Frances Fitzgerald
Question:1 Ms Fitzgerald asked the Minister for Social, Community and Family Affairs the measures he will take to address the impact of rising inflation on the real value of social welfare payments. [25293/00]
Ceisteanna – Questions. Priority Questions. - Social Welfare Benefits.
I share the Deputy's concern about the impact of inflation on people dependent on social welfare payments. The budget last December provided for a £7 per week increase for pensioners over 66 years, a special increase of £5.90 per week for invalidity pensioners aged under 65 years and a £4 increase for other recipients under 66 years. The £7 increase for pensioners represents an increase ranging between 7.9% and 8.9% while the £4 general increase represents an increase ranging between 5.2% and 5.6%.
Since this Government took office social welfare payments have been substantially increased in real terms. For example, social welfare pensioners aged 66 years and over have received total increases of between 23% and 27% compared with an increase of 11.2% in the cost of living during the same period. It is also clear that for many social welfare recipients and their families the overall rate of increase in payment this year will be ahead of the increase in the cost of living. Pensioners who received the £7 increase are well ahead of inflation. In addition, special increases in the rates of qualified adult allowances were provided this year, ranging from 8% to 17%. The budget also provided for significant increases of between 22% and 23% in monthly child benefit payments.
The implementation dates for social welfare increases have been brought forward by six weeks, four of which were this year. Furthermore, as part of our commitment to align the tax and social welfare changes by 2001, all increases will take place at the start of the tax year from April next. This progressively earlier payment of increases has to be taken into account in assessing the real level of increases which have been provided by this Government over its period of office.
The higher than expected inflation has had the effect of reducing the real value of this year's budget increases in social welfare payments. However, in the budget for next year the Government will take full account of the increased level of inflation in setting increases for 2001.
Why was the Minister's proposed compensation package turned down by the Cabinet if the Government is concerned about the effect of inflation on social welfare recipients? Thousands of people are dependent on these allowances and the real benefits have been ravaged by inflation. Real standard of living has declined rather than improved because of inflation and because the increases were based on a lower inflation rate. What steps will the Minister take to compensate for what has happened to social welfare recipients over the past year? How does he intend to handle this and has he any immediate proposals, such as bringing payments forward or producing an extra package of measures for the people who have been so affected?
In its programme An Action Programme for the Millennium, the Government set itself the target of increasing social welfare in real values. This is carried on into the Programme for Prosperity and Fairness which promises that all social welfare recipients will experience a real increase. Over the past three budgets – even taking into account that people under 65 years of age are, in effect, in a static position – they have received a real increase. The figures prove they have received an increase way in excess of anything given by any previous Government.
I cannot comment on discussions that take place at Cabinet.
The Minister has no clout.
Neither can I discuss reports in the newspapers. The Deputy should, like me, treat the newspapers with a cursory attitude.
The issue of dealing with the problems created by rising inflation in 2000 will be taken into account by the Government in framing the budget for next year, as well as giving people a real increase for that year. That will be done in the forthcoming budget. The Government has increased the Christmas bonus from 70% to 100% at a cost of approximately £20 million. That has been done to bring the bonus back to the level that was set—
The Minister would not do it last year when we asked.
—when Fianna Fáil originally introduced it. It was reduced by Fine Gael and the Labour Party when they were in office. It was not reduced when Fianna Fáil was in office. It was either left the same or increased. We have now increased it again. It will be a recurring Christmas bonus unless there is a change of Government—
And that is likely.
—and Fine Gael and Labour do what they did when they were in office previously, reduce it.
Thomas P. Broughan
Question:2 Mr. Broughan asked the Minister for Social, Community and Family Affairs if, in view of the ongoing rises in the cost of living, he will request the Government to introduce the major social welfare changes for 2001 on 1 January 2001 to compensate social welfare recipients for the erosion of their benefits in 2000. [25271/00]
I have already indicated to Deputies the Government's concern about the impact of the higher than expected inflation on people dependent on social welfare payments and that the forthcoming budget will take full account of this in setting social welfare increases for 2001.
