare systems as far as possible. One obvious step in this area which should have been taken during an election year is the harmonisation of the years of payment under the tax and social welfare systems. The Minister did not avail of the opportunity to do this in the Bill and I wonder if it will be done in the near future.

I am very disappointed that no consideration was given in the budget or the Bill to the alignment of basic social welfare payments with general tax allowances. If the public had been invited to submit their views on desirable proposals for the budget the Minister would have received many representations urging him to use the additional money available to increase basic tax allowances and to harmonise the tax and social welfare systems. The Government lost the opportunity to do this and the budgetary process represents more an Arab bazaar than coherent policy. The incremental improvements in tax benefits for various groups provided in the budget have no underlying direction or philosophy. This policy has been carried through into the Social Welfare Bill which provided the Government with a marvellous opportunity to ensure some alignment between basic social welfare payments and general tax allowances.

That, too, is a disappointment and a failure by this Minister who claims to have effected a complete transformation of the social security system. He has not made any fundamental change to the social welfare system.

Another issue which arises when one considers the integration of tax and social welfare is child benefit payments. Substantial improvements in these payments were made in recent years, but further increases would serve to emphasise the child centred nature of social welfare support. That is important because there is much discussion in the media about the desirability or otherwise of payments to particular categories of persons. We must make it clear that these moneys are being targeted at children.

If the tax and social welfare systems are to be integrated, the relationship between a possible tax allowance for children and child benefit must be examined. The Minister has avoided that issue. I realise there are political pitfalls involved and that it is not a good idea to be courageous in an election year or engage in fundamental thinking, but in introducing this measure the Minister advanced the bold claim that he has effected a transformation of the system in the past three years. He has not, and that guff must be got out of the way well in advance of the general election.

A further matter in relation to the social welfare system is whether taxpayers receive value for money. I am referring to the incidence and extent of fraud perpetrated on taxpayers by those who do not qualify under the legislation making claims. Whether the Minister likes it or not, there is enormous public concern about this issue. Deputies constantly receive representations about alleged abuse of the system. Abuse is inevitable in any system, and in his contribution the Minister of State referred to discussions he had with ISME on attempts to tackle problems relating to the black economy, but there is substantial public disquiet about the incidence of abuse. That public disquiet reflects not only on the social welfare system but on the entire political system. It is one of the factors that has contributed to the considerable loss of public confidence in the political system. To put it bluntly, people who work hard and keep the rules feel discriminated against. That is the general perception. I note from the Minister of State's contribution he does not have any specific legislative proposals to deal with this problem.

The issue of PRSI arises under this Bill because it provides the statutory foundation for the collection of social insurance contributions in any particular year. For many years, taxpayers did not really understand or accept the theoretical basis of PRSI as advanced by successive Ministers for Social Welfare. As far as they are concerned it is another form of taxation. Because of the Government's refusal to reduce the top rate of income tax, we now have a situation where more than half of certain taxpayers' income is taxed at an early stage. That has caused enormous disquiet over a number of years, yet the Minister has not seen fit to address it in the budget.

Given the continued Exchequer commitment to pensions, it will be necessary to ensure adequate and proper funds are collected through some form of social security tax in the future. The Minister has not brought forward any real proposals to effect fundamental reform in social security tax arrangements, despite the fact that commentators and commissions over many years have indicated that the current arrangements are unsatisfactory, operate as a disincentive to creating employment and bear hardest on the weaker and poorer sections of the community. There has been some tinkering around in particular budgets but no fundamental change. The suggestion of some sort of transformation in the social welfare system is entirely fallacious.

I would like to hear the Minister's view on the question of a movement towards individuated payments. I welcome the introduction by the Minister of certain changes in the dependency rules relating to adult dependants. A clear suggestion in that measure is that there will be a movement towards individuated payments over a period of time.

If one looks at the social welfare system historically, it is clear that it has operated to inhibit the greater participation of married women in the workforce. The rules in the current social welfare code relating to that area will have to be reviewed, and I am glad the Minister has taken a step in that direction. I agree this is an aspect of his brief where transformation will take a substantial period of time — it will not be done overnight.

There is an anomaly in the payments for multiple births. The Minister of State is aware that the parent of twins is discriminated against because the amount prescribed for multiple births is in excess of that prescribed for twins. The Minister for Social Welfare, when in Opposition, viewed this as a justifiable case for reform, but he has opted not to remove this anomaly from the social welfare system. I urge him, even at this late stage, to consider whether the special payment for multiple births should be extended to include twins so that this differentiation can be equalised. The current arrangements are discriminatory. For example, a person who gave birth to triplets last year received £184 in child benefit while a person who had twins received £58. Certain changes were introduced in the initial grant to alleviate the position of the parents of twins, but the financial differentiation seems remarkable and difficult to justify in principle.

I urge the Minister to re-examine that issue to see if this anomaly can be eliminated from the social welfare system. With the declining birth rate this could be done without any great loss to the Exchequer. In the context of a declining birth rate, the birth of twins to a couple is a far more fundamental development than it might have been ten or 20 years ago. The Minister should review these arrangements to ensure there is no inequality of treatment as between the parents of twins and the parents of triplets or greater numbers of children.

Mr. Gallagher

(Laoighis-Offaly): I am delighted to have the opportunity to speak on this Bill. I disagree with Deputy Lenihan in respect of what he said about fundamental transformations not taking place. The current Minister and the Government have set out clear targets for transforming the system in three main areas: in encouraging people to take up employment opportunities and making it easier to do so if the opportunity arises; in focusing on the needs of children in the social welfare system; and in trying to undo the damage to the social insurance system that was done by Deputy Lenihan's colleague, Deputy McCreevy, when he was Minister for Social Welfare for a short but very damaging time for the ministry for Social Welfare.

The current Minister is receptive to suggestions for dealing with anomalies that Deputies come across in dealing with their constituents, and addressing them in legislation. While addressing these anomalies may not seem very important in terms of strategic issues, it is important to the people we represent. The Minister has done much to remove many anomalies and niggling aspects of the rules which frustrate social welfare claimants and those who represent their interests. I compliment him on focusing on strategic issues — returning to work, the needs of children and the social insurance system — while at the same time having an eye for detail.

The measures taken in the past few years to encourage people to return to the workforce, which include the back-to-work scheme, the introduction of the one parent family allowance and the changes in the tax and social welfare systems, have been most successful. That almost 20,000 fewer people are signing on the live register compared with this time last year shows those measures are working. My experience of dealing with constituents who have shown great interest in taking up employment schemes is borne out by the national figures. The schemes are working, and I would encourage the Minister to extend schemes that allow people to consider job options when they arise and take them on perhaps for a trial period, to ease their way back into the workforce. Many people are doing that after a long period of unemployment.

