In accordance with recent modifications to Standing Orders, all Members may speak twice. A Member may make a second contribution which shall not exceed two minutes. The Member who moves an amendment retains the right of reply. Effectively the mover may speak three times — a contribution when moving the amendment, a second contribution of two minutes and a third to conclude the debate.
Returns to Writs: Dublin North and Limerick East. - Social Welfare Bill, 1998: Report Stage.
Is there a limit on the opening contribution?
No, but I ask Members to remember there is a time limit on the debate so that we have the opportunity to debate as many amendments as possible.
I move amendment No. 1:
In page 6, between lines 34 and 35, to insert the following:
"6. —The Minister shall lay before each House of the Oireachtas a statement on the increase in the Consumer Price Index for the period of 1st January, 1998, to 31st December, 1998, within seven days of the publication of the relevant figures by the Central Statistics Office, and the statement shall compare the increases in Schedule A and Schedule B of this Act in percentage terms with the increase in the Consumer Price Index for the said period.".
My concern in putting down this amendment is that there are indications of inflationary pressures, confirmed by the recently published spring 1998 report of the Central Bank of Ireland. While the increases the Minister has given in the Social Welfare Bill are in excess of inflation, any rise in the inflation rate on which the budget was based will cut into the value of the increases given to those dependent on social welfare. My proposal does not oblige the Government to increase levels of social welfare if inflation rises. I would prefer to table an amendment to that effect but because of the way our business is conducted here we cannot table an amendment which obliges the Government to spend more money.
My amendment simply asks the Minister to lay before the House a statement on the increase in the consumer price index for the period January 1998 to December 1998 within seven days of the publication of the relevant figures by the Central Statistics Office, and the statement shall compare the increases in Schedule A and Schedule B of this Act in percentage terms with the increase in the consumer price index for the said period. Obviously that is a less powerful amendment than a simple, straightforward one stating that the value of social welfare should be increased by the corresponding increase in the inflation rate, but this is the only amendment which would be in order.
When I raised this matter previously the Minister indicated that he did not expect there would be any increase in inflation in the period between now and the end of the year, but I draw his attention to page 9 of the Central Bank of Ireland Report, Spring 1998, which goes into some detail concerning the issue of inflation. The report refers to price developments and the international and domestic economic outlook. In regard to the inflation outlook it states:
The outlook for inflation over the next year has worsened in the light of the recent overall decline in the value of the pound. Reflecting the impact of the weaker exchange rate, the composite leading indicator points to an acceleration in inflation. Anecdotal evidence suggests some worsening of inflation expectations and price increases for many imported goods and services. A worsening in inflationary expectations among consumers is also reflected in the latest EU survey. The possible emergence of an asset price bubble [this is a reference to the inflation in house prices] ..
Taking account of a relatively benign external environment, the likely containment — at least in the short-term — of domestic inflationary pressures and the expected convergence of short-term interest rates to levels prevailing in other EU countries during 1998, it is probable that the average rate of CPI inflation will pick up through 1998, employing an average of 2 3/4 per cent. for the year.
That is significantly higher than the rate assumed by the Minister for Finance when he announced his budget.
I hope the prediction is wrong for a range of reasons not least to do with the value of social welfare payments. When we apply a social welfare increase, particularly in a period where we have enormous economic growth, income levels are rising and the quality of life for those who are working generally is improving beyond expectations, we must ensure that the standard of living of those on fixed income and those who, for reasons beyond their control, are unable to earn an income outside of social welfare, whether they be pensioners or people with disabilities, will be protected. We all know that while our social welfare rates are generous compared to other European Union countries, they are not sufficient to ensure that people have a decent standard of living.
The ESRI report on the issue of poverty and updating the Commission on Social Welfare rates applied a number of different criteria to how an adequate income might be measured. Depending on the mechanism applied to measure the question of an adequate income, one can estimate that between 15 per cent and 40 per cent of the population are living below a given poverty line. We do not have time today to debate that issue but I hope the Select Committee on Family, Community and Social Affairs will get an opportunity to debate that important report.
The report also raises the question of moving beyond the simple application of the 1986 recommended rates for social welfare. Given our enormously buoyant economy and the wealth generation in this society, we need to move beyond examining our social welfare rates in terms of their value and increasing them on an annual basis beyond a simple measurement of inflation. We know that earned incomes increase significantly above the inflation rate, the net effect of which is that people on various kinds of social welfare incomes, but more particularly pensioners because of their circumstances, fall behind. That has been the case in the past ten years or more where the value of pensions, which only increased largely in line with inflation or perhaps marginally above inflation, have fallen significantly below the value of the income people might have had when they were working.
We should aim towards a level of pension which at least enables a person to live a life of some dignity. That is the background to the amendment which I hope the Minister accepts. If he is advised against incorporating the amendment into the Bill, I urge him to at least accept the proposal in principle so that we will have an idea as to how our social welfare rates are keeping pace with the cost of living.
