Dáil Éireann debate -
Wednesday, 24 Mar 1999

Vol. 502 No. 4

Social Welfare Bill, 1999: Report Stage (Resumed).

Debate resumed on amendment No. 4:

In page 6, between lines 2 and 3, to insert the following:

"4.–The Minister shall lay before both Houses of the Oireachtas a report outlining up-to-date figures for the expected current Budget surplus in 1999 and contrast these with up-to-date figures for the additional monies payable from the Exchequer in 1999 arising from measures in the Bill over and above the pre-Budget estimate for the Department.".

–Deputy J. O'Keeffe.

Mr. J. O'Keeffe

I want the House to agree, by virtue of this amendment, that we need to adopt a new approach to establish a fairer society. We have unprecedented funds at our disposal with an expected current surplus of £2,300 million. It is in that context that I want the contrast to be made with the moneys we are making available through the social welfare budget. This is not really a criticism of the Government. I am trying to get a united view of this House, of which the Government might take notice and which might be of support to whoever is Minister for Social, Community and Family Affairs when the next budget negotiations take place, that we want future social welfare budgets to reflect the unprecedented wealth in the economy and, in particular, the Exchequer.

If we are in favour of a fairer society, we must be prepared to accept a different approach, one which is predicated on the enormous moneys now available for the achievement of that fairer society. We must aim for and work towards the achievement of that fairer society and one way is to use the device I propose in this amendment.

Mr. Broughan

I warmly support this amendment which concerns a report on the current budget surplus in 1999. I referred, in the context of amendment No. 3, to the timing of changes in social welfare benefits. The overall picture has been painted well by Deputy O'Keeffe.

I cited a couple of reports on Committee Stage, particularly the ESRI report of 27 October 1998, in which Tim Callan, Brian Nolan and John Walsh, the authors of an interesting paper called "Income Tax and Social Welfare Policies", conclude that, with current policies, recent budgets have favoured higher earners. They say that if we continue past policy trends, with social welfare rates increasing more slowly than average incomes, we will see a rise in poverty in coming years. An anti-poverty strategy cannot rely wholly on growth in employment or increased welfare rates, it must combine each of these with broader measures to reach the target reductions in relative poverty.

This report shows that up to the 1997 period our expenditure on social welfare, as a percentage of GDP, fell from 12.5 per cent in 1987 to 9.8 per cent in 1997. The authors of this report and the authors of the recent CORI report also note that we spend the lowest percentage of national income on social welfare support in the EU, apart from Portugal. We must put into that context the various improvements in social welfare this year, on some of which I have commended the Minister.

At a private meeting yesterday of the Committee on Family, Community and Social Affairs, of which I have recently become vice-chairman, we decided that one of the topics we intend to study is the performance of the Department in reaching, by 2007, the target in the NAPS report in regard to 5 to 10 per cent of those living in poverty.

The overall figures are not impressive when looked at in global terms, as Deputy O'Keeffe has noted. In terms of fiscal performance, the social welfare segment of the budget has fallen from 36 per cent of fiscal expenditure in 1992 to 32.3 per cent in the recent budget. In the recent budget the poorest 30 per cent of the population gained 2 per cent less than the richest 10 per cent. The bottom line is that the massive income increase obtained by the country in the past four or five years, especially in the past two years, has not been reflected in the targeting of extra resources at the areas of greatest deprivation.

The Minister, in common with many of his predecessors, has not been prepared to grasp the nettle of poverty in our society. However, this Minister is different from all previous Ministers in that he has at his disposal resources about which other Ministers could only dream. That is the essence of this amendment which has been tabled by Fine Gael. The Minister has the wherewithal to, if he so wishes, reach the NAPS targets and effectively abolish poverty from our society, in regard to the spend of £5.2 billion on social welfare. Once again, he is not prepared to be the man who used the greatest opportunity in Irish history to launch a definitive war on poverty and to rid our society of it.

This is exacerbated by the difficulties resulting from the decisions made by the Government on regionalisation. The Minister is lucky that his constituency is one of the 13 which will have Objective One status for the next five years, with the possibility of Objective One in transition status after that. The Taoiseach and his colleagues are working busily today trying to nail down the best possible deal for this country. However, many Deputies, including myself, represent areas in which there are still grotesque unemployment rates of between 40 and 60 per cent and tens of thousands of children are living in poverty.

Many community leaders, including politicians, say glibly that we are a wealthy community. Some people are wealthy and about one third of the population are struggling to get by in relative prosperity, but one third of the population are still existing from hand to mouth and from day to day. Given the massive budget surplus this year and the projections for the next three or four years, it is outrageous that the Minister for Social, Community and Family Affairs—

An Leas-Cheann Comhairle

The Deputy does not seem to be addressing the amendment.

Mr. Broughan

I am addressing the substance of the amendment, which is this year's budget surplus. I am asking the Minister—

An Leas-Cheann Comhairle

It is not appropriate to address a budget surplus on Report Stage, particularly where it would involve a charge on the Exchequer.

Mr. Broughan

—to bring forward a report on this matter, to see how, as a starting point, he could take initiatives, particularly in areas which have missed out on Objective One status, such as the north and west sides of Dublin, to ensure we reach the targets set in the National Anti-Poverty Strategy and that significant numbers of people do not live in poverty while others are glibly talking about Celtic tigers. I support the amendment.

Mr. McGrath

I know the Minister is anxious that I make my contribution before he responds. I also support the amendment. It is very important at a time when we seem to have a great deal of money and are regarded, as Deputy Broughan said, as a well off country, that the fruits of that wealth be distributed evenly across the population. Unfortunately, that is not happening. The Minister will produce statistics to show what he has done. However, the stark reality is that there are people trying to live on unemployment assistance or unemployment benefit of about £70 a week and pensioners—

An Leas-Cheann Comhairle

I must make the same point to Deputy McGrath as I made to Deputy Broughan. He is wandering away from the amendment, which deals with a report to be laid before the Houses of the Oireachtas. It is not appropriate on Committee Stage or Report Stage to raise matters which would put a charge on the Exchequer.