These people certainly are not social misfits as was alleged by ISME earlier this week. I was shocked when I heard what ISME had to say about the 100,000 or so long-term unemployed people on the live register who find it difficult to get back to work. It was not a revelation to find they existed. The work of the National Economic and Social Forum, and reports and debates in this House going back years, have shown that there are people for whom the various measures have not worked, mainly because of the length of time they have been unemployed, their lack of skills and many other complex factors. To label them social misfits was not alone an insult to them but to the many people in small businesses who have co-operated with the schemes the Department of Social Welfare and FÁS have introduced in recent years to encourage the unemployed back into the workforce. It is no good telling us it is a technical term. If I were a person on the dole for five or six years and heard an organisation which claims it should have a place at the negotiating table with the other social partners call me and others like me a social misfit, my anger would not be assuaged by being told it was only a technical term. I call on ISME to withdraw that term of abuse and co-operate in the efforts being made by the trade union movement, by the INOU, by the Government and by the business sector generally to try to find ways of tackling this persistent problem of long-term unemployment.

I am particularly glad to see this year's increase in child benefit. The payment of child benefit is most effective in ensuring the money goes to the children who need it. It may sound sexist to say it, but studies not alone in this part of the world but in the developing world have shown that money paid directly to mothers in families is, to a much greater extent, spent on the needs of children in those families. I would argue for a continued increase in the payment of child benefit, and it should not be brought into the tax net. In the absence of a specific child tax allowance, paying this to all families is justified. The increase of more than 90 per cent to the rate of the child benefit paid to people with three or more children since my party went into Government, 50 per cent of which has been paid since the current Government was formed, contrasts with the record of Fianna Fáil and the Progressive Democrats when they were in Government. It has made a real difference to children. In particular it has made a real difference to mothers of families who are struggling to meet the costs of education, clothes and the many other needs children have.

I particularly compliment the Minister on the measures introduced to reverse the effect of the "dirty dozen" cuts on unemployment benefit claimants who may have casual, seasonal or part-time employment. This is a very large element of the workforce. Studies of the workforce show that part-time and casual employment is an increasing feature of working life. Those people continue to pay into the social welfare system but, under the measures introduced by Deputy McCreevy in 1992, many of their entitlements to benefit were decimated. We have been working for years to reverse those cuts.

Last year the Minister listened to the case which those of us representing midland counties made on behalf of seasonal workers, particularly in Bord na Móna. We made their case to Deputy Woods when he was Minister, but it was the present Minister who brought in the changes necessary to reverse for that category of worker the disincentives to work that had resulted from Deputy McCreevy's measures. Similarly, this year, the changes in the requalification conditions for unemployment benefit will make a significant difference to up to 10,000 workers. The contributions paid after the sixth months unemployment by those who have part-time or casual employment and who are paying the full rate of social insurance contribution will start the clock running again for their future entitlement. A particular group of workers had been detrimentally affected and, on their behalf, I thank the Minister for the changes he has made. I refer to the part-time fire-fighters in the local authority service who were in a very difficult position as a result of the changes made in 1992. They were paying a full stamp, but when their benefit ran out they had to go back on unemployment assistance, go through a difficult means assessment and start clocking up 13 fresh contributions even though they had continued to pay contributions while signing on. They will now be able to regain their entitlement to unemployment benefit and that is very welcome among that category of workers. In that category, there are still a few on unemployment assistance who do not qualify for benefit. In assessing their means for the purpose of unemployment assistance, the training and retainer allowances paid to them should be disregarded. They are not payments for work; they have to be trained for their job, and the element of training is increasingly complex, given the type of work fire services do nowadays, and they are prevented from taking up other employment because they have to be available for duty. I would ask that those two services be taken into account in the calculation of means for unemployment assistance.

I welcome the changes in the reckoning of capital means for social welfare payments. The amount of savings or investment to be disregarded has been greatly increased, from £2,900 to £6,000. That will apply to old age non-contributory pension, carer's allowance, pre-retirement allowance and widow's or widower's non-contributory pension. In the case of old age pensioners in particular who put aside a small amount of money for the rainy day, or in some cases for their funerals, that money was taken into account in assessment for social welfare purposes. I welcome the increase in the amount to be disregarded and ask that it be index linked in line with cost of living increases.

I welcome the changes in regard to dependent spouses, as they were known to date. That title is very insulting, particularly to women. The change in terminology to qualified adults, together with the increase in the amount — from £60 to £90 per week — which may be earned before the qualified adult allowance is withdrawn from one's partner, was brought to the attention of the Minister last autumn by the Irish National Organisation of the Unemployed, national women's councils and women's groups throughout the country. I would ask the Minister to consider changing other areas of the social welfare code where women are discriminated against.

I compliment the Minister on extending maternity benefit and adoptive benefit to self-employed people. The small business sector is the fastest growing sector in the economy and, as a member of an enterprise board in my county, I am aware that the promoters of many of those businesses are women. It is welcome that women who pay self-employed social insurance contributions will be entitled to maternity and adoptive benefit.

I welcome the change in family income supplement, a scheme that has been improved tremendously in recent years. The disregard of PRSI and levies in the calculation of pay for FIS purposes is a welcome move towards disregarding all deductions. The increase in the threshold will mean that a greater number of people will be entitled to payment and those already claiming will receive measurable increases this year.

I compliment the Minister for Social Welfare on introducing the disability allowance, one of the major successes of the Department in recent years. Claimants with whom I have had contact are very happy with the service they receive from the Department. Previously they had to apply to the health board for disabled person's maintenance allowance and it took months on end for their claims to be processed. Work on their application was carried out by a clerical officer in the health board, the medical officer, the community welfare officer and, finally, the administration. I dealt with cases which took more than 12 months to complete. The service provided by the Department is extremely swift and client-friendly, and people find the response speedy, effective and sympathetic. Now that the Department is dealing with applications, Deputies may put down parliamentary questions on the issue, which may be of assistance in having claims dealt with.

I welcome the power granted to the Minister to be more flexible in terms of the regulations governing disability allowance. I also welcome the introduction of sickness allowance. As with those on disability allowance, the sick-no-benefit people — an unacceptable title — will also apply to the Department of Social Welfare for sickness allowance if they are not fit enough to sign on for unemployment assistance. I am confident the level of service provided to those on disability allowance will be extended to people claiming sickness allowance. I wish the Minister success in the implementation of that measure.

One issue that is of concern to all of us is the anomaly in the payment of child dependant allowance to short-term social welfare claimants. The changes for those on unemployment assistance with child dependants in education are welcome. It is unacceptable, however, that people who have contributed to the social insurance system, which entitles them to unemployment benefit, are treated differently. Disability benefit, which may be claimed for years, is classified as a short-term benefit. I am at present dealing with the case of a man who has been on disability benefit for 12 years. He is certainly not a short-term claimant, yet when his children reach the age of 18 payment is stopped.

With the introduction of the transition year and the extension of the post-primary cycle to six years, many students reach 18 years before they leave secondary school, but parents of those students do not qualify for child dependant allowance. A case was recently brought to my attention of a father who has lost payment of child dependant allowance for his son who will sit his leaving certificate this year. When his son leaves secondary school, however, the allowance will again be payable because the son will be unable to sign for unemployment assistance for three months. The Minister should seriously consider that anomaly which is deserving of urgent attention. The cost factor would not be exorbitant because the number of people involved is not great.

