Social Welfare Bill, 2000: Second Stage.

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

I move: "That the Bill be now read a Second Time."

This Bill gives effect to the substantial improvements in social welfare rates of payment announced in the budget. It introduces new income support measures for carers, special rate pensions for people with pre-1953 insurance and a new widowed parent grant. It also provides for exemptions from PRSI for low paid employees, a radical reform of the method of assessing capital for social assistance purposes and improvements for farmers and people making the transition from welfare to work. The Bill addresses commitments set out in the Government's action programme, as recently reviewed, aimed at building an inclusive society and improves the living standards of everyone on social welfare.

This year's package of social welfare improvements is by far the most significant ever, involving a core budget package of £403 million, increased since budget day to £428 million to include improvements aimed at pensioners, people with disabilities and the low paid. In addition, this Bill provides for substantial reductions totalling £103 million in PRSI and health contribution levies for low paid employees. This amounts to a total package of £531 million. To put this in context, the equivalent figures for my previous two budgets were £225 million in 1998 and £316 million in 1999.

That is not all. I also refer to the social inclusion commitments entered into by the Government with the social partners in the new Programme for Prosperity and Fairness which forms a solid basis for further economic prosperity and promoting greater social inclusion over the next three years. All rates of social welfare will be increased in real terms and substantial progress will be made towards a target of £100 per week for the lower rates of payment. For pensioners the new agreement confirms that the level of old age pensions will be improved in line with the commitments given in the review of the Government's action programme. For families, substantial progress will be made towards a target of a monthly child benefit rate of £100 per month for the third and subsequent child. These commitments are backed up by a £1.5 billion investment over the three years. This investment represents a clear demonstration of this Government's priority in ensuring that the fruits of our new found prosperity will be shared equally among all our people.

I wish to outline the provisions contained in the Bill. Securing the future of older people continues to be a key priority of this Government. Since we took office we have taken significant steps towards our objective of building an inclusive society. In our recent review of An Action Programme for the Millennium we have set priorities in a number of key areas, including the attainment of a minimum rate of £100 to all social welfare old age pensioners by 2002 and to increasing these pensions in line with increases in average industrial earnings. The Bill delivers on these commitments. It increases all pensions to older people by £7 per week bringing old age (contributory) and retirement pensions to £96 per week and on target to exceed our original commitment to a rate of £100 per week for those pensions in next year's budget.

The rate of payment to widow(er)'s (contributory) pensioners for those aged 66 or over increases to £89.10 with the old age (non-contributory) pension increasing to £85.50 – both on line to reach £100 by 2002. These increases represent real increases for pensioners well ahead of the expected rise in average earnings. The Government is also committed to substantial increases in other social welfare payments. The personal rates of social welfare payments, other than those for older people and invalidity pensioners, are being increased by £4 per week. This represents an increase of about 5.5% for most payments, the same level as the wage increase agreed in the Programme for Prosperity and Fairness.

I secured Government approval for an additional increase of £1.90 in the standard weekly rate of invalidity pension. This will increase the weekly rate by £5.90 from £75.20 to £81.10 and bring it into line with the standard rate of widow's and widower's contributory pension.

In addition, the Bill provides for a special increase in the rate of qualified adult allowances for this year as part of an overall strategy to increase the allowance to 70% of the main rate over the next three budgets. This Bill represents the first step in this strategy by providing for a minimum increase of £3.80 in the general qualified adult rate. The qualified rate for old age contributory and retirement pensioners is being increased by £4.70 per week giving a total increase for a pensioner couple of £11.70 per week. The rate for old age non-contributory pensioners where the qualified adult is aged over 66 is being increased by £7.50 with such couples gaining £14.50 per week overall. There are also higher increases for those rates currently below 60% of the relevant personal rate.

The combination of personal and qualified adult increases will mean that couples will receive a minimum weekly increase of £7.80 per week, an increase of almost 7%. The increases in the weekly rates will take effect from the first week of May or four weeks earlier than last year. Next year, I intend to bring forward this implemen tation date to coincide with the start of the tax year in early April 2001.

The Government acknowledges the importance of child benefit in providing financial support to families and in reducing child poverty. The Bill provides for substantial improvements in the monthly rates resulting in a full year investment of some £106 million which represents an overall increase of 23% in the cost of the scheme. Child benefit rates will be increased by £8 per month in respect of the first two children and by £10 per month in respect of the third child and subsequent children. This means that a family with three children will receive £141 per month, an increase of £26. I intend over the next few years to continue to provide substantial increases in child benefit in line with the commitments in the Programme for Prosperity and Fairness with a priority focus towards £100 per month to the third child and subsequent children.

Sections 8 and 34 introduce key reductions relating to PRSI and the health contributions aimed at improving the position of low paid workers, following on the discussions of the new partnership agreement, the Programme for Prosperity and Fairness. Under section 8, employees paying Classes A, H and E contributions earning £226 or less per week will be exempt from paying PRSI. Employees earning more than this will continue to pay PRSI on earnings above the PRSI allowance of £100. More than 460,000 employees will gain up to £5.67 per week from this additional measure at a cost of £50 million in a full year.

The earnings limit for exempting employees from the 2% health contribution is also being increased under section 34 from £217 per week to £280 per week, £14,560 per year. All employees earning between £217 and £280 per week and all self-employed people earning between £11,250 and £14,560 will benefit by up to £5.60 per week at a cost of £52.6 million in a full year. This will benefit up to 200,000 workers.

Sections 8 and 9 also provide for an increase, from April next, in the earnings ceilings up to which contributions are payable by employers, employees and the self-employed and for a reduction of 0. 7% in the employer's rate of social insurance contribution to compensate for the introduction of the new training fund levy later this year.

The Bill contains a number of measures aimed at improving the incentive to work and alleviating certain unemployment traps. Section 7 increases the weekly income thresholds for family income supplement from May next by £13 which will lead to an increase of approximately £8 per week in the average FIS payment. I also intend to increase by way of regulations the minimum payment provided under the scheme from £5 per week to £10 per week.

As announced in the budget, the tapered qualified adult allowance arrangements, which relate to the treatment of spouses' earnings are being improved and extended to include people on invalidity, old age contributory and retirement pensions. At present, a qualified adult allowance is payable where the qualified adult has income or earnings of less than £60 per week. A reduced allowance is paid where his or her income is between £60 and £105 per week and in such cases child dependant increases are payable at 50%. The improvements announced in the budget provide for an upward adjustment of the income range to £70 and £135 per week, improvements in the rate of withdrawal and the full payment of child dependant payments until the spouse's earnings exceed £135 per week. Section 20 implements the latter measure. This improvement will be of particular benefit to families where the head of the household is claiming social welfare and the other is engaged in part time work. A family with two children, where the spouse has earnings of £90 per week, for instance, will be better off by £38 from May next, by comparison with the current system.

I am also taking steps in section 26 to improve the treatment of people on rent supplement who take up part-time or casual work opportunities. Under the existing arrangements, any increases in earnings are currently clawed back in full by way of reduced rent supplement payments. From April, a £25 income disregard will be introduced to ensure there is a positive return from work for those who avail of part-time work opportunities. The section also provides for a disregard of additional income arising from participation in training courses, such as FÁS skills training courses, for people in receipt of rent supplement. This measure will take effect by April next and some 2,500 people are expected to benefit.

The valuable role of carers in our society is irreplaceable. No other Government has been as committed to supporting carers as this one. We have delivered on a wide range of measures, both in terms of income support and in terms of services provided. This is reflected in the increasing numbers of carers in receipt of carer's allowance which have increased by more than 60%, from 9,200 when we took up office to more than 14,200 at the end of this month. Expenditure has also increased substantially and will be more than doubled this year, from £36.5 million in 1997 to £78.3 million this year.

In addition to improvements in the carer's allowance, I have extended existing schemes to carers, such as the free schemes, and introduced new support measures such as the respite care grant. I am providing for an increase of £100 in the respite care grant this year.

However, in spite of these major improvements, more needs to be done and this Bill extends our support to a new group of carers. As announced in the budget, I am introducing a radical and innovative benefit scheme to enable carers to give up work temporarily to care full time while still retaining their employment rights. This will ensure that our social insurance system caters for a very important contingency with which many of us are only too familiar.

I am very pleased that the Government has agreed to extend the duration of the carer's benefit and associated leave from 12 months, as originally announced, to 15 months. The new scheme, to be called "carer's benefit", will involve two central elements, both of which are regarded as essential to the recipient. The first of these is a weekly income support payment of £88.50, to be operated and paid by my Department. This will be a social insurance benefit and will therefore not be means tested. It will be paid provided the relevant PRSI contribution conditions have been met.

The second entitlement is the protection of the carer's employment rights for the duration of the caring period. This will require the introduction of separate legislation by my colleague, the Minister of State at the Department of Enterprise, Trade and Employment, with special responsibility for labour affairs, Deputy Tom Kitt.

Sections 10 to 12 outline the main features of the new scheme. The new benefit will be based on a person's PRSI contributions and the maximum claim duration will be set at 15 months in respect of any one care recipient. This time period should be sufficient to facilitate carers who have to leave the work force temporarily to care for an elderly or infirm person or to make alternative long-term arrangements. In addition, it will allow for the protection of the carer's employment rights, which is a key feature of the scheme. In the event of the carer's benefit expiring and the need for income support still existing, the carer will be able to apply for carer's allowance. Although it will not be means tested, the new scheme will be closely linked to the means tested carer's allowance in relation to other conditions. The same medical criteria, residency and part-time working conditions will apply. Employed contributors paying social insurance will be included for the purpose of the carer's benefit scheme, except for the self-employed, class S, and those earning less than £30, class J. The scheme will be available to people in employment for at least three months immediately prior to claiming benefit, who have at least three years' contributions and are working for a minimum of 38 hours per fortnight prior to commencing full-time caring duties. The weekly rate of payment will be £88.50 and additional increases for child dependants will be payable, where appropriate. The Bill also provides for an additional payment in cases where a carer is caring for more than one person, as applies to the carer's allowance and for payment of a respite care grant. It is estimated that when the scheme reaches maturity there could be in the region of 6,600 claimants of this benefit. This new scheme will become operational from October 2000, following the introduction of the necessary legislation by my colleague on the protection of carers' employment rights.

Deputies will recall that in my budget speech last year, I announced that my Department would carry out a review of the qualifying conditions for the retirement and old age contributory pensions in 1999. I am pleased to be able to report to the House that the first phase of this review is now completed. The second phase will be finalised before the end of 2000. The review is looking closely at the operation of the current yearly average test and the implications of moving to a total contributions approach which many people consider more equitable.

In relation to contributions paid prior to 1953, Deputies will be aware that such contributions, while currently taken into account for certain requirements in determining entitlement to old age contributory and retirement pensions, are not counted in determining the yearly average test. Consequently, many people with pre-1953 insurance have failed to qualify for pensions or only qualified for a minimum pension because their contributions were not fully recognised. Under section 16 of the Bill, these people may now qualify for a special old age contributory pension at 50% of the maximum personal rate if they have at least five years or 260 social insurance contributions paid under the National Health Insurance Acts or a combination of pre- and post-1953 insurance.

I am also pleased to announce significant improvements in the current structure of the rates bands for the retirement and old age contributory pensions. The current structure includes five different rates of reduced pensions. This will now be reduced to three rates. Pensioners with a yearly average ranging between 20 and 47 contributions will now be entitled to a reduced rate of pension equivalent to 98% of the maximum personal rate. This change will result in some 38,000 pensioners receiving overall increases of between £7.50 and £12.20 in their weekly personal rates of pension. This improvement will take effect from May next and will be implemented in regulations.

Section 17 introduces radical changes to the method of assessing capital for social assistance payments. This is an issue that has been raised by the Oireachtas Committee on Family, Community and Social Affairs, by members of my own parliamentary party and indeed by Deputies on all sides of the House. Concerns have been expressed, for example, that the effective assessment rates under the existing system, particularly in the case of single people with relatively low amounts of capital, bear little relation to the actual returns currently available on investments. I am pleased to be in a position to respond positively to these genuine concerns and I have gone further than required. I am introducing quite radical changes to the system of capital assessment and extending this improvement to most social assistance schemes, including unemployment assistance.