Mr. McGrath

I appreciate the point you have made, a Leas-Cheann Comhairle, but I am sure you can appreciate my point of view also.

Mr. D. Ahern

Does that mean the Deputy will keep going?

Mr. McGrath

I am outlining what should be contained in this report. The Minister should face up to reality. It is extremely difficult to survive in a typical household where an old age pensioner receives £83 per week while a dependent pensioner receives approximately £50 per week, yet there was a £1 billion Exchequer surplus last year. Unfortunately, it was not distributed evenly across the population. Various figures could be mentioned and I am sure the Minister will say that the increases he secured are unprecedented. Nonetheless, we must be aware of this issue.

The number of unemployed people has reduced to a record low and recently the number of social welfare recipients has also fallen. That must be reflected in how we look after those who are in receipt of such payments. At a time when there is such an Exchequer surplus, the Minister must fight harder at the Cabinet table to ensure that a bigger share of the nation's wealth is given to those who are less well of, many of whom live from hand to mouth. I attended a meeting of business people and retired business people recently and social welfare expenditure was mentioned. A person in receipt of unemployment assistance receives £70 per week while a single parent with one child is in receipt of £83 per week. This brought home to many people who attended the meeting that it is virtually impossible to survive in reality. We must distribute the country's wealth more evenly. I hope the Minister will not trot out a ream of statistics and will face up to the reality.

Mr. D. Ahern

Deputy Broughan stated that the Joint Committee on Social, Community and Family Affairs was examining the NAPS issue. I am delighted that is the case and, since I took stewardship of my Department and the Government took up office, our record on this issue exceeds that of all our predecessors. Recently during Question Time I stated that the targets outlined in regard to NAPS by the then Government were not ambitious and I instanced that we have virtually reached the unemployment target already, well within the NAPS timespan, and it is probably the most important poverty indicator. I still firmly believe that the way to eliminate poverty in society is to create jobs and this Government has presided over job creation during the past 20 months. The live register figure has reduced by more than 50,000 and is still reducing – between April 1997 and September 1998 96,000 jobs were created. That is the way to deal with poverty.

Mr. Browne

(Carlow-Kilkenny): The country was in good shape when the Government took up office.

Mr. D. Ahern

Deputy O'Keeffe requested a philosophical debate. However, action is much better than such a debate. The Government has taken action by reducing the live register figure by 50,000 and creating jobs. The Deputy said the Government has huge amounts of money at its disposal. While there is an Exchequer surplus for the first time in many years, we must also take cognisance of the fact that rainy days will return and could do so quickly. The Deputy said that four or five years ago we did not foresee what has happened and he is correct. I recall taking part in an away day meeting of my party in the Slieve Russell hotel a number of years ago at which a number of economists spoke. They told us that the boom would continue for at least the next five years. I am always acutely aware of the wisdom within my party and it is probably no different from that in other parliamentary parties.

Mr. J. O'Keeffe

Can the Minister make a prediction on Pádraig Flynn?

Mr. D. Ahern

One of my colleagues said to a leading economist that he and his colleagues did not foresee what has happened five years ago and he had to admit that he was correct. Economists did not foresee that there would be such an economic boom. It is a simple illustration of how it is absolutely vital we use our current resources wisely and not in a spendthrift way. I would love to be able to spend more, as would the Government.

Deputy O'Keeffe referred to the fact that the social insurance fund is in the black but we must look down the road when there will be much more dependence in this society than is currently the case. Currently, there are approximately 400,000 old age pensioners but in 50 years there will be more than one million. That is not a long way away.

Mr. Broughan

They will be active.

Mr. D. Ahern

The ratio between worker and dependant will reduce significantly from 5:1 to 2:1 in 50 years but in 20 years it will also have reduced significantly. While it would be great to be able to say that we can spend every penny, Deputy O'Keeffe and others would be first to say that there are many other issues. There are many bottlenecks in the economy which prevent advancement. Deputy Broughan referred to the ESRI report on social welfare. Since the Government took up office, social welfare increases have at least equalled or, indeed, exceeded wage inflation in many cases. Between 1997 and 1999 expenditure on social welfare has increased dramatically to take into account the better circumstances that prevail. Opposition Deputies must acknowledge that.

The ESRI states that £50 million must be spent over the next few years in order to break the infrastructure logjam. That must be paid for and money must be provided for people with disabilities, carers and other social welfare recipients. The number of people in receipt of social welfare is reducing. That is an indication of how the economy is being handled. With one or two exceptions, the amounts under the heads in the estimate are decreasing. That is good and should be welcomed.

However, we must not forget those who are, as Deputy McGrath said, living on £83 per week. It is enlightening for those who are doing well in the economy to see what it is like to live on social welfare. That is one of the reasons this Government gave significant increases to old age pensioners in the last two budgets. It believes that, unlike other groups, they did not have a strong voice. This Government has done extremely well in its first two budgets and it will continue to do its best, taking the broader picture into account. The social welfare package amounts to £317 million in a full year. It is 49 per cent higher than the budget two years ago when the rainbow coalition left office. It is a significant increase. During the coming years when this Government and my party is in power it will be increased even further.

For those reasons the amendment is not necessary. All these issues will be discussed during Question Time and at the Committee on Social Affairs. At the end of the day, the Government makes the decisions regarding the Exchequer amounts to be given to the Department of Social, Community and Family Affairs and other Departments while looking at the long-term picture.

Mr. J. O'Keeffe

We have reached the crunch point in the debate. My amendment is framed in an unusual way to comply with the rules of the House. I cannot say, as I would like to, that because of unprecedented moneys in the Exchequer a substantial portion of extra money should be made available for the social welfare budget.