One of the principal features of the Bill is the introduction of pro rata pension for people who do not have a full social insurance record for pension purposes. This is a hoary old chestnut concerning people who left work under a redundancy scheme, those who may have worked in the 1950s or 1960s and then went into self-employment or small farmers who may have worked in the past with the Office of Public Works, Bord na Móna, the county council or other organisations. The stamps those people had paid in their previous employment were not taken into account for pension purposes. I made representations on behalf of a number of people in that position and the Minister informed me that most of those people will now qualify for a pension at either the 50 or the 75 per cent rate. I would like the Minister to confirm that for people paying the self-employed rate who do not have full contributions by the time they reach 66 years, contributions from other employment in their working careers will be taken into account for pro rata pension. Constituents often ask us what is the use of paying a stamp. The changes in this area recognise the importance of a social insurance record and ensure people can draw benefits later in life.

Questions have been raised about the 1 per cent reduction in PRSI and how it squares with the integrity of the social insurance scheme. It is certainly justified as a once off measure because many low income earners, who are exempt from paying income tax, will not benefit from the reduction in the basic rate of income tax. I welcome the reduction in PRSI because those at the lowest end of the earnings net will benefit, but any future reductions should be consolidated and maintained within the income tax code.

Mr. N. Ahern

The Social Welfare Bill merely inserts in legislation the measures introduced in the budget. During the budget debate we heard many positive speeches about the wonderful transformation in society. The Bill is all hype because, while it contains some worthwhile measures, very few people will benefit from its provisions. When in Opposition some members of the Government claimed they would change the world when they got into Government, but after three budgets nothing much has changed. There have been a few percentage increases in some areas, but society has not been fundamentally restructured. In the past, because of a lack of resources, budgets and social welfare Bills could only try to maintain the status quo, but when the economy is booming people should benefit.

One of the main yardsticks by which a society can be judged is its treatment of the elderly. It is pointless to talk about a booming economy if we do not pass on a fair share of the fruits of that boom to the less privileged and the elderly who have contributed to its development. They are not getting their fair share. If we can believe our national income figures, we have all been doing well in recent years. However, while the Minister may claim the £3 increase to the elderly is well above the rate of inflation, that is not a proper yardstick with which to measure their income.

I am concerned about the operation of the social insurance fund. I accept some employers and employees view PRSI as a form of income tax, but the social welfare fund is being squeezed between the right and the left. In fighting his corner and defending the social welfare increases in the budget, the Minister of State at the Department of Enterprise and Employment, Deputy Rabbitte, outlined the tax and social insurance contributions in a number of other countries and, while our personal income tax rates are high relative to other EU countries, our social insurance contributions are very low. He made all the right points, but they were not included in the Bill.

The social insurance scheme is being diluted. The PRSI system was introduced some years ago as an insurance fund into which people can pay to claim benefit when sick or unemployed. However, we do not respect the dignity of those who pay into the fund. When they make a claim they are seen as sponging on the system. We do not treat those who have paid into the fund all their lives differently from those on assistance. Perhaps those two groups of people should be dealt with by different Departments. If I pay into an income continuance scheme and am out of work because of illness, nobody would suggest that in drawing down my insurance fund I am milking the system. However, this attitude has crept into the social insurance scheme. If we continue to reduce the PRSI rate, contributors will be viewed in the wrong light. The worthwhile arguments made by Minister of State at budget time were not inserted in the Social Welfare Bill.

The Department of Social Welfare should be viewed in a much broader light and not merely as a Department that hands out money. In recent years it has tried to promote a sense of value and dignity among people claiming social welfare. However, there is something wrong with a society that fails to tackle unemployment, poverty and social exclusion when its economy is booming. The Government is not living up to its glossy words.

Additional resources which have come on stream in recent years have not been allocated properly. Poverty, unemployment and social exclusion persist and few inroads have been made into these problems. While we may talk in glowing terms about the additional number at work, they are not coming off the unemployment register. The more people at work and the more they contribute should mean the fund to distribute to the less well off is greater. We are not addressing the problem of the long-term unemployed. If we cannot do anything for these people at a time when the economy is booming, what hope will they have when the pendulum swings the other way? Now is the time to do something for the socially excluded because money is available. Many of those in Government made brave promises about what they would do if they found themselves in a position to deliver in this regard.

This Bill does not distribute resources properly. I realise there are competing views in any Government and it must make choices with which it must live. However, this Government pretends it has done more than it has. Is it too much to ask that people should have a sufficient income to live with dignity, have something meaningful to do each day and have good housing? We have not fully availed of this opportunity. We hear much about the additional number at work but few of those have come off the long-term unemployment register. A figure showed that only 400 people came off the long-term unemployment register last year, which is shameful.

It is not good enough to say the economy is booming but that there are 250,000 people for whom we can do nothing. These people are human set aside. We give them increases in their social welfare payments in line with inflation, but that is all. There is more to life than having enough money to buy food and drink. People need to make a contribution and to have a reason to get up in the morning, to say when they go to bed at night they have done an honest day's work or that they have made a contribution to their well-being or that of their family or community. It is important that every individual is treated with respect and is given something meaningful to do.

People who have been given adequate accommodation in the suburbs of Dublin have been given nothing else apart from sufficient money to survive. Many of them do not live by the same clock as others in our society. They seem to go to bed at 5 or 6 o'clock in the morning and get up at noon. Teachers have told me that children drift into school at 10.30 a.m. or 11 a.m. and when asked why the are late, they say their mothers did not get up because they did not go to bed until 4 or 5 o'clock in the morning. The reason they live by a different clock is that they do not have anything meaningful to do. We should do more for them by providing jobs. If we cannot provide them with employment in the economy, we should give them something useful to do in their communities to help raise standards and give them dignity.

The Government has done little for the long-term unemployed. All it has done this year is approve increased participation of a few thousand on the back to work scheme as if it were a scheme this Government introduced. The scheme was introduced by the previous Minister for Social Welfare, Deputy Woods. This Government seems to have turned its back on a number of other schemes. The number participating in the community employment scheme has been static since this Government came to power two and a half years ago. Some community employment schemes are good but perhaps we approved too many schemes in the past and there was pressure to get them up and running without properly scrutinising their implementation. Even if some people do not progress to full-time employment, the scheme gives them a reason to get up in the morning and respects their dignity. Yet this Government has not increased by even one the number on the community employment scheme.

Another scheme, the part-time job opportunity scheme, was promoted by the Conference of Religious of Ireland and Fr. Seán Healy. After the 1994 budget it was set up on a pilot basis for three years. In my constituency of Finglas, a couple of hundred people are on that scheme but it is coming to an end. It is a great scheme and has given much satisfaction to those on it. I should not have used the word "scheme" because it should be seen as a job rather than a scheme. Those in Finglas have enjoyed great personal development and much job satisfaction. They believe they are making a contribution to organisations and groups in Finglas. I understand, however, the axe is hanging over this scheme. I had hoped the number on it would have been increased to 50,000 or 100,000. Instead of this Government giving the scheme its blessing, it seems to be winding it down. The supervisors and managers of the scheme are on notice and others have been told they may remain until September.

Creating jobs in the open economy is all very well but long-term unemployed people must be given something meaningful to do. A fortune is being spent on window-dressing. It would be better if we used that money to create jobs rather than give hand-outs. In parts of Dublin city thousands of people are unemployed yet computer factories in the area are looking for staff. However, those who are unemployed are not trained to take up these jobs. What are we doing about that? Many of them have not been educated and are not able to take up available jobs, but that does not mean we can ignore them. We should be able to create local employment so that they may work in their communities. We must stop handing out money left, right and centre. There is much work to be done in the community which will help to raise the quality of life in these areas. It is appalling that, despite all the promises, the Government has done nothing to help them. They have been set aside.