Briefly, the new arrangements will provide that the first £10,000 of capital will be completely disregarded. Capital between £10,000 and £20,000 will be assessed on the basis of £1 weekly means for each £1,000 of capital; capital between £20,000 and £30,000 will be assessed on the basis of £2 weekly means for each £1,000 of capital, and capi tal above £30,000 will be assessed on the basis of £4 weekly means for each £1,000 of capital. These limits will be doubled in the case of a married couple in receipt of old age non-contributory or blind pensions or carer's allowance.

This new system, which will be introduced next October, at a full year cost of £6.7 million has a number of key virtues. First and foremost, it means that pensioners with the lowest amounts of capital will not face any pension reduction. A survey of old age pensioners with capital, undertaken by my Department, found that 88% had capital of less than £10,000. The majority of pensioners with capital will no longer find that capital assessed against their pension. The change is equitable and progressive and is considerably easier to understand from the perspective of the customer. It also provides significant gains to social welfare claimants who have capital. For example, a single pensioner with £10,000 capital will gain £6 per week as a result of this change. This will also apply to those on unemployment assistance, as announced earlier.

Section 18 of the Bill provides for a number of improvements in the farm assist scheme agreed as part of a package for the farming community outlined in the new Programme for Prosperity and Fairness. They involve a reduction in the assessment rate from 80% to 70% and an increase of £100 per annum in the child income disregards. Both these improvements will make a valuable contribution in supporting farmers on low incomes. It is proposed these improvements will also apply in the case of low income self-employed fishermen claiming unemployment assistance.

In the 1999 Social Welfare Act, I introduced an enhanced bereavement grant of £500. As a result of this measure, the numbers claiming the bereavement grant in 1999 increased by 80% and expenditure on the scheme increased fourfold. I also indicated that it was my intention to introduce further measures in this year's Bill to address some of the difficulties and problems faced by newly bereaved people. We are all well aware of the particular grief experienced by families on the loss of a spouse and parent. The emotional difficulties can be particularly acute as, more often than not, it means the loss of a spouse at a relatively young age. In addition, with children involved there can also be very practical problems for a newly widowed person at this time.

To assist newly widowed persons with children to cope in the immediate aftermath of such a loss, the Government has decided to introduce a special additional grant payment of £1,000 effective from budget day, 1 December 1999. This is provided for in sections 13 to 15 of the Bill. The grant will be payable to widows and widowers with dependent children who qualify for widow's and widower's contributory pension, a one parent family payment or a bereavement grant payable on the death of their spouse. It is estimated that the payment will benefit over 1,500 widows and widowers each year at a cost of £1.5 million. The measures contained in section 25 of the Bill deal with the problem where the six weeks after death payment is not currently made or is paid at a reduced amount. This is additional to the changes announced in December's budget. These arise in particular in households where there are two pensions in payment and in cases involving the payment of one parent family payment. Approximately 3,300 people will benefit from these measures at a full year cost of approximately £1.5 million. These measures will mean that a six weeks after death payment now applies in all circumstances under the social welfare code. We have eliminated the many anomalies in this regard.

Section 27 of the Bill implements one of the social inclusion commitments in the proposed Programme for Prosperity and Fairness and addresses a concern which has been raised many times by Members of this House and other public representatives. The section allows an unemployed person to qualify for either unemployment benefit or unemployment assistance, whichever is more beneficial to his or her circumstances. This change will be of particular benefit to community employment workers who were previously long-term unemployed. They will now be able to claim unemployment assistance at the long-term rate if they revert to the live register and qualify for extended child dependant increases for school going children up to age 22 and for secondary benefits such as free fuel and the Christmas bonus, which is a bone of contention in this House every year.

I now turn to some of the miscellaneous provisions. Current financing arrangements of the social insurance fund allow for the reimbursement from the fund to the Exchequer of social insurance costs arising where a person entitled to old age or widow's and widower's contributory pension or deserted wife's benefit opts instead to claim old age non-contributory pension at a higher rate. The annual cost of these payments is £24 million. These provisions are being extended to other categories of payments where a person who is entitled to a social insurance benefit on foot of his or her PRSI contributions opts instead to claim certain assistance payments at a higher rate, for example, a higher unemployment assistance payment than an unemployment benefit payment. The new arrangements are expected to cost in the region of £22 million annually.

Section 29 also provides for the charging to the fund of expenditure incurred in relation to recipients of social insurance payments under certain free schemes administered by my Department. These schemes are currently available to people receiving certain social welfare payments or other qualifying payments, or who are aged over 66 years and satisfy a means test. The schemes are currently fully financed by the Exchequer from my Department's Vote. This change will not lead to an increase in overall expenditure by my Department but will involve a transfer of charges from my Department's Vote to the fund of approximately £71 million.The section further provides that expenditure incurred under the medical card system for dental treatment for insured persons who would otherwise qualify under my Department's dental benefit scheme by virtue of their PRSI contributions will also be borne by the social insurance fund. This will involve a transfer of approximately £7 million in charges from the Exchequer to the fund. I believe it is logical, therefore, to charge the social insurance related expenditure, such as free schemes, to the social insurance fund. On the same principle, it is also logical to recoup from the fund any liability which exists where a person who is entitled to a social insurance benefit on foot of his or her PRSI contributions opts instead to claim certain assistance payments at a higher rate.

Section 31 provides for changes in the administration of the supplementary welfare allowance scheme. As Deputies are aware, the scheme is currently operated by health boards under the general direction and control of the Minister. The purpose of this amendment is to enable deciding officers of my Department to decide entitlement in certain cases. These include claims for basic supplementary welfare allowance from people who are awaiting a decision on claims made for social welfare payments, such as unemployment assistance or one parent family payment, and claims for retention of rent or mortgage interest supplement from people who are making the transition from welfare to work with the support of active labour market programmes such as the back-to-work allowance.

Some 22,000 people currently receive a basic weekly payment under the scheme. Just over half of these, 11,600 people, claim supplementary welfare allowance from their local health board while awaiting a decision on claims before my Department for payments such as unemployment assistance/benefit or one parent family payment. Dissatisfaction has been expressed by public representatives and others that people seeking assistance from the State are obliged to make their case in duplicate at the health board office, having already provided all the relevant details to the Department. Some 47,000 people currently receive rent or mortgage interest supplements under the scheme. Approximately 5,000 of these are people who are making the transition from welfare to work with the assistance of programmes such as the back-to-work allowance. They receive supplementary welfare allowance under special arrangements introduced as a work incentive and, in most cases, would not qualify under the standard rules of the supplementary welfare allowance scheme. It is my intention to provide for the direct payment of supplementary welfare allowance by my Department in these cases with a view to improving customer service and administrative efficacy. This proposal is in line with the conclusions reached by the Comptroller and Auditor General in 1998 in his report on the value for money examination of the administration of the scheme. My Department is at present consulting with the relevant staff interests in the health boards on the appropriate timescale for this change. Following these discussions, I will be bringing forward regulations giving effect to this transfer.

Section 32, at the request of the Department of Health and Children, extends the scope of the legislative provisions I introduced in 1998 for an integrated social services system to include the National Breast Screening Board on the list of specified bodies. Deputies will recall that these provisions provided for the standardisation of the RSI number as a unique public service identifier, the introduction of a public service card and a payment card and the sharing and transfer of personal information between specified public bodies for the purposes of determining entitlement to certain social services and for the control of such services. The existing list of specified bodies includes Departments, local authorities, health boards, the Revenue Commissioners, FÁS, An Post, the General Registry Office, the Legal Aid Board, the General Medical Services Payments Board and the voluntary hospitals. My Department has consulted with a wide range of specified bodies on how the new system should work. Plans are now well advanced to launch a combined PPSN and public service care initiative across the public service to heighten public awareness of the potential it offers for improved service delivery. This initiative will include the development of a common means database accessible to agencies delivering means tested public service schemes.

At this stage I wish to inform the House of my intention to introduce an amendment on Committee Stage to extend the existing data sharing provisions to allow data exchange between my Department and other specified bodies for the purpose of providing them with a PPSN for each person for whom they hold records. The amendment will provide also that my Department provides to local authorities landlord details of tenancies in respect of which a rent supplement is payable by my Department to assist them in carrying out their statutory responsibilities with regard to fire safety and accommodation standards in relation to private rented accommodation; that the Department of Education and Science track early school leavers across publicly funded training courses so that the information may be used to develop appropriate responses in terms of outreach and curriculum development; and that the National Breast Screening Board should exchange data with other specified bodies, using the PPSN, for the purposes of identifying persons who, for public health reasons, may be invited to participate in their programme.

In relation to the issue of post-retirement integration, I tabled an amendment in last year's Social Welfare Act to prohibit reductions in occupational pensions already in payment arising from increases in social welfare pensions, as recommended by the Pensions Board in its report on the national pensions policy initiative. However, I am still concerned that, under the rules of a very small number of occupational pension schemes, the integration process is continued after retirement under a total pension income approach effectively depriving the pensioner of the full benefit of the large increases in recent years in the social welfare pension. Therefore, I am tabling an amendment to this Bill which will prohibit this practice. In relation to the general issue of post-retirement integration, I will be considering a report which I have requested from the Pensions Board on the indexation of occupational pensions generally in the context of the new pensions Bill which I propose to publish during the summer.

The Social Welfare Bill demonstrates the Government's commitment to looking after the needs of our older people, carers and others who are dependent on the social welfare system for income support. This is clearly evident when one considers the additional resources being made available for these improvements – £252 million this year and £428 million in a full year. I commend the Bill to the House.

Mr. J. O'Keeffe

Fine Gael will vote against the Social Welfare Bill. We will do so not because of what is included in the Bill but because of what is not included. This Government has unprecedented resources at its disposal and it has failed to use this bounty in a fair way to help the poor, the disabled and the vulnerable in society. It has dispensed mere crumbs to carers and children and totally failed to address their real needs. The Government, therefore, has squandered the substantial resources and real opportunities that now exist to tackle want and poverty in society. Someone once said that poverty will always be with us. Perhaps they were right because each day someone will be poorer than someone else. Some will have designer clothes, some will not. Some will have the latest DVD video player, while others will have to make do with the ordinary video. Some may have an Ansbacher account, the rest of us will not. However, that is life – the division between the haves and those who have somewhat less.

But there is another type of poverty, a real poverty. For all the glories of the Celtic tiger, poverty still exists. The issue for some people is not whether they can afford the latest Nike footwear, but whether they can afford the cost of putting basic shoes on their children. The issue is not whether these people can afford to eat in the Shelbourne and get themselves in the gossip columns of the Sunday Independent but whether they can afford to buy basic good food for their families in the local Dunnes Stores or SuperValu. These people are not worried whether they can buy a new apartment on the Quays and fill it with designer furniture or have a new car with a 2000 registration but whether they can afford the bus fare or be able to pay the rent to enable them to provide a proper, decent home for their families. It is all too easy in this image conscious boom and bloom Ireland to forget that such real poverty still exists.

In the past, when Ireland was poor, people knew about it. It could be seen on every street where children went barefoot to school, wore hand-me-downs from their older siblings and the houses had no running water. That was the world of Strumpet City and Angela's Ashes. Poverty in those days seemed like part and parcel of our Irishness. There was struggle on the land to survive the mass emigration that drove Irish people in their millions to greener pastures in Manchester, Boston or Adelaide. In those days the majority were poor, some desperately so, while only a small minority had the money to live well and avoid the daily slog that haunted the ordinary Irish. Today things are different and most are no longer at the bottom of the heap. In Celtic tiger Ireland there is more money and it is spread far more widely, thank God. We no longer see children barefoot or wearing hand-me-downs. Emigration is no longer the spectre which haunts families. Even those in relative poverty can hide it to some degree by buying new clothes in the large department stores; they can hide their relative poverty in homes furnished with cheap mass produced items that make them look as good as the homes of the rich and famous. However, this change should not fool us into thinking that poverty no longer exists.

Perhaps it affects fewer people, a smaller percentage of the population, than in the past, but for many poverty is still a haunting reality. It makes every living day a nightmare and a humiliation. These thousands of people see the country racing ahead and the wealth of some and they wonder "Why them"? Why are they being left behind by the Celtic tiger economy? Why is their housing estate falling apart because of a lack of investment? Why are they begging on the streets because adequate hostel accommodation is not available? Why are their children left behind and forgotten? Do they not matter?