I agree with the Minister on a number of issues. I agree that the money being made available is greater than in the past. I agree that the approach of trying to get more people into employment is a very fine one. I am delighted to see the employment figures increasing and long may that continue. However, that is one half of the answer to the problem of disadvantage and poverty. There are people who will not gain from the improved employment position or benefit from the Celtic tiger. It is in that context that we must be prepared to devote a share of the extra wealth in the economy and a reasonable share of the extra wealth in the Exchequer towards the have nots in society. I do not think that is being done. The contrast between the estimated £2,300 million surplus on current account and the £77.9 million extra that will be paid in 1999 as a result of the increases in the budget proves the case. We should all be prepared to make more funds available to deal with the problems of disadvantage and poverty in society. The money is there to do so.

With all due respect to the Minister, saying that in 50 years' time there will be more people drawing old age pensions is no consolation to the person trying to cope today. Of course we must have reasonable prudence but with the vast amount of money that is available we can now do the kind of things we never dreamt of doing. If we take the proposal on child benefit put forward by Fine Gael, £150 million is needed to increase child benefit from £8 per week to £20 per week for children under five years. That would make a real impact on child poverty. Why do we not do that? It is because we are locked into a timeframe in the past where we did not have the means to allow us think in those terms.

I am asking people to pay more out of the moneys that are available in order to have a fairer society. It would be of benefit to the Minister if the amendment was accepted. It is the core issue in the Bill. Are we prepared to make a reasonable amount available in an effort to achieve a fairer society and make a significant impact on disadvantage and poverty? Despite what the Minister says the budget will not make that impact. That is where I part company with the Minister. The money is there to make a significant impact. We are not doing so and that is why I will press this amendment which seeks to achieve a fairer society.

Amendment put.

Tá

Bell, Michael.Belton, Louis.Bradford, Paul.Broughan, Thomas.Browne, John (Carlow-Kilkenny).Burke, Liam.Burke, Ulick.Carey, Donal.Clune, Deirdre.Connaughton, Paul.Cosgrave, Michael.Coveney, Simon.Crawford, Seymour.Currie, Austin.D'Arcy, Michael.Deasy, Austin.Deenihan, Jimmy.Dukes, Alan.Durkan, Bernard.Ferris, Michael.Finucane, Michael.Flanagan, Charles.Gilmore, Éamon.Gormley, John.Hayes, Brian.Higgins, Michael.Hogan, Philip.Kenny, Enda.McCormack, Pádraic.McDowell, Derek.McGahon, Brendan.

McGinley, Dinny.McGrath, Paul.McManus, Liz.Mitchell, Gay.Mitchell, Jim.Mitchell, Olivia.Moynihan-Cronin, Breeda.Naughten, Denis.Neville, Dan.Noonan, Michael.Ó Caoláin, Caoimhghín.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Owen, Nora.Penrose, William.Perry, John.Quinn, Ruairí.Rabbitte, Pat.Reynolds, Gerard.Ring, Michael.Ryan, Seán.Sargent, Trevor.Shatter, Alan.Sheehan, Patrick.Stagg, Emmet.Stanton, David.Timmins, Billy.Wall, Jack.Yates, Ivan.

Níl

Ahern, Dermot.Ahern, Michael.Ahern, Noel.Ardagh, Seán.Aylward, Liam.Blaney, Harry.Brady, Johnny.Brady, Martin.Brennan, Matt.Brennan, Séamus.Briscoe, Ben.Browne, John (Wexford).Byrne, Hugh.Callely, Ivor.Carey, Pat.Collins, Michael.Cooper-Flynn, Beverley.Coughlan, Mary.Cowen, Brian.Daly, Brendan.Davern, Noel.Dempsey, Noel.Dennehy, John.Doherty, Seán.Ellis, John.Fahey, Frank.Fleming, Seán.Flood, Chris.Foley, Denis.Fox, Mildred.Gildea, Thomas.Hanafin, Mary.Haughey, Seán.Healy-Rae, Jackie.Jacob, Joe.

Keaveney, Cecilia.Kelleher, Billy.Kenneally, Brendan.Killeen, Tony.Kirk, Séamus.Kitt, Tom.Lawlor, Liam.Lenihan, Brian.Lenihan, Conor.McDaid, James.McGennis, Marian.McGuinness, John.Martin, Micheál.Moffatt, Thomas.Molloy, Robert.Moloney, John.Moynihan, Donal.Moynihan, Michael.Ó Cuív, Éamon.O'Flynn, Noel.O'Hanlon, Rory.O'Keeffe, Batt.O'Keeffe, Ned.Power, Seán.Reynolds, Albert.Roche, Dick.Ryan, Eoin.Smith, Brendan.Smith, Michael.Treacy, Noel.Wade, Eddie.Wallace, Dan.Wallace, Mary.Woods, Michael.Wright, G. V.

Tellers: Tá, Deputies Sheehan and Stagg; Níl, Deputies Barrett and Power.

Amendment declared lost.

An Ceann Comhairle

We come to amendment No. 5. Amendment No. 10 is an alternative. Is it agreed that amendments Nos. 5 and 10 be discussed together? Agreed.

Mr. J. O'Keeffe

I move amendment No. 5:

In page 6, between lines 2 and 3, to insert the following:

"4.–The Minister shall prepare a report on the measures required to close the differential within the rates of weekly benefits and social assistance paid to a beneficiary and the rates paid to an adult dependant and to lay such a report before each House of the Oireachtas not later than three months from the enactment of the Act.".

This amendment deals with the position of adult dependants and an approach which should be part of the philosophy of the Department of Social, Community and Family Affairs. There should be an effort to close the differential within the rates of weekly benefits and social assistance paid to a beneficiary and the rates paid to an adult dependant. In most instances the adult dependant is a woman. I present this amendment as pro-woman because women would gain most from closing the gap between the rate payable to a beneficiary and the rate payable to an adult dependant. That is the net issue. The gap has not been closed. I would like an indication from the House of a willingness to adopt the broad approach to close the gap and eliminate the differential so far as we can.

