Vol. 523 No. 1
102 Ms Fitzgerald asked the Minister for Social, Community and Family Affairs if he will increase the fuel allowance in view of the 7.9% increase in the cost of fuel and light and the 13.3% increase in energy products. [20668/00]
I wish Deputy Fitzgerald all the best in her new position. These are her first oral parliamentary questions.
The aim of the national fuel scheme is to assist householders who are on long-term social welfare or health board payments and who are unable to provide for their own heating needs. A payment of £5 per week is paid to eligible households for 26 weeks from mid-October to mid-April regardless of the temperature. Some £8 per week is paid in smokeless zones.
The national and smokeless fuel schemes were reviewed in 1998 as part of my Department's series of programme evaluations. The review group took the view that improvements in the national fuel scheme cannot be looked at in isolation from the improvements in the primary weekly payment rates.
The group concluded that the current rates of payment should remain unchanged if improvements in primary payment rates fully compensated recipients for all price inflation, including fuel price inflation. Increasing primary payments gives people greater flexibility in meeting their needs and the increased rates are payable for all 52 weeks of the year and not 26 weeks, as with the fuel allowance.
In that regard, substantial increases in all the social welfare primary payments of either £3 or £6 per week were paid from June 1999 with further increases of either £4 or £7 which came into effect at the beginning of May 2000, a month earlier than last year. This is equivalent to increases ranging from 10% to 16% over the last two budgets.
In addition, the qualified adult allowance was increased by amounts ranging from £3.80 for people on disability benefit, £4.70 for old age contributory and retirement pensioners and £8.50 for invalidity pensioners where the qualified adult is aged 66 years or over.
Fuel price inflation was much lower than general price inflation up to last year, with an overall cumulative increase of less than 10% over the 14 years between 1985 and last year. However, as the Deputy points out, an increase of almost 7.9% was recorded in the fuel and light component of the consumer price index in the 12 months up to last August.
Additional Information
The increase recorded for energy products was 13.4%, although that is not entirely relevant to the fuel allowance as it includes petrol, motor oil and other products. I am concerned about the extent to which general price inflation, including fuel price inflation, is impacting on the significant improvements in social welfare payments I have mentioned. The Deputy will know that I cannot give specific details of the measures that will be contained in this year's budget but I assure the Deputy that improving the overall position of social welfare recipients will receive a very high priority in that budget.
In the meantime, I would point out that fuel allowances are not the sole mechanism through which assistance is provided to people with heating needs. There is a facility available through the supplementary welfare allowance scheme to assist people in certain circumstances who have special heating needs. An application for a heating supplement may be made by contacting the community welfare officer at the local health centre.
Where a person would not normally qualify for a heating supplement there is provision under the supplementary welfare allowance scheme to pay an exceptional needs payment. Exceptional needs payments are payable at the discretion of the health board taking into account the requirements of the legislation and all the relevant circumstances of the case.
Does the Minister believe the allowance should be reviewed at this point and that a change of policy is required given the impact of inflation on those dependent on social welfare, that the cost of fuel and light has increased by 7.9% in the past year and that those dependent on fixed incomes and social welfare have been particularly hard hit by inflation, are falling behind other groups and are finding it increasingly difficult to have a standard of living similar to other people given the effect of inflation on their incomes in the past year particularly? There is a real danger that the standard of living of social welfare recipients will fall substantially behind other people. The price of coal has gone up by £25 per tonne in the past year and the allowance barely covers a bag of coal. In that context, does the Minister believe the allowance needs to be reviewed as well as the overall rates of social welfare?
As I said, a review of this scheme took place in 1998, only two years ago. I fully accept, in view of the increase in inflation, particularly in relation to fuel, that this scheme should be looked at. I am currently examining the scheme, as well as other social welfare schemes, in consultation with the Minister for Finance in the run up to the budget. It has always been my view that rather than give people an increase in the fuel allowance for only 26 weeks of the year, it is preferable to give them a higher increase in their normal weekly rate. That is why, rather than increase the fuel allowance for the 26 weeks, we gave a larger increase in the general increases over the 52 weeks.
The review also pointed out that the more we increase the fuel allowance, the more difficult it is for families in poverty when they lose that amount. For instance, if we were to double it to £10, in mid-April families would lose £10 per week.
They would not need coal then.
A reasonable way to deal with it is through the general increases but I fully accept the cost of fuel has gone up in the past 12 months and that it is something we need to consider.
I welcome the Minister's recognition of the difficulties people face. The scheme operates from October to April. Is there a need to review that because many elderly people, in particular, need the fuel allowance for a longer period. It is a rather miserly allowance for people and, as the Minister said, the cut off point is quite sharp and early given the needs of many people.