Why do we continue to allow such deprivation to exist? This is the essential question that we in politics must address and that the Government has not answered. Where is the anger that should exist at the fact that, despite all the resources at our disposal, our tiger economy continues to leave so many citizens behind? Are we so blinded by the new rat race of greed that those who are gaining the benefits of the economy do not care any more about the poor? Are we condoning poverty? Do we think it does not matter now that it no longer affects us?

Seán Lemass once said that a rising tide would lift all boats – if only that were true. The trouble is that many of those boats cannot float because they are leaking, damaged by a lack of educational opportunities, long-term unemployment and extreme poverty. If those damaged and leaking boats are to be made to float and be capable of catching the full force of the economy's rising tide, they need help, resources, investment and hope.

If one wants to see the reality of how little of the booming economy's benefits are seeping down to the poorest of our fellow citizens, one should look at the job supplements in the Irish Independent, The Irish Times and The Examiner. One will see the highly paid jobs that are available, but many of them require third level qualifications.

One should then go to Trinity College, Dublin, UCD or any other third level institution to see how many working class children one can spot. One will not see many, but one will see plenty of middle class children and those whose families already had the means. They were in undamaged boats, so to speak, that could catch the rising tide and get all the opportunities that it brought. That is fine. It is great that our graduates are doing so well, but it does not help to spread the new wealth around the nation. Those at the bottom of the pile do not end up in educational institutions which will make them employable and eligible for the large salaries and the opportunities now available.

The only working class people one will see in Trinity College, Dublin, UCD, UCG, UCC or any other third level college are the contract cleaners scrubbing the floors at night when the middle class students and lecturers have gone home. What plans does the Government have to tackle this problem? What plans are in place to open the door of opportunity, particularly educational opportunity, to those who are at present marginalised? This aspect is not dealt with in the Bill. It is only one example of the many to which one can refer.

A British king once said famously, "Something must be done" and I echo that phrase. Perhaps from the 1920s to the early 1990s one could have made convincing excuses, proclaimed the State's poverty and said how much one wished one could do something about it. We did not have the resources and Ireland was a poor country. For example, in 1966, Ireland was in receipt of a developing country loan from the World Bank. There was poverty and our economy was not performing well enough to give us the means to do something about it.

However, those excuses are not acceptable any more and this is the major plea I wish to make in relation to the Bill. There is so much money in the Exchequer that the Minister for Finance, Deputy McCreevy, could wallpaper his office with £100 notes and carpet Government Buildings with £50 notes without even noticing. We like to think we are moral people and it is the case. Whatever about the State and the Government, the people have shown their generosity towards the poor in the Third World. I saw that when I was a Minister of State with responsibility for overseas aid. As a people, we showed that we are hugely generous.

Now is our chance to put that morality into action as far as our own people are concerned. We have the means, resources and potential. All we need is the will not only to say something must be done, but to do it and to show that when we use the phrase "independent Ireland", we mean an Ireland independent of poverty. We should make Pearse's words in the Easter Proclamation about cherishing the children of the nation equally a living, breathing hope filled reality of which we can all be proud.

This is the background against which the Social Welfare Bill must be considered. It is probably the main instrument of Government focus this year on the needs of the less well off in our society. However, does it pass the test of being an effective instrument? It is fair to say that the moneys being made available are greater than in previous years. I accept that is the case. It is also fair to say that the bruising budget battle has brought some additional benefits with an improved social welfare deal for some pensioners and some on low pay. However, in the wider context of the Government having the historic opportunity with ample funds to declare war on poverty, the Social Welfare Bill will have only a marginal impact.

Even worse, it must be considered against the widening gulf created by the budget which laid the foundations for a two tier society. Effectively, in the budget, the Government gave the well off ten times the gain of the less well off. Is that fair? It is the classic way to imbed a two tier society. Even worse, the crumbs provided for the very poor will copperfasten their poverty.

CORI gave its verdict and I agree with it. It said "This is a scandalous squandering of resources and is indefensible in the context of the poverty and social exclusion that is still so prevalent around the country." CORI does an excellent job examining Government policies and measures. It has a slant which favours the less well off in society. I am happy with that, but, at the same time, it gives an objective analysis of the measures introduced by Governments. I have rarely seen such criticism from CORI as in relation to the measures introduced by the Government in the overall package of the budget, the Finance Bill and the Social Welfare Bill.

CORI knows, as we know and the Government must know, that with the unprecedented resources available to the Government there was a real and historic opportunity to establish a war on want and poverty. That opportunity has been squandered. CORI said the approach adopted by the Government is unfair because those who are already better off gain much more than those who are poor. They remain poor because the Government has not taken steps to lift them out of poverty. Benefits are skewed towards the better off and they have been given substantial gains. The poor are once again left collecting crumbs from the table The Government has to take note of this legitimate criticism. If one does not take into account the flowery phrases about child poverty and problems of ill-health and disability, one must take note of the figures. An analysis of the way the Government allocated funding from its new resources for 2000 indicates that under the Social Welfare Bill – the main instrument for coping with wanton poverty in society – social welfare increases funded by taxation get only a 8.9% increase. Is that adequate? Is the Minister proud of that? The Minister proclaims all the good he has done, and some good has been done, but is he proud that he has been limited by the Government and the Minister for Finance—

Mr. Broughan

He was hoping for another Department.

Mr. J. O'Keeffe

I am afraid the Minister did not escape, he has to continue the battle, and I do not envy him. It is clear that a Minister who would ignore—

Mr. D. Ahern

I intend to stay where I am.

Mr. J. O'Keeffe

—a movement, such as the credit unions, with 1.5 million members can afford to say he does not give a damn about the poor because that is the message coming from the Government. This is not a Social Welfare Bill of which the Government can be proud but it is not even a Social Welfare Bill of which this nation can be proud. I do not wish to dwell on each item in detail, nor would time permit it, but there are a couple of areas on which I wish to focus.

Carers and children have always been two of my main concerns. Both sectors have been treated disgracefully in the Bill. The Minister repeats the usual mantra about how much the Government cares for the carers and what a great job it is doing. He introduced a limited scheme for carer's benefit. He confirms that the valuable role of carers in our society is irreplaceable. If so, why does he not do something about the majority of carers who get no support from the State? It is all very well to go into detail about the carer's benefit. It will mean a minor improvement for a number of people who have to give up employment to take on the role of carer. What about the tens of thousands of carers who are already caring for their aged and disabled relatives and who get absolutely no support from the State? We do not know the number of carers. The Government admits there are approximately 50,000. It also admits that only slightly more than a quarter of that number receive support. The carers associations mention much bigger numbers. I do not know the total number, but there are tens of thousands of carers looking after people in need of full-time care and attention, the majority of whom are getting no support from the State. They are precluded from such support because of two main rules – the means test and receipt of social welfare. This Government, with the billions of pounds at its disposal, should focus attention on those two iniquities.

I would like the means test to be abolished – that may be an issue for the distant future. As of now it should be relaxed. When was the means test for couples last relaxed? As I understand it, this Government has never altered it for couples and it has not been relaxed since the £250 disregard was established about five years ago. Why does the Government, which claims the valuable role of carers in our society is irreplaceable, continue to ignore those who, because of the means test, are precluded from getting an allowance?

Another major objection is that those on social welfare are precluded from the carer's allowance. How can any Government justify that? Normally those on social welfare, particularly those on assistance payments, are at the bottom of the pile, the lower rung of society. They, like everybody else – in some cases even more so – care for elderly relatives and disabled members of their families. Why should they be excluded from a carer's allowance? The Minister may respond with a technicality and say they can get the carer's allowance. They have to give up their other income to get it. Effectively, they are precluded from qualifying for a carer's allowance. That is unjust and the Minister has no real answer to my criticism on that front.

We have heard of the great work being done by the Government for children. Everybody knows we have a bad record so far as our children are concerned. State support for our children is the worst in Europe, apart from Spain and Portugal. What are we doing with the wealth at our disposal? Children will get nothing extra today, tomorrow, next week or next month. The Minister reminds us of the great job he is doing because from next October about £2 per week will be payable for children.

Everybody, including the Minister, accepts that one of the best means by which child poverty can be tackled effectively is through child benefit. It channels resources directly to families and is of particular importance to families on low income. The Minister said the incidence of child poverty is a major concern of this Government. He claims the Government is seeking to ensure our children are protected and given the opportunities to bridge an inter-generational cycle of poverty. How then does he justify the main anti-poverty instrument of this Government for the new millennium which gives nothing extra to children for two-thirds of the year and only a miserable £2 per week for the last third. The expression "too little too late" aptly sums up this miserable allocation.

What galls me is the smug self-satisfaction of the Government. I see it in the way the Minister, Deputy McCreevy, dismisses the credit unions. His approach is one of total arrogance. As a member of a credit union I am affronted by that approach. The few pounds I have in the credit union will not be affected by it, but there are 16,000 volunteers who are committed to that movement and that is the attitude of the Minister. I have tried to provide support for the Minister, Deputy Ahern, in getting extra resources from the Cabinet but the smug self-satisfaction of the Government galls me. Some of its members seem to believe the increase of a few pounds per week in welfare payments will enable people to confront the pressures of poverty on their lives. I cannot believe the Minister, who is an intelligent man, believes that, perhaps he is putting on a front. That smug self-satisfaction is a symbol of this Government so far as the weak, the poor and the vulnerable in society are concerned. This approach is unacceptable.

The Bill will make no impact of consequence on the problems of the disadvantaged in society. The resources are available to make such an impact but clearly the political will is not there to commit those resources to a war on wanton poverty.

In the past few years some changes have been made to the means test. I have fought battles about the means test over many years. I am glad to see some changes are being made in the means test but I am not entirely happy with the Minister's approach. The basis on which the new means test is made is confusing. I am glad the first £10,000 of savings will be disregarded but the test is not fair at higher levels. I have always assumed the means test should be calculated on the basis of actual returns. The system outlined by the Minister calculates interest on £1,000 at £4 weekly. This amounts to £200 per year, or 20%. Is this fair? Any revised system should be a fair system. Is the Minister making a bad system worse? If it is the Minister's intention to set a cut-off point beyond which holders of money on deposit will not receive a social welfare payment, he should say so openly. He should not maintain the charade of providing a fair system while basing it on the assumption that bank deposits earn interest at 20%. This is something of which the Minister cannot be proud.

Only following a political storm in the lead-up to the local elections did the Minister do a U-turn and agree to open negotiations directly with An Post for the renewal of the contract. Unfortunately for him and the country, he is now trying to compete in Brussels against his own arguments for open tender. I favour the renewal of the contract with An Post. I do not see how any other system can provide the nationwide distribution necessary for the effective delivery of social welfare payments. As matters stand, the system and the national network of rural post offices are at risk and the Minister carries the full responsibility for this situation.

The Minister and the Government had an opportunity to do something for the poor, the weak and the vulnerable. They have not taken that opportunity. Next year, I hope a different Government will ensure that a reasonable and proper allocation is made to deal with the problems I have outlined.

Mr. D. Ahern

More wishful thinking from Deputy O'Keeffe.

Mr. Broughan

This Bill is historic for all the wrong reasons. Never before have the provisions in a social welfare Bill differed so vastly from those announced on budget day. The purpose of this Bill is to save the face of the Minister for Finance. It is not motivated by a desire for social justice or the redistribution of wealth but by a desire to keep the Government intact, regardless of the consequences. The Bill is born out of the unprecedented tick-tacking which followed budget day. Few Members of the House could comprehend the blatant give-away the Government awarded to those who are already doing very well in our booming economy. Even Fianna Fáil backbenchers could not believe what they were hearing when Deputy McCreevy delivered his biggest ever give-away budget.

So stark was the contrast between the awards given to the well-off and the low paid that social partnership almost collapsed. The outrage expressed by the third pillar of the national agreement and the withdrawal of SIPTU from the talks forced the Government to rethink the most socially divisive budget in the country's history. Hence, the faithful lieutenant and namesake of the Taoiseach has been sent out to rescue the Government when it is in serious difficulties.

The failure of the budget to address the question of the tax burden of the low paid was its biggest crime. There is no logic to awarding a tax cut of £1,620 to a single earner on £50,000 while a single earner on £10,000 receives an annual increase of only £206. Basic logic dictates that a person on the lowest income deserves the biggest gain. However, the warped logic of the Government gave the most to those who deserve it least, so that they can buy another expensive car, take another expensive holiday and enjoy the fruits of our Celtic tiger economy.