Mr. Costello

I welcome the Bill which contains a number of innovative provisions and gives effect to the measures announced in the budget. It is part of an integrated package devised by the Government to help all sections of the population. In this instance, we are dealing with the old, the young and the unemployed. Measures to help workers were announced in the budget. These include a reduction in the standard rate of tax, a reduction of 1 per cent in PRSI, increases in personal allowances and a widening of the tax bands.

In furtherance of the principle of social solidarity, measures include the provision of new primary schools, the Breaking the Cycle programme, first step education, transition year and applied leaving certificate courses, the appointment of extra remedial and home-school-liaison teachers, and free third level education. These are part and parcel of a programme aimed at bringing the community together in an egalitarian fashion. In the health sector, steps have been taken to reduce hospital waiting lists, the carer's allowance scheme has been extended while the Minister for Health has announced the introduction of a new cancer strategy. The stubborn issue of long-term unemployment is being tackled under the anti-proverty programme.

All of the social partners are now involved in the process. Apart from the business community and the trade unions, the Irish National Organisation of the Unemployed and the National Economic and Social Forum, which represents minority groups such as travellers and the disabled, have an input.

Deputy Ahern raised the issue of inflation. There is a general increase of 4 per cent in social welfare payments. The latest figures show that inflation is running at less than 1 per cent. This gives a ratio of 4:1. If inflation was running at 5 per cent — it has been as high as 15 per cent in the past decade — and there was a general increase of 20 per cent, it would be considered an enormous increase. With inflation running at less than 1 per cent, a 4 per cent increase is welcome and far in excess of the increases granted in recent years.

All social welfare payments now stand at 95 per cent on average of the rates recommended by the Commission on Social Welfare. Old age contributory pension stands at 113 per cent of the recommended rate. It is estimated that by the end of the year the figure will have increased to 98 per cent. That is a significant achievement and an indication that the benefits of the economic boom are being passed on. If the Progressive Democrats had their way, the high rate of tax would be reduced from 48 per cent to 40 per cent immediately to the benefit of a particular clique or niche market, the very well off. There is a need, however, to help everybody in society, the well off and the less well off, the old and the young, as well as those who are finding it difficult to secure employment.

There is a reduction from 5.5 per cent to 4.5 per cent in employee's PRSI. In many ways, this is a double edged sword. Under no circumstances should we undermine the social insurance fund. We must ensure there are adequate funds available to provide for the rainy day when people find themselves unemployed, perhaps due to illness. While the reduction will remove some of the financial burden on those in employment, we must ensure the fund is maintained at an adequate level.

In the past two years child benefit has been doubled. It is to be increased substantially again this year. This is a move in the right direction as the principle behind the payment is an important one. It is paid directly to mothers and not taxable. I would have a difficulty with any proposal that it be means tested.

Important changes have been made to the family income supplement scheme. It will now be calculated on the basis of net rather than gross income. Superannuation, PRSI and levies will be deducted. There is a substantial increase of £10 in the weekly income thresholds.

In the area of pensions there is a most important innovation. People lost out in the past because to qualify for a full contributory pension one had to have an average of 20 yearly contributions. One can now receive 75 per cent of the maximum pension with an average of 15 to 19 yearly contributions and 50 per cent with an average of 10 to 14. This is a welcome improvement because it provides for a pro rata benefit. Before this, payments made would have been of no benefit in terms of contributory pension if a person did not have the required average payment. With the pro rata system, people receive benefit for their contributions.

I would like clarification on whether all payments are on a pro rata basis? I am especially concerned with the self-employed who I am sure have approached many Deputies on both sides of the House since the 1988 scheme for the self-employed was established. It requires a minimum of ten years' contributions. Many people would have reached the retirement age of 65 before they would have fulfilled the ten year requirement. Until now, they have not been able to obtain a pro rata benefit. Will previous insurance contributions be included to allow them reach the pro rata level? Is there any scope for people who have not reached that level? The scheme was introduced in 1988 and someone could have been self-employed then at 60 with no possibility of reaching the ten years' requirement before retirement age. Can those self-employed people continue to work after 65 and accumulate years on a pro rata basis? If someone works until 70 he should receive benefit from those contributions. I would like to hear the Minister's response to see how it could be teased out. There is a large number of people who have contributed enormously in terms of giving employment, making contributions in tax and superannuation paid to the State who do not have the required years.

This new pro rata entitlement will especially benefit married women who left employment without the necessary contributions. It will clear up an anomaly. That is an exceptionally fine development but I am anxious to hear what it means for the self-employed and the farming community. We are led to believe there is a large number of people in this category, anywhere between 30,000 and 40,000. I am interested in how they will benefit under these proposals.

The doubling of the special allowance for a single pensioner from £200 to £400 and from £400 to £800 for a married couple is a welcome development. No one can say innovative supports for pensioners have not been given in this Social Welfare Bill. The new sickness allowance for short-term sickness not covered by contributions clears an anomaly and is welcome as are the equality provisions which will finalise the equal treatment issue.

There are provisions relating to the anti-poverty programme and bringing people back to work. We have seen developments in this area, for example, lone parents retaining their allowances, the unemployed retaining secondary benefits when they return to work and the tapered adult dependant's allowance being extended from £60 to £90. Those are important and welcome developments. There are also measures such as the provision of 1,000 places for the disabled on the back to work allowance scheme and that all State Departments should reach their 3 per cent quota of disabled people employed by the end of the year. The increase of 5,000 places on the back to work allowance scheme from 17,000 to 22,000 is an indication of the Government's and the Minister's intention of providing pro-employment measures. The retention of child dependant's allowance for 12 months upon taking up employment is extended to people in the community employment scheme and is another incentive and enhancement for people returning to work.

Other measures are being implemented under the local employment service and these are important in achieving a reduction in the level of long-term unemployment. There has been a very satisfactory average monthly reduction of 4,000 to 5,000 for the past five to six months. It is the first reduction. Before this Government came into office, there was a danger that the 300,000 threshold would be breached but numbers have now reduced to 250,000 and I hope that continues.

We have a stubborn long-term unemployment problem and the measures introduced have not been effective in dealing with it. With students graduating and finding jobs, people returning from abroad and finding jobs and the numbers on the live register beginning to fall significantly, it is time the long-term unemployed were specifically targeted. The local employment service is now being set up under the various partnerships and that must be promoted firmly and determinedly so that we have a local forum whereby everyone interested in employment and who has been long-term unemployed is given every encouragement. That can only be given at local level and it must be a major focus in future. With the establishment of the task force on drugs, we are now beginning to get a grip on this area neglected by successive Governments. It will improve the quality of life and give people some hope. We must examine unemployment blackspots with a view to designating them for specific tax reliefs and pro-employment measures to encourage entrepreneurs to come to the area and to encourage people living in endemic unemployment to return to work.

I welcome the Bill and compliment the Minister on its various innovative measures.

Dr. O'Hanlon

I wish to share my time with Deputy Keaveney.

An Leas-Cheann Comhairle

I am sure that is agreed.