Mr. Broughan

I support my colleague as in a previous similar amendment on the question of qualified adults. On the issue of income inadequacy, next April we hope to get the minimum wage. Recently we have seen advertisements for unskilled jobs at rates of £6, £6.50 per hour and so on. It is clear the median wage rates and the average industrial wage in the economy have risen so far that we should address this gross inequity and inequality in relation to the adult dependency rates and equalisation. The Minister supplied a helpful brief on budget day, 2 December 1998. It shows for senior adult dependants on social assistance an increase from £41.20 to £44, an increase in the blind person's pension from £41.20 to £43 and for assistance an increase from £41.20 to £43.20. It is an insult to any Irish citizen to say their basic weekly income will be in the region of £40. That is what any couple might pay for a basic meal this evening in a modest place of entertainment in the city. The princely sum of £43.20 is what we offer to these people.

The Minister's argument during a previous Question Time about equalisation was that the combined basic rates for the person depending on assistance or a non-contributory pensioner would act as a disincentive. I do not see how that is possible. These rates are disgraceful. The spouse of the person on assistance at home who may not have an insurance record often does not qualify for community employment or many of the other activities which are supervised by the Department of Enterprise, Trade and Employment. Therefore, there is a double whammy effect, with people on extremely low and deplorable incomes while at the same time people are cut off from joining the workforce. Because of this equalisation is very significant. The Minister's predecessor, Deputy De Rossa, was anxious to ensure every adult would have a separate payment on which he or she could live and which would stand on its own. I put it to the House that £43.20 is a disgrace. I urge the Minister to bring forward a report on equalisation which will address this as a matter of urgency.

Mr. McGrath

I support the amendment. The points made by my colleague are very important. Equalisation of payments to adult dependants is the next big measure which must be addressed. I ask the Minister to examine it particularly in the context of, for example, two brothers living together and each drawing a pension. In such cases do both receive full pensions or are they treated as one adult and one adult dependant? Equally, do two sisters receive full or reduced pensions under the social welfare code? As Deputy O'Keeffe rightly said, in general it is women who are disadvantaged in this context. They miss out as they are seen as the adult dependant and therefore receive the reduced rate. It is unfair that this should happen and I ask the Minister to examine it very carefully.

In the context of statistics and how the pension burden will increase over the years, the Minister referred to the possible situation in 50 years' time. It is impossible to predict the population in 50 years. Statistics produced for Ireland were based on birth rates, emigration rates, etc., which have long since been surpassed. In the early to mid-1980s there was a relatively high level of births but huge emigration rates. There are approximately 77,000 in the current cohort of 18 year olds, but the figure for 12 year olds is only 47,000. Therefore, it is impossible to predict what is going to happen so far down the road. I agree with the Minister that over the next 25 years we can reasonably accurately predict what will happen in the over 65 age group, but after that we are fishing in the dark. We should not decide policy on what might happen 50 years from now. We must examine what will happen over the next five to ten years and base our policy on that.

Now is the time to provide for those people given the unprecedented growth and surplus in the economy. Even in bad times, if they do come, we will find the resources to look after them. I say this in the context of the early 1980s when, despite inflation running very high and a school population of about one million children, we were able to pay social welfare increases which were nearly in line with inflation. While the number of pensioners has increased, the number of school children has dropped substantially below a million and when both figures are taken together the number of dependants balance. Over the past three or four years the numbers at work have increased, a trend which will continue in a dramatic way in the coming ten to 15 years. Therefore, the number providing for dependants will increase substantially while the number of dependants will remain relatively stable. This means we can provide better payments for those in need of them.

I ask the Minister to carefully examine this amendment and in his reply to comment on the rules pertaining to two brothers or two sisters living together who are in receipt of contributory old age pension. Similarly, do a husband and wife, who in their own right qualify for contributory pensions, receive the full rate?

Mr. D. Ahern

Two brothers or sisters who live together and are in receipt of the old age pension in their own right in effect receive the full rate of pension if they qualify for it. There are no restrictions in this regard. There may be some instances where spouses may not have a pension in their own right and may qualify for a lesser payment. Under the changes in the budget and brought forward in the Bill, 119,600 qualified adults will benefit in real terms as a result of the increases.

We all want equalisation and Deputy Broughan referred to the fact that Deputy De Rossa wished to see it implemented. I can make a political point and say Deputy De Rossa did not go a hell of a long way in achieving this.

Mr. Broughan

He had only two and a half years.

Mr. D. Ahern

The Commission on Social Welfare which examined this area did not set a specific minimum rate for adult dependants but recommended that the appropriate rate for a couple should be 1.6 times the basic personal rate. In other words, a qualified adult would get, at the very least, 60 per cent of the basic personal rate. I achieved that in the last budget. It was one of the issues raised on Committee Stage this time last year by Deputies on all sides of the House who validly made the point that the qualified adult rates had slipped back and that the Government's first budget in some cases did not reach the 60 per cent rate. For these reasons, and given that the budget available to me was the largest in the history of the State and 49 per cent more than the last budget of the rainbow coalition Government, we were able to increase all the qualified adult rates to equal or surpass the 60 per cent level. The increases in this respect were very significant.

An issue previously introduced was the concept of tapering. The point was made about the poverty trap associated with complete withdrawal of the qualified adult allowance and tapering was introduced in this context. I addressed this to a certain extent in the budget by extending the basic rate from £60 to £105, replacing the previous top rate of £90.

All of these issues are being examined. Previously on Question Time I said an interdepartmental committee, established under my Department, is examining household income under both the tax and social welfare systems and is due to report very soon. It will address some of the issues referred to by the Deputies.