There are a range of other issues I would like to raise; I do not know if we will get the opportunity to raise them at a later stage but I have concerns about the manner in which many local authorities claw back the social welfare increases which are given. If the Minister were to accept this proposal, at least in principle if not in the Bill, I would like him to examine the manner in which local authorities assess old age pensioners for differential rents and the proportion of social welfare increases they take from them each year. It is a mistake in policy — I have made this point in relation to other issues which arise in the Bill — for one agency of the State, the local authority, to pocket income provided by the State in general as income support.
I know from experience, as I am sure does the Minister, that when we calculate increases for social welfare or for pensions we do not take claw backs into account. We examine the existing figure and apply a rate of increase to that whether it is a percentage rate or X number of pounds of an increase. We do not examine the impact of that on the calculation of differential rents for old age pensioners. When I was in the Department a number of pensioners told me they did not want this increase because they felt they would not really get it, and that all we were doing was giving more money to the local authority. That issue needs to be addressed. If the Minister is prepared to accept my proposal I would like him to examine that issue. Other issues need to be addressed but this matter in particular, as well as the inflation indexing of social welfare payments, need to be examined.
Deputy De Rossa has done a service to the House in tabling this amendment as it has given us an opportunity to consider the dangers of inflation and the impact of inflationary pressures, particularly on those with fixed incomes. He said he does not expect earth shattering results but it is important to recognise the existence of such problems, which is why I support the amendment in general terms.
There are clear indications of inflationary pressures, although we cannot say how far they will develop, in the explosion in house prices. Imported inflation is probably an inevitable consequence of the exchange rate between the punt and sterling because of our high levels of imports from the UK on which there is now a surcharge of at least 20 per cent. We must accept there are inflationary dangers and the recent revaluation will not be sufficient to contain them. I do not have the necessary expertise to say whether those inflationary pressures will develop to the extent where they will cause a real problem. I do not think we will have a huge problem this year but they could cause considerable difficulties next year.
The other point is the position of those who will be worst affected by inflation. Many people gain from inflation but those on fixed incomes do not and can be very badly affected if the inflationary pressures are too great. That category encompasses all those who depend on social welfare payments.
We must be aware of the dangers of inflation and the fact that the social welfare increases, modest as they are, could be completely eaten away. All the amendment seeks is to have a report tabled so that we would be aware of the problem if it arose. It is a reasonable amendment. It does not demand any index linking, which would not be possible because such an amendment would be out of order. The Minister should either accept the amendment or, at least, give an undertaking that if inflationary pressures were indicated along the lines signalled by Deputy De Rossa the House could debate the issue.
The Minister has told us about the huge increase of £125 million in social welfare payments this year. However, the Exchequer's income was £100 million over target for the month of January alone. That is our fiscal situation. I understand the broad need to contain public expenditure and to comply with Maastricht criteria and the other restrictions. However, we must be aware of the danger that those on fixed incomes could be badly affected by inflation. If that were to happen we should at least have the opportunity to discuss the matter in the House, which is why I support the amendment.
I also support the amendment. Those who come under the most pressure from inflation are those in receipt of social welfare payments. Will the Minister accept a discussion is needed in this House on the difficulties which may arise for such people?
I thank Members for their comments. Unfortunately, I cannot accept the amendment. However, when the Department examines the increases which are to be given at budget time cognisance is taken of the anticipated inflation rate for the coming year. This was taken into account in the preparation of this year's budget.
As I said on Second and Committee Stages, the Government had a very short period in which to prepare a budget after it came into office. However, we made an early policy decision to give substantial increases, particularly to anyone over 65 years of age. We also gave a general increase of £3 to about 566,000 people. Given the anticipated inflation rate of 2 per cent, those general increases of between 2.2 and 4.2 per cent were real increases. The increases in old age pensions of between 6 and 7.5 per cent were much greater than the anticipated rate of inflation. Cognisance was taken of the position in relation to inflation.
There was also a policy view that we should give far greater increases than those given in the recent past. I do not say that to make a political point but because, as Deputy De Rossa acknowledges, the payments made to older members of society who rely on social welfare have fallen behind over the years. We made a decision to increase those payments.
I do not want to talk up the issue of inflation during a discussion on social welfare. However, and I do not say this as a defence, there is no doubt that the rates of increase in the recent budget are way in excess of anything given in recent years. The rates of increase are proofed against even a substantial rise in inflation because there is quite an amount of leeway in the figures in that respect. At the end of the day, it boils down to pounds, shillings and pence for those in receipt of the increases and I accept they do not look at percentages.
Deputy O'Keeffe will probably not acknowledge that the increases are substantial but the £125 million package is there for all to see. We decided to spread that package and give substantial increases to the areas we considered to be most in need. We could have spread the money more broadly, across the spectrum and included other initiatives, but we decided as a matter of policy that a sizeable amount of money would be put into old age pensions while not forgetting general increases for others.