Dr. O'Hanlon

I, like previous speakers, welcome the changes for the better in the Bill. As I have only ten minutes to make my contribution I will not go into them in detail. However, they are not such great changes when one considers that while old aged pensioners will get a larger increase in their benefits this year than in the previous two years, the average increase this year is only £2.33. The increase for those in receipt of unemployment assistance and disability benefit is only £2.17. It would not be unfair to suggest the reason there is a larger payment this year is that this is an election year. It is not fair that social welfare recipients should have to wait until an election year for a reasonable increase in their allowances. They certainly have not fared well in respect of increases over the past three years. The Fine Gael-Labour Government put back the payment of increased benefits to October, but given the amount of money available this year I thought it might have brought forward the payment to April.

I wish to raise a number of matters not included in the Bill which the Minister might be able to deal with by regulation. Regarding supplementary welfare allowance, I met a person in receipt of lone parent's allowance studying for a degree through a correspondence course who finds it difficult to pay for her books. Will the Minister consider if provision could be made under the supplementary welfare allowance scheme for people on the margins who wish to pursue an education qualification or who wish their children to pursue such a qualification? I also know of a woman in receipt of lone parent's allowance who has a number of children, the eldest of whom are twins and are studying for the leaving certificate. That woman has to pay £92 for exam fees. Will the Minister ensure in cases where more than one child is studying for exams that some provision will be made to assist parents under the supplementary welfare allowance scheme or the back to school allowance scheme? He might discuss this matter with his colleague in the Department of Education. The school in question has a small budget, but the woman I mentioned was not given anything near half the sum she had to pay out.

The MABS scheme is working well. Will the Minister consider ensuring people can have their local authority house rent deducted from their social welfare income if they wish? That facility is available in some areas to people in receipt of unemployment assistance. When the housing Bill was debated last week I made the point that the day is past when a person should be evicted for the non-payment of rent, particularly people on the margins who are in receipt of an income from the Department of Social Welfare. More than 82 per cent of the tenants of local authority houses receive part of their income from the Department of Social Welfare. It should not be too difficult for the Department to arrange with local authorities to make provision for those who wish to have their rent deducted from their social welfare income.

I welcome the provision to transfer from disabled person's maintenance allowance to the disability allowance scheme. The legislation which provides for that was in gestation when Deputy Woods was Minister for Health and Social Welfare and during my time in the Department of Health. As a result of the expanded disability allowance scheme and the new sickness scheme that will be introduced incapacitated contributory pensioners under the age of 66 will not be eligible from the free schemes. Recently I called to see a widow who is incapacitated whose sole income is a widow's contributory pension. Because she did not qualify for a long-term disability pension, she was not entitled to free telephone rental. If ever a case were to be made for providing free telephone rental to a person living alone, it could be made for an incapacitated woman living alone and in her fifties. I do not see why that woman should not qualify for that benefit in the same way as those in receipt of long-term disability pensions under the age of 66.

I frequently made the point that there is an anomaly in the carer's allowance scheme. I pay tribute to Deputy Woods who introduced the carer's allowance, which is a major advance, when he was Minister for Social Welfare. While I accept the amount of income disregarded under the scheme has increased, a major anomaly needs to be addressed in the interest of the elderly, the carers and health boards, which are facing increasing difficulties in providing care for the growing number of elderly persons in the community. Two carers could live side by side. In one house there may be an elderly relative who needs full-time care but who is able to assist with baby-sitting or some housework and the daughter in law, as it is generally the woman who is the carer, may receive the full carer's allowance on the basis of her husband's income. Next door a carer may be looking after an elderly lady who is totally incapacitated, who may have had a cerebral haemorrhage, is paralysed, cannot leave the bed and requires a good deal of home care in terms of laundering sheets and feeding four times a day. That carer is not free to leave the house, but because the carer's husband may be earning £100 or £150 more than her neighbour's husband she is not entitled to the carer's allowance. It would not involve major cost on the State to totally disregard income for people caring for a person who is totally incapacitated and needs care and attention 24 hours a day.

I raised the matter of funeral grants in the past. There are a very small number of people over the age of 90 whose next of kin will not receive a funeral grant when that person or his or her spouse dies on the basis that they retired before 1971, even though they may have worked for 50 years and paid contributions. I know the reason for that ruling, but the Minister could make a gesture by extending the provision to include those people and their relatives. There was a report in the newspaper some time ago that the Minister was to remove branch managers and replace them with civil servants. Why did the Minister make this outlandish proposal which created insecurity and caused anxiety for branch managers who are doing an excellent job? What has become of that proposal?

Mr. Durkan

Deputy Woods knows all about that.

Dr. O'Hanlon

Has the Minister withdrawn it? Branch managers in my area are doing a first class job and there is a case to be made for expanding the role of local offices so people can obtain more information.

Cecilia Keaveney

The Bill has many positive aspects and I welcome the opportunity to speak on it. It gives legislative effect to the announcements made in the budget.

Much has been said about the great handouts in this year's budget and how everyone will be better off. At a time of national economic boom, the increases of £2 or £2.20 over the past three years have not been that exciting for widows, the unemployed or OAPs. These were not great handouts.

As regards section 12 and the employed, someone who works is interested in how much they will receive when they retire. Up to now someone could make contributions for three years, sign for credits for seven years and would still be entitled to a contributory pension. Now someone must sign for ten years before they have the same entitlements. Surely this cannot be seen as a step forward. There is no solace in knowing that this will not happen all at one but will creep in unnoticed. Saying that the timescales are more generous than those envisaged by the National Pensions Board will not give much comfort either.

A great deal has been said about the increases in payments. Pensioners have received a colossal £7 over three years. I still await information on the free fuel scheme and how it can or will be expanded so that the increase given over three years will cover the cost of the extra fuel rural pensioners must buy out of their own pockets. The current allowance of £5.50 does not buy a bag of coal in most areas and our weather often warrants the use of more than one bag. I would like to have seen realistic support for our pensioners in this year's budget.

The butter voucher scheme has been reduced by half, affecting over 900,000 people. Those who really need these vouchers were let down at a time when we held the Presidency of the European Union. It is a sad boast at a time when dairy products are plentiful and a little leniency would have meant so much.

The carer's allowance was introduced by Deputy Woods. It was announced that those caring for more than one person will receive an additional payment amounting to 50 per cent of their existing basic rate. How many carers does the Minister know? Is the true extent of the hours they put in realised? Is the mental and physical stress carers are under fully appreciated? If so, I would like to know the number of cases — the Minister mentioned 2,000 — who are able to manage more than one dependant and I would like to meet them.

The role of the carer is not fully recognised and the sacrifice these people make should warrant the abolition of means testing, especially for those who are in the special circumstances of dealing with someone 24 hours a day. The carer's ability to leave the house to earn a substantial wage is curtailed. Many of them are living on a pittance and they do not need to be penalised further. The provision of respite care for both the carer and the cared for is covered by the Department of Health. The Department of Social Welfare's abandonment of this problem is awful.

An announcement was made last year that carers would be given support in meeting mortgage repayments. Many carers were delighted because they thought they could buy their local authority house, only to find this was not included in the scheme. The manner in which it was presented was misleading.

