Social Welfare Bill, 2000: Second Stage (Resumed).

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

Mr. M. Moynihan

I wish to share my time with Deputy McGuinness.

The Social Welfare Bill provides for pensioners and will help to secure their future. This is a key priority of the Government. Since June 1997 significant steps have been taken to build an inclusive society and the Bill continues along those lines. Pensions have been increased by £7 a week, which will bring old age contributory and retirement pensions to £96 per week. Contributory pensions for widowers aged 66 years or over have been increased to £89.10 and the old age non-contributory pension has been increased to £85.50. Both are on line to reach the £100 guideline by the year 2002. These increases represent progress for pensioners well ahead of the expected rise in average earnings.

The Bill contains a number of measures aimed at improving the incentive to work and to alleviate certain employment traps. Section 7 increases the weekly income threshold for family income supplement by £13 from May. This will lead to an increase of approximately £8 per week in the average FIS payment. By way of regulation the Minister also intends to increase from £5 to £10 per week the minimum payment provided under these schemes.

As announced in the budget, the qualifying adult allowance arrangements which relate to the treatment of spouses' earnings is being improved and extended to include people on invalidity, old age contributory and retirement pensions. At present, the qualifying adult allowance is payable where the qualifying adult has income earnings of less than £60 per week. A reduction 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 the rate of 50%.

The improvements announced in the budget provide for an upward adjustment of the income range of £70 to £135 per week and the full payment of child dependant payments until the spouses' earnings exceed £135 per week. Section 20 implements the latter measure. This improvement will be beneficial to families where the head of the household is claiming social welfare and the other spouse or partner is engaged in part-time work. A family with two children and earnings of £90 per week will be better off by £38 per week from May.

Section 26 includes steps to improve the treatment of people in receipt of rent supplement who take up part-time or casual work opportunities. Under the existing arrangements, the increase in earnings is clawed back in full by way of reduced rent supplement payments. From April a £25 income disregard will be introduced to ensure a positive return to work for those who avail of part-time work opportunities. This section also provides for the disregard of additional income as a result of participating in training courses, such as FÁS, and skills training courses. This measure will take effect from April when 2,500 people are expected to benefit from it.

The role of carers in our society is invaluable. No Government has been more committed to and supportive of carers than this one. Action has also been taken on a wide range of measures both in terms of income support and services provided. The number of carers in receipt of carer's allowance has increased by more than 60%, from 9,200 when the Government took office in 1997 to more than 14,200 at the end of this month. Expenditure has also increased substantially from £35.5 million in 1997 to £78.3 million this year. The budget provides for a radical and innovative benefit scheme to enable carers to give up work temporarily to care for a person on a full-time basis while retaining their employment rights.

The farm assist programme has been a source of income for farmers caught in the poverty trap. However, some social welfare officers who interview these farmers often treat them like criminals when they apply for the farm assist programme rather than being as co-operative as possible.

Mr. McGuinness

I welcome the provisions of the Social Welfare Bill. Since the Minister's appointment, many radical changes have been made in the Department. It no longer resembles the Department of five or ten years ago. The service it provides for Deputies, public representatives and their constituents has been extremely efficient and proactive. I thank the officials in the Department for their speedy replies to the queries raised. It is a change to get such accurate and quick responses from that Department.

While I welcome the pension provisions in the Bill, the Fianna Fáil-led Government should revise its pension targets in line with the positive economic forecasts and aim for an increase of 50% over the lifetime of the Government. If one considers the actual rather than the percentage increase, one will note there is a need to increase pensions at a greater rate until we reach a realistic level of payment.

There are a number of anomalies in the social welfare schemes, particularly in relation to differential rents. No sooner have pensioners received their budget increases when local authorities request details from pensioners and tenants of local authority houses. There should be a waiver in the differential rents scheme for all pensioners and they should be placed on a minimum rent which is lower than the norm and should not be increased. That they reach pension age and are on a pension should be enough to indicate these people are on a lower income bracket and, therefore, the minimum rent should apply. When the pension is increased in a budget or at any other time during the year, that should not be reflected in a further take by the local authority through rent. This can be addressed only by interaction between the Department of Social, Community and Family Affairs and the Department of the Environment and Local Government.

The same can be said of local authority charges, a matter which I have raised on a number of occasions. When charges, such as the refuse charge, are levied by a local authority, a minimum charge should be introduced for pensioners and the local authority should be asked to factor the collection of only a minimum charge from pensioners into the overall cost of that rate. Pensioners are easily defined because there are not many of them in local authority areas. Therefore, local authorities should be capable of dealing with pensioners in a positive but biased way and request far less than the norm from them for the cost of those services.

Pensioners should also be exempt from library fees and other such charges. While these may be minor charges, they make a huge difference to pensioners who receive a very basic payment from the State. To give them that payment and take it back in local authority charges simply defeats the Minister's purpose in introducing pension increases in the budget.

We debated the motion on car testing costs in Private Members' time. The State should have a policy of positive discrimination in favour of pensioners. The Department introducing such a scheme should factor into its overall costs provision for the extra burden or the financial costs of a minimum costs scheme for pensioners.

The fuel allowance should be paid to pensioners all year round. Given that they need heat all year, it is ridiculous that their needs should be acknowledged for only a part of the year. This payment should be increased to equal the cost of a cylinder of gas or a bag of coal. There is nothing radical about that – it is essential. It is ridiculous that we overlook the cost of the item to which the scheme refers, in this case the fuel scheme. The fuel allowance does not equate with the cost of a cylinder of gas or a bag of coal.

The foundation for the success of the economic boom was laid by those who are now pensioners. We as legislators should go out of our way to recognise this. The excellent weekly wage brought home by most people far exceeds the pensions paid to those who helped create the wealth in the first place. That is true right across the economy particularly given current wage levels. Older people in our community receive a paltry payment from the State when compared to their years of service in building the economy.