However, it would not be possible to bring the payment dates for social welfare increases forward to January 2001 as a way of compensating for the rise in inflation. A lead in time of a number of months is needed to make the required legislative and administrative changes necessary to implement the social welfare improvements announced in the budget. This includes the enactment of the necessary social welfare legislation, the printing of pension books and so forth. Given that the budget will only be announced on 6 December, there would not be sufficient time to implement social welfare changes from the beginning of January 2001.
As part of our commitment to align the tax and social welfare changes by 2001 we have already brought forward the implementation dates for social welfare increases by six weeks, four of which were this year. In addition, I recently announced that the alignment of tax and social welfare changes will be maintained when the tax year is changed to coincide with the calendar year in January 2002.
This will mean the increased social welfare weekly rates will be paid a full 23 weeks earlier than when we came into office. Then they were paid in the first week of June. In 2002 they will be paid on 1 January. Even the Opposition would accept that this is some achievement.
The crumbs that fall from the table.
This progressively earlier payment of increases has to be taken into account in assessing the real level of increases which has been provided by this Government over its period in office.
When the Ceann Chomhairle and I played hurling, we used to talk about people getting their retaliation in first. The disgraceful report in the Sunday Business Post—
The Deputy cannot quote at Question Time.
I wish to refer to it. It reports on the extraordinary situation where the Minister for Social, Community and Family Affairs publicly admits that he failed to get a modest proposal through the Cabinet. The question we should ask this Minister, after three and a half years in office, is if he should consider resigning.
His Cabinet colleagues have admitted there is a serious problem where social welfare recipients received no increase this year. This is the first Minister for 20 years to do that to people living on social welfare. That being the case, it is disgraceful that he tries to get his excuses in first before we find out, in four weeks, what the Minister, Deputy McCreevy, has done. Does this Minister disagree with the Combat Poverty Agency's assertion that it would cost just £100 million to bring forward social welfare increases to 1 January? What is the difference between doing it on 1 January 2001 and 1 January 2002?
It was the Minister's former leader, Charles J. Haughey, who pushed back social welfare increases to the autumn of each year during the past 15 years. There is an onus on the Minister, for the sake of a measly £100 million from a budget of £20 billion, to bring forward social welfare increases to 1 January. All sides of the House acknowledge that in terms of groceries, housing, transport and heating—
The Deputy must confine himself to the question.
—our social welfare population is devastated. This Minister presides over that. Instead of getting his puerile retaliation in first by making excuses, he should do something or get out.
All Deputy Broughan's bluster cannot disguise that during our time in office—
Three and a half years.
—pensions increased by 23%, as opposed to 9% during the three previous years of the Deputy's time in office.
(Carlow-Kilkenny): The budget surplus increased as well.
The Deputy's Government gave old age pensioners a real increase of only 4%. Over our three years we gave them 12% and, in relation to all social welfare, we did not do what the Government of which the Deputy was a supporter did; we did not link social welfare increases to inflation, which that Government did in its first year. Inflation was targeted to be 2.5% and that Government purposely gave social welfare recipients 2.5%. In other words, it was telling social welfare recipients that they would now get an increase. Over the life time of this Government the facts speak for themselves.
What about last year and the coming year?
In relation to the Christmas bonus, the Deputy castigates my party. A special Christmas bonus was brought in by Fianna Fáil in December, 1980.
We know that. It is history.
In 1985 the Fine Gael-Labour Government reduced it to 75%.
The Minister was not even in the House then.
What about 2000-01?
As if that was not bad enough, in the following year it was further reduced to 65%. I am delighted to be able to inform Members of this House on all sides and the general public that in 2000 the Government has agreed to increase the bonus to a full 100% at a cost of—
(Carlow-Kilkenny): On a point of order, is the Minister entitled to give information about the increases without telling us what inflation was? It is giving a distorted picture.