I accept Deputy De Rossa's remarks regarding the local authorities. It has always been a source of discontent among members of the public that moneys provided by my Department in the budget can be clawed back. Deputies are aware of this. We have been in contact with the local authorities on the question of FIS and the calculation of the differential rent. Ultimately however, the decision on differential rents by the local authorities is based on guidelines issued by the Minister for the Environment and Local Government.
As my predecessor, Deputy De Rossa will appreciate the frustration involved in finding that, after fighting for the maximum resources available, a claw back can be operated by others. This does not only apply to the local authorities. The effect of the claw back is to reduce the benefit of the increase provided to people. That is wrong and I will look at any areas where this happens to try to ensure that people really benefit from the increases allocated to them.
While I appreciate the purpose of the amendment I cannot accept it. Amending the Bill is not the right way to proceed. However, perhaps the Oireachtas Joint Committee on Social, Community and Family Affairs could monitor the issue and submit its views. Matters will become clearer as the year progresses and the question of inflation will then have to be considered when preparing the budget for the following year.
I thank the Minister for his response. The amendment is unusual and it is not essential that it be incorporated in the Bill. However, it would be an important service to the House if he was to agree, at a minimum, that such a report would be presented to the House when the CSO publishes its report on the level of inflation.
The increases we are approving in the Bill will not be given until June and will probably run until the June 1999 less whatever few weeks the Minister manages to bring them forward. Even allowing for that, I do not anticipate that he will be able to close the gap by six months in the next budget.
Even if there is higher inflation towards the end of this year, people will have to pay more for their food and services for a period of up to six months before the next increases are given. In view of this, it would make sense if the report proposed by this amendment were to be made available. It would strengthen the Minister's hand when negotiating with his colleagues on the kind of money his Department needs to assist those on fixed incomes and who have no other way of earning incomes.
Will the Minister agree to present a report to the Oireachtas Joint Committee on Social, Community and Family Affairs on the trends in inflation and the impact they will have on social welfare rates? He may have good news in that the rate of inflation may be declining.
In percentage terms a rise of £3 represents increases ranging from between 4.2 per cent and 4.6 per cent. The real increase would be between 2.2 per cent and 2.6 per cent based on anticipated inflation of 2 per cent. A rise of £5 represents a real increase of between 4.4 per cent and 5.4 per cent. The increases we provided this year were well ahead of the anticipated rate of inflation. For example, in 1995, the real increase was 0 per cent; the rate of inflation was 2.5 per cent and the increase provided was 2.5 per cent. In 1996 the rate of inflation was 1.7 per cent while the real increase in social welfare was 1.3 per cent. In 1997 the rate of inflation was 1.4 per cent which provided for a real increase of 2.6 per cent. By comparison with the figures for the previous three years, the rates of between 4.2 per cent and 4.6 per cent with regard to the rise of £3 per week and of between 6.4 per cent and 7.4 per cent with regard to the rise of £5 per week illustrate the real increases that were provided.
While I do not wish to give any hostages to fortune regarding the ultimate rate of inflation, the differential between what we anticipated and the percentage increase we provided allows for plenty of leeway. I will accede to any request from the Oireachtas Joint Committee on Social, Family and Community Affairs to discuss the issue and assist it in its deliberations. I may have a good news story to tell.
I would prefer if the Minister agreed to produce a report on the trend in inflation. I will not debate rates of increase in previous years. If a 10 per cent increase was provided this year across the board it would still not bring social welfare rates to a level which would enable people to live with dignity. That is the sad reality. The rates in the past have been increased on an inflation basis and have not been related to the cost of living in terms of the people's standards of living and their potential earnings in the workforce.
Amendment put and declared lost.
I move amendment No. 2.
In page 6, between lines 34 and 35, to insert the following:
"6. -The Minister shall prepare a report on the measures required to close the differential between the rates of periodical benefits and rates of periodical social assistance paid to a beneficiary and the rates paid to a qualified adult, and he shall lay the report before each House of the Oireachtas not later than six months from the enactment of this Act.".
This is a device to have the issue of individualisation of rates brought to the floor of the House. What I am talking about is the gap between what is sometimes referred to as the main rate and the rate paid to an adult dependant. If I am claiming unemployment assistance and my spouse is a dependant, she is paid the qualified adult rate. There are strong arguments in equity and in equality for giving the dependants of claimants the same rate of payment as the main beneficiary. From the statistics the Minister gave us on Committee Stage, it is clear the differential is growing and the qualified adult rate has declined as a proportion of the main rate.
The Commission on Social Welfare recommended that the adult dependant rate should be a minimum of 60 per cent of the main rate. Some of the qualified adult rates are in excess of that, although not greatly so at around 62 per cent or 63 per cent. Unfortunately, the rates are declining. To relieve the Minister of the task of reminding me, it is not just this year they declined. They declined in previous years as well. For policy reasons Ministers tend to concentrate on the main rates, on putting resources into certain areas, whether carer's benefit, child benefit or whatever, and then allocate resources as best they can across the other areas.