The Government will have to deal with the question of carers. While I acknowledge the positive steps taken by the Minister, carers must be recognised for the invaluable work they do. Having met carers' representatives, I ask the Minister consider the following suggestions either now or as part of future policy. Income disregard for married couples should be £250 per week. The disregard is currently £150 and it has not been changed in the past three budgets. The income disregard for single people should be £125 a week. This year's budget brings the rate of carer's allowance to £80. This allowance should be £100 and the Minister should re-examine this area in the context of the current Bill to see if there is any room for further improvement.

The means test is an important issue. While we cannot abandon the means test and allow the gates to be opened, some amendment is necessary. We should confine the allowance to those who are not in a sound financial position. The means test should apply to the carer's income only, setting aside the income of the spouse. If the test were abolished it would prevent the wealthy from claiming it but it would safeguard those who cannot claim at present and who should be able to claim. This is perhaps a positive form of individualisation.

I ask the Minister to take my points into consideration in this Bill and in future policy.

Mrs. B. Moynihan-Cronin

I wish to share my time with Deputy Shortall.

An Leas-Cheann Comhairle

That is agreed.

Mrs. B. Moynihan-Cronin

The Government benches have made much of this Social Welfare Bill. They have hailed it as a major contribution towards the elimination of poverty and no doubt they will continue to pat the Minister on the back for the increases provided in the old age pension. While I accept there are some commendable measures in the Bill, most of them are add-on. They were not central to the budget announced by the Minister for Finance on 1 December. Many of the positive elements of the Bill would not have come about without the extensive pressure exercised by the Opposition, the trade union movement and the community and voluntary sector who were involved in the recent partnership negotiations.

This Social Welfare Bill fails to address some crucial anomalies which continue to exist in our social welfare system. We are now in a financial position to deliver a social welfare system which is characterised by clarity and equity and not the anomalies and the complexities which have been the order of the day until now. I will address some of the Bill's shortcomings and raise with the Minister some of the glaring problems the Bill presents.

A fundamental problem with this Bill is the decision to introduce a new PRSI exemption for low paid workers. This exemption has come about because the Government failed to award decent tax breaks to low paid workers in the budget. As a reflex action to the public revolt to the budget, a decision was made at Government level to effectively raid the PRSI fund instead of rewriting the flawed tax reforms announced by the Minister for Finance on budget day. The decision to substitute tax cuts with reductions in PRSI is a fundamentally flawed policy. It is wrong and will not benefit any person in the long term. The social insurance fund exists because it is necessary. It is basically a savings account which can be used to fund disability, dental and maternity benefits. The Government's decision to make PRSI cuts instead of tax cuts for the low paid undermines the integrity of this fund and is unacceptable. Instead of paring back on this fund we should build it up so we can provide more secure pensions or introduce new social welfare insurance based payments such as parental leave payment or a more enhanced maternity benefit.

This new social insurance exemption introduces a new anomaly. A low paid employee earning £226 per week will be exempt from paying PRSI. However, if a low paid worker earns £226.50 per week he or she must pay the full rate of PRSI. The result of this anomaly – perhaps I should call it a poverty trap – is that low income earners will struggle to keep their incomes below the exemption limit. If they accept an increase in wages of £5, for example, they will be worse off. This does not make sense and it is probably indicative of the rush job done by the Government in an attempt to cover up the damage done by the budget.

The Social Welfare Bill could have achieved a great deal. However, it seems the Minister views himself only as an administrator and not as a policy-maker. The Bill lacks vision and it also lacks the will to make our social welfare system comprehensive and modern, reflecting the type of society in which we live. We live in a society where self-employment and atypical work arrangements are more prevalent in workplaces. However, the social welfare system is so far behind that it fails to reflect this.

One of my constituents recently submitted correspondence to the Minister in respect of her rate of maternity benefit. This women runs a small business with her husband, employs staff and complies with the tax and social welfare codes but, because she was on maternity leave during the 1997-98 tax year, she is entitled to only a reduced rate of maternity benefit during her maternity leave this year. If one of her employees went on maternity leave during the same period, she would be entitled to the full rate of benefit provided her PRSI record was up to date. The social welfare information booklet states that women who pay S1 contributions – which the woman in question pays – are entitled to maternity benefit. That is misleading because she is not entitled to the full amount and I want the Minister to address that matter when he replies to the debate. This is a very serious issue.

It is amazing that the Government is calling on women to return to the workplace. It introduced a divisive individualisation of the tax system as a stick which can be used to beat women into returning to work. At the same time, however, the Government is not doing enough to make workplaces more family friendly. Ireland has one of the worst records on maternity payments and paternal leave arrangements in the EU and it is time we got our act together.

Another aspect of the Social Welfare Bill which is most disappointing is the provision for increases in basic social welfare payments such as disability allowance and unemployment assistance. The logic used by the Minister, Deputy McCreevy, in awarding minimum increases to people on the lowest social welfare payments is warped. I understand he is of the view that the jobs market is so good that it is not now necessary to look after the people who are in receipt of these payments. However, this warped logic fails to recognise that some people on unemployment assistance and disability allowance have, and always will have, problems accessing the labour market. Employers' prejudices, a lack of skills or poverty of the kind which makes it difficult for people to purchase a suit of clothes to wear to an interview are among some of the difficulties these people face. The Government has decided to ignore those difficulties. Is the Minister not aware that those on disability allowance are ill? Instead of supporting these people and recognising their position, he chooses to penalise them.

The failure of the Government to ease the means test for the carer's allowance is outrageous. This failure sends a message to the thousands of people who have sacrificed their jobs and, in many cases, their leisure time to care for a loved one. The Government has failed to recognise that the service which carers provide saves this country millions of pounds. The fewer carers there are, the fewer hospital beds will be available. The new carer's benefit will be of no value to existing carers.

I could speak about this Bill at greater length but I wish to hand over to my colleague, Deputy Shortall.

Ms Shortall

In the context of a booming econ omy, the availability of reasonably good wages and a rise in the cost of living, the Social Welfare Bill can be described only as a miserable effort on the Government's behalf. The proposed increases will barely keep pace with inflation and, in real terms, social welfare recipients will not be any better off as a result of the Bill. When compared to the increase in wages which others will receive, the increase in their incomes will be negligible. No attempt has been made to link social welfare payments to wages which is obviously a sore point with many social welfare recipients, particularly pensioners. I agree with Deputy McGuinness who made that point strongly.