I will give the House all that.
The Chair has no control over the content of the Minister's replies. The Deputy should resume his seat.
Is the Minister in order in talking about 1980 instead of telling us what he is will do in 2000 and 2001? The Minister is being disorderly in talking about 1980. Why is he talking about what happened in 1980?
Deputy Fitzgerald is being disorderly. This is not her question. During Priority Questions the Deputy has no right to intervene. We will have an orderly Question Time or I will suspend the sitting.
There was no increase when you were in office.
Will the Minister resume his seat? Deputies should remain seated while the Chair is on his feet. During Priority Questions only the Deputy in whose name the question is tabled can intervene.
The Minister is being provocative.
Under Standing Orders no Deputy other than the Deputy who has tabled the question has a right to intervene. Deputies should know that. Also, there is a time limit on these questions. I call the Minister to finish, as he was on his feet. Let us have an orderly Question Time.
In relation to the issue of linking old age pensions to gross average industrial earnings, the facts speak for themselves. In 1995 there was an increase of – 0.7%, in other words a net decrease. When we came into office in 1998 we gave an increase in our first budget of 2.21% over average industrial earnings for contributory pensions; for non-contributory pensions the increase was even greater. That has been the case in the successive years 1999 and 2000. The increases for old age pensioners have been above gross average industrial earnings – in relation to contributory pensions, 1.20% and in relation to non-contributory pensions, 2.27%. I rest my case.
Does the Minister disagree with the ESRI, the Combat Poverty Agency and other agencies, who tell us that since 1994, across Governments, average wages have risen by 40-45% while average increases in social welfare have been of the order of 30%? Clearly people on social welfare have fallen dramatically behind. Given that the Minister and his colleague, the Minister for Finance, Deputy McCreevy, got the inflation rate for 2000 so badly wrong, being out by 3 to 4%, what is his prediction for next year and, therefore, how much will the increases be, given that various groups are asking for a minimum basic increase of £14 across the range of payments, and a minimum payment of £90 a week.
Quite apart from the general rates of increases, this Government has brought in a number of changes which have increased the household income of many families around this country. To name but a few, we changed the rules in relation to pre-1953 stamps under which many people are now qualifying for pensions who did not up to this. This is something that was asked of all parties in Government. This Government has delivered on that. Similarly, in relation to self-employed people over 56 years of age being covered by PRSI, last year we changed capital assessment which again meant that people, particularly those on means-tested payments, were able to avail of—
We must proceed to Question No. 3.
I will leave the House with one thought—
I have called Question No. 3.
The poorest householders gained least and the richest households gained most.
This is not Deputy Fitzgerald's question. She should cease interrupting during Priority Questions when the questions are in the name of another Deputy. It is very disorderly.
On a point of order. It is disheartening that the Minister will not answer questions.
A Ceann Comhairle, can you remind me of the time limit for Priority Questions?
It is six minutes for each question. I have called Question No. 3. I would ask the Minister to proceed with Question No. 3.
Frances Fitzgerald
Question:3 Ms Fitzgerald asked the Minister for Social, Community and Family Affairs the number of staff working in his Department on the recovery of maintenance payments; if he has satisfied himself with the level of maintenance paid; if he will change Government policy in the approach to the recovery of maintenance; and if he will make a statement on the matter. [25294/00]
The one-parent family payment under the social welfare system acts as a safety net for people where there is inadequate or no maintenance. To that extent, my Department is dealing with liable relatives who are already reluctant or unable to provide support even at the direct request of their families. This is the experience of all countries with similar systems in operation.
Applicants for one-parent family payment are required to make ongoing efforts to seek adequate maintenance from their former spouse or, in the case of unmarried applicants, the parent of their child. Normally, such maintenance is obtained by way of informal negotiation or by court order under family law, though separated couples are increasingly using the Family Mediation Service which has been progressively extended nation-wide by this Government since it came into office.