It is all very well to say we should equalise payments. In the case of old age pensioners, for example, the overall increase given in the budget of December last to a couple on the old age pension was £9, £6 for the personal rate and £3 for the qualified adult. This is significant and well in excess of anything given in recent times. The Government has made significant progress in its two budgets and has fulfilled the recommendation that it should be 1.6 times the basic personal rate. For those reasons, I am not of the view the Dáil should accept the amendment.

Acting Chairman (Mr. Kirk)

I remind Deputies there has been a modification of Standing Orders in that the second contribution of the Deputy who moves an amendment may not exceed two minutes.

Mr. J. O'Keeffe

I am cognisant of the fact that almost 40 amendments have been tabled with limited time for consideration of the Bill because the debate which should have taken place yesterday took place this morning, the Private Notice Question on Kosovo has restricted the time further and there is a time limit of 10 p.m. tonight.

Mr. D. Ahern

And because of the histrionics over one Deputy yesterday.

Mr. Broughan

She was 100 per cent right.

Acting Chairman

This could get out of hand very quickly. We are on Report Stage of the Social Welfare Bill, 1999, and Deputy O'Keeffe is in possession.

Mr. J. O'Keeffe

I will not spend too much time on any one amendment in an effort to deal with as many as possible. It was a laudable objective to aim for the 60 per cent rate for adult dependants in the past and I am glad it has been reached. Perhaps that should be increased towards equalisation. It cannot be achieved immediately, but I would like to open the debate that the 60 per cent should no longer apply and that we should in future aim towards equalisation, mainly because of the position of women in society who comprise the majority of adult dependants.

Tapering does not apply to adult dependants in contributory pensions and I want that issue examined. There is a £60 cut off point and the tapering does not apply after that. It has caused problems for contributory pensioners.

Mr. Broughan

I deplore the unwarranted attack by the Minister on my colleague, Deputy Shortall, regarding the events yesterday surrounding the juvenile justice Bill in which she was in the right.

Acting Chairman

The Deputy should confine his remarks to the Bill.

Mr. Broughan

I accept that, but it must be ensured the Minister addresses the matters before the House and does not resort to attacks on Deputies who are not in the House to defend themselves.

Acting Chairman

The Deputy is straying.

Mr. Broughan

The Minister attacked my colleague when she was not in the House and that is deplorable.

I reaffirm the substance of amendment No. 10 which calls for a report on closing the differential. I welcome the fact that we have reached the target of 1.6 times the basic personal rate but the fundamental issue, which is again concerned with income adequacy, is that it is deplorable and an outrage that any citizen would be expected to live on £41 a week. The Minister is in a unique position to improve on the situation. He has a golden opportunity – these are the golden years – and it is up to him to grasp that opportunity.

Mr. Callely

One area which could be addressed is the making of announcements about social welfare changes at budget time, be they by the Department of Social, Community and Family Affairs or the media. Pensioners are inclined to read the headlines, whatever they may be. On this occasion it was that they would receive a £6 per week increase, which is a huge improvement on the increases given during the rainbow coalition's tenure. This increase is a long way from the £1.90 increase during Deputy De Rossa's tenure as Minister in the rainbow coalition a few years ago. Pensioners see the headline they are to receive an increase of £6 per week. However, it is £6 per week for the recipient and a lesser amount for the dependant, and that causes complications because a husband and wife might expect a £12 increase.

Mr. Broughan

Did the Deputy raise this matter at the parliamentary party?

Mr. Callely

I did. The Minister is genuine and sincere in raising social welfare rates to what he sees as an acceptable standard and in line with the report of the Commission on Social Welfare. His response just now proves he is attempting to do so and he has succeeded in that he has fulfilled the recommendation that adult dependants receive 60 per cent of the full rate. He deserves congratulations in that regard. Perhaps some mechanism could be put in place to indicate clearly to those who will receive an increase exactly what it entails.

Another anomaly relates to a pensioner, usually a woman, who may have been paying social insurance and left her job to spend some time in the family home rearing children. She finds that, had she signed for credits, she would be entitled to a full contributory pension. That is an anomaly which needs to be addressed.

Mr. D. Ahern

Regarding Deputy Shortall, the debate has been curtailed because rules of the House were flouted yesterday.

Acting Chairman

The Minister should not engage in debate on Deputy Shortall.

Mr. D. Ahern

I compliment Deputy O'Keeffe on the rationale behind his thought processes on how to address this matter in future. It would be the view of all in the House that we should work towards equalisation if the Exchequer could sustain it. However, looking at the figures, between the last amendment and this one we would have spent the surplus to which Deputy O'Keeffe referred, and that is before dealing with people with disabilities, carers, the unemployed and others. I accept it would be preferable if we could move further than 1.6 times the basic rate.

Deputy Broughan said this is a scandal over which I am presiding. He has a short memory. I do not wish to make my point in a political way but he has raised it in that way. He and his party have been in office more often over the past decade than my party or Deputy O'Keeffe's party and they have presided over this.

Mr. Broughan

I presided over nothing. I never sat on the Front Bench, but I am waiting. My time will come.

Mr. D. Ahern

The Deputy should not raise his voice saying it is terrible and it only happened today. It did not. His party also presided over it. The Government was the first to meet the 1.6 target recommended by the Commission on Social Welfare.

Regarding the issue raised by Deputy O'Keeffe about why the tapering only applies to certain categories and not others, especially pensioners, it was introduced to facilitate a return to work. It is part of the review being conducted by a number of Departments of the way household income is treated under the tax and social welfare systems. The report will be available soon.

It would cost in the region of £180 million to £190 million in a full year to increase the QAA to the same level as the personal rate. A total of 120,000 people are in receipt of the allowance. The cost of the 1999 social welfare package is £317 million in a full year. The Government has achieved the figure recommended by the Commission on Social Welfare.

Mr. J. O'Keeffe

Although £190 million may sound enormous, it is less than 10 per cent of the projected current budget surplus. A different approach should be adopted.