In section 8 there is a reduction of 1 per cent in the standard employee contribution rate of PRSI, which will surely reduce the social insurance fund. Is there a rationale behind this which could be clarified? If income is reduced by £114 million, what kind of security will this give to workers as regards illness, pregnancy, occupational accidents and pensions? Perhaps the 1 per cent levy could have been removed instead, which would have been to the benefit of pensioners. However, they paid their PRSI when they worked and will continue to pay the 1 per cent levy when retired. This does not bode well for care of the aged.

I would like clarification on whether it was conveyed on budget day that pensioners over 75 years would be entitled to free electricity. Will the Minister confirm that this was stated at the time? Will all pensioners qualify, as opposed to being entitled to apply, for free electricity? There is a substantial difference between being eligible to apply and being able to qualify. I hope that pensioners will not be led astray in a word game. Free schemes should be widened.

Another issue which needs clarification is the resources the Department intend to put into the student summer job scheme, which was also introduced by Fianna Fáil. It is a tremendous asset to those students who exist on a very low education grant and depend on this potentially great resource. However, the value of the scheme is not only financial but has massive repercussions in areas in which they work. Local communities give significant support to the scheme and they see its benefits. Why is the scheme not appreciated and expanded further?

I, like others, was concerned at the message conveyed by the qualifying requirements last year. It was wrong that if someone was eligible for unemployment assistance they were ineligible to contribute to the community through the scheme. This was giving the message to young people not to work but to go on the dole. The scheme should be extended to encompass as many categories of student as possible, including leaving certificate students. Too many people are not getting a chance to participate in the scheme. I know parents whose child was told to draw unemployment assistance, despite having a place on the summer jobs scheme. The parents fretted all summer that the student would decide not to go back to college and remain on unemployment assistance. Whether this fear was rational, it was real.

There are rumours circulating today about proposals to cut the student summer jobs scheme by 50 per cent this year. If they are true, I am horrified.

Mr. Durkan

More rumours.

Cecilia Keaveney

I hope they are only rumours.

Mr. Durkan

They are greatly exaggerated, as the man said about his death.

Cecilia Keaveney

I appreciate the Minister's clarification. I want the scheme extended, not reduced. It is not only students who benefit from this scheme. Students can only earn a maximum amount of money but if they are on unemployment assistance all summer, they cost the State more. I cannot understand why this scheme would be reduced. I am delighted to hear the rumours are grossly exaggerated.

I welcome the support given to windows who deserve recognition. However, it is small comfort to them as we need to expand the support they receive. I welcome the fact that small firms will work with the Department in preparing a guide for employers on how they and their employees can legitimately avail of support from the social welfare system. They would have liked some movement on VAT returns, but that is an issue for another Minister. I am very disappointed that the children's allowance, another Fianna Fáil initiative and the best mechanism for supporting families and tackling poverty, is being increased by a mere 25 pence a week for each child and will not be paid until September next. The increase would not even purchase an extra bar of chocolate.

An average increase of £1.17 for adult dependants over three budgets is a mere pittance for the 120,000 involved. There is no doubt that our society is changing rapidly with people remaining in school longer and living longer, necessitating radical reforms of existing structures accompanied by initiatives to target those most in need.

Self-employed people, whether fishermen, farmers, contract workers or others, need support in terms of occupational injuries benefit and invalidity pensions. Some months will elapse before these very small increases are paid, which I trust will not be after a long summer minus the student jobs scheme.

Mr. Ferris

Although the media appear to have little interest in this Bill, it is one of the most important to be considered by the House annually. It is important because its provisions affect over one million of our citizens, many of whom have been identified by the Progressive Democrats as people who cannot help themselves and in whom that party has no interest. There are social welfare recipients who, through no fault of theirs, are unable to help themselves, who should not be thrown on the scrap heap by the right wing philosophy of the Progressive Democrats but rather deemed to be in need of a minimum amount of income to sustain the standard of living we know to be just about possible from social welfare payments.

I congratulate the Minister, Deputy De Rossa, on having obtained the support of his Cabinet colleagues for these proposals, thus addressing some anomalies in the system. I have no hesitation in complimenting the Minister of State, Deputy Durkan, on his efficiency and caring attitude in carrying out his responsibilities. He is at all times prepared to examine specific difficulties encountered within his remit. Whenever particular issues were brought to his attention — as inevitably Members will do — he was prepared to examine all the relevant regulations and rules governing decisions in an attempt to make his Department as user-friendly as possible. In this he has been very successful, something certainly appreciated by my constituents.

I should also compliment the Fianna Fáil spokesman on social welfare, Deputy Woods, on the ingenuity he displayed during his tenure in office. If there is anybody who knows about social welfare issues overall, it is he. He has always made a very constructive contribution. Unfortunately, at one point his party appointed Deputy McCreevy to this portfolio. He did irreparable damage with the "dirty dozen" cuts which successive Governments have endeavoured to rectify.

I am pleased to note that the Bill also addresses some problems such as those in respect of one's entitlement to disability benefit. While Deputy Woods has been complimented on introducing the carer's allowance — which replaced the dependent person's allowance of approximately £14 or £15 weekly — it should not be forgotten that he also introduced a means test to establish eligibility. That may have been necessary at the time of its initiation because it would have been impossible to grant all applicants that allowance without some form of means test. Nonetheless, I am pleased to note that means testing of carers will be eased under the Bill.

Recognising the work they undertake and service they provide to elderly relatives, in-laws or other qualified categories in their homes, which is a huge saving to the State, no compensation or payment is sufficient for carers, who perform a 24 — hour task, day and night without respite. It is appropriate that the Bill should go some way to addressing the overall concept of caring, even if the carers involved are not required to sleep overnight in the home of the person for whom they are caring. This easement should allow an average working family a reasonable income without penalising a spouse's eligibility for this allowance.

This issue of caring for the elderly will continue to need serious examination. With a growing elderly population clearly the State will be unable to meet the many residential care demands made on it which could be met by relatives for a fraction of the cost within a much happier and more secure environment. This would also leave elderly people happy in the knowledge that they could remain in their homes for as long as possible. That concept represents the way forward. I am pleased that this Bill attempts to address that anomaly of very strict means testing for this allowance.

Means testing is odious anyway, particularly in its application to those who have been saving with a view to having sufficient for a decent burial, many of whom, on inspection by the Department, are penalised for having been thrifty. I am glad to note that the relevant income ceiling has been raised from £2,500 to £6,000 in the case of a single person and £12,000 in the case of a married couple. This should be of considerable benefit to carers who should not continue to feel they are operating within a black economy. Such savings were put aside by a generation of people meticulous in managing their limited resources, which they either worked for or secured through social insurance contributions. They were invested in the post office, credit union or elsewhere and were intended for one specific purpose, to pay for a decent burial.

Another benefit is that this allowance will be index linked, resulting in meaningful increases, thus obviating the possibility of budgetary increases being usurped by increased local authority rent. It was important to overcome that vicious cycle of annual budgetary increases being negatived by reassessed local authority rents.

I am pleased to note also that the Minister and his Minister of State have examined pro rata old age contributory pensions in the case of some contributors who, because of their longer life span, do not have the requisite average 20 contributions in order to qualify for the minimum payment. Henceforth those who have fewer than that average, perhaps between ten and 20 contributions will be eligible, as they should be, for a pro rata pension based on their individual contributions. This is especially important in the case of small shopkeepers, small farmers and other self-employed people who had made pay related social insurance contributions, perhaps in the course of earlier, part-time employment. For the first time, they will be eligible.

