Paul McGrath
Question:5 Mr. McGrath asked the Minister for Social, Community and Family Affairs when he will provide equality to self-employed families so they can avail of family income supplement on the same terms as PAYE families. [25273/00]
Ceisteanna – Questions. Priority Questions. - Family Income Supplement Scheme.
The family income supplement scheme was introduced in 1984 with the specific purpose of providing an incentive to low paid employees with families to take up or remain in full-time employment.
The question of extending the scheme to cover the self-employed has been considered on a number of occasions. Such consideration would have regard to a range of factors including: the practical difficulties associated with extending the scheme to the self-employed; the arrangements already in place to provide income support to self-employed people on low incomes; and the cost of introducing such a measure in the context of the need to prioritise the use of the limited resources available for the development of a wider social welfare system. Self-employed people whose income falls below the rate of unemployment assistance appropriate to their family circumstances are entitled to claim unemployment assistance. The rate of unemployment assistance payable depends on the person's means. In assessing means, account is taken of the net income, which the applicant may reasonably expect to receive in the next year. I am aware that the family credit scheme, which operated in Northern Ireland and throughout the United Kingdom, included provision for the self-employed. It is interesting to note that the UK has recently converted family credit from a social welfare payment to a tax credit.
The Deputy may be aware, that a recently convened Programme for Prosperity and Fairness working group is examining the role which refundable tax credits can play in the tax and welfare systems, including the possibility of paying family income supplement through the tax system. In the course of their deliberations, they will evaluate the potential of the refundable tax credit as an instrument for delivering benefits on an equitable basis, with particular reference to families on low incomes, including self-employed families