Amendment put and declared lost.

Mr. J. O'Keeffe

I move amendment No. 6:

In page 6, between lines 2 and 3, to insert the following:

"4.–The Minister will consider the possibility of assessing applicants for non-contributory social assistance payments with actual income from capital as opposed to fictitious and artificial income.".

This amendment deals with the rates at which capital is assessed in the case of those applying for non-contributory social assistance payments such as unemployment assistance or non-contributory old age pension. The current system is unfair because of the huge drop in interest rates following the introduction of the euro. The deposit interest rate is less than 1 per cent. In spite of this, for most, capital is assessed at 7.5 per cent. Capital in excess of £20,000 is assessed at 15 per cent.

Applicants should be encouraged to place their capital in a bank, credit union or post office rather than keep it under the bed. The current system, however, discourages them from so doing and, in many instances, creates an injustice through the payment of a reduced rate.

I have been running a campaign to have the rates changed and some progress has been made. On Committee Stage the Minister agreed to make his officials available and said that the matter could be looked at by the Joint Committee on Family, Community and Social Affairs. That is the way forward. It should be possible to come up with a more acceptable formula, which would not prove costly, to remove this injustice. I am not looking for those with enormous sums in the bank to qualify for non-contributory old age pension. That could be the effect of a straight cut in the interest rate to 0.2 per cent. The issue was included in the work programme of the joint committee yesterday.

Mr. McGrath

I share the thinking of my colleague on this issue on which he has been working for some time. He has raised it on numerous occasions with the Minister who has agreed to look at it. The first £2,000 of income is disregarded. The next £20,000 is assessed at 7.5 per cent. The best approach might be to raise the amount disregarded to £10,000 to remove from the net those who are vulnerable and for whom a reduction of £15 in their old age pension would have substantial consequences. A reduction in the notional interest rate could result in those with substantial sums in the bank qualifying for payments.

Many are anxious to leave this world without being in debt. It costs a substantial amount to bury someone. A man in receipt of an old age non-contributory pension told me recently that he had a few pounds in the bank which he believed would not be enough to bury him if his nieces and nephews were to have a bit of a party. He has £5,000 in the bank.

Mr. D. Ahern

This issue has been raised at Question Time and the Select Committee on Family, Community and Social Affairs. At first sight, the figures quoted by Deputy O'Keeffe, 7.5 per cent and 15 per cent, do not look right in the current climate where deposit rates are low. The rationale which prompted my predecessor, Deputy De Rossa, to introduce these rates was correct. He endeavoured to assist those with limited means to qualify. On the other hand I have given an undertaking that I would look at some way of tinkering with the system, as suggested by Deputy McGrath, although I am not altogether sure if that is the way to proceed. We can get costings. That is one of the issues which would be part of the review I have undertaken will be looked at in the Department.

Deputy De Rossa stated when he was bringing this forward that a couple with capital of £20,000 would be assessed with means of £600 which would give an effective rate of assessment of only 3 per cent. That is not unreasonable. If we were to reduce the 7.5 per cent and the 15 per cent without touching the disregard of £2,000, taking into account the other issues, the figures would be astronomical and people would be able to retain full pension. For instance, if one reduced the 7.5 per cent and 15 per cent assessment to a combined 0.2 per cent without touching the disregard, a single person on OAP would be able to have a sum of £158,000 in the bank and still get the maximum pension. A married couple would be able to retain in the region of £313,000 in the bank and still get full pension.

This capital assessment provision which was put in place by my predecessor compares very favourably with the capital assessment regime in the UK. As part of the exercise of the review, we looked at what was happening in the UK. Our people, particularly our old age pensioners, are much better off under our regime of capital assessment than are those in the UK.

I outlined this umpteen times to Deputy O'Keeffe during Question Time. I subsequently wrote to the Deputy and offered the facility of one or two of my officials – I named two officials in my recent letter to the Deputy – who would sit down with him so that he could question them as to the rationale behind this issue because I seem to be failing to convince him. However, I accept what he said today that it is not just a matter of doing away with the 7.5 per cent and 15 per cent.

We are looking at the system to see if we can more or less achieve the same thing while ensuring it is as transparent as possible in that the 7.5 per cent and the 15 per cent, from a soundbite point of view, look quite excessive. However, when one looks at the disregards and all the other issues which are taken into account, the effective rate is much lower than those two figures.

Mr. J. O'Keeffe

The Minister referred back to the changes introduced by his predecessor, Deputy De Rossa. Those changes improved the situation which previously existed.

Mr. D. Ahern

I acknowledged that.

Mr. J. O'Keeffe

The interest rates which applied three years ago were totally different. It was a different ball game altogether. On the basis that we can have the issue looked at, not just by me and my officials, because I cannot provide the answer, but by the Joint Committee on Family, Community and Social Affairs, to make an effort to tease out a solution, I am prepared to withdraw this amendment.

I again emphasis that it is not the person with capital over £20,000 – there is only 2 per cent involved—

Mr. McGrath

No, 4 per cent.

Mr. J. O'Keeffe

—between 2 and 4 per cent. It is not those people who are my main interest; it is the ordinary person who is being penalised at present. We will propose a way to remove this anomaly. I withdraw the amendment on the basis that we will tackle that at the Joint Committee on Family, Community and Social Affairs. I hope we will come up with a solution.

Amendment, by leave, withdrawn.

Mr. Broughan

I move amendment No. 7:

In page 6, between lines 2 and 3, to insert the following:

"4.–The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the situation of women who were formerly in receipt of deserted wives benefit and were under 40 years of age on the date of its abolition.".

As the Minister addressed this amendment effectively on Committee Stage, I will withdraw it.

Amendment, by leave, withdrawn.

Mr. Broughan

I move amendment No. 8:

In page 6, between lines 2 and 3, to insert the following:

"4.–The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the social welfare situation of persons resident in Ireland who are in receipt of pensions under the social security legislation of any other jurisdiction.".

