Dáil Éireann debate -
Wednesday, 1 Jul 1998

Vol. 493 No. 4

Written Answers. - Social Welfare Benefits.

Trevor Sargent

Question:

141 Mr. Sargent asked the Minister for Social, Community and Family Affairs if he has decided on the date by which he intends to achieve 100 per cent of social welfare claimants receiving 100 per cent of the minimum rates recommended by the Commission on Social Welfare in 1986; and if he will make a statement on the matter. [16697/98]

John Gormley

Question:

143 Mr. Gormley asked the Minister for Social, Community and Family Affairs whether his attention has been drawn to the evidence from the consumer price index which shows that food prices have increased by 4.9 per cent over the past 12 months in view of the fact that food costs account for a very high proportion of the outgoing of people who depend on social welfare payments; if, in view of this report, he proposes to introduce supplementary social welfare increases in the period between now and June 1999; and if he will make a statement on the matter. [16455/98]

John Gormley

Question:

144 Mr. Gormley asked the Minister for Social, Community and Family Affairs the proposals, if any, he has to bring those social welfare claimants whose incomes are still below the minimum levels into line as recommended by the Commission on Social Welfare in 1986 in view of what the Central Statistics Office has called the quite significant jump in food prices over the past year; and if he will make a statement on the matter. [16456/98]

John Gormley

Question:

145 Mr. Gormley asked the Minister for Social, Community and Family Affairs his views on the recent food price increases as reported on by the Central Statistics Office in the context of the low level of social welfare increases which became effective this month; his views on whether, in this economy, the poor are getting measurably poorer; and if he will make a statement on the matter. [16457/98]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

I propose to take Questions Nos. 141, 143, 144 and 145 together.

The 1998 budget provided for significant social welfare increases. A special increase of £5 in the maximum personal rates of payments has been provided for some 270,000 pensioners aged 66 and over, with pro-rata increases for a further 54,000 pensioners on reduced rate contributory pensions. The £5 increase represents an increase ranging between 6.4 per cent and 7.4 per cent. Indeed, these are the largest percentage increases which have been provided for the elderly since the early 1980s.

This year's budget also provided for a general increase of £3 for 560,000 social welfare recipients aged under 66 years, with pro-rata increases for a further 6,000 people on reduced rate contributory payments. The £3 increase represents an increase ranging between 4.2 per cent and 4.6 per cent. In addition, the increases provided in the budget took effect from the first week in June. This means that this year's increases are being paid for 31 weeks — an additional two weeks on previous years.

This year's social welfare increases also mean that the rates for all but two categories, representing some 832,100 recipients (94 per cent) are now at or above the recommended minimum rate set by the Commission on Social Welfare. The rates for short-term unemployment assistance and supplementary welfare allowance, representing 57,000 recipients (6 per cent), have been increased from 95 per cent to 98 per cent of the target rate. Accordingly, substantial progress has been made in meeting the commitment in Partnership 2000 to achieve the minimum rates recommended by the Commission on Social Welfare for all payments before the end of the partnership, 1999.

The consumer price index measures the monthly changes in the cost of purchasing a representative basket of consumer goods and services. The quantity of each item in this basket is proportional to the average amount purchased by all households in the country, as determined by the latest household budget survey. While the cost of some of the items in the basket might increase, these can be offset by reductions in the cost of other items. For instance, the May CPI figures indicate that the year on year increase in food was 4.9 per cent while fuel and light increased by 0.9 per cent. However, these increases were counterbalanced by a decrease of 6 per cent in the cost of clothing and footwear during the same period. The overall CPI is designed to take account of these different indices, by measuring the change in the average level of prices.

While a projected inflation of 2 per cent for 1998 was assumed at budget time, present indications are that inflation will average somewhat higher than 2 per cent this year. The latest information published by the Central Statistics Office for May 1998 highlights that average consumer price inflation for the year to May 1998 is of the order of 1.3 per cent while the year on year rate is 2.7 per cent.