So headstrong was the Minister for Finance that he refused to deal with the issue of low pay in the Finance Bill. In fact, his headstrong attitude is characteristic of this Government. Instead, the Minister for Finance has passed the buck to the Minister for Social, Community and Family Affairs and we are presented with a Bill which proposes to raid the social insurance fund in the name of social justice. The social insurance fund must carry the can for the mistakes of the Minister for Finance and the Taoiseach. Until recently, PRSI was regarded as a second tax. The social insurance fund operated at such a loss throughout most of its history that it was unable to cover basic outgoings such as unemployment payments. All this has changed and our social insurance fund has developed into a fine little war chest, with surpluses of £600 million predicted in the next couple of years. We are in a position to attach a real sense of integrity and usefulness to the area of social insurance. We have a chance to offer better income support to those out of work and enhanced benefits to those in work.

Such are the proposals which the Minister should have presented in this Bill. He should have presented a comprehensive programme based on an expanding social insurance fund. He has had almost three years to formulate a new approach to the funding of benefits for the least wealthy but he has clearly failed in the administration of his brief. Given the policy direction of the Government, the chance to develop the social insurance fund is now withering away. The new threshold for PRSI will be a short-term income boost for the very low paid but an expansion of the system of tax credits would have been more beneficial. Why did the Minister not explore the concept of positive tax credits in this year's budget or at least aim for it in next year's?

The majority of workers should contribute to social insurance and it should offer very real and expanded benefits. The Bill proposes a social welfare exemption for workers earning less than £226 per week. It also proposes a relatively small increase in the PRSI ceiling, bringing it to £26,500. The new exemption and the continuation of the ceiling significantly reduces the number of people eligible to contribute to the social insurance fund, thereby stealing the integrity which it has established in recent times. When the Bill landed on our desks section 29 was the one that jumped out at us. It is the key change and far more significant than the famous section included in the 1999 Act dealing with the stopping of motor vehicles. It provides for the charging to the social insurance fund of expenditure incurred under certain free schemes – free fuel allowance, free electricity allowance, free television licence, free telephone rental allowance, free natural gas allowance, free bottled gas allowance and dental treatment under certain conditions – and where a person opts for a higher unemployment assistance payment. While I accept that this has to be agreed between the Minister and the Minister for Finance, we still have not been informed why this is being done at a cost in the order of £70 million. It seems that it has been estimated that within a few years there will be a fund surplus of £600 million. With this image dangling in front of their eyes the Taoiseach and the Minister for Finance decided to make a raid.

Like many other Members I am deeply concerned at the influence exerted by the Progressive Democrats and, in particular, the powerful Progressive Democrats wing of Fianna Fáil, including as it does the Minister for Finance within its deadly embrace. When on this side of the House the Tánaiste and the Attorney General said time and again that, if at all possible, the concept of social insurance should be abolished as it was simply another tax on business. That central core of the Government does not give a damn about social insurance and for blatant ideological reasons wants to get rid of it. This contrasts with the progress made in relation to capital taxation. It is clear that it is operating to a narrow ideological agenda.

The Labour Party totally opposes this sleight of hand to transfer the charges involved to the social insurance fund. Given the projected budget surplus there is no justification for it. While it will have the technical effect of reducing direct Government expenditure, the Appropriations-in-Aid will have to be adjusted downwards to take account of it. Even on accountancy terms, therefore, it seems that this is a very dodgy section to which the Labour Party will table a major amendment.

If we are to believe the mainly aspirational Programme for Prosperity and Fairness, our trade union colleagues have secured agreement on the establishment of an overseeing board. Such a board is badly needed given that the Government has now put its hand in the fund and clearly cannot be trusted. The fund surplus could have been utilised to fund the integration of tax and social welfare contribution rates, the elimination of poverty traps or, alternatively, measures such as a family responsibility payment, among others, which were the subject of a recent fine discussion document on the nexus between social welfare and taxation. A reduction in the standard employee PRSI contribution could also have been considered. If the fund is to be operated properly and progressively it needs to be developed extensively. The Labour Party will shortly bring forward proposals on how this can be done.

There is no evidence that it is the intention to reform the fund. I note the commitment in the Programme for Prosperity and Fairness to establish a social insurance fund board which I hope will be established shortly and that we will have a report and plan of action without delay. The Labour Party will not sit idly by and watch the fund fall apart under this careless Fianna Fáil-Progressive Democrats Administration.

The Bill which contains so-called rebalancing measures creates a new poverty trap for those on low incomes. Those who are 1p over the exemption limit of £226 will continue to pay PRSI in the normal way, thereby creating another complex anomaly. There is consensus that the creation of such anomalies should be avoided. In trying to eliminate anomalies the Minister, as many commentators, including the economist, Mr. Colm Rapple, have said, has created two or three others. This is beyond belief.

Mr. D. Ahern

Is the Deputy against looking after old age pensioners? I make no apology for looking after them.

Mr. Broughan

Given that I have asked the Minister to look again at the situation on pre-1953 contributions, I welcome section 16 in Part V of the Bill which has been criticised in the media and which attempts to provide some cover for those who paid contributions under the National Insurance Acts, 1911 to 1952, or have a combination of such contributions and qualifying contributions. I have raised this issue almost every time the Minister has answered questions in the House since my appointment as my party's spokesperson on social welfare. I, therefore, welcome the initiative taken by him. Anomalies remain, however, in the contribution system. It has been highlighted recently that persons who paid contributions for up to nine years still are not receiving benefits because of the manner in which they compiled the contributions. I may return to this issue on Committee Stage.

Apart from the botched job on section 29, there are a host of other issues which I wish to address. The new carer's benefit is very welcome and is an example of how the social insurance fund surplus can be used to positive effect. Deputy Moynihan-Cronin and I called time and again at Question Time for the introduction of such a benefit. Lest the Minister has had his head buried in the sand for the past 12 months, there is widespread consensus that the gradual abolition of the means test for carer's allowance is the most appropriate way of acknowledging the contribution of carers to society.

The new carer's benefit is designed to assist workers who leave their jobs temporarily to care for a relative and will only be payable for 15 months. Existing carers will not benefit. The new benefit will be useful where a relative has a terminal illness and only has a short time to live. This ignores the sacrifices made by others when forced to give up their jobs permanently to care for a relative with a long-term illness or disability.

All parties in the House have met the Carers Association since the Bill was published last week.

I was struck by some of the contributions of carers about the difficult lives they have led, caring for a person for perhaps 30, 40 or 50 years with little support at times because the head of the household works. It is something to which the Minister might have returned between the budget and the publication of the Bill. Indeed, I think the Minister announced at Question Time to Deputy O'Keeffe and me that he had extended the 12 month period for the carer's benefit to 15 months. Perhaps he could look at it again to see whether it could be further extended and come back to us. For example, as carers said to us last week in Leinster House, on the basis of medical reports there might be an extension of from nine months to a year and a half.

At current levels, of course, the cost of funding all full-time carers – I presume they were talking in terms of funding up to 50,000 full-time carers – would be £150 million per year. The Minister's officials gave me that information at the Joint Committee on Family, Community and Social Affairs, of which I am vice-chairman. Many of us calculated the cost of caring for that number of people in institutions. However one looks at it, it could cost perhaps ten times that amount to adequately care for all of those who are being cared for voluntarily in a heroic way by carers all around the country.

The Labour Party believes that the Government should remove the means test for the full-time carers allowance and should move speedily towards a situation where full-time carers are given a basic payment. The extension of the carer's allowance to all carers would be an acknowledgement of their tremendous work and the savings they make to the State through the provision of home based as opposed to institutional care.

Among the proposals we received from the Carers' Association and others which the Minister might consider on Committee Stage, there is also a proposal to provide that spouses may swap the carer's benefit where one carer is working within the family home to allow the benefit to transfer from one person to the other in a family. The fundamental point about caring is that, as the Minister said, the State has reached 14,200, but this seems to be still only a quarter of the people who are caring on a full-time basis. I ask him again to look at ways in which the benefits for carers could be extended.

On the issue of social welfare payments, which takes up the major part of the Bill, there has been a great deal of praise in Government circles of the increase in old age pensions. However, in the context of the much flaunted £100 target for OAPs, the £7 increase is disappointing. The Irish Senior Citizens' Parliament, which I met a few months ago, was confidently expecting that the Minister would break the £100 barrier this year, not next year. It must be remembered that people on non-contributory pensions have a long way to go to break the £100 barrier.

Much worse, of course, was the £4 basic increase for long-term social welfare claimants. Those increases must be seen in the context of Government surpluses of £16 billion projected to 2002 and the general increase in social welfare is well below the £6.50 needed to raise social welfare levels to 50% of median household income.

There has been a lengthy discussion in the media about current inflation rates. In his speech on the budget the Minister for Social, Community and Family Affairs took pride in the fact that he has awarded increases of between 5.2% to 5.6%, but in the context of a 4.6% inflation rate where does that leave the most vulnerable people in society? Is it not the case that he is barely keeping ahead of inflation as the Celtic tiger finds it hard to struggle with the poor performance of the euro vis-à-vis sterling in particular? There is significant imported inflation and also inflation through the property market and elsewhere. This morning I heard an economist, Mr. Jim O'Leary of Davy Stockbrokers, state on the radio that in 2000 there would be an inflation rate of 7% in services and entertainment. People on social welfare certainly use services and need entertainment also. How do the Minister's increases of between 5.2% to 5.6% compare in the context of the performance of the economy? This only emphasises the fact that this year's £4 increase was shameful and the Minister should have been thinking in terms of at least £6.50 to meet the demands from Share the Wealth and many other groups to approach the 50% of median income target.

The rates which take effect from May next, that is, unemployment assistance of £77.50, blind person's benefit of £77.50, invalidity benefit of £79.20 and the widow's pension of £81.10, are modest incomes by any stretch of the imagination for people who are totally dependent on them. It is shameful in the era in which we live, where there are 8% to 10% sustained growth rates, that the social welfare general increases should be so low. I asked the Minister on a number of occasions at Question Time for a basic increase of £10 per week and I remember discussing this in committee with Deputy Noel Ahern, chairman of the Joint Committee on Family, Community and Social Affairs, but the Minister chose not to spend some of the additional funding on the most vulnerable citizens and to stick with a modest increase. The gains the Minister may have made with the senior citizens are now seriously under threat due to the overheating economy.

I commend the Minister for bringing forward the date of the payment of these increases to May 2000 and that he is on target in the context of Budget 2001 to bring them forward to April in 2001, but it must be remembered that there is still a large range of critical payments which are stretched towards the end of 2000 – for example, the new carer's benefit. If I understood him correctly incidentally, the Minister stated that it will not be introduced until the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, introduces the necessary legislation on the workplace. Nevertheless, he is still targeting its introduction for October. Child benefit, as always, will not be increased until September. Why did he not consider bringing that forward? The free schemes for the carers will be introduced in October 2000 also. In addition, the new capital assessment operates only from October 2000.

Indeed, the general £132 package for 2000 is ludicrously modest in the context of the immense strides which the economy has made. It seems that the strategy of awarding the lowest increases in social welfare payments to unemployment assistance and disability allowance is a determination on the Government's behalf to create an undeserving poor. While I accept that the healthy state of the jobs market has taken many welfare dependants off the dole, there are people with serious labour market difficulties who will not get a job no matter how good the employment climate.

For adult dependants, the introduction of the 77% dependant rates has been put on the long finger. The Minister is now operating over a three year term when we urged him to do it this year. Adult dependants, mainly women, are being awarded a disgraceful increase of £3.80 per week. This is indicative of the Government's confused budget. While it is still planning to equalise the social welfare payments for married dependants, it is effectively removing the same principle from the tax code. I would again urge the Minister to look again at individualisation of social welfare, which is what the Labour Party asked him to do, instead of which the Minister for Finance, Deputy McCreevy, came in with a proposal on taxation which nobody anticipated. I welcome the extension of the benefits for senior citizens and the extension of the free schemes although, as I said, the Irish Senior Citizens' Parliament and other bodies were expecting far greater progress on some of the terms.