I have made representations to successive Ministers to examine the possibility of increasing the death grant which has remained at £100 since its introduction in the 1970s. This £100 bears no relation to the cost of burials which average at between £1,000 and £1,200. The response always given is that it is important to use the resources available under the social welfare code to the best possible effect. It was never considered that assisting people for burial was the way to do it.

The health boards have a similar scheme but if one has received the £100 from the Department it will not give assistance particularly if one has a small insurance policy on the deceased. These are sensitive issues. If improvements were made in this area it would not cost much and it would be recognised that the Government is serious about looking after people in their old age.

Major progress has been made in providing for families. In the last three budgets child benefit increased by 52 per cent. This has been confirmed by the Combat Poverty Agency and the Irish National Organisation for the Unemployed as the way to get money into families with children where it is needed most.

The changes in the family income supplement are significant for those in low paid employment who have major family responsibilities. The family income supplement has been identified as a useful scheme for low paid large family units to obtain State assistance in recognition of the challenge to take up employment even if it is low paid. Employers have an obligation, when the rate of pay is low enough for the person to qualify for family income supplement, to assist employees by identifying the schemes available. No employer has used the family income supplement deliberately to pay workers low wages. It is an important indemnification of low income families. Those who have availed of the back to work scheme — whether in self-employment or in the commercial sector — and continued to draw percentages of their unemployment benefit or unemployment assistance should be entitled to family income supplement in addition to the back to work allowance. That would be a real boost towards getting people back into the workplace.

That the Government and the Minister have extended the entitlement to medical cards for a period of three years on taking up employment has succeeded in breaking the cycle where people were reluctant to take up employment because of the loss of benefits. For larger families the benefit of a medical card cannot be over emphasised. It is not abused but it is an important reassurance for families that in the event of illness they can call a doctor and get a prescription. People in continuous employment, and on similar or lesser incomes, have complained that, because of its extension to people who have returned to work, they have difficulty in obtaining medical cards. They point to their colleagues who have returned to work as being still in receipt of benefit. If anomalies are created they should be examined but the health board is not the most democratic organisation to examine anything.

I was pleased when the disabled person's maintenance allowance was removed from the ambit of the health boards to the Department. I had the experience of years of waiting for decisions on disabled person's maintenance allowance applications which were legitimately before health boards and were not being processed due to internal difficulties. They are being processed now and the means test has been eased.

When a health board made a decision it was not retrospective to the date of application or else it included a proviso that the applicant for disabled person's maintenance allowance went for retraining. I have had to avail of the services of the Ombudsman to prove to the health board that there is no such requirement to qualify for disabled person's maintenance allowance. I am pleased the Ombudsman has found in our favour in many cases and has confirmed that people are entitled to it from the date of application. The only requirement is that one has to be means tested and sick enough to get it. I am pleased changes have been made in that area.

On invalidity pension and disability benefit there is some difficulty in the Department about people who were awarded invalidity pensions based on medical evidence that can be updated and reviewed at any time by hospital consultants. There is no doubt decisions based on medical evidence, X-rays, tests and so on will stand up to basic scrutiny by any inspector from the Department. Yet doctors arrive from the Department of Social Welfare and give an opinion based on a simple examination of the patient who is seen either in a social welfare office, a hotel room or wherever with no facilities to check the legitimacy of a person's condition. On the law of averages their applications are refused in the knowledge that if the applicant is bad enough he will reapply. One has to go through a bureaucratic procedure to enter the appeal, produce new medical evidence, have another medical examination and nine times out of ten a medical referee is necessary. All this costs money and here we are always talking about value for money.

If an application for disability benefit, invalidity pension or some of the new sickness allowances is backed up by X-rays from hospital consultants why is that evidence not accepted in the Department of Social Welfare? Much time and money is wasted by doctors travelling around the country informing people that in their opinion they are fit to work when if they opened the file they would know they are not fit to work. If the patient being examined suggests to the medical inspector or doctor that his full case is on file he would be snapped at for daring to enter into a conversation with the medical inspector who seems to consider the patient is seeking something to which he is not entitled. I resent that attitude to the people I represent. I have one case where, because we have managed to appeal and win it, the person in question has deliberately chosen every year to be re-investigated. His condition has worsened and that has been confirmed by consultants.

It is a pity we should subject people to this supernumerary investigation which pushes them almost to the point of suicide. We all have a responsibility to ensure that does not happen.

Given that social welfare touches so many people in our constituencies every week and every day the Minister will realise it is an emotive subject for many of us. I compliment the Minister on making the Department more user friendly and beneficial to people who cannot help themselves.

Mr. M. Ahern

I am glad of the opportunity to speak on this important Bill. The Social Welfare Bill implements the strategy adopted by the Government in the budget.

After the publicity generated by the Government's spin doctors in the preceding six months, the budget and the Social Welfare Bill were a grave disappointment to all sectors of society that depend on social welfare. In each of the past three years the old age pension has been increased by £2.33 per week while the widow's pension has been increased by only £2.20 per week. A person on disability allowance or long-term unemployment assistance received even less at £2.17 per week. Allowances for dependent children of recipients were not increased. This flies in the face of justice and the concept of dealing equitably with the less well off in society. It shows this Government's lack of understanding of the poorest and most disadvantaged members of society.

Each Social Welfare Bill provides the Government with an opportunity to improve existing schemes and to introduce new ones. However, the major elements of importance in a Social Welfare Bill, from the point of view of the public, are the increases in basic payments. The basic payments under this Bill do not live up to the Government's promises and, in view of the current economic climate, a Government never had a better opportunity to provide decent increases. In 1983 to 1987 the Government almost bankrupted the country. When Fianna Fáil came to power in 1987 it had to get the country back on its economic feet. However, even during those times of stringent economic policies, the then Minister for Social Welfare, Deputy Woods, ensured that the less well off received higher than expected increases.

Mr. Durkan

They were certainly more than they expected.

Mr. M. Ahern

Not only did Deputy Woods secure the necessary funding to improve the lot of social welfare recipients, he also saw the need for innovative schemes.

During the history of the State, Fianna Fáil was responsible for introducing the children's allowance, free travel, the carer's allowance, the back-to-work allowance and second chance education for the long-term unemployed. In three years this Government has failed to bring forward any innovative schemes, which demonstrates the lack of ideas in the rainbow coalition. When three different parties are pulling in different directions, it is difficult to bring forward new ideas.

Mr. Durkan

One party can be pulled in different directions.

Mr. M. Ahern

No doubt the Minister of State has different ideas from his senior Minister in many areas of social welfare.

The carer's allowance was one of the most important developments introduced in the social welfare area. It was introduced at a time when State finances were restricted but it was improved over the years. The allowance should be examined again with a view to not imposing an income limit in cases of severe disabilities. The Departments of Social Welfare and Health should work together to identify such cases and provide a carer's allowance to people who look after those with severe disabilities in their homes. Carers save the State vast amounts of money. If people are put into homes or hospitals there are added costs of subventions and nursing care which cost the State much more than the cost of carer's allowances to have those people looked after at home.