However, because of the significant level of this year's social welfare increases as set out above, a small increase in the expected inflation will still mean that social welfare recipients will have received real increases this year and, therefore, their real income position has been protected and enhanced.

The question of further increases in social welfare rates, including the question of bringing those rates currently below the minimum Commission on Social Welfare recommended rate up to the target rate, will be examined in the context of formulating proposals for the 1999 budget.

The most recent information available on the extent and nature of poverty in Ireland dates from a household survey conducted in 1994. This survey found that in the period from 1987, when the last such survey was carried out, the proportion of the population living below incomes set at 50 per cent and 60 per cent of average disposable income had increased. However, the overall trend indicated an improvement as regards the level of poverty. The depth of poverty, for example, as measured by the average gap between actual incomes and the 50 per cent and 60 per cent lines, fell considerably.

In the period since the 1994 survey was undertaken the economy has performed strongly with the numbers at work increasing by 150,000 to 1,338,000 and the rate of unemployment decreasing from 14.1 per cent to 9.3 per cent. These developments, together with other measures being taken by the Government, such as the substantial social welfare increases outlined above, will have a positive impact on the level of poverty.

Noel Ahern

Question:

142 Mr. N. Ahern asked the Minister for Social, Community and Family Affairs the regulations, if any, there are in relation to unemployed persons retaining secondary benefits on return to work; and if he will make a statement on the matter. [16454/98]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

In general, the social welfare secondary benefits of the Christmas bonus, butter vouchers and free fuel are payable only to recipients of long-term social welfare payments. Other benefits, such as rent allowance or mortgage supplements and the back to school clothing and footwear allowance available under the supplementary welfare allowance scheme, medical cards and differential rents, are generally income-related.

In the ordinary course of events, an unemployed person who makes the transition to full-time employment does not retain automatic entitlement to secondary benefits since they are no longer in receipt of the appropriate qualifying payment.

In the case of the long-term unemployed — i.e. people who have been signing on the live register for at least one year — special arrangements have been put in place to provide them with an incentive to re-enter the active labour force. For instance, since 1996, such people are entitled to retain the medical card for a period of three years when they take up paid insurable employment.

In the case of certain employment programmes, including, for example, the community employment scheme, the back to work allowance scheme, and the area enterprise allowance, participants are generally enabled to retain their secondary benefits at the level prior to participation in the programme, provided that the gross household income does not exceed £250 per week. In addition to this income limit, it should be noted that the maximum rent or mortgage supplement payable in such circumstances is £250 per month.

Noel Ahern

Question:

146 Mr. N. Ahern asked the Minister for Social, Community and Family Affairs the regulations for the granting of free schemes to those on State or semi-State occupational pensions; the income limit applicable; if he will consider a sizeable increase in the next budget; the number of pensioners who qualify; and if he will make a statement on the matter. [16496/98]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

Free electricity-gas allowance, free television licence and free telephone rental allowance have always been available to persons in receipt of social welfare pensions, including contributory pensioners, without the need for an additional means test. Persons in receipt of occupational pensions could qualify for these schemes provided they were also in receipt of a social welfare pension.

It is possible for a person to be in receipt of an occupational pension but not be entitled to a social welfare pension. This can happen where they were in State or semi-State employment and not insured for retirement or old age (contributory) pension and where the level of their occupational pension is such as to preclude them from entitlement to old age (non-contributory) pension.

In 1996 entitlement to free schemes was extended to pensioners not in receipt of a social welfare pension, provided their income does not exceed the maximum personal rate of old age (contributory) pension, currently £83 per week, plus increases for dependants, where appropriate, plus £30. The means test used to determine the level of income in individual cases is similar to that used for non-contributory pension purposes.

There are currently 207 people in receipt of free electricity allowance, and 178 people in receipt of free telephone rental allowance, who are not in receipt of a standard qualifying pension for free scheme purposes and who have satisfied a means test instead.

Any further improvement to the free schemes which would have a cost implication, such as that proposed by the Deputy, would have to be considered in a budgetary context.