Little or no effort has been made to introduce significant reforms to the social welfare system. The current system is outdated and it does not cater for the needs of a large number of people who, for one reason or another, find themselves out of paid employment. There is very little flexibility in the system and it has been amended and tinkered with so much that it must be thrown out. We must start over with a new, more flexible system which is a great deal more relevant to people's circumstances.

I wish to concentrate on the effect the Bill will have on families. The Minister is presiding over a Social Welfare Bill which ensures that those families on the lowest incomes remain embedded in poverty. The Bill represents a lost opportunity because we have failed to recognise the needs of families on low incomes and those who care for the elderly, the disabled and children. The Minister, in common with the Minister for Finance, seems to view people solely in terms of their ability to engage in paid employment. That displays a complete and utter disregard of the other facets of people's lives, namely, their needs and the demands which are placed on them in terms of engaging in unpaid caring work. No effort has been made to recognise those needs.

An important element of the Social Welfare Bill is the manner in which the social welfare code currently treats couples compared to parents who live apart. I refer here to lone parents who live apart from their partners. Attention has been drawn to this problem for many years and no serious effort has been made to tackle it. At present, because of the way the social welfare system operates, parents stand to lose up to 30% of their incomes if they chose to marry or live together. The Social Welfare Bill does nothing to address this disincentive and it sends out a signal that the State is not prepared to support those parents who wish to live together to jointly rear their children. As public policy, this is atrocious.

If a couple, one of whom is in receipt of a one parent family payment and the other is in receipt of a social welfare payment, opt to live together, cohabit or get married – any of these options are in their children's best interests – they will lose £32.60 per week. Their total income would be £129.60 and by choosing to do the right thing by their children they would lose £32.60. How could that be right? The total income of a couple where one partner is in receipt of a lone parent family allowance and the other works for a low income amounts to £215 per week. However, by choosing to get married, that couple loses £76 per week. How could any couple on a low income possibly sustain that level of loss? It is any wonder that so many couples are living apart in those circumstances because they know it is in their financial interest to do so? That is bad public policy which is driving parents apart and working against the interests of their children.

A couple in that scenario who chooses to cohabit is treated even more harshly because the tax code militates against cohabiting couples. Where one member of the couple is working full-time on a low income and the other is in receipt of a one parent family payment and has a part-time job, their total income amounts to £271 per week if they are living apart. If they choose to live together, which we should be trying to encourage and which is the best for their children, they stand to lose £98.26 per week.

Those figures speak for themselves. Is there any justification for a system which treats couples like that? A system which continues this policy is profoundly anti-family and anti-children. I am bitterly disappointed the Minister has ignored the facts and has avoided the opportunity to address this most urgent issue. I call on him to rethink that. His officials are well aware of the huge disincentives for two parent families. I urge him to take action to address this matter without delay.

I also wish to refer to the Minister's attitude to people involved in caring activities. Most parents' first choice is to take time out of the workforce to look after their children at home, at least in the early years. The budget and this Bill do nothing for those people who are trying to do their best for their children. There is no improvement in the rates of maternity benefit. Parental leave was introduced in a fairly meaningless way and on the strictest possible terms. There has been a very low uptake of parental leave, simply because it is not paid. I ask the Minister to consider the systems that operate in almost every other European state. The work parents do in rearing their children, which many people would say is the most vital and important work anybody could do, is given no recognition by the Department of Social, Community and Family Affairs. Our system is light years behind what happens in most other European countries, in terms of providing financial support to parents to take time out from the workforce to look after their children at home. Most people are bitterly disappointed that the budget and the Bill have done nothing to recognise the expenses involved in child care, whether by a parent taking time out or paying for child care outside the home.

The provisions in regard to the carer's allowance are also very disappointing. The Government does not seem to recognise that people who give of their time and effort to care for elderly relatives or incapacitated people at home save the State thousands of pounds each year. The Minister should consider abolishing the means test. The Government seems to have established the principle of individualisation in the tax code. It is much more urgent for that to be done in relation to social welfare, where people are means tested on the basis of their spouse's income. This is not good enough. A person should be given due recognition for looking after an incapacitated person. A person who is already in receipt of a social welfare payment gets no additional recognition for being a full-time carer.

Section 16 provides for pre-1953 credits. That is to be welcomed, as far it goes. However, a flaw in it is that it does not allow recipients of contributory old age pensions on reduced rate pensions to top-up their pensions. Attention should be given to that. Also, there is no means by which consideration of pre-1953 credits can allow someone to qualify for a retirement pension.

In regard to the housing crisis, I do not know if the Minister is aware of the contribution scheme which operates very successfully, certainly in the Dublin area, under which elderly people can sell houses back to the local authority and avail of senior citizen accommodation. A major stumbling block to that very innovative scheme is the fact that a person on a social welfare allowance fails the means test when he or she gets a lump sum from the sale of the house. This is inhibiting the operation of that important scheme. The Minister should pay attention to that. When I contacted officials in the Department they seemed unaware of the scheme. This needs urgent attention.

There are problems in regard to maternity benefit where a child is born prematurely and has to spend time in hospital. I have come across a number of cases where the mother had to return to work before the child came home from hospital. That is unfair and unjust and urgent attention must be paid to it.

—it is very hurtful to show that the great socialists when last in Government were unable to make any major improvement for old age pensioners and others.

When we look at the increases that have taken place across the spectrum of social welfare as a result of the budget and this Bill, we see there are changes of benefit to all sections. We can all identify anomalies, some of which were identified by Deputy Shortall tonight. I can identify an anomaly in regard to ESB meter readers who are on contract to the ESB. They are forced to pay PRSI contributions from which they can receive no benefit. This group should be looked at to see what can be done to alleviate their problems. The Department of Social, Community and Family Affairs has said they are entitled to pay the full rate but their employer, the ESB, has refused to accept that ruling. That should be pursued by the Department. The ESB has threatened some of the workers that if they pursue this to its full conclusion it might make them redundant because they have absolutely no rights. I hope we will be able to do something for this group in the not too distant future.