We need to be serious about the issue of the qualified adult. For years there has been pressure to eliminate gender discrimination from our social welfare system. The major advance in that respect was made by way of European Union directives, but these were not properly implemented in this country and this resulted in many court cases and, eventually, in married women achieving success and being paid something like £260 million which was due to them. Had the European Union directives been implemented correctly in the first place, the estimated cost would have been about £18 million.
There are issues not only of equity but of cost. If we continue to treat the qualified adult in this discriminatory way, we will face court challenges. I do not know the proportions, but I am sure that in excess of 90 per cent of qualified adults are women, generally married women working in the home. Some of them may have part-time jobs, but that would not be a significant proportion. There is a case for looking seriously at the issue of individualisation of rates. There has been pressure over the years to eliminate discrimination against women in our social welfare code. The EU directives went a long way towards that. In terms of language, and in most if not all schemes, we have eliminated any discriminatory aspects of qualifying criteria for social welfare, but there is still this distinction between the main beneficiary and the qualified adult where the qualified adult gets only approximately 60 per cent, perhaps a bit more or a bit less, of what the main claimant is receiving.
All kinds of benefits would result from individualisation of rates. It would be costly and there are major policy implications involved in going down that route, but it is time we began to look at it. It is the next step in terms of equality in our society as it relates to social welfare. I would like at the very least to see a policy of increasing the proportion of the qualified adult rate gradually over a period of years to bring it closer to the main rate. It may take a long time to reach the target of complete individualisation, but we should at least make a decision to head in that direction. One way of doing that would be to monitor the qualified adult rate when we apply our annual social welfare increases. In that way the issue would be upfront all the time and we would be able to argue for or against what was happening. It is only on the basis of hard information that we can make rational arguments in this House for or against policy options.
I support the amendment put forward by Deputy De Rossa and agree with most of what he said. What he said could be extended further in the context of two young people in receipt of unemployment assistance who are supposedly living separately. If they get married one of them becomes an adult dependant, thus reducing their overall income by between £20 and £25 a week, which is a substantial amount of money. Many young people would say that is a disincentive to marriage. The Minister may say that if they are living together and getting the full amount, one of them is making a false declaration, and that is so, but if one were to examine the situation in many large housing estates one would find that this is cited as a disincentive to marriage. Knowing the Minister's background and his commitment to the family, I am sure he would be anxious that the Government should encourage the institution of marriage, and this is one of the bars that prevent a small number of people from getting married.
There is another point associated with this. A constituent of mine spoke to me yesterday about increases in social welfare pensions resulting from the budget. She is an adult dependant on her husband's allowance, and she was a little bit upset that he, as the pensioner, was going to get an increase of £5 on his pension but that she, as an adult dependant, would not get the same level of increase. If she had her own pension payment, she would have received an increase of £5. She felt that because she was a wife and an adult dependant she was not being treated fairly under the social welfare code. The lady is in her seventies and I was surprised at how upset she was and how vigorously she pressed her case.
This relates to the point made by Deputy De Rossa. There is a need to equalise the system. Most adult dependants are women and they are treated as second class citizens. I understand the huge financial implications involved but perhaps there is a way round it, such as a household allowance with adults treated individually and at the same level. We must move towards a position where everybody is treated equally under the social welfare code.
I support the amendment because women are particularly affected by this issue. The majority of adult dependants are women who stayed at home to look after their families and who do not have any contributions in their own right. In common with Deputy McGrath, I received representations from a woman recently on this matter which arose following the £5 increase in the budget for old age pensioners. This increase is welcome but married pensioners presumed they would receive £10. The woman wanted to apply for her own old age pension. She did not understand that her husband had contributions and she did not have any contributions. I appreciate that pensioners received a large increase this year but the possibility of paying women pensions equal to those of their husbands should be considered.
I am also aware of a case involving a woman who had stamps and sought an invalidity pension. She was most aggrieved because she was asked on the application form how much money she had in the bank, etc. A number of anomalies in the system need to be examined, particularly the equalisation of pension payments. I presume this would cost a great deal of money; the Minister probably has the figures. Perhaps the Oireachtas Select Committee on Family, Community and Social Affairs in conjunction with the Minister should consider how equalisation of pension payments could be introduced.
I acknowledge the points made by the Deputies. The general 3 per cent increase in qualified adult allowances, which will be paid from June, will involve increases ranging from 56 per cent to 68.6 per cent of the relevant personal rate of payment. The increases for those on long-term social assistance, with the exception of invalidity pension for those over the age of 65 or in excess of 60 per cent of the personal rate, and short-term social insurance payments will amount to 58.4 per cent of the relevant personal rate. Treatment of married or cohabiting couples and one parent households under the tax and social welfare systems is being examined by the interdepartmental working group established by my predecessor, Deputy De Rossa, in May last year. This group, which is chaired by my Department, will submit its report later this year.