Maintenance payments, where they are being made, are assessable as means in determining entitlement to one-parent family payment. Independent research has shown that only 12% of the family law maintenance orders are honoured regularly. Therefore, where there is inadequate or no maintenance, the social welfare system guarantees the lone parent a regular weekly income.
The staff dealing with one-parent family payment claims also deal with the enforcement of the requirement to seek maintenance. This process is backed by social welfare inspectors throughout the country. In addition, a separate unit has been set up to operate the system of direct recovery of contributions from the parents concerned. There are currently seven staff in this unit.
In implementing the maintenance recovery provisions, the Department has concentrated on those cases where the "liable relatives" concerned, being in employment or self-employment, appear to be in a better financial position to make a contribution towards the relevant benefit or allowance being paid by the Department to their families. More than £3.6 million has been collected through direct contributions from some 545 liable relatives to date through the maintenance recovery system.
In addition to direct contributions from liable relatives, the maintenance recovery operation has resulted in scheme savings of more than £2 million. A further sum, estimated at £2.7 million per annum, is saved from the assessment of maintenance in payment directly to lone parents at the time they make their claims.
Additional information.The review of the one-parent family payment was published in September 2000. The main focus of the review was the extent to which the scheme achieves its objectives having regard to the needs of lone parents and their children and the desire to avoid long-tern dependency on social welfare.
On the issue of maintenance, the review set out a very comprehensive analysis of the options in the maintenance area. This included recommendations that the system should be enforced more vigorously while bearing in mind value for money considerations. The implications of this recommendation are under active consideration at present.
This is obviously a difficult area in which to develop policy. Would the Minister accept that a major review of policy is necessary in this area? In relation to the number of staff dealing with this in the Department, I understand that seven people are directly involved in recovering maintenance. Does the Minister consider that adequate to deal with this issue? The statistics seem to suggest that 70 to 80% of parents who ought to pay maintenance do not pay, and only 12% of court orders are honoured regularly, which is extraordinary. What does the Minister believe he can do to create a culture where maintenance is part and parcel of the way we operate in relation, for example, not just to the allowance we are discussing but in general? Does the Minister believe the Department should run campaigns on this issue? There has been very little public discussion of this. Does the Minister accept that more public discussion is needed in terms of the obligations and responsibilities of both parents, given the very low levels of compliance with court orders? Is it acceptable that the burden of pursuing the maintenance should be on one parent, in most cases, the woman, or does the Minister feel his Department could play a stronger role? Is it right that this should be pursued through the judicial system rather than through mediation, which I think is a better way to pursue it? As we develop the family mediation service, I hope that can be used more.
I agree with many of the Deputy's comments. The staff of seven are dedicated to recovering moneys. All the staff, of which there are many, who deal with the scheme of one parent family payments, have an obligation to ensure maintenance is properly paid, as it is taxpayer's money. One only need consider the approach adopted by the child support agency in the UK. It adopted an extremely heavy-handed approach, which was more severe than that required. The Comptroller and Auditor General has raised this matter in the context of putting in place better procedures in the Department. I launched the review of the one parent family payment recently, which dealt with a number of options we could examine. Hard and fast recommendations were not made. Ultimately this matter will be up to me as Minister and the planning unit in my Department, but it is an area in which I accept more can be done. Up to recently, mainly because of the economic circumstances that then prevailed, the area could be divided into one third of parents who disappear, one third who are in receipt of social welfare payments, whom there is no point pursuing as they are in receipt of a basic payment and a cohort of one third of parents whom the Department pursues. I accept what the Deputy says regarding maintenance. Our system is one of pursuing the parents concerned through the courts, which can be a frustrating experience. Over the years the Department has adopted a more easy attitude that is less onerous on the person making the payment.
The time allowed for this question has expired. We must proceed to Question No. 4.