The changes made in regard to capital allowances for old age pensioners are to be welcomed. If those capital allowances had been in place before, some of the robberies and muggings of old people over the years might not have happened. Pensioners often believe their money is safer kept in their houses. As a result of the changes announced in the Bill, these people will no longer be forced to keep money at home but will be able to place it in savings accounts on which the first £10,000 per individual will be exempt. This measure is long overdue and will encourage people to refrain from keeping money in their homes.

Other groups are also experiencing difficulties. For example, the unemployed are finding it difficult despite increases in unemployment benefits. In many cases, these people are not able to obtain work due to lack of transport or geographic location, or the fact that there are no employment opportunities in their areas. We have to examine what steps can be taken to reduce the number of people unemployed. There has been a major reduction in unemployment levels in the past few years but we must encourage more people to seek employment and we must make it attractive for them to work. This is an important consideration when examining the social welfare code.

It is also important that people perceive the code as being equitable and fair. Some people complain about the fact that they are not entitled to certain benefits to which their neighbours are entitled. However, in many such cases, if people fully understood the social welfare code they would appreciate why they are debarred from such payments.

Social welfare officers must also take a more tolerant approach to investigations. People have complained to public representatives that social welfare officers have been hard on them and intrusive in the nature of their investigations. These officers have a job to do but they have gone beyond acceptable standards during some interviews. It is wrong of them to make accusations which people have to deny and produce documentation to back up their denials. People are entitled to receive in writing accusations made against them by social welfare officers and they should also be entitled to know who made the accusations. This issue should be considered by the Department.

All Members accept that the carer's allowance has made a significant contribution to the care of the elderly at home and we understand the overall benefits which accrue to the State from such efforts. People cared for at home during illness or old age produce major savings as they are not forced into geriatric hospitals or nursing homes where the State would have to pay subventions and other payments. We should consider a system under which the first 80% of family income is excluded from assessment of means. This is a new scheme which could be of major benefit to the families of carers and those being cared for if it were more widely applicable. As the scheme develops I hope a greater proportion of family income will be excluded from the means test. We do not want a situation where everyone qualifies, irrespective of means. However, this scheme could make a major contribution.

We all welcome the increases announced in the budget and the Finance Bill and the fact that they are being introduced one month earlier than in previous years. I hope we will soon reach the goal of the £100 pension, which is within sight, and that increases will apply from 5 April, the same date from which tax free allowance increases apply. We have only one month to go to achieve this objective and that should be the aim of the next budget and social welfare Bill.

Mr. Collins

I thank Deputy Ellis for sharing time. This Bill provides for record investment of more than £428 million in social welfare payments, as well as providing for substantial reductions in PRSI and health contributions. The Bill also includes supplementary changes brought about as a result of discussions on the Programme for Prosperity and Fairness.

The economy is performing well and annual growth rates in recent years of between 8% and 10% have resulted in new-found wealth. The competitive nature of the economy has also improved but recent economic strides have not filtered through to all sectors of society. Studies produced by the Combat Poverty Agency and the ESRI highlight that rural and urban poverty is still prevalent. There are also concentrated pockets of long-term unemployment in rural and urban areas.

We are also experiencing many widespread social problems which need to be addressed in a concerted manner. This Bill provides for a record investment of more than £428 million in social welfare measures. There are increases in rates of social insurance and assistance payments for the elderly and the long-term unemployed, as well as increases in child benefit. There are also improvements in the family income supplement and even more beneficial changes in PRSI rates than originally announced in the budget. These changes will reduce employers' contributions and increase the annual earning ceilings for social insurance contributions. The Bill also allows for an increase in the weekly exemption threshold for the payment of health contributions and an additional provision is being introduced which will provide for a weekly PRSI exemption threshold for employees.

However, before commenting in detail on these changes, I wish to address the future assistance which should be given to carers. All Members know of the great social difficulties carers encounter in carrying out what is invariably a personal act of generosity and commitment to a person unable to care for himself or herself. Until last year, the carer's allowance was available only to a family member taking care of a relative who was unable or incapable of caring for himself or herself. This was a serious deficiency in the social welfare code and all Members were pleased to see this anomaly removed.

Parts II, III and V of this Bill introduce much needed and continued reform of the carer's allowance. I welcome these changes and commend the Minister for his personal interest and commitment to carers, but more reform will be needed in the coming years. Section 5 of the Bill increases the carer's allowance from £80.50 and £120.80 where the carer is looking after more than one person. Where the carer has attained a pensionable age, the rates are increased to £88.50 and £132.80, respectively.

Sections 10 to 12 provide for the introduction of a new social insurance scheme of carer's benefits as announced in the budget. The new scheme is designed to facilitate and support those who wish to leave the workforce temporarily to care for older people or for those with disabilities in need of full-time care and attention. The proposed new benefit will be available to those in employment for at least three months and who are working for a minimum of 38 hours per fortnight prior to commencing full-time caring duties and who satisfy certain contribution conditions.

The new scheme will be closely linked to the means tested carer's allowance and the weekly rate of payment will be £88.50 in line with the rate of carer's allowance payable to carers aged 66 years or over. The benefit will be payable for a period of 15 months in respect of the same care recipient, during which time the person's employment rights will be protected. Separate legislation dealing with the protection of employment rights in this regard will be introduced by the Minister for Enterprise, Trade and Employment.

Additional increases for child dependants will be payable where appropriate at the same rates as those payable with a carer's allowance. Provision is also being made 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 the payment of a respite care grant. Part V deals with the financial basis for the grant. The grant, which was introduced in 1999, is payable on an annual basis to all recipients of the carer's allowance, prescribed relative's allowance and to people providing full-time care and attention to recipients of the constant attendance allowance.

Irish society has always had a special place for older people. It is now more important than ever that measures are introduced to help those in retirement who depend on State assistance. This Government recognises the special needs of elderly people and, accordingly, under Part II, section 4, an increase of £7 per week for pensioners aged 66 or over is provided. This will also apply to people on retirement or in receipt of invalidity pension aged 65 or over. A special increase of £5.90 in the standard rate of invalidity pension is being introduced to bring it into line with the standard rate of the widow's contributory pension.