Regarding widows and widowers, I welcome the new widowed parent grant of £1,000, but the Minister still has not moved on the arrears and that is something to which we will return on Committee Stage. The Minister still has not moved on the problem of disability benefit. Although it was a small incremental benefit, we are, after 20 years, in the last few days of the operation of the butter voucher scheme. As far as I can see, the Minister has no provision to make up for the small amount of money which has been lost by some of the most vulnerable people in society.

The total failure of the budget to address in a meaningful way the child care crisis is most disappointing. It is disappointing that the Social Wel fare Bill and the new national agreement have failed to establish any framework for a parental payment to directly assist families with the cost of child care. To this end, I do not accept that even in the lifetime of the new national programme the Department of Social, Community and Family Affairs could not bring its computer programme capacity up to date to deal with the administration of a parental child care payment. A child care payment along the lines put forward by the Child Care 2000 campaign would significantly improve access to child care, particularly for families on low incomes. I again urge the Minister to study the proposals put forward before the budget by my colleague Deputy Shortall which were a very comprehensive approach to child care provision referring to a child care task force, the designation of a Minister for Children and, in particular, a parental payment.

I am very critical of this Bill because of the small amount of assistance given to those most in need despite our booming economy. It has not come forward with a vision of how poverty might be eliminated. The Labour Party and my party leader, Deputy Quinn, have made fundamental proposals on how the position of so many of our fellow citizens living in poverty could be addressed. There is nothing in this Bill which does that.

On Committee Stage, we will focus on section 29 and the blatant attempt to raid the social insurance fund to cover up the fundamental mistakes made by the Minister for Finance in the budget and to try to use this fund, to its detriment, to keep the social partners quiet while the right-wing ideological drift of the Department of Finance and the Government is allowed to continue. One of the figures which stuck in my mind was that which the Minister for Finance cut off capital taxation, particularly given the total package the Minister, Deputy Dermot Ahern, has introduced in this Social Welfare Bill. The figure is nearly the same and that is comment enough on the Government.

When the time comes, the Labour Party will bring forward its own proposals on the development, expansion and security of the social insurance fund. It will develop it in such a way that it will become a major support for our people, particularly the least able and the most deprived. We will be happy to bring forward such proposals to the House and the people on that occasion.

Mr. D. Ahern

On a point of clarification, I would like to inform the Deputy that the decision to charge the free schemes to the fund was made well in advance of the budget date. It cannot be said it was done to put something right in the budget.

Mr. Broughan

We can check that under the Freedom of Information Act.

Mr. D. Ahern

If the Deputy gets it.

Mr. McGrath

The Deputy voted against.

Mr. D. Ahern

We could not believe our ears.

An Leas-Cheann Comhairle

Deputy Noel Ahern without interruption.

Mr. N. Ahern

We have to be consistent whatever side of the House we are on.

Mr. McGrath

The Deputy should be consistent.

Mr. N. Ahern

I judge people by what they do and not just by what they say. Providing £2.20 or £1.80 when in power and then criticising others a mere three years later when they give £7, is inconsistent. Those opposite should be fair and reasonable.

I welcome the opportunity to say a few words because there was much good news in the budget from a social welfare point of view. Given that the budget is announced before Christmas, we do not have a proper budget debate. Given the fuss about individualisation and—

Mr. Broughan

Who's fault is that?

Mr. N. Ahern

It is good management to bring it forward, although there is a problem from the point of view of the Dáil—

Mr. Broughan

A two day debate.

Mr. N. Ahern

—being able to tease out matters and to listen to the good news from Ministers' reports on their briefs.

Social welfare is a huge expenditure item – close to £5.5 billion this year. The measures the Minister has brought forward will amount to £428 million from the budget figures plus over £100 million extra given the reductions in the PRSI and health levies. That is another £550 million, which is a considerable sum. I congratulate the Minister on holding on to so much of that money despite the savings and the reduction in the numbers drawing unemployment assistance. He has done well to hold on to much of that money which will be spent on innovative improvements in other spheres under his control.

I am proud to be a member of Fianna Fáil. Over the past seven or eight years all politicians agreed that the elderly, as a category, were being left behind. The emphasis seemed to be on the long-term unemployed. A couple of years ago it was decided at political level that the elderly needed to be brought up to a certain level. When times are good we should at least reward those who struggled through the difficult times.

There is fantastic progress with the £7 increase in the old age pension this year – bringing the total increase to £18 over the past three years – the considerable increase in the number of elderly people over 70 years who qualify for the medical card, although I know it does not come under the remit of this Department, and the large increase in the exemption limits for tax. I am proud to be part of a Government which has done so much for the elderly.

Mr. Broughan

They are still not happy.

Mr. N. Ahern

I heard what the Deputy said and what other groups are saying. There is almost a resentment among community groups who believe other categories have not kept up with the elderly. There are commitments in the Programme for Prosperity and Fairness that other groups will be brought up to that level. That is fine but the benefits we have got for the elderly must be retained. The increase given to the old age pensioners, who have done their bit over the years, over other categories must be retained, although I welcome the commitments in the new programme.

As well as that £7 increase, others aspects of the budget have not got publicity. The dependent adult gets an increase of £4.70, the dependent adult on an invalidity pension gets £8 or £8.50 and the dependent adult on the non-contributory pension also gets an increase. There are increases for several people way above what they got in other years. Normally, they get a pro rata sum based on the increase but there has been movement this year. I welcome the Minister's decision on the pre-1953 issue. The Department's line was that when one paid the stamp, back in 1951, it did not include any element of old age pension contribution. That was a technical point and it may have been correct, but the people did not understand why that was the case. Then a rule was introduced whereby contributors were given credit for some of their contribution years. I am delighted there has been movement on that measure. When a move was made last year to provide for the self-employed who were relatively new to the system, I thought it was a shame that the people who had paid stamps were not entitled to this benefit. Therefore, I welcome the introduction of this measure in the budget. It will help many people who were self-employed at some stage in their lives who may have been in and out of work and not have paid their full stamps, people who worked in State or semi-State bodies and many women who worked for five to ten years and married in 1955 or 1965 whose husbands worked in CIE, the Civil Service or the ESB and did not have a social welfare pension. Many people will qualify for the payment of £48 old age pension for the first time. Many of them will be women and they will view this payment which they will get in their own right as a sign that they have been recognised for the first time, given that in the past they did not receive any pension payment because their husbands had an occupational pension.

There was. Fianna Fáil voted against the Bill in its entirety, and it would be possible to pick out any one aspect of it, say that was what Fianna Fáil voted against, and put the interpretation Deputy Ahern is putting on it. If he makes such comments he should look to see whether his own house is in order before taking the matter forward.

I agree wholeheartedly with Deputy Ahern in relation to community employment schemes. The Minister for Social, Community and Family Affairs, Deputy Dermot Ahern is now in the House, and I know, having worked in committee with him, that he has a particular grá for such schemes. What Deputy Noel Ahern said is apt. We should look again at the community employment schemes. There is one point I would add to what Deputy Ahern said. There are many people working on community employment schemes. It is good that they get out and go to work and so on. However, they also fulfil a tremendous social function, doing work in the community that is very important from a social point of view. Some of them are caretakers in schools, community centres, GAA centres and the like. Some of them work with disabled people. Given that they do a tremendous job for the community, I find it difficult to justify telling somebody who is 55, 56 or 57 years of age that he has to stop doing that very good work for 12 months until he comes back into benefit before he can go back on the scheme again. I ask the Minister to intervene with the Tánaiste on that and try to improve the situation so that those people can continue to do the very good work they do.

Another point relates to the timing of increases. We welcome the fact that many increases will now be paid in May. Nevertheless many will not kick in until the back end of the year. Child benefit always seems to be stuck around September of the year it is introduced. Why does it take so long for those benefits to kick in? Surely it creates and maintains a two-tier society when benefits for those on social welfare do not kick in until May or September or even October or November, while benefits for people on PAYE kick in on 6 April every year. Is that not maintaining the two-tier society that we have? Surely the benefits should accrue to every body at the same time. It is a basic understanding of any system that people should be treated equally and I hope we can move fairly quickly to that position.

The actual increase in child benefit this year was moderate to say the least. There was a huge expectation that the increases would be much larger than they were, and there was much disappointment when they were announced. When he is summing up, perhaps the Minister will comment on why the increase was so small. There was a potential for a greater increase in child benefit and the Minister is well aware that for approximately 60% of people child benefit is the only income they have in their own name. That is a huge number – mainly women – who are in receipt of child benefit and it is a tremendous boost to them. It should have been increased further.

In his speech the Minister stated:

I intend over the next few years to continue to provide substantial increases in child benefit in line with the commitments in the Programme for Prosperity and Fairness with a priority focus towards £100 per week to the third and subsequent children.

It is now time to move on and remove that anomaly. The social welfare code has many anomalies in it. The Minister for Finance, Deputy McCreevy, is adamant that individualisation is the way to go but when one transfers that across to the social welfare code, individualisation does not exist. For example, an adult dependant can be paid a rate of £47 if they are on unemployment benefit; it could be £64 if they are pensioners, or £53 if the male recipient is an invalid. If they are on short-term unemployment benefit it is £47. If they are on the old age non-contributory pension the adult dependant is worth £52. There is a disparity of rates applicable to the adult dependant, depending on the actual recipient of the social welfare payment. If the argument in relation to individualisation is to stand up, then surely they must be unified and brought up to an improved rate.

We have the same difficulty with the child dependant allowance. The child of an unemployed person is worth £13 a week, but the child of a lone parent is worth £15 a week and that of a prisoner is worth £17 per week. Why are three different rates applicable to child dependants? Surely the Minister should take the bull by the horns and have one rate.

Another point relating to the Social Welfare Bill, although it is not directly contained in it, is the £600 million that is being put into the long-term pension fund. The Bill that was brought forward to create this fund did not stipulate how the money would be spent. It is simply put into a nest egg and left there to hatch. Hopefully it will hatch and taxpayers' money will not be wasted. I hope it will be invested wisely. I contend that much of the thinking on pension funds may not be accurately based. That is because it is very difficult to make projections for 2050 and subsequent years. If the projections are based on early 1980s figures, one must take into account the fact that tens of thousands of people were leaving the country annually and population figures were quite high. In 1983, for example, there were approximately 80,000 15 year olds. If the predictions were based on that year – rather than 1993 when the number of seven to eight year olds had fallen dramatically to approximately 50,000, and there was net immigration – then the projections at the end of that 50 year period would be totally different.

I agree with the Minister that projections can be done over a 20 or 25 year period, but to project further than that is taking a shot in the dark. It is difficult to know where the population figure is going. If we place too much emphasis on what will happen that far down the road, we may leave those currently dependent on social welfare without money that could be invested in such schemes now.

Carers have not been looked after well in the Bill. There was an expectation that they would get something worthwhile, but their income disregard has not been reviewed for a long time. As the Deputies present are well aware, thousands of people are doing an excellent job, 24 hours day, caring for dependants. They feel let down and left out because they have received no recognition for the job they are doing. It is disappointing that the Minister did not see fit to improve the carers' lot. This is an increasingly contentious point which will have to be rectified quickly. One comes across so many cases of hardship involving people who do a great job, yet they are being kicked in the teeth. The classic case is that of the woman who was looking after her father-in-law while her husband was working. She was in receipt of a carer's allowance because he was on a relatively low income. When her husband died, however, she qualified for a contributory widow's pension and thus lost the carer's allowance. That woman had lost her husband and the carer's allowance, yet she still had to look after her father-in-law. The system was unfair to her. I know the rules say that one cannot have two incomes from the same source, but in cases like this the rules should be changed and the Minister should examine this situation.

The rate of payment to widows is very disappointing. Widows have a particularly difficult situation to deal with. They are left without a breadwinner and the money they receive is a pittance. Last night I spoke to a widower whose wife has recently died. He is 81 and said he had seen a newspaper report about a bereavement grant of £1,000 to widowed people. He said he was delighted to see it, as he was not well off and wondered if he would qualify for the allowance.

When we checked the small print of the Social Welfare Bill we found he did not qualify because he does not have any dependent children. He said it was typical of politicians to take the kudos for a big announcement while the small print excluded as many people as possible. It is disappointing that that announcement was made in the way it was as we now find the number of people who can avail of it will be quite limited. The same applies to some people with contributions made before 1953. I made representations on that issue and wrote to one man who had contacted me about it to tell him the good news, but this will only come into play in October. He wondered whether the Minister hoped he would be dead by October so he would not be able to draw that benefit. Many people will benefit from this and it is a pity it cannot be brought in sooner.