The issue of the individualisation of payments was raised on Committee Stage. I undertook to have the matter examined, but it will take considerable time. I inherited a tradition which developed over the years where all my predecessors, irrespective of political party, increased the full personal rate for the relevant spouse in the household. There are a number of ways to address this issue. One would be to aggregate the total current payment and divide it in two. However, the fact that previous Ministers did not do so is testimony to the point that if such a move was made, the Minister would be subject to the wrath of male social welfare recipients and old age pensioners. The alternative is to implement the various suggestions over a long period. Equalisation could take place by substantially raising the qualified adult allowance but this would cost a huge amount of money.
Perhaps the Oireachtas Select Committee on Family, Community and Social Affairs could consider this matter and make suggestions. I would then consider proposals in the context of a future budget. However, I do not have figures on the cost of equalising qualified adult allowance payments. I accept Deputies did not seek that because it would be asking for the impossible. However, some people are aggrieved by the current position and I also received representations about the matter. This puts into context the point I made regarding amendment No. 1. Substantial increases were given in the budget and people in receipt of qualified adult allowance are aggrieved because the differential between the personal and qualified adult allowance rates is much more stark as a result.
However, that is the consequence of the decision to positively discriminate in favour of those on social welfare over the age of 66 years and on the personal rate. In an ideal world it would be lovely to be in a position to proportionally increase the qualified adult allowance. However, everything was not possible in the budget package that was available. I accept this area needs to be examined and perhaps the Oireachtas Joint Committee on Family, Community and Social Affairs and my Department officials will bear it in mind in their future deliberations.
The Minister's point about aggregating the main rate and qualified adult allowance payments and dividing it in two might appear attractive at first glance. However, the effect of this would be that individual recipients living alone would be on a lower rate. This would be unfair and discriminatory. Therefore, the only way to achieve individualisation is to raise the qualified adult rate. The theory behind a lower rate for qualified adults as opposed to the main rate is that it is assumed it is cheaper for two to live together than one to live alone. I do not know if the evidence sustains that argument any longer. That was believed to be the case when the commission published its report in 1985-86 and recommended that the adult dependant allowance — as it was then known — should be no less than 60 per cent of the main rate. I have a vague recollection that a more recent report questioned the theory of two being cheaper than one. Nevertheless, we need to address this unfair treatment of qualified adults who, because of the nature of our society are mainly women, many of whom are married. It has already been stated that some people choose not to inform the Department of Social, Community and Family Affairs that they are living together because of the fear of losing the two main rates and ending up with a 1.6 per cent rate. This would place them in a limbo and cause great difficulties for the Department. The Minister should seriously consider bringing the qualified adult rate closer to the main rate.
I have nothing further to say on this matter. On Committee Stage I gave an undertaking to consider it, but it will involve some long-term planning. Perhaps it could be discussed further at the Select Committee on Family, Community and Social Affairs. This measure would involve a large number of people and substantial cost.
Amendment put and declared lost.
Amendments Nos. 3 and 4 are out of order because they involve a potential charge on Revenue.
(Dublin West): On a point of order, while I accept the Chair's ruling in respect of Standing Orders which are very restrictive and ridiculous, it is in the gift of the Minister to sponsor the——
I cannot allow the Deputy to debate the matter because it is out of order.
Amendments Nos. 3 and 4 not moved.
I move amendment No. 5:
In page 7, between lines 40 and 41, to insert the following:
"7. —The Minister shall consider the possibility of introducing a Parents Child Care Supplement of £360 per annum for all children up to age of 5 years to be paid directly to the mother through the Child Benefit Scheme and shall lay a report on this proposal on the table of Dáil Éireann within 3 months of the passing of this Act".
As the father of twins and somebody who would benefit from Deputy Higgins's amendment, I was hoping the Minister might respond.
The Deputy did not thank me for increasing benefit for twins.
The Minister quoted statistics which do not bear up under a total examination of child benefit. As Disraeli once said, "There are three kinds of lies: lies, damned lies and statistics." When the Minister talked about the percentage increases provided for in the Bill he did not refer to an increase for child dependants. He was not able to do so because that allowance was not increased. Most people agree that child support should be expressed through child benefit rather than child dependant allowances. While I do not disagree with that established dictum, I would point out what we should do in respect of child benefit. If the Minister uses the consensus in that respect as an excuse for not increasing the allowance, there must be a much more liberal approach to child benefit. That is the background to this amendment.
Child care should be a priority. That is why I pressed this amendment on Committee Stage and tabled it again on Report Stage. The amount of increase provided in the Bill for child care generally is inadequate. In the short reign of the rainbow Government child benefit was increased by 60 per cent while under this Bill there will be a very modest increase of approximately 37.5 pence per week which will apply from next September. That is the only provision for child care.
A further initiative is necessary to provide real additional child care support for families with pre-school children. There is scope for this in the context of this Bill because of the failure to increase the child dependant allowance and the very modest increase in child benefit from the end of the year. Against that background, I propose that there should be a parent's child care supplement of £360 per annum payable in the same way as child benefit. This would amount to less than £1 per day and would apply to all children under five. In a pre-budget submission on behalf of Fine Gael I stated that I would be satisfied if this initiative was introduced on a phased basis. I appreciate the cost tag would be considerable if it were introduced initially for all children up to five years. It could be paid in respect of one and two year olds in 1998 and extended to cover all children up to the age of five in 1999.