It has always been a bone of contention that the low paid had to pay PRSI. Section 8 of Part II seeks to address this anomaly.

As a representative for the constituency of Limerick West, I know personally of the real difficulties being encountered by small farmers. As Deputies Ellis and Michael Moynihan said, there is real concern among the social welfare officers examining these problems. I welcome, therefore, the changes being introduced to the farm assist scheme. At present farmers' net income from self employment, including farming, is assessed at 80%. In addition, where the farmer has child dependants, £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 from 80% to 70% and for an increase of £100 in the amount of income disregarded for child dependants.

The changes being introduced by this Bill are far reaching. It is Government policy to help the less well off. We do not want to build a society of haves and have-nots, we want to build a society in which all people can actively participate. The changes announced by the Government are part of a long-term policy and I am confident there will be further substantial changes in next year's budget to help those in receipt of social welfare payments.

Mr. Durkan

It is not unusual that Opposition Members do not get as enthused by social welfare Bills, or any other Government legislation, as Ministers and Government backbenchers. There are some positive contributions in the Bill but it goes without saying that it is an after thought following public reaction to the budget. These changes were not provided for in the Social Welfare Bill as it was then anticipated. This Bill bears no relationship to the legislation as it was originally conceived.

While some of the issues referred to by Members opposite are addressed, there are many others outstanding. Members on the Government side constantly talk of the golden figure of £100 for various pensioners. Reaching that target is laudable but it must be remembered that it was an election promise which did not go over board, it merely identified the necessary annual increases and multiplied them by three, four or five. The same could be done for the next ten years if we were to plan for increases on the basis of 5%, 10% or 15% and then identify what the pension should be for particular categories of social welfare recipients at that time.

There is another issue which has not been mentioned. The Government backbenchers tell the House how pensioners must feel good. The Government believes that if they are told they should feel good, they will feel good but that is not so in this case. The increase of £1 per week was gone before the Social Welfare Bill was introduced for any couple who smoke. In the budget those poor people who have the consolation of a smoke and who thought they were getting an increase had it taken away from them.

Cecilia Keaveney

Does the Deputy disagree with the 50p increase?

Mr. Durkan

If a person smokes one packet of cigarettes in a week, a small concession for those who have lived for 80 years, 50p is gone in one fell swoop. If they smoke two packets, the whole increase is gone.

Cecilia Keaveney

They have more now than they ever did under the last Government.

Mr. Durkan

Then comes the real peach – inflation. When Members on the Government side were in Opposition they used to harangue the then Government because they reckoned there were not sufficient increases in excess of inflation. At 4% inflation is twice as high as it was then. What increase is there for the person who smokes two packs of cigarettes a week when inflation is taken into account? The feel good factor emanating from Deputies on the Government side, in an attempt to make those people feel better, is not working.

We have been told over the years of the importance of the young generation and that we must look after them. Everyone in the House wants adequate child benefit.

Cecilia Keaveney

It was increased by only 25p in 1997.

Mr. Durkan

The provisions for child benefit this year, however, fall far short of the hype and expectation.

Cecilia Keaveney

That increase would not have bought a bar of chocolate in 1997.

Mr. Durkan

Once again I am astounded that no provision was made for inflation. No recognition was given to the fact that it is increasing to its highest level for ten years. It is extraordinary that there was no provision for inflationary rises in the cost of living. People affected will have to put up with the Government trying to generate a feel good factor, as well as with inflation. How will they feel? The Government parties should go to the plinth on another pilgrimage and apologise to those unfortunate people for misleading them.

I compliment the Government on introducing some badly needed improvements for carers. They are appreciated as people who make a serious contribution, economically and socially, to the State. In that climate the improvements are gratefully accepted. It must be remembered, however, that there is a long way to go. If the Government wanted to set down benchmarks it should state that each year for the next five years it will provide more money for the 20,000 carers who provide free care. Without their intervention, at great personal sacrifice, hospitals and other such institutions would be crowded to an extent that would not be contemplated today. There is, therefore, considerable room for improvement in this area.

Reference was made to deciding officers and their decisions. Having had experience in this area, I believe they have a difficult job at the best of times. To be fair, and apart from one or two exceptions over the years, such as the women's equality payments, decisions made in the Department are not set in tablets of stone. Other Departments are notorious for doing this. It must be emphasised that decisions should not be made in this way to the extent that the only recourse available to people who wish to appeal them is through the courts. If this were to be the norm the courts would be crowded. There must always be an appeals mechanism. This is provided for in this Department, but not in others.

The issue of women in the home was forgotten in the budget. The initial response to the Minister's Budget Statement was euphoric because of the billions of pounds that were thrown at the public. However, a number of groups who made a huge contribution to society were ignored. It was an extraordinary oversight, especially when in the months leading up the budget they were told it was not a question of whether, but how much, the Government would help them.

Despite prompting from other areas, the alarm bells were raised in this House by my colleague, Deputy Noonan, who was the first to raise the question of the treatment of women in the home. He did so very effectively, to the extent that the Government had to burn the midnight oil to find a few more pounds as upstanding and outraged Government backbenchers, some of whom are no longer such, stood on the plinth of the House and condemned the unfortunate Minister for Finance, who was only doing what the Government had jointly and severally agreed on. It was appalling.

The Government managed to get its act together and made changes to its budgetary strategy. It found a couple of more million of pounds, opened the hat once more and plucked another one or two rabbits. As a result, we have now begun to address an issue which the Government failed to recognise earlier. I do not understand how that could have happened because everybody here read the newspapers and listened to the reactions to the budget. While the Government's response was a damp squib, I compliment the Minister for Social, Community and Family Affairs on recognising, even belatedly, that a number of issues needed to be addressed, including that of women who have spent years looking after their families, some in the home full-time and some part-time.

When debating social welfare Bills the Opposition is at a huge disadvantage because goodies are dispersed from the other side of the House. The Minister is usually the first to declare that the biggest ever increases in social welfare benefits have been provided for, as if it was a development unique to that year's budget and despite the fact that every social welfare Bill provides for the biggest increases ever because people will be paid more. It would, after all, be unwise to provide for, or say, the opposite, notwithstanding the inflation rates to which I have referred.