The issue of farmers on the farm retirement scheme is outside the Minister's remit, but I ask him to raise the matter at Cabinet. It is important to note that this Government is telling retired farmers they cannot have an increase in their pensions. If they get on the farm retirement scheme and quality for the old age pension, as the social welfare pension increases their farm retirement pension decreases so that they remain at a constant level. Last year they were docked 5% because of the rate of conversion to the euro. It is a disgrace that the farming community should be held at this level without any prospect of an increase – all they got was a decrease. Given collective Cabinet responsibility, how can the Minister justify that? I ask him to intervene with the Minister for Agriculture, Food and Rural Development to have that put right. It is unfair that the farming community should have incomes capped in that way when the same restrictions do not apply to others. Someone on a social welfare pension gets an increase of £7, but a farmer on the farm retirement scheme will receive that increase only to have it taken away by the Department of Agriculture, Food and Rural Development. That is unfair and should be put right.

Mr. Dennehy

This is a comprehensive Bill and I compliment the Minister on dealing with long standing anomalies, some of which were referred to by Deputy McGrath. I have also made many efforts to have issues such as contributions made before 1953 dealt with and was totally ignored. The Minister is to be complimented, though I am disappointed with the sting in the tail in that it will not come in for some months. However, it is most welcome and I imagine it was strenuously resisted by officials, probably those in the Department of Finance, who would have argued that it was not a pension contribution. However, the Minister has taken the issue on. He saw the difficulty faced by people who had what would have been termed good jobs in the past but who do not have pensions. Anomalies will always come up, but I will deal with specific issues later.

Many of the Bill's measures will be welcomed by everyone. Though the Opposition opposes the Bill it cannot criticise the whole Bill and will welcome portions of it at least. Any fair-minded contribution would have to compliment the Minister – as Deputy McGrath and others have – on what he has included in the Bill. I am sure the Minister sees the comments made by speakers as encouragement to continue his efforts, though we have also heard criticism. That is the job of the Opposition, but it should be constructive criticism. What is difficult to entertain, as Deputy Noel Ahern said, is the criticism of bringing forward payments of old age and other pensions. That is hard to take from Members who were here in 1997. The final submission in the 1997 budget from those now criticising this budget was to push payments out to November, though I am open to correction on that. I do not know if Deputy McGrath was party to that, but he was part of the coalition at a time when social welfare increases were to be implemented in November and obviously he did not vote against that proposal. This Minister is bringing payments into effect in May and this is the second occasion he has brought payments forward by a month. It is correct that changes for PAYE workers and others take place in April, but Opposition Members made no effort to implement that. In fact, it is on record that the Minister in 1997 proposed to pay the increases in November. That is recorded in the Official Report, but it is also clearly recorded in the minds of members of the public affected by it and who put that Government out of office. An earlier speaker mentioned the difference between the good talk and the good act being very clear. This Minister has been very active, which I welcome. It is logical to treat all people equally and to pay them all at the same time.

Other criticisms are being levelled by people who were party to decisions on social welfare increases at that time, but the alibi for not acting is now gone. I recently heard a Fine Gael spokesperson claiming the country was awash with money when this Government took office. The alibi for not taking a more humane approach is now gone. I have learnt that when distributing public money, the question of prioritising needs and causes arises. There is a danger that funding is given to more vocal or better organised groups and over the years many legitimate and worthy causes have been left behind or not attended to because of that. I welcome the Minister's approach in ensuring individual voices are listened to and account is taken of them. One does not need to be in an organised group to have one's case heard.

I am happy with the Government's approach to the co-ordination of issues on an interdepartmental basis. There was difficulty with this in the past. Now the Minister for Social, Community and Family Affairs, the Minister for Health and Children and the Minister for Finance work to co-ordinate their approach on issues for which there is interdepartmental responsibility, striving to remove anomalies that exist and that would have continued to arise as the range and level of services improved if a new approach was not adopted. Too often in the past the public suffered because cases fell into a grey area of departmental inactivity. The first reaction of a Department and some Ministers seemed to be can this be passed to another Department? Happily that approach has changed and for that we must thank the Taoiseach and Ministers for responding to his directive on cross-Department co-operation.

Nobody works in isolation and that is true of Departments. If the Taoiseach did not insist on that new approach we would continue to have sad cases. For example, the education of those with special needs fell between the Departments of Education and Science and Health and Children. That affected a category of people but there are many other issues that apply to the individual. In the past, their rights were compromised as a result of the lack of a co-ordinated approach by Departments.

This is a crucial aspect of the Taoiseach's approach and one he has articulated on a number of occasions. It forms part of the social inclusion programme we are implementing. We now have multi-annual budgeting and so on and it is important that Departments are not allowed to work in isolation.

Another cause of concern to all public representatives is that when schemes are introduced, particularly those that are more innovative, some people will not benefit from them and will feel badly done by. In many instances it is obvious that there is an unintentional effect and genuine grounds for grievance. In such cases there should be a willingness to investigate the matter and, where possible, sufficient inbuilt flexibility to deal with the seemingly unfair issue. We have all battled over the years to rectify such problems. I am glad that many of the issues were dealt with by Fianna Fáil Ministers, for example, pro rata pensions and mixed pensions. I am also glad that when we are canvassing and issues are raised, there is not a feeling of helplessness and the attitude that things cannot be changed. The Minister, Deputy Ahern, is to be complimented.

In the past, regardless of the merits of the case raised, the bureaucratic response was it did not fall within the terms laid down. I am glad that over the past three years we have taken a different approach and have been willing to deal with anomalies. Social welfare is a very complicated field and every time a change is made it will have a ripple effect. We must be prepared and able to deal with that. Very often, it is the personality of the Minister that will decide the approach taken and in this instance I am very happy with the approach.

The Government's commitment to social inclusion and the policies included in the Programme for Government will ensure all citizens, whether in organised groups, are catered for and their situation improved. That commitment is reflected throughout the Social Welfare Bill and in other legislation. We are committed to the areas of social inclusion and environmental impact. Through my involvement with the Southern Health Board and community activities, the care of the elderly and the handicapped have been to the forefront of the issues I have been involved in over the years. They are two broad headings and cover a variety of specific but related requirements, such as the carer's allowance and facilities for carers. Deputy McGrath mentioned the disappointment at how badly carers had fared. I put on record that no Government has done more for carers than this one. I hope that will continue as there are still great needs to be met

Many arguments will be put forward on a number of issues, such as abolishing the means test. Would it be unfair to give badly needed money to someone who is extremely wealthy but who would meet all the other requirements or should it be given only to those who are less well off? We must continue to improve the well being of carers. However, there are many related issues such as respite care, finance and so on. There was a failure to deal with this issue in the past and I welcome our approach to it. I will continue with my efforts to ensure there are improvements in this area.

All these issues can involve a number of Departments. Sheltered housing, voluntary housing aid for the elderly, essential housing repairs, and so on involve the Department of the Environment and the Departments of Finance, Health and Children and Social, Community and Family Affairs are also affected. From almost his first day in office the Taoiseach set up an interdepartmental co-operation group and has ensured the public are catered for.

There are many improvements under the Bill. Elderly people like to keep money in the bank for their funeral but they ran into difficulty when they applied for various services. The Minister has taken this on board and I am glad the threshold has been raised to £10,000. It was a matter that affected a vast number of people and caused them great concern. Such thinking should be extended to other schemes. Ten thousand pounds is a modest sum but it represents a significant change. With the rapid increase in house prices, the market value of property, which may be of no immediate benefit to anyone, is causing difficulty for people claiming benefit. The Minister is attending to that area and I am glad of that.

Moves towards introducing a basic pension of £100 a week are continuing and the £7 increase in this budget is a major step towards achieving that objective. There has been criticism from some quarters. I can understand a new Opposition Deputy saying the £100 pension should be granted this year. However, it is hard to take criticism from someone who has held ministerial office, but, like thunder, this must be listened to.

These payments will come into effect in May, which has not been widely publicised, apart from some press releases by the Department. This was forgotten in the furore surrounding the budget and the efforts by some, including Deputy McGrath who spoke earlier, to mask the improvements. I do not know the cost of introducing these payments although I am sure it is substantial. I welcome them and I hope the £100 pension will be achieved next April. I have yet to hear the Opposition compliment the Minister, perhaps because of embarrassment as before it left Government it proposed that social welfare increases be implemented in November. I would like the Opposition to give credit to the Minister.

Child benefit is central in assisting families provide for the needs of their children. Credit is due to the Minister for the generous and timely 25% increase in child benefit. I welcome his commitment to improve it further. Deputy Noel Ahern dealt with child benefit. We work with poor families and we know how important child benefit is to them. I would like to see the Minister continue this approach. I also welcome the increase in the family income supplement thresholds which will have a great impact. This increase is targeted at the less well off.

I am expected to speak well of the Bill. However, I am glad the criticisms I made last year and the previous one have been acted upon. I compliment the Minister on his work to date and I wish him well. The continuation of these policies in the next number of years will change the social structure.

Mr. Yates

I propose to share my time with Deputy Theresa Ahearn.

Acting Chairman (Ms McManus)

Is that agreed? Agreed.

Mr. Yates

I welcome the £500 bereavement grant and the pro rata contributory pension arrangements for those who were over 56 years when PRSI was introduced for the self-employed. It is important to acknowledge these significant changes. I wish to highlight some of the anomalies in the social welfare system which I have come across in my constituency work. These deserve to be looked at in the context of spending an extra £400 million on social welfare.

People over 66 years are entitled to many fringe benefits, including the living alone allowance. Those living alone who are under 66 years are just as deserving. The age-based criteria for the living alone allowance, free electricity and telephone rental has no basis in reality. The Minister should look at reforming this. There is an unarguable case as regards need and hardship.

The poorest people I meet are dependent on supplementary welfare allowance. It is my experience, and I am sure that of other Deputies, that the approach of community welfare officers varies in this regard. Some are extremely sympathetic, understanding and helpful while others tend to be, whether they mean it, more abrupt, indifferent and even callous. A code of conduct should be introduced for community welfare officers so those in desperate circumstances who call to a local health clinic, needing a rent subsidy or other payments, can expect a minimum standard of procedure in the way they are dealt with.

One of the most important schemes in dealing with poverty is not to the fore in the budget but is essential to those affected, that is, special housing aids for the elderly. This applies to old age pensioners with medical cards who require essential repairs to their houses – in many cases they may not have a toilet, bathroom or shower unit. This is an effective but under-resourced scheme. In my county there is a waiting list of more than 200 and people can wait two or three years for a service, the need for which has been established by the health board. I have constituents whose roofs are leaking and whose windows need to be replaced. They live in a vested county council house and are not entitled to have their repairs carried out. This should be seen as a priority and a minimum standard of accommodation should be provided for the elderly.

As regards the disability benefit scheme, a code of conduct is necessary for medical referees. Constituents constantly come to me saying that their disability benefit has been cut off after a visit to a medical referee. Typically, these people have back injuries and are in agony. They have a cursory discussion with a medical referee who may test their blood pressure. They do not receive a detailed examination which they could expect from a hospital or a general practitioner. Their benefit is cut off and then they go through months of appeals.

With the advent of the minimum wage on 1 April, the threshold for the adult dependant's allowance needs to be reviewed. The Minister emphasised the graduation of payments over £60. However, the basic £60 payment needs to be increased.

Mr. D. Ahern

It has been increased to £70.

Mr. Yates

That is a step forward. The pay of home helps employed by health boards will be increased from £5 per hour. This is important work. However, they will have to give up their jobs if their husbands lose the adult dependant's allowance.

I welcome the improvements in the back to work schemes as regards the transfer from welfare to work. However, yesterday there was a story on the front page of the Evening Herald about a man who was advised by the Eastern Health Board that he must give up work if his daughter, who requires critical cardiac surgery because she has a hole in her heart, is to receive that treatment on a medical card. There needs to be more liaison between the Department of Social, Community and Family Affairs and the Department of Health and Children in providing an incentive to prevent people returning to welfare from work.