Respite care must be improved. Our population is changing and the number of elderly people will continue to grow. Future Governments will have to provide more respite care places. Carers who are looking after parents or other relatives occasionally need a break from their work and respite care is a suitable method of giving them one. However, as time passes, more people will need respite care places but there are insufficient places available. It is incumbent on future Governments to ensure greater resources are put into providing such places.

Widows and old age pensioners must be properly taken care of. Most other social welfare recipients receive extra moneys from various sources but widows and old age pensioners usually cannot do so. However, their heating and health expenses continue to increase just as they do for everybody else. We must pay particular attention to providing sufficient income for these groups so they can live in a degree of comfort. A pensioners' charter is worthy of consideration and would be an important means of clarifying the rights and benefits available to them.

The invalidity pension and appeals procedure cause grave concern for many of my constituents, particularly the time it takes for appeals to be heard. Every Deputy will have met constituents who want to know why their appeal is not being heard within a reasonable time. The Minister should try to improve the provision of this service. It is important that people who are in need are not left waiting for their entitlements.

I am disappointed I do not have more time to discuss the Bill. It is a failure and shows a lack of understanding on the part of this three party coalition of the problems of social welfare recipients.

Minister of State at the Department of Social Welfare (Mr. Durkan)

It is impossible during the time available to reply in detail to the many points made. I thank all the Deputies who contributed to this very important debate. It is interesting to listen to those Deputies who are familiar with the workings of the social welfare system. I have noted the points made by them and these can be debated in more detail during the later Stages.

I will confine my remarks to a few broad points. Many Deputies expressed concern about the ability of the State to make future provision for pensions in view of demographic trends etc. This matter has engaged the minds of officials in the Department for some time. A pensions initiative has been undertaken within the Department to generate discussion and to ensure adequate provision is made. Occupational pensions also raise questions about the future burdens on the State. It is important to point out that the combined assets of occupational pension schemes amount to approximately £18 billion, an increase from £2.3 billion in 1981-2. This constructive and helpful development must be measured against the increasing number of people in insurable employment. Concern was also expressed about the changes in regard to PRSI, the social fund etc. All future requirement have been fully taken into account and are adequately catered for in the Bill, the budget and the Estimates.

On the controversy which arose during the past week about the long-term unemployed, Deputies show their knowledge of an issue by the way they apply themselves to the debate. It goes without saying that Deputies generally have a very good understanding of the problem of long-term unemployment. People must have a good knowledge of the problem if they are to properly appraise it. It is very easy for a person who has never been unemployed to conclude that the long-term unemployed do not want to work. This misleading assumption is very hurtful to the people concerned. I know from my clinic that many people are not considered for certain jobs because they are too old or have outdated skills. It is totally unfair to suggest that these people do not want to work. Some people may live in deprived areas, but this is not their fault. The Government is taking the necessary long-term measures to deal with this problem to ensure the maximum number of people can secure places on training schemes and courses and can compete for jobs with other workers.

It is impossible to explain the true position to people who do not deal with this problem on a regular basis. People look at the issue in different ways: those who see things as they are ask "why?" while those who only see things as they should be ask "why not?". The policy being pursued by the Government in relation to the long-term unemployed is aimed at ensuring long-term unemployed people will be able to compete in the workplace and will not be patronised. There is no quick fix solution to the problem of long-term unemployment. A person who has been unemployed for five, six, seven or eight years requires a great deal of assistance to re-enter the very competitive work arena.

As somebody once said, rumours can be greatly exaggerated. However, rumours during an election year can be very misleading and dangerous. Many young people may decide to stand in the general election on the basis of misleading rumours. I would not like them to be misled. Rumours about the student summer job scheme and various other schemes are misleading and harmful and do not benefit anyone. I do not want to be political but the main Opposition party——

Dr. Woods

Was it proposed to cut the scheme?

Mr. Durkan

Deputy Woods was Minister in the Department of Social Welfare for nine years.

Dr. Woods

I introduced the scheme.

Mr. Durkan

He was quite successful in that Department and should know better than to proceed on the basis of groundless rumours. One can get into a terrible tizzy as a result of rumours and I would not like this to happen to the Deputy.

Dr. Woods

Did the proposal to cut the scheme come from the Department of Finance.

Mr. Durkan

I can allay the fears of the Opposition by telling it the scheme will not be cut. Everything is in order and under control and the Minister has dealt with this issue in the context of the Estimates.

Dr. Woods

Is the Minister saying there is a proposal but it will not be implemented?

Mr. Durkan

I will address a point about which I am concerned, particularly if Deputy Woods gets his wish and the election is held earlier than I would like. I have calculated the costs of the extension of existing schemes and the provision of new schemes. We would have to increase the social welfare budget by at least 30 per cent this year to meet the hopes and aspirations of the Deputies opposite. The Progressive Democrats Party has not entered this arena during this debate as it is difficult to call for increased expenditure and fiscal rectitude at the same time. It is unfair to the public for Opposition parties to call for increases for everybody, while telling another audience they are in favour of fiscal rectitude, without indicating how they propose to do that. Those parties need to clarify that contradiction in the near future or they will face difficulties on the doorsteps in the general election.

Dr. Woods

We may be on our own.

Mr. Durkan

Perhaps in some parts of the country candidates from only one party will appear on the doorsteps. This issue may not arise but the public will want to know about it at some future stage.

A question frequently raised by Deputies in the debate was whether the increases proposed in the Bill are adequate. They are not as good as we would like. A budget has never been produced which satisfied every Minister in charge of a Department.

This is a good Bill by national and international standards and there is little sense in the parties opposite decrying it and calling for more increases for the elderly. Every person receiving a payment from the Department of Social Welfare can justify a case for an increase, but we must have regard for budgetary strategy, which is controlled from within, and follow guidelines laid down outside this House. Everybody recognises that is the way to proceed and we are proceeding in that fashion. We have achieved the best that can be achieved within those constraints.

The Minister, Deputy De Rossa, has a good working knowledge of the way the Department of Social Welfare works. He has taken his responsibilities for the Department seriously. He understands the needs of the people who depend on the services provided by the Department. That is important because, without a reasonable understanding of those needs, it is difficult for a Minister to do justice to a brief. The Minister has done exceptionally well in that regard and I am privileged to have served with him. Perhaps we will have an opportunity of repeating the performance.

Time does not allow me to deal with the other points raised but I hope to have an opportunity to do so on Committee Stage. I thank Members for their contributions which have been noted. They were constructive, although some of the proposals would be expensive to implement. I thank the departmental officials with me in the Chamber and those working behind the scenes. When these measures are put into operation and the benefits begin to flow, the public will have an opportunity of passing its judgment on the Bill.

Dr. Woods

Since growth in GDP was 10.1 per cent in 1995 and 7.25 per cent in 1996, with inflation at 2.5 per cent and 1.6 per cent respectively, will the Minister of State agree the benefits of some of that growth should go to pensioners, widows and others in need?

Mr. Durkan

I did not create the irregularity. The suggestion in the Deputy's question is already being done. Increases for this year are approximately equal to the rate of inflation. As the Deputy knows, when inflation is low each increase in benefit is worth at least twice what it was four years ago.

Question put and agreed to.