Another advantage of child benefit that cannot be underestimated is that it is normally paid to mothers. In many cases it is the only independent source of income they receive. Unfortunately, there are many selfish fathers who are not prepared to live up to their family responsibilities, particularly when there are a number of children involved.
That is why I phrase it to seek a report on this issue. I am interested in the actual costing, on which there was a difference of opinion on Committee Stage. I did my calculations on the basis of approximately 50,000 children born each year. The figures produced by the Minister were somewhat higher. Will he give a commitment to consider this initiative? If he gives favourable and positive consideration to the introduction of such an initiative, in time he may be remembered as the Minister for Social, Community and Family Affairs who made an appreciable difference to the quality of child care. I do not seek to have my name associated with it. I would be happy if the Minister took credit for it and announced that he is prepared to accept it and adopt it as his own.
My colleague, Deputy O'Keeffe, has set out clearly the thinking behind this amendment and has made a strong case for a parent's child supplement to be paid to the mothers of children under five years of age. Children in that age group do not receive a great deal of State support in terms of school costs and so on. Those who have additional help at that age will reap the reward later.
It is important that this supplement be paid through the child benefit scheme. It is interesting that 58 per cent of mothers who receive child benefit have it as their only source of income. If we want to get money directly to the mothers of children, it should be channelled through the child benefit scheme. On Committee Stage we haggled about the costings which amounted to approximately £17 million or £18 million per annum. This would have to be multiplied by five if it were to be paid for five years. If this were phased in it would be a worthwhile additional benefit to the parents of young children. The Minister's broad remit includes not only social welfare but families. Will he take this amendment on board and have a thorough look at what can be done in that area? There is an even greater need for support for families at this time, especially those with children of pre-school age.
(Dublin West): I support this amendment which calls on the Minister to consider the introduction of a parent's child care supplement of £360 per annum for all children up to the age of five years, to be paid directly to the mother through the child benefit scheme. It is recognised that the earlier years of children are expensive for parents. Given that in most cases it is the mother who is required to make provision for the child, this supplement would be of special assistance to mothers. As well as asking the Minister to accept this amendment I ask him to look again at child benefit for twins. The Minister should go the whole distance in providing 200 per cent to families with twins. There was an injustice here. The Minister went half the way towards recognising that injustice as compared to the treatment of triplets and so on. I invite him to sponsor the two amendments ruled out because of Standing Orders. The birth of twins imposes a huge charge on families and puts an extra strain on parents. In the event of multiple births of two or three, costs are not only doubled but there are extra costs involved for various reasons. The State is backward in providing cre ches for child care. While finance is not everything it is of enormous assistance; the amount involved would be small. While Standing Orders do not allow Deputies make proposals that may impose a charge on the Exchequer I could point out where the revenue could be found. As a corollary to the extra cost, one could reverse the cut in capital gains tax from 40 per cent to 20 per cent, which benefits only the superrich and speculators, and give it to the mothers of children.
I support the amendment. I agree that any payments for children should be made through the child benefit scheme. In this way the benefit goes directly to the mother. We are all aware of mothers, whether in the private sector or on social welfare, who have irresponsible husbands who do not provide for their children. Women dependent on social welfare with unscrupulous husbands who apply to the Department of Social, Community and Family Affairs for a payment, receive only half the payment while the unscrupulous husband drinks the rest.
The Deputy is being unfair on males.
I wish she was.
I have yet to meet a man at my clinic who complains about his wife is drinking the money. The Minister knows the point I am trying to make that payments for children should be made through the child benefit scheme.
I support this amendment.
However the constraints of Report Stage do not allow us to expand and explore the amendment as we would wish. I am aware the Minister has cost constraints. A change of mind set and attitude is required to child care and equality. Even if this has to be done on a phased basis, it can be done with a certain confidence because the buoyancy of the economy and tax revenue will allow us to do it. A modest step in the right direction would allow women to make choices in the home. We have an idyllic picture of rosy cheeked children and a mother who wishes to spend all her time with them. For many reasons it would be positive for both the mother and children if the accommodation and resources were available to allow the children to attend a cre che or child care centre in which the mother might also be involved. At present, there is a two tier system. If people have sufficient money, they can use it to give their children the social and intellectual start which is recognised as an extraordinarily positive beginning with regard to equality of opportunity for children. However, the mothers and children who need that start most are those who can least afford it. As legislators, we must begin to tackle that inequality and that is the objective of this amendment.
Deputy McGrath quoted the staggering statistic that the sole, independent income of 58 per cent of women with children is child benefit. That is a cold figure which reflects a huge amount of poverty and a lack of recognition of what women, as mothers, do. Is a policy being developed in the medium term with regard to the recommendations of the Commission on the Family and the working group on child care? Can that be a support mechanism for the Minister in seeking Government decisions to increase budgets to meet the requirements of amendments such as this?