The figure for extending the allowance is £1.7 million per week. To give the fuel allowance for the full season would cost £7.1 million for every £1 increase. It is a better policy to give old age pensioners, in particular, higher increases which they will get for 52 weeks of the year as opposed to the fuel allowance which is for 26 weeks of the year only. There are arguments on both sides to extend the period from 1 October to the end of April or to change it in some way. All those issues will be considered in the run up to the budget.
103 Ms Fitzgerald asked the Minister for Social, Community and Family Affairs the percentage of carers who currently receive the carer's allowance; the total number of carers; if he will increase the income disregard; and the cost of abolishing the means tests. [20669/00]
As part of the Government's commitment to carers, as set out in An Action Programme for the Millennium, an overall review of the carer's allowance was completed by an interdepartmental committee, chaired by my Department, and was published in October 1998.
The review of the carer's allowance noted that it is difficult to estimate the number of full-time carers in the country. While care groups have stated this figure to be around 120,000 carers, they have provided no supporting basis for this figure. The high number may be due to their definition of carer, whereby, for example, a person visiting or assisting an older person may consider themselves to be a carer. However, for the purposes of the carer's allowance, a person is required to be a full-time carer.
Based on the research carried out in the review, the current number of full-time carers is estimated to be around 50,000 people, covering carers of older people and adults and children with disabilities. There are currently 16,127 carers in receipt of carer's allowance which indicates that 32% of carers are in receipt of a payment. This is an increase of 75% in the number of carers in receipt of the allowance since this Government took office. The large increase is reflected in the expenditure on carer's allowance, which was £36.5 million when I became Minister and which is projected to be £78.3 million this year, representing an increase of 115%.
Based on an additional 34,000 carers qualifying for carer's allowance, the complete abolition of the means test would cost in the region of £179 million annually. If one were to use the estimate of the care groups, this figure would rise to £547 million annually. As with all other social assistance schemes, a means test in which the income of the applicant and his or her partner is assessable, is applied to the carer's allowance to ensure that limited resources are targeted at those most in need.
The means test has been significantly eased in recent years, most notably with the introduction of disregards of income from employment and other sources. The effect of these changes means that a couple with two children could have an income of up to £19,500 and still qualify for the minimum carer's allowance, an annual respite care grant and the free schemes.
The review of the carer's allowance noted that the allowance is an income support payment and not a payment for caring. It examined the means test and considered that it should be maintained as a way of targeting resources towards those most in need. A wide range of services is required to support carers in their caring role, including community and respite care. It is doubtful if a payment to all carers, regardless of their income, could be considered the best use of resources. However, the position in regard to the means test will be kept under review.
Does the Minister accept that the vast majority of carers receive no payment from the State? Does he also accept that when one examines the total number of carers, as assessed by the Carers Association and others, the carer's allowance means test is set at a very low level and excludes many people? The Minister has not changed the means test in the past four years. Does he consider the time is right to ease that test so more carers can be included?
As regards the cost of institutional care, and in terms of investment by the State in care, is the carer's allowance not a better alternative than institutional care, given the cost of institutional care and the quality of life issues involved? Is the Minister considering a further examination of the means test disregard?
The Deputy will be aware that the carer's review made many recommendations, all but one of which I implemented over the past two budgets. Since the Government took office there has been a 75% increase in the number of recipients of the carer's allowance – up from 9,000 to more than 16,000. There has also been a substantial increase in the amount of money allocated – from £36 million when I took office up to £78 million at the end of the year. All those in receipt of the carer's allowance receive all the free schemes, again as a result of changes.
The needs assessment still has to be addressed. This is a substantial issue which was dealt with in the review and involves the Department of Health and Children and health boards. This issue is being examined. I have stated during previous Question Times that I will examine the disregard in the context of the upcoming and future budgets.
Some, but not all lobby groups have called for the abolition of the means test. Some Members of the Deputy's party do not call for the total abolition of the means test. Apart from child benefit, all social welfare assistance schemes include a means test. Abolishing the means test would mean that a very wealthy family, for example, one with 300 acres and many cattle, would receive the same payment as someone on social welfare. I do not agree with that. Whatever resources we have should be targeted at those most in need. That is as it has been since the scheme was started by my predecessor, Deputy Woods, and I would hazard a guess that the same will be the case after the next election, no matter who will be in office.
We must move on to Question No. 104.
May I ask a brief question?
The six minutes have concluded, Deputy. There is a six minute limit on each question. The Chair has no control over this matter.