I get tired of hearing the mantra of the biggest ever increases in social welfare benefits or the biggest ever budget giveaway. How could any Government introduce the smallest budget ever? How could a Minister justify that course of action? Even without the people on the plinth he would not get far.

Mention was made of poverty traps, overlaps and the kind of measure that causes difficulties for individual cases. Although there will always be some of them, greater time and energy should be put into refining budgetary and social welfare provisions. When an anomaly is identified it is always possible to resolve it.

I welcome the Minister. I was lost in the vacuum that existed in his absence.

Mr. D. Ahern

I had to come into the House to hear the Deputy.

Mr. Durkan

I was seeking inspiration, which was adequately provided by his colleagues.

Mr. D. Ahern

I am still in the Deputy's shadow.

Mr. Durkan

May we continue to be in each other's shadow, although not on the sides of the House on which we now sit? Anomalies that arise with changes in legislation should be addressed on a more regularised basis. It can, and should, be done effectively and humanely.

The issue of pro rata pensions has preoccupied me for many years. The Minister addressed some aspects last year and when my colleague, Deputy De Rossa, and I were in Government we had the pleasure of addressing others in a previous Social Welfare Bill. However, there are still outstanding matters. The phrase “pro rata” indicates something that does not necessarily apply. It should mean that once one has achieved a certain level of contributions it should be possible to ensure that payment is pro rata in accordance with the contributions made over a period of years. Notwithstanding the P53 provisions and, more especially, the self-employed and PAYE provisions, which are equally affected because of the lack of the five year contributions, all outstanding areas can be addressed. The pension payable to the recipient or the applicant may not be great, but it would at least recognise the contribution made.

Deputy Ellis referred to an employee who is bound to make contributions but can never benefit from them. That is wrong and unnecessary, although it may have been necessary when the national budgetary framework was not as it is now. It is possible to address those issues. I ask the Minister to establish in the course of the year a group in his Department to identify the snags, poverty traps and pitfalls which have developed with the passage of time and to address them at the earliest opportunity. Addressing them may mean very little in overall budgetary terms, but such issues have a serious impact on those directly affected, namely, the applicants. This is an area which could be very constructively addressed and it would be useful for the Minister and the Department to do so. I know a social welfare Bill is supposed to do that in any event. However, that does not happen simply because there are too many other pressing and competing demands, and neither the Minister nor the Department can get around to do the work to which I am referring which requires a much longer run-in period.

I compliment the Minister on the good work he has done, but point out that there are many areas to which he has not attended. I chide the Minister and the Government for hyping expectation to such an extent and attempting to cod the poor unfortunate recipients of social welfare into the mistaken belief that they are on top of the world when they are barely holding onto the tiger's tail by a very small hair. I say this in the context of the points I made relating to the increase in the budget in duties on tobacco and the rise in the rate of inflation. I am not saying everybody should smoke, but the increase affects some people more than others.

Mr. M. Kitt

I wish to share time with Deputy Cecilia Keaveney.

I congratulate the Minister on introducing the Bill. The Minister has introduced major improvements in the past two and a half years. I usually have to consult my social welfare directory when people ask me about entitlements. We cannot say what the new entitlements will be until the budget is passed, the Social Welfare Bill is published and the partnership agreement is concluded.

I welcome the changes made by the Minister in the method of assessment of capital, the introduction of a new scheme of carer's benefit, a widow's parent grant and a special contributory pension for people with pre-1953 insurance. I also welcome the progress made towards the £100 target for lower rates of social welfare payments. The Minister has gone a considerable way by increasing old age contributory pensions by £7, and retirement pensions to £96 per week, which is ahead of target. I hope we will reach our target of £100 for non-contributory old age pensions very soon.

I will address the fuel scheme which elderly people find of great benefit. It should be extended for a longer period with the level of benefit increased, as it has not been increased for some time. In that regard, I welcome the announcement by the Minister for State, Deputy Molloy, regarding home heating under the housing aid for the elderly scheme. This is a very important move forward. We should have had a millennium project to help elderly people through a heating scheme, and this goes some way in that direction. However, given the number of people seeking assistance under the scheme, perhaps the Department of Social, Community and Family Affairs will examine the issue of further improvements.

The Minister has made approximately 21 changes for carers since becoming Minister, which are to be welcomed. A challenge facing the Minister and all of us is the significant increase in the number of carers over the years. There are currently almost 15,000 carers, an increase of 60%. We must provide for a further increase in the number of carers. People entitled to carer's allowance qualify for the free scheme, which is very important. I welcome the greater flexibility in the scheme following the relaxing of the residency qualifying conditions. The Minister is selling himself short by referring to non-resident carers as broadly encompassing people who live next door as the scheme is better than this. People who live down the road from the person being cared for and who qualify under a community alert or neighbourhood watch scheme, and who have a security system in place through such schemes, can also be included. Phonewatch, for example, is one of the very successful schemes operating in this regard. I welcome the fact that many people are wearing alarm pendants which they can use to alert people if they need help.

I am delighted the carer's scheme has been extended. It safeguards the needs and interests of care recipients, which is very important as was pointed out at a recent meeting with carers. The issue of the means test will be raised in the context of applications for carer's allowance. During discussion on the last Social Welfare Act I called on the Minister to examine the means test as the cost is increasing and there are more carers. The carers' association would like the means test abolished. The income disregard of £75 in the case of a single carer and £150 in the case of a married couple has not been increased, as I believe it should have been. There should be a scheme similar to the nursing home subvention scheme which has three rates of payment relating to the level of care, namely, £75, £90 and £120. Carer's benefit is very welcome and will allow carers to avail of protected leave of absence from work for a period of up to 15 months. Carer's benefit is not subject to a means test and the scheme should be straightforward.

The back to work and back to education allowances have been extended to carers when they cease caring. The back to work scheme includes a condition that the applicant must be an additional employee, something with which I agree, but there seems to be some difficulty in relation to people who do shift work. Perhaps they are not working the necessary number of hours, but I would like them catered for. The back to education scheme is excellent for people who cease caring or for students who drop out of college. However, it is necessary to help people return to education more quickly, as I have seen cases where students have had to wait up to five years to benefit from the scheme. I am sure the Minister will support what I say in this regard.