I support the amendment. It is essential that financial supports for child care be developed. However, we should not simply discuss the issue of payment for child care. It should not just be a matter of giving money to parents to buy child care. We should examine the issue of child care in its broadest context. The parent who remains in the home to care for the child is equally as in need of support as the parent who goes outside the home to work and needs to buy child care for the period he or she might be employed.
I support the concept of developing child benefit as a means of supporting children in society. It should be sufficient to enable parents to do that, whether they remain at home on a shared basis to care for children or one spouse chooses to stay at home or both take up employment outside the home and need to employ a child care service. Numerous studies have shown that the child benefit system is the most effective means of tackling the issue of child poverty in society. There is no longer any debate about this finding and it is simple to find out why it is the case. Child benefit is not clawed back in any way. It cannot be clawed back by local authorities in the same way as pension, unemployment benefit or family income supplement increases can be clawed back. No end of trouble will be caused if local authorities ever attempt to include child benefit in their assessments for differential rents or other benefits.
The only time child benefit is taken into account for State supports is in the case of legal aid, and we should insist that the Legal Aid Board end that practice. It cuts into the principle that child benefit should never be taxed. However, when people seek free legal aid to go to court to protect their rights, they are essentially taxed on their child benefit. That is wrong and we should draw attention to it.
Child benefit is not taxed by the Revenue Commissioners and it is not clawed back by way of grants from local authorities if a recipient seeks a housing grant which is means tested. It is also not taxed if one returns to work after having been unemployed, unlike child dependent allowances. I am pleased the Minister continued the innovation of the last Government which froze child dependent allowances and gave significant increases in child benefit.
Deputy Moynihan-Cronin spoke earlier about the anomalous situation that arose when the main beneficiaries of such allowances, who are usually male, complained bitterly when child dependent allowances were not increased but child benefit was. The increase did not come in his cheque but went directly into the pocket or purse of his spouse. There are probably good reasons in many cases for such complaints but child benefit is a payment which goes directly to women. It is given to every parent who has a child and it is the nearest thing this country has to a basic income.
For those reasons we should examine the possibility of developing and increasing the child benefit system to a point where it can give adequate support for rearing children. Numerous reports over many decades have shown that it is the best way to deliver support for children. On that basis, I wholeheartedly support the amendment. It deals with child care and I have no problem with that.
If child benefit was sufficiently enhanced it would enable people to buy child care where they need it. It is a better way for the State to deliver support for child care than through the tax system. Britain has introduced a tax allowance for child care and many people argue for its introduction here. However, we must distinguish between a tax allowance on a person's income which enables him to purchase child care, which I believe is wrong and would be an inequitable way of delivering support, and the need to examine how people involved in child care are taxed. Thousands of people who are paid to provide child care are working in the informal economy. It is not financially worthwhile for them to come into the tax or PRSI system. That issue must be seriously examined. As it is a hidden industry, it is extremely difficult to regulate and we are, therefore, leaving it open to all types of dangerous practices.
I urge the Minister, when examining the issue of child care, to concentrate his efforts on increasing child benefit and to forget the Fianna Fáil promise to introduce a tax allowance for child care. Tax allowances will not benefit those who are not at work or those who are working for low pay. It will only benefit people who are on high levels of pay. The more tax a person pays, the more he or she will benefit from a tax allowance for child care. However, that would be anomalous because, by definition, if somebody is on a high income, he or she can afford to buy child care. The person at the other end of the income ladder is the person who is most in need of assistance.
The delivery of child care in a fair and equitable way for all children should be through child benefit.
I thank Members for their contributions. It is one of the major issues facing our changing society which has changed dramatically in the last two decades. All political parties are of the view that it must be addressed but there are differing opinions on what should be done. On a radio programme this morning on which there was a large number of contributors, all female —— I do not see this as a female problem——
I wish all men were of that view.
I was taken with some of the contributions. One contributor said they did not believe it was the duty of the State to intervene——
Was Nora Bennis on the programme?
——but I would not agree with this. The issue has to be dealt with not alone by the State but also by individuals and the social partners. The Government will do its utmost to address it.
Deputy Higgins referred to the child benefit payment in respect of twins which was increased in the budget in keeping with the commitment given in our manifesto and the programme for Government. It boils down, ultimately, to a question of pounds, shillings and pence.
(Dublin West): It is a paltry sum.
The increases were larger than those granted the previous year, although I acknowledge the previous Government granted substantial increases in its first two years in office.
A number of Members referred to the report of the Commission on the Family which is due to be published shortly. It received more submissions than any previous similar State commission. One in three referred to the issue of child care. The commission asked the ESRI to conduct a national survey of child care arrangements. The preliminary findings indicate that one in three or 77,000 pre-school children experience periods of care outside the home and away from their parents for part of the week. A total of 75 per cent or 99,000 children under the age of two are cared for in the home by a parent. A total of 13 per cent or 13,200 children under the age of two are cared for by a childminder in the childminder's home. Almost 20 per cent or 21,600 of children between the ages of two and three at home with a parent attend a nursery, cre che or other pre-school service. A total of 99 per cent of five year olds and almost 50 per cent of four year olds — not surprisingly — attend primary school. The experience in many European countries is that children start school later. The results of the survey indicate a varied approach among families to the care of young children. The report of the commission will be a starting point for the expert working group established under Partnership 2000 under the remit of the Department of Justice, Equality and Law Reform.