This is something which a number of Deputies have brought to my attention. It relates to people who worked in Britain for most of their careers. I stated on Committee Stage that unfortunately there was a massive exodus from the country in the 1950s and early 1960s, especially to the UK. Many of those senior citizens, some of whom are Dubliners, have returned to live here. Despite the fact that they qualify for free schemes, etc., they find that with the British pension on which they live they do not qualify specifically for the living alone allowance or the over 80 allowance. Perhaps the Minister should address that issue in the future.

The Minister referred to the fact that our senior citizens tend to do much better than the UK senior citizens in relation to capital assessment. In terms of labour mobility in the EU, this is a classic case over a number of decades of a huge movement of labour from this country to the neighbouring economy, which is now returning. We have been trying to address these problems over recent years. The Minister and his UK colleague, the Secretary of State for Health and Social Services, should get together and see if they can sort out this matter.

Mr. McGrath

I support Deputy Broughan's amendment. It is important that we take a broad view of people who are in receipt of pensions from Britain. Some do and some do not get top ups in this country, depending on their circumstances, etc. The Minister might conduct a specific review of those people because in some cases they get a raw deal. Deputy Broughan mentioned the living alone allowance and the over 80 allowance for which they do not qualify and many of them feel disgruntled about that.

I am sure the Acting Chairman has come across this in his constituency and has met people who have run into those problems, although I suppose nowadays they are all handled and solved by the Minister and the workload is easier. Nonetheless he will be aware of them and will know what is happening.

Another issue which should be looked at in conjunction with this, although it is not strictly within the Minister's jurisdiction, is the question of medical cards for people with British pensions. I understood at one stage that a person entitled to a British pension automatically qualified for a medical card, but recently I was disgusted to find that this is not the case. If a person receives an Irish pension also, the medical card is not automatically granted. That is the case despite the fact that the British Government pays the Government £60 million per annum for medical services to pensioners in this country. It is something at which we must look carefully. Are we taking money under false pretences? Why do all those pensioners, who are supposed to be getting the medical treatment to which they are entitled and for which they have paid in Britain, not get medical cards? We must look carefully at how we treat pensioners who have come here from Britain and are in receipt of pensions from Britain.

Another anomaly is that an occupational pen sion and a social security pension from Britain are not taken into account in granting the medical card. If the person has a few pounds in Ireland, he or she is not entitled to a medical card and that is not fair. In supporting this amendment I ask the Minister to look at the whole question of foreign pensions. It is a good thing that pensioners choose to come to live in Ireland. Some are Irish people who have come home and some are British people who have chosen to live in Ireland to get away from it all. We welcome them and their contribution to the Irish economy. The subscription by the British Government to our health service is also welcome. It is interesting to note that this subscription goes into the central Exchequer and not to the health boards on any notional system. I am not sure if it even goes to the Department of Health and Children.

I ask the Minister, in considering this amendment, to look at the details of the treatment of British pensioners in Ireland and ensure that they are treated fairly, noting our involvement with Europe and our close ties with Britain. Many of these pensioners went to work in Britain in bad times and have come home to retire. We should make sure that they are treated fairly.

Mr. D. Ahern

This matter has been referred to previously in committees and during Question Time. I have already instituted a review of free schemes. A review of schemes is being carried out in all Departments but this is an area I feel should be looked at intensely. The issue of the entitlements of people, particularly pensioners, coming to this country must be looked at. Deputies have previously raised what they consider to be anomalies. Many of these so called anomalies are determined by EU regulations. Deputy McGrath referred to the reported figure of £60 million coming from the UK in payment for health services. I can safely say there is reciprocation of that money in respect of our responsibility for people living outside Ireland. Some Deputies have raised the question of medical cards for British pensioners. This is not strictly relevant to my Department but I quote EU regulation 1408/71:

Persons taking up permanent residence in Ireland who are in receipt of a social security pension from another EU or EEA member state who are not in receipt of an Irish social welfare pension as either a recipient or a qualified adult and who are neither employed or self-employed here, are entitled to health services free of charge irrespective of means. Medical cards are normally given in such cases. The cost of these cases is normally borne by the country which pays the social security pension.

In relation to the issue Deputy Broughan raised, that is the extension of the living alone allowance of £6 and the over-80 allowance of £5 to UK pensioners, these allowances are in effect increases paid to supplement the basic personal rate of social welfare pension to people who satisfy the conditions, in recognition of the extra cost faced by pensioners. Some 107,000 qualify for the living alone allowance and some 84,000 people qualify for the over-80 allowance. These supplements are not paid to people over pension age who do not qualify for an Irish social welfare pension, for example UK pensioners. Where a UK pensioner also qualifies for an Irish social welfare pension, he or she can get these supplements, subject to satisfying the appropriate conditions. The current basic rate of retirement pension payable by the UK is £64 sterling which is considerably lower than ours.

Mr. Broughan

Did the Minister buy sterling recently?

Mr. D. Ahern

It is less, even taking account of the currency difference. It should be noted that a UK pensioner can also get an additional pension which is earnings related, based on his or her contributions paid since 1978. This can amount to one eightieth of their earnings in excess of the specified threshold for each year, subject to a maximum of 25 per cent. The appropriate percentage depends on the number of years since 1978 and since reaching the pension age, 65 years. In many cases UK pensioners may well be receiving a higher overall pension than Irish pensioners when they are in this country.

Amendment put and declared lost.

Mr. Broughan

I move amendment No. 9:

In page 6, between lines 2 and 3, to insert the following:

"4.–The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the level of uptake of the grant towards personal security alarms for the elderly and the extent to which this relates to the level of reimbursement available.".

I have a particular interest in the security of senior citizens in urban and rural areas. Deputy Callely will be aware of many very vulnerable senior citizen complexes in Dublin city. Senior citizens in rural areas are perhaps even more vulnerable especially if community alert systems are not available and people live many miles from the nearest secure area. Gardaí, furthermore, are often severely stretched.