There have also been changes to the family income supplement which are very welcome. The weekly income thresholds have been increased and the minimum payment has been increased from £5 to £10 per week. The scheme is very useful in helping families.

Regarding pensions for people with pre-1953 insurance, the Minister said this was the first phase of a review providing 50% of the maximum personal rate to people with five years or 260 social insurance contributions, or a combination of pre-1953 and post 1953 contributions. This latter provision is important because people who do not have five years contributions prior to 1953 will benefit greatly if they can combine their pre and post 1953 contributions. However, as mentioned by Deputy Ellis, those who are self-employed had to have ten years contributions. Many farmers benefited under the scheme. The Minister then introduced a five year pro rata pension which was welcome. However, a number of people were born after 1927 and they are not eligible for this pension. One individual who was born on 24 April 1927 told me that he missed out on eligibility for the scheme by 19 days. Such individuals should qualify for the pre-1953 pension.

Some Members have said for years that the capital assessment for social welfare bears little relation to the return on investment. The Minister has moved quickly to ensure that the first £10,000 of capital is completely disregarded and I welcome its introduction. In the past he reduced the assessment rate for the farm assist scheme from 100% to 80% and he is further reducing that to 70%. He has also provided for an increase of £100 in the child income disregard and this scheme also applies to fishermen. These improvements are most welcome given the difficulties faced by farmers over the past year.

An additional £1,000 will be provided to a widowed person with children through the bereavement grant. The cost of funerals is increasing and health boards can only allocate a set amount. We could have a useful debate on the cost of funerals because it can be exorbitant, as has been pointed out by other Members. The Minister cannot provide the solution to this issue but he is doing his best in the provision of bereavement grants.

Section 27 provides that an unemployed person can qualify for unemployment benefit or assistance, whichever is more beneficial, and that is useful for those who try to join a community employment scheme. Extended child benefit and other benefits, such as free fuel, can be paid. I very much welcome that. Improvements could be made in conjunction with the Department of Enterprise, Trade and Employment to allow more FÁS workers qualify for schemes because it is difficult to find suitable people to take up such schemes as a result of some conditions which must be complied with.

The Bill provides for the needs of the elderly, carers and people who are dependent on social welfare for income support. I welcome the fact that the Minister has obtained the resources from the Department of Finance to make these improvements. His budget has been increased by £252 million this year and by £428 million in a full year.

Cecilia Keaveney

I am grateful for the opportunity to contribute to the debate. Ireland is doing well under its current Administration and people almost take for granted the increases that are announced each year. While it is human nature to always wish for more and for Opposition Members to belittle all the extremely positive news contained in this Bill, one should objectively examine the facts. In this context, I refer to the Social Welfare Bill, 1997, which was the first to be introduced in my time as a Member.

Anyone who compares both Bills will see how well the Minister is doing in obtaining the finances he needs. Anyone who examines his mission statements when he took up office and the facts and statistics will see that his ideals and those of the programme for Government are being implemented. There are indications that the figures that might have seemed aspirational to some at that time are on course to be surpassed. I congratulate the Minister on his work, especially in regard to the building of an inclusive society and in improving the living standards of those on social welfare. Deputy Durkan stated that it would have been a surprise if the Minister provided less than he did last year, but he missed the fact that people must generate the revenue in order to provide such increases. It does not happen by magic.

The social inclusion commitments entered into by the Government with the social partners in the new Programme for Prosperity and Fairness, together with the Minister's input, will form a solid basis for economic prosperity for all in the coming years. The agreement will progress in real terms all rates of social welfare, provide continued improvement for pensioners and increase the monthly child benefit to £100 a month for the third child and others. As a result of this Bill, a family of three children will receive £141 per month, an increase of £26, and this is a pro-family measure. I refer Opposition Members to the Social Welfare Bill, 1997, which provided for an increase of 25p per week. At the time it would not have bought a bar of chocolate.

It is worth reiterating just how significant are the changes and the total spend in this budget. The core package was £403 million, but that has since been increased to £428 million, and it is aimed at the elderly, people with disabilities and the low paid. A total of £103 million in PRSI and health contribution levies has been provided for the low paid. The overall budget of £531 million puts the Minister's previous budgets, totalling £316 million in 1999 and £225 million in 1998, in the shade.

It would be easy to go through all the increases one by one but I am interested in assistance for workers, the unemployed and pensioners. There has been movement towards delivering a £100 per week pension for the latter group. The review of An Action Programme for the Millennium is well on course and by 2002 the pension will be in excess of the £100. An added positive element within this is the fact that payments will be brought forward to the first week of May, one month earlier than usual. It is even better that the Minister has undertaken to bring that date forward again next year to the first week of April. This is only right when one considers that the negative aspects of any budget, such as increases in the prices of petrol and cigarettes, are implemented almost immediately after the Minister for Finance's speech.

Many people await the conclusion of the review of eligibility for the retirement and old age contributory pensions because it is examining the current yearly average test compared to the idea of a "total contributions" approach. Most Members can highlight examples of people who have felt badly treated by the current system and in commending the conclusion of the first phase of the review I look to the end of this year and the completion of the exercise set.

However, there are improvements in the Bill this year for pre-1953 contributors and the general changes to the structure of the retirement and old age contributory pension rate bands from five to three rates will assist 38,000 people. The new disregard of £10,000 for assessment purposes will be welcomed by a large number of people. Often people with a relatively low level of capital have felt that the assessment was unduly harsh. They felt that they were penalised for every pound they had. The new system that will come into effect in October will help many pensioners and welfare claimants to retain their full pension entitlement and in that context it is interesting that 88% of pensioners with capital surveyed by the Department had less than £10,000.