The third level allowance needs to be reviewed. In many cases, future employability is linked to further education, such as PLC courses. The grants have been modified by the Department of Education and Science. However, many people are not eligible because of the technicalities involved regarding the vocational education committees, the higher education grant section of Wexford County Council and the Department of Education and Science. A new clause should be inserted in the qualifying criteria for the third level allowance whereby a lone parent would be able to continue his or her studies and ensure good future prospects. The TLA should have a discretionary clause inserted which would enable these people to continue their studies if recommended by a social welfare officer.

Many people returning from the UK with a full insurance record must work in Ireland before they can trigger their UK entitlements under the DHSS. There needs to be an EU approach to this issue so that Irish people travelling abroad and Europeans coming to this country can automatically receive the same social welfare entitlements, based on Irish rates, which they would receive if they still lived in the member state in which the contributions were paid. At present one must have one week's PRSI contributions to trigger one's entitlements in another member state.

A real failure of the partnership agreement and the budget is in dealing with the issue of child care. Fine Gael has continually tried to emphasise that children who are too young to be in formal education, that is, under five years of age, have special needs. In many cases both parents must work to pay a mortgage. Child benefit of £25 per week for children under five is a special case. This would be a uniform payment which would be fair to people across the board and it should be implemented. Given the cost of education per child, it would provide a balance in terms of State support for children throughout their childhood.

The transport sector is changing. I would like the free travel pass benefits made available to licensed operators, whether CIE or private operators, who carry pensioners or other transport users with free travel passes.

I hope in due course we will move towards a basic income. It is the correct way to deal with the poverty issue. I tried in my brief contribution to highlight a number of anomalies and problems I have come across in my constituency work. I ask the Minister of State and the Department to take on board these proposals, which would not be too costly. The Department of Social, Community and Family Affairs is the most efficient and customer-friendly in terms of representations from TDs and other public representatives. As someone who puts down many parliamentary questions, sometimes withdraws them and who has availed of the hotline service, I have nothing but the height of praise for the Department. People in rural areas in particular depend on their public representatives because there is a considerable mindset barrier to ringing a Dublin number. These people like their public representatives to articulate their cause. When Minister for Agriculture and Food, I tried to get that Department to work under the system operated by the Department of Social, Community and Family Affairs. It would be a good idea generally if people in the Department of Social, Community and Family Affairs moved out to other client-based Departments because it has consistently set the pace by improving services to customers in terms of speed, efficiency and its response to public representatives.

I ask the Minister of State to take on board my points. They have been made in a constructive spirit and I hope to get a response as soon as possible.

Mrs. T. Ahearn

Second Stage debates, as in the case of the Social Welfare Bill, are very important. With their practical experience of dealing with their constituents, Deputies put forward fair, practical and realistic proposals during Second Stage debates. This enhances the effectiveness of Bills such as the Social Welfare Bill. Criticisms will be made to try to highlight to the Minister concerned the anomalies in the Bill which may affect those in receipt of social welfare benefits. It is regrettable that the proposals made by Members in a sincere manner are just recorded. Each year they continue to be recorded but not acted upon.

When introduced a Bill should not be written in stone. Cognisance should be taken of the anomalies highlighted on Second Stage and they should be acted upon. The proposals are put forward by Deputies who have met with the anomalies at the coalface. The best way to measure the effectiveness of a proposal from any Department is how it operates in practice. I urge the Minister to begin the debate on the first Social Welfare Bill of the century by listening to the proposals and anomalies highlighted on Second Stage. I guarantee this will result in a much more effective Social Welfare Bill. The practical proposals highlighted should not just be recorded in the Official Report, they should be acted on because in the long-term they will benefit all the participants of the different schemes.

There has never been a better time in the history of the State to be Minister for Social, Community and Family Affairs. There have never been more resources available or more opportunities or scope to make a real difference to the quality of life for the most vulnerable in society. Given the abundance of Exchequer funds, now is the time when we can at last narrow the margin between the haves and the have nots. We can now ease the burden on carers, people with disabilities, on the quality of care for the sick and on those who are homeless and unable to provide for themselves. Yet it is difficult, if not impossible, to believe that this great opportunity was not utilised to the optimum in order to change forever the lives of those who depend on the Minister for Social, Community and Family Affairs to give them the quality of life they cannot provide for themselves.

With other Members, I welcome many of the aspects and improvements in the Bill. However, I deplore the unfair burden which remains on those who care for the sick, the elderly and the disabled. The real needs of the poor have not been addressed. I will concentrate on people with disabilities. It is incredible that the Government has refused to give disabled people a legally backed right to health and social services because it would cost too much, given the unprecedented resources at its disposal. This was a key recommendation of the report of the Commission on the Status of People with Disabilities, which the Government backed.

The Government cannot accept these recommendations which imply the underpinning by law of access to and provision of services for people with disabilities as of right. That is the sentiment of the Department of Finance in a new report which states that this right, if given a statutory basis, would be prohibitively expensive for the Exchequer and could lead to requests from other persons seeking access to health and other services without regard to the additional cost of providing a service. Taking into consideration the recent report from the Department of Finance, is the Government committed to the needs of people with disabilities?

The Government has also rejected a cost of disability payment, which was not just one of the recommendations in the commission's report but it was also one of the promises in the Fianna Fáil policy document prior to the previous election. This was called Meeting the Challenge of Equality. The many groups who campaigned for so long for these improvements are absolutely dismayed at the Government's response. Is it any wonder then that over the past year hundreds of people with physical disabilities wheeled their way to the Dáil to demand that they be treated with dignity? It is the start of a new century, but people with disabilities still live in Victorian conditions. The requests and demands of people with disabilities belong to the last century but, unfortunately, they are still relevant today.

Their plea is for resource centres, personal assistance services, residential and respite care and a cost of disability payment. The cost of fulfilling these demands and the promises of Fianna Fáil while in Opposition would be £32 million. This is not a massive sum when one considers the millions the Government had to allocate to its choice areas or pet projects. The IWA is asking for public money to be redistributed to where it is needed. Yet again, unfortunately, its plea has fallen on deaf ears and the provisions of the Bill will not change the lives of people with disabilities. I always hoped that the budget at the turn of the century would have been in their favour. The Bill could, and should have been, their passport to a better future.

We cannot highlight enough the abundance of resources available to the Government for its pet projects. How can a Government allocate millions to sport and leisure pursuits when so many children with physical and mental handicap cannot get respite care? In addition, little or no full-time residential care is available. Is the Government aware of the stress and strain parents are shouldering and the trauma experienced by all family members who are struggling to provide full-time care to a member of their family with a disability? Imagine their reaction and dismay when they learned of the millions the Government was able to provide for other projects.

I welcome the money provided for leisure and sports facilities, but I am not ashamed to say that I cannot accept it as long as handicapped children and severely ill people cannot get the health services they require. It says much about the Government's priorities that millions can be invested in leisure facilities while parents are desperate for respite care and a few days rest from the trauma and burden they shoulder. Many parents fear what will happen to their handicapped children in the future and they also worry about whether they will get proper care before they die.

The Bill was a wonderful opportunity to show where the Government's priorities lay. Unfortunately, that opportunity was wasted. The Government could have made the needs of people with disabilities and carers a priority. Many people are carers but they do not apply for the carer's allowance. I got a leaflet today about the home carer's allowance. Whoever produced it should be told that a carer would have to take a day off to read and digest it. Do the people dealing with the carer's allowance know that carers are so tired and exhausted from carrying out their duties that they do not have the energy to apply for the carer's allowance, get all the documentation ready and fill in all the questionnaires that are required?

I am aware of a case where a person had to give up work to care for a sick child. The family decided not to apply for the carer's allowance and to struggle on because of the demands it would place on them both mentally and physically. If the Government's concern for carers is genuine, it should relax the means test and make the experience of applying for the carer's allowance less stressful. It should be consumer friendly.

Mr. P. Carey

I am pleased to contribute to the debate on the Bill which must be viewed as a continuum of measures in the area of social policy introduced by the Government. Other Deputies mentioned the commitments made in the programme for Government, An Action Programme for the Millennium, and more recently in agreements concluded with the social partners. The Bill introduces new income support measures for carers and special rate pensions for people with pre-1953 insurance. I will return to that matter later and I applaud the Minister for moving on it. The Bill also provides for a reduction in PRSI for low paid employees. These measures will help build a more inclusive society and improve the living standards of people on low incomes and social welfare.

Social partnership needs to be taken into consideration in discussions on the Social Welfare Bill and any other financial or social measure introduced at this time. Approximately two weeks ago the Fianna Fáil/Progressive Democrats Government concluded its negotiations on the new social partnership agreement, the Programme for Prosperity and Fairness. This programme sets out an ambitious agenda and out lines a comprehensive series of integrated economic and social objectives that map out the path through which we can achieve further economic prosperity and fulfil our social policy goals. The programme complements the national development plan, which sets out the planned investment of £40 billion to improve the living standards of all sectors of society, and the review of An Action Programme for the Millennium, which provides the political basis for our action in Government over the rest of our term.

A matter of some concern must be a statement issued recently by the Labour Party spokesperson on Finance, Deputy McDowell, in which he cynically threatened to undermine the social partnership agreement and deny people the benefits of that agreement which the Government concluded with the social partners. The Labour Party stated that it "would not be bound" by the Programme for Prosperity and Fairness. These ill-judged remarks, if carried out, would threaten an agreement reached after the painstaking negotiations with employers, trade unions, farmers and the community and voluntary sectors which started on my birthday, 9 November. I heard Senator O'Toole, the vice-president of ICTU, talking this morning about how much time and commitment all the partners put into the agreement.

If the agreement was allowed to unravel, the Labour Party would shatter the process of social partnership which was created by Fianna Fáil in 1987 to ensure recovery from the economic ruin created by a Fine Gael/Labour Party Government over five years. I am glad Deputy Durkan is present.

As a Government, we must tackle effectively the consequences of economic success, developing our infrastructure and public transport, bringing about real balance between the regions and between urban and rural communities and developing real global strengths in research and development and the information society. We must also aim to end the exclusion of blackspot neighbourhoods, tackling school drop-out and literacy problems, and giving a second chance to those who missed out on the economic boom. These blackspots are not confined to inner cities but are spread throughout rural areas.

The Government is facing up to these challenges and the Programme for Prosperity and Fairness has the necessary focus and content to ensure everyone can benefit from social partnership, including the marginalised and disadvantaged in society. The new programme sets out detailed but flexible operational frameworks by which these over-arching objectives will be pursued.

In the area of social inclusion, there is provision for a substantial increase in resources, amounting to £1.5 billion by 2003. This programme goes well beyond resource considerations. Within the social inclusion area, a key component in the programme centres on the issue of income adequacy. Substantial progress will be made over the lifetime of the programme towards a target of £100 per week for the lowest rates of social welfare. In addition, the level of old age pensions will be improved in line with the commitments in the review of the Government's own programme.

In the area of housing there are important targets and significant objectives. Public transport and health care are areas for targeting. In respect of the low paid, the Government's record is second to none. More than 50,000 people including 10,000 over 65 years of age were removed from the tax net in the recent budget because their wages were so low. In just three budgets, a total of 135,000 people have been removed from the tax net by the Minister, Deputy McCreevy. The rainbow coalition's record of just over 30,000 in the lifetime of its Government does not stand up in comparison. The issue of low paid employees is also dealt with comprehensively in the new agreement. Under the programme the biggest gainers will be those earning less than £200 per week, who will not have to pay PRSI. This will ensure that nearly 0.5 million low-paid employees will gain up to 3.67% per week from April.

The Government is also introducing in April the long-awaited national minimum wage. The programme supports increases to £4.70 from 1 July, 2001 and to £5, which will be the highest rate in Europe, from 1 October 2002. Those earning the minimum wage should be removed from the tax net within the lifetime of this Government. The measures in the Social Welfare Bill will contribute towards that objective.

Minimum social welfare rates will be raised towards £100 per week during the 33 months of the agreement. In addition, the level of old age pensions will be improved in line with the commitments in the review of the Government's own programme. The recent budget provides for a £7 increase in the personal rate of pensions for those over 66 and for those over 65 on retirement and invalidity pension. This follows on the unprecedented £5 increase in his first budget and a further £6 increase in his second budget. People with selective political memories should not be allowed to forget it was not so long ago – 1995 – that Deputy De Rossa, as Minister for Social Welfare, gave pensioners a meagre £1.80. The effect of the increases under Fianna Fáil and the Progressive Democrats is that the rate of old age contributory pension will now stand at £96 per week, a 20% increase on the rate payable when the Government came into office, compared to a total increase of under 10% over the lifetime of the rainbow coalition. I recall that Deputy Durkan was a Minister of State at the Department of Social Welfare in that Government.