In the last Dáil, Deputies Flaherty, Hughes and others joined me on an all-party committee in trying to address some of the problems faced by our senior citizens. I welcome the increases in social welfare payments for senior citizens which the Minister has introduced. The all-party committee proposed that old age pensions be linked to the average industrial wage. That was also the desire of the Senior Citizens' Parliament, the Irish Congress of Trade Unions senior citizens' group which liaised closely with the all-party committee.

On Committee Stage the Minister deplored the practice of lining up senior citizens to avail of security facilities. I have here a letter from a community worker who believes that the initial grant of 90 per cent, which was reduced to 60 per cent and in some cases 30 per cent, should be restored to 90 per cent. I still receive many communications of this sort. Given the great vulnerability of senior citizens and the fact that personal security is now essential in rural and urban areas, the Minister should accept this amendment.

Mr. McGrath

Personal security has become extremely important for everyone, particularly for the elderly. Many elderly people feel vulnerable and if one visits an elderly person in the evening one hears bolts being drawn back on the door and the elderly person is very cautious when answering the door. This is a result of the atmosphere in which we live. Atrocities have been perpetrated on elderly people, although these are very few. Many are very afraid, particularly if they live alone. It is important that the initiative of Deputy De Rossa, former Minister for Social Welfare, should be followed up and as much money as possible made available to ensure that all elderly people can avail of security systems. These systems reassure an elderly person that he or she can contact someone if necessary and the elderly person will not be frightened. In many cases these systems have been found to be effective in cases where the elderly person is in danger, feels he is in danger or simply does not feel well. I ask the Minister to accept the amendment and I hope the necessary level of funding will be restored to ensure the scheme can continue.

Mr. Callely

Deputy Broughan spoke about the northside and I would like to record my appreciation of one individual who has done trojan work in that part of the city to ensure those in need obtained alarms under this scheme. I am talking about Sergeant John O'Driscoll who has done tremendous work in identifying those in the community most in need of alarms. I want to record my appreciation also of the good work done by the many voluntary groups which ensure that those in need of personal security alarms avail of the necessary grants.

I congratulate the Minister because I understand when he took office the allocation to this scheme was £4 million and he increased it by £6 million to £10 million. I know the Minister is closely monitoring the efficacy of the money in the community and hopefully there are sufficient moneys in the kitty to allocate to the scheme should they be required.

Mr. J. O'Keeffe

We should congratulate everybody in relation to this successful scheme, one of the more far-seeing schemes introduced by the previous Government. I also congratulate the Minister on his support for the scheme but it needs even more support. The rate of support that was available to the individual has been reduced considerably in some instances. Since the scheme is a victim of its own success, do we want it to be even more successful? In the light of the relatively modest amount of money involved as against the benefits available, we should ensure that the scheme is continued and that it becomes even more successful. I support the amendment.

Mr. D. Ahern

Like other Members of the House I believe this is a good scheme and the rationale behind it is excellent. Over the years it has been in place, approximately 62,000 people have benefited from the scheme. The task force was set up soon after a particular budget when it was pointed out that the tax allowance included in that budget would not be availed of by the people who most needed these alarms because the majority of people at whom it was targeted did not pay tax. The task force recommended that resources be made available through my Department to voluntary and community groups which would deliver these services. I did not use the word "abhor" that Deputy Broughan referred to. Over the years voluntary and community groups were successful in targeting people but the—

Mr. Broughan

The Minister should talk to Deputy Callely.

Mr. D. Ahern

—expectations of the scheme have gone way beyond the financial resources made available to it. The parameters and estimates set by the outgoing Government were £2 million for 1996, which was spent; £2 million in 1997, which was increased by me before the first budget to £5 million; and another £2 million in 1998 which again was increased by me by £3 million to £5 million.

I accept Deputy O'Keeffe's point that, to a certain extent, the scheme is a victim of its own success. One view is that while the scheme was successful in its initial phase, it should be examined. Over the past few months an interdepartmental review group, involving the Departments of Finance, Health and Children and my Department, examined it. A report is due on my desk in the coming days and we will then be in a position to decide how the scheme should proceed. While 62,000 people benefited from the scheme, most of them are living alone. The number of people in receipt of the living alone allowance is 107,000 and if we continue with the current scheme we will meet that need in a few years.

The scheme must be examined, however, because I understand the report will suggest that the more preponderant issue in relation to these alarms is peace of mind. If people are living alone they may suffer a stroke or heart attack and there is nobody to help them in the house. The health issue, as opposed to the security issue, must be taken into account also. We are conscious of that and we will closely examine it in the coming months. When the report is available I will publish it but ultimately the Government will have to make a decision in regard to the future of the scheme.

Amendment, by leave, withdrawn.

Acting Chairman

Amendment No. 10 was discussed earlier with amendment No. 5.

Mr. Broughan

I move amendment No. 10:

In page 6, between lines 23 and 24, to insert the following:

"5.–The Minister shall prepare a report on measures 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 or she shall lay the report before each House of the Oireachtas not later than six months from the enactment of this Act.".

Amendment put and declared lost.

Mr. J. O'Keeffe

I move amendment No. 11:

In page 7, before line 1, to insert the following:

"6.–The Minister shall, within 3 months of the passing of this Act, lay before Dáil Éireann a report on the implications of paying all Child Benefit for children up to the age of 5 years at the rate of £20 per week.".

A central point of our approach to social welfare is the way we deal with child poverty. This is the basis for Fine Gael's proposal to increase the amount of child benefit, particularly for all children up to the age of five, to a rate of £20 per week. If there were limitless resources I would like to increase child benefit for everybody but I accept that we have to establish priorities and I and my colleagues in the Fine Gael Party decided to put the focus on younger children up to the age of five years.

Debate adjourned.