This is one of three major issues facing our society. The others are the ageing profile of the population and disability. Irrespective of who is in Government, they will have to be looked at closely. We must start planning for the future.
We indicated in our election manifesto and the programme for Government that, if at all possible, we would address the issue of a tax allowance for stay-at-home spouses — generally females — who give up their careers to rear their children. We also indicated that we would address the issue of a tax allowance to assist couples working outside the home with the cost of child care in registered cre ches. These issues are being examined by the Minister for Finance.
I could be political and ask why the Deputies opposite did not address this issue when in Government but I will not go down that road. It is an issue which will have to be dealt with on a broad front. I accept what Deputy De Rossa said, that tax allowances alone are not the cure. There are differing opinions. On the radio programme mentioned people from all walks of life and backgrounds expressed their views on how the issue should be addressed from their perspective but the Government and the social partners have to take a broader view.
As regards what Deputy De Rossa said about the Legal Aid Board assessing child benefit, we should take that issue up with the Legal Aid Board or the Department responsible for it and I undertake to do that. Members are aware why I cannot accept the amendment. I acknowledge that not only my Department but other agencies must look at the area of child care in greater detail.
The issue of child benefit as opposed to child dependant allowance was accepted by the previous Government and followed by me since I took office. The freezing of child dependant allowances is the right thing to do because child benefit is, as other speakers said, the best way of getting to the core of child poverty. It will ensure that the female spouse gets money into her hand. It is well established that the best way to direct resources to children is through child benefit and I will continue that practice as long as I am Minister.
I welcome the Minister's statement that he will address the issue of the Legal Aid Board taking child benefit into account. I am worried that this could be used in the future as the thin end of the wedge in relation to other qualifying criteria for support and public services. When I was the Minister for Social Welfare I sought to have it dealt with by the Department responsible for the Legal Aid Board but, unfortunately, I did not succeed. I wish the Minister well and I will write to the Minister for Justice, Equality and Law Reform about the matter.
The Minister's heart is in the right place and if he was not on a leash from the Minister for Finance he would make some decent progress on child care, particularly in relation to child benefit. I listened carefully to some of the points the Minister made about what is in the programme for Government on this issue.
There seems to be common ground on all sides of the House about improving the lot of children and a common view that child benefit is preferable to increasing child dependant allowance. There may not be common ground on tax allowances and tax relief. I am worried about an approach which involves tax relief. It is not that I am against tax relief but there is a danger that if one focuses on tax allowances it may discriminate against the stay-at-home mother and those at the lower end of the tax scale while favouring the well off or those on substantial incomes. Is that the right approach? The UK is looking at that approach at present. Perhaps the Minister might examine how it works there. We should follow the tried and trusted approach of child benefit. As my colleague, Deputy McGrath, said, child benefit is the income of a substantial percentage of mothers. Increases could be made under any of the headings of child benefit.
Deputy Joe Higgins mentioned a particular approach close to my heart when he spoke about multiple births. Consideration should be given to a child care benefit supplement for pre-school children. I take the Minister's point that our children go to school much earlier than those on the Continent. In some continental countries they do not go to school until the age of six or seven, whereas children here go at four years of age. There are special costs before that happens whether or not the mother is working.
I would like to press the amendment to a vote to indicate how strongly I believe in it but I do not want to hold up the debate as we only have limited time. I am sure we will have an opportunity to return to this issue in the future.
Amendment put and declared lost.
I move amendment No. 6:
In page 8, line 3, to delete "(Employment)" and substitute "(Employments)".
This amendment is to correct a citation in the Bill.
Amendment agreed to.
I move amendment No. 7:
In page 9, before line 1, to insert the following:
"8. -The Minister shall, within 3 months of the passing of this Act, lay before Dáil Éireann, a detailed report on the implications of the extension of the Family Income Supplement to the families of persons who are self-employed.".
One of the bouquets I gave the Minister is the fact that family income supplement is now payable on net income. A step towards that was taken in the previous Social Welfare Bill which was introduced by Deputy De Rossa. I support the Minister in taking that a step further. However, there is now greater discrimination against the self-employed. The self-employed, who cannot qualify for family income supplement, are painted as the fat cats of our society. That attitude to self-employment must be changed. Traditionally, many self-employed people survived on a low income. Many farmers, for example, are self-employed and they do not have big incomes. I remember asking a constituent for a description of a small farmer and I was told it was a farmer with more children than cows. They are not all in that category. We must consider that category of self-employed people as well as those who own small shops in our cities, towns and villages.
Debate adjourned.