Mr. Durkan

Things were different then.

Mr. P. Carey

Things are always different then.

Mr. Durkan

The Deputy was under no illusion at that time.

Mr. D. Carey

Under the rainbow coalition old age pensions stood still compared to the growth in earnings. This Government has increased them well above the increase in average earnings.

Mr. Enright

The Deputy should not look back.

Mr. P. Carey

It is not any harm to remind some people in order to jog the memory from time to time.

Mr. Enright

Brian Boru did a great job too.

An Leas-Cheann Comhairle

Please allow Deputy Carey to continue without interruption.

Mr. P. Carey

When the increase in the qualified adult payment is included, a contributory old age pensioner couple both over the age of 66 will receive £160.60 per week from next May compared to £133.40 in 1997. The Government has worked hard to ensure that work is worthwhile. It has delivered significant increases in take-home pay by reducing substantially the burden of tax on all those who work for a living.

A matter close to my heart is pensions for people with pre-1953 insurance. From the beginning I felt this was an area of injustice we ought to address. Last year the Minister announced his Department would carry out a review to examine this matter. I note from his contribution today that the second phase of that review will be concluded towards the end of this year. The new pension arrangements for those who did not benefit from pre-1953 contributions will benefit approximately 3,000 people who are not receiving pensions. These are elderly people who often worked in difficult conditions. It is time they were rewarded and I applaud the Minister for introducing this measure. Approximately 38,000 pensioners will benefit from the rationalisation of the rate bands. However, I have one quibble. If we have managed to increase the reduced pensions to 98%, why can we not increase them by the remaining 2%. I hope the Minister will examine this possibility, if not this year in the next budget.

Mr. Durkan

Hear, hear. Fair play to the Deputy.

Mr. P. Carey

Deputy Durkan referred to the plight of such people when I raised this issue on a previous occasion.

I welcome the increase in the respite care grant and the introduction of carer's benefit. Nobody can pay adequate tribute to carers. We should not devise forms for carers which are difficult to complete. Deputies from all parties met representatives of the Carers' Association in the last week or so and heard some valid points. We must adopt a more customer friendly approach to form filling.

The £10,000 disregard of capital is important. This has been a source of worry for many people who are being assessed for welfare payments. The bereavement grant was increased last year and the extra six weeks payment after the death of a spouse provided for in this year's Bill is extremely welcome. The extension of free schemes to those over 75 is a very progressive measure which many elderly people in my constituency will welcome. The significant increase in medical card guidelines for those over 70 will also be welcomed. A large number of people in receipt of private occupational pensions will now be eligible for medical cards. The measures regarding supplementary welfare allowances also represent a significant move forward. An applicant for supplementary welfare allowance should not be obliged to make his or her case in duplicate to the health board and to the Department of Social, Community and Family Affairs.

I draw the attention of the House to the following anomaly. Dublin Corporation, and I assume other local authorities, encourage the sale of houses back to the local authority to add to the public housing stock. We seek a contribution from senior citizens – usually a quarter or one third – out of the proceeds of the house sale towards senior citizen accommodation. Elderly people in the Dublin area can be left with £80,000 or £90,000 when this contribution is made and there is some concern among them that this will affect their entitlements to free schemes, medical cards and so on. The Departments of Social, Community and Family Affairs, Health and Children and the Environment and Local Government should examine this matter and devise measures to make it easier for elderly people to buy into this scheme without losing benefits.

I am delighted to have the opportunity to speak on this Bill and I commend it to the House.

Mr. Enright

This is an important Bill and I welcome its broad thrust. It is of particular relevance to people on low incomes, people with disabilities, old age pensioners, widows, widowers, parents of young children and all social welfare recipients.

The increases being paid to old age pensioners are welcome. However, the new rates of £96 for the contributory old age pension and £85.50 for the non-contributory pension are insufficient, especially in view of last year's Exchequer surplus of £1,600 million. In the past we had huge budget deficits but in a time of plenty we should be much more generous to our senior citizens. The old age contributory pension should be at least £100 and there should have been a far greater increase in the non-contributory pension.

I am particularly concerned about the contributory and non-contributory pensions for widows and widowers. The pension paid to a widow under the age of 66 will increase by only £4, to £81.10. The widow's non-contributory pension will increase by only £4, to £77.50. This £4 increase to widows and widowers is too little. It is wrong and unfair. The loss of a husband or wife is a traumatic experience. Life becomes much more difficult for a widow or widower, especially when there are dependent children. Widows and widowers must cope with the loss of a partner, which causes a major social upheaval for the family. We must be much more generous in looking after widows. I call on the Minister to look, in a caring way, at the widow's pension. There is no reason it should not be on a par with the old age pension. A widow or widower under the age of 66 is not entitled to free travel, free electricity, free television licence or free telephone rental allowance. The Minister should ensure these are granted immediately. This would be of considerable benefit to widows and widowers and would not impose an enormous burden on the Exchequer.

An enhanced bereavement grant of £500 was introduced last year. As a result of this measure there has been a huge increase in the numbers claiming the grant. The Minister said however that the new special grant of £1,000 that the Government has decided to introduce will be payable only to widows and widowers with dependent children. This grant should be payable to all widows and widowers.

The subvention payable to private nursing homes should be closely examined. The maximum subvention payable is £120 but in many instances smaller amounts are being paid as one has to satisfy a means test which extends to one's relatives—

Dr. Moffatt

It has been discontinued.

Mr. Enright

It is too severe and needs to be looked at. As the State has failed to provide adequate accommodate elderly persons have no choice but to enter private nursing homes, the cost of care in which continues to increase while their assets are depleting. While the overall standard has improved, it now costs between £250 and £350 per week to maintain an elderly person in a private nursing home. The elderly should be entitled to live out their lives in dignity and comfort. It is therefore incumbent on the Minister to ensure the subvention payable is substantially increased.

The chairman of the Mid-West Private Nursing Homes Association, Mr. Vincent Kinsella, stated recently that the lack of funding for private nursing homes is a human rights issue and that the elderly are entitled to end their days with dignity and pride. I fully share his views. This issue has been raised with me by a considerable number of people.

I compliment all those who work in private nursing homes and State-run hospitals. I am in regular contact with the State-run hospitals in Birr, Tullamore, Abbeyleix and Mountmellick and the work of those involved is exemplary and top class.

Personal assistants care for persons confined to wheelchairs for life, for example, following the loss of a limb in a horrific accident. This is a time of great change in their lives and they are confronted by enormous challenges. The service pro vided in County Offaly is excellent and those involved should be warmly congratulated. Under the scheme a personal assistant is appointed by FÁS for a period of three years at the end of which the course is discontinued despite the fact that the invalid concerned may have become dependent on the person in question. This results in a lack of continuity given that a new personal assistant has to be trained in.

I congratulate the Midland Health Board on its decision to assume responsibility for and to pay personal assistants on completion of a FÁS course. This is common sense and demonstrates goodwill but so far as I am aware there is no statutory obligation on it to do so. A major initiative is required in this area.

I know of a 79 year old lady who had not left her home for several years and following the provision of a personal assistant she now does her own shopping, goes to church and bingo and is leading a new life. Prior to this she lived within the confines of the four walls of her home.

I have visited a few of the 26 centres of independent living which do tremendous work to help those whose active lives in the community have more or less come to an end. They provide computer courses and opportunities to engage in productive and rewarding work for themselves and the community. The provision of personal assistants relieves the stress and strain placed on the family of an invalid, and that is important. Respite care and home care which are being provided in many instances are of great benefit, but it is important that the provision of personal assistants is placed on a statutory footing. I ask the Minister to make every possible effort to make sure that this is attended to at the earliest date.

The Minister referred to the farm assist scheme formerly known as the small farmer's dole. Regularly I meet people who are under severe financial pressure. These are small farmers who really do not have enough to eat and they are unable to provide proper heating in their homes. Their lives are very tough. They have little or no income, and yet when their means are assessed they are refused unemployment assistance. This area needs to be closely examined. The Minister must re-examine the means test being imposed on farmers. I note that this scheme extends to fishermen also but I do not have contact with them. I have received representations from a considerable number of people who have found that the manner of calculation of the farm assist scheme is unfair and too rigid, having regard to the capital allowances, the moneys they receive, etc. I find the appeals procedure most unsatisfactory. Will the Minister conduct a careful examination of the method of assessing the applicant's income because it is too severe.

I welcome the increases in carer's benefit, although they might have been more generous. The means test on carers needs to be examined also. As with the farm assist scheme, the means test is severe. Where a woman is looking after a relative, her husband's income is taken into account. This must be carefully examined to see how it can be made more accessible.

The one area in which the budget and the Finance Bill is wrong is in regard to widows. I said that at the outset. Will the Minister look closely to see how the situation can be improved for widows and widowers.

Mr. M. Moynihan

While one can pick flaws in it, the overall thrust of the Bill is an improvement for those on social welfare or the lower rungs of the ladder. The Social Welfare Bill, 2000, provides for an increase in the rates of social insurance and social assistance payments, child benefit and family income supplement, changes in the method of assessment of capital, and introduces new schemes in the area of the carer's benefit.

Caring for the elderly has been placed at the top of the agenda by the Government and the Bill provides for many improvements in this area. It provides for an increase of £7 per week for pensioners aged 66 or over and for people on retirement or invalidity pensions aged 65 or over. A special increase of £5.90 is being provided for in the standard rate of invalidity pensions. Provisions are made for increases in the rates of qualifying adult allowances ranging from £3.80 to £8.50. All other weekly personal rates of social insurance and social assistance payments have been increased by £4 per week.

The Bill provides for the introduction of a new social insurance scheme of carer's benefit, as announced in the budget. This new scheme is designed to facilitate and support people who wish to leave the workforce temporarily to care for older people or people with disabilities in need of full-time care and attention. The proposed new benefit will be available to those who are in employment for at least three months and working for a minimum of 38 hours per fortnight prior to commencement of full-time caring duties, and those who satisfy certain contribution conditions. All PRSI contribution classes will be covered by the new scheme with the exception of the self-employed and those earning less than £30 per week. The new scheme will be closely linked to the means tested carer's allowance scheme. The weekly rate of payment under this scheme will be £88.50, in line with the rate of carer's allowance payable to carers aged 66 or over. The benefit will be payable for a period of up to 15 months in respect of the same carer recipient, during which time the carer's employment right will be protected.

The carer's allowance and the benefits contained in the budget and this Bill go a good distance, but there is a long way to go. The Government and its officials are coming to the conclusion that infrastructure and moneys must be made available by the Department of Health and Children, the Department of Social, Community and Family Affairs or the Department Finance to ensure that older people can be facilitated in their own homes as long as this is possible and practi cal. Provided one can provide the care and the opportunities necessary for older people, it is easier to cater for them at home because people are happier in their own homes. I welcome this aspect of the Bill. I know there is much to be done yet and that the Government and the various Ministers concerned are looking at this in detail.

Section 18 provides for a number of improvements in the means test for the farm assist scheme. This scheme was new a year ago. It was created as a result of the severe difficulties which farmers were encountering due to cattle prices and the fodder shortages during 1998. At present a farmer's net income from self-employment is assessed at 80%. In addition, where the farmer has child dependants, an amount of £100 for each of the first two children and £200 for each subsequent child is disregarded. This section provides for a reduction in the assessment rate of 80% to 70%, and an increase of £100 in the amount of income disregarded for child benefits.

I welcome this important scheme. It is doing a power of good in combating poverty in rural areas. For so long we have seen in urban areas where people have been put into poverty traps, but this scheme is helping to alleviate a certain amount of rural poverty which is attached to agriculture and small farmers throughout the country.

I also welcome the provisions regarding bereavements, which were contained in the budget and which are followed through in the Bill, and the improvement in the six weeks death payments where the arrangements are to be as follows. Where both partners are getting a retirement or an old age contributory pension in their own right, the survivor will be paid six weeks' payment of the deceased person's pension. No payments in that regard are made currently.

Debate adjourned.

Dáil Éireann debate - Thursday, 24 Feb 2000

Social Welfare Bill, 2000: Second Stage.

Dáil Éireann debate -
Thursday, 24 Feb 2000