People who need to be cared for, such as the elderly or those with a disability, are acknowledged in an extremely pleasing manner in the Bill. A range of measures cover not only direct financial help but also services, and the work that is done is reflected in the fact that the number in receipt of carer's allowance has increased by 60% and expenditure has almost doubled. The extension of the free schemes to carers is extremely important as was the increase of £100 in the respite care grant announced last year. The Minister acknowledged in his contribution that more had to be done and, therefore, new people have been given the chance to opt in. They can give up work temporarily to care full time while still maintaining their employment rights and gaining the entitlement to £88.50 that is not means tested for up to 15 months. Those who fulfil this role are not in an ideal situation but often they have been forced out of work due to circumstances at home and were not able to avail of help. This is an extremely important innovation.

Unfortunately, unemployment in my constituency is four times the national average. It has been heavily reliant on fishing, farming and Fruit of the Loom type industries. There have been 1,600 redundancies over the past 18 months. The budget and this Bill provide improvements to unemployment assistance and the various schemes. There is a decrease in assessment rates from 80% to 70% and an increase of £100 per annum in the child income disregards for farm assist and for low income self-employed fishermen claiming unemployment assistance. An important announcement last year for coastal communities such as my own was the new fishing and farm assist arrangements under the unemployment assistance scheme. The assessment of 80% of their income from self-employment; the similar £100 and £200 disregards for the farm assist scheme; and the relaxation of the signing on arrangements meant a lot to those on low income who have suffered from prolonged bad weather. As I stated, the new improvements are all the more welcome.

While the other social welfare payments are well above the rate of inflation and most welcome, there are a number of people in my constituency who would prefer not to have to avail of the newly increased social welfare payments. The many people who were laid off from Fruit of the Loom, the Donegal shirt factory, Jockey Underwear, Glenveagh Mushrooms, the Fingal shirt factory, Dromont shirt factory, Jay Bees shirt factory and so on continue to impress on us their wish to have replacement work provided. I take this opportunity to reiterate their commitment to work and extol their work ethos and capability. I look forward to continued pressure being exerted on all agencies to ensure increased job creation in Inishowen and Donegal North-East generally. I also look forward to the day when our unemployment statistics come down in line with national trends.

For those on the lower wage rate, I welcome the improvements for those families in danger of falling into the poverty trap. The weekly income threshold increases that will lead to an increase of £8 per week in the average FIS payment, and the new regulation that will raise the minimum payment from £5 to £10 will have a significant impact on many families. Under section 20, a spouse in a family with two children can now earn £90 per week in part-time work and still benefit by an additional £38 under the new system. This is a positive measure that families can look forward to in May.

I welcome the work being done by FÁS, the partnerships, Leader companies and other agencies to provide opportunities to retrain and acquire skills. There are also improvements for people working on community employment schemes. I welcome the fact that the Minister has recognised those who are suffering a bereavement with a £500 grant last year and £1,000 for those widowed this year. I ask the Minister to examine the position of ESB meter readers and reiterate the case Deputy Ellis made here earlier. I trust their case can be re-examined.

I commend the Bill which will greatly improve the lives of many people. The Opposition will always call for more and belittle what has been done, but when one looks at the facts, the Minister, Deputy Ahern, is doing as much for social welfare as we would want him to do. The people in his Department work very hard in accommodating the many requests from us for information. I look forward to the next two Bills of the five year programme.

Mr. U. Burke

I wish to share my time with Deputy Ring.

An Ceann Comhairle

That is agreed.

Mr. U. Burke

I welcome the opportunity to contribute to the debate. There are many positive aspects to the Social Welfare Bill. It is important legislation, introduced in the House annually, outlining what is being done for the people who can least afford the benefits of our rising standard of living. It is difficult for social welfare recipients to keep pace with those who have a job, are more privileged and benefit from the increasing wealth generated in the economy.

Introducing the Bill, the Minister said that the package of measures is central to a comprehensive framework of policies costing £1.5 billion which the Government will introduce to combat exclusion in the coming years and to ensure full participation for all citizens in our society. I have difficulty with some aspects of that statement. The Minister is in a privileged position on this occasion, but many of his predecessors did not have the resources at their disposal which are now available to the Minister. In the past, Ministers for Social Welfare would have had to increase taxes on some people in order to alleviate some of the hardship on those in greatest need by way of increasing the old age pension, children's allowances and so on. The Minister has huge resources at his disposal. He has allocated £530 million to people on low incomes, yet a huge section of our society has not benefited. That is a damnation. Regardless of whether we like it, one quarter of our school children are poor and the depth of their poverty is increasing. That is difficult to reconcile with all the plaudits for this budget.

I have worked as a teacher and I saw at first hand the difficulty faced by many school children, whether at primary or second level. For any system to benefit those children who are in need, great discretion is needed. The back to school schemes represent a good system provided they are adequate. The Minister has provided for an increase of £20, and that is welcome, but what does that mean in reality to a child living in pov erty? It means a pencil, a biro, one book or a few copies. If that is what we believe is necessary to combat increasing poverty for one quarter of our children, we have failed our young people miserably. These are the first people to drop out of the education system, at a great cost to society, without training or certification. They are unable to take their place in the workforce. These are the people who get involved in either petty or more serious crime, and that can be the case for the remainder of their lifetime. That results in an enormous cost to the State. The Minister had the opportunity in the Social Welfare Bill to invest in our young people who are stricken by poverty, but the opportunity has passed. I hope he revisits the whole question of poverty among school-going children. Bonuses and additional incomes could be given to certain people on low incomes. We must look after our young people in education.

I want to refer to the farm assist scheme which was launched with great hype and enthusiasm. The reality of the scheme as it is implemented on the ground is that it has been a total failure. If its original intention was anything other than to increase the income of low income farmers in rural Ireland who are on their knees because of low prices, it has failed. We talk about a write-off increase from 70% to 80%, but what does that mean to the people on the ground? It means nothing to the people who have to apply for it. As for those privileged enough to get as far as an appeal, I know of a person who applied in early 1999 but who was assessed and refused. That person appealed in July 1999 and the appeal procedure continued until 12 January this year.

Debate adjourned.

Dáil Éireann debate - Tuesday, 29 Feb 2000

Social Welfare Bill, 2000: Second Stage (Resumed).

Dáil Éireann debate -
Tuesday, 29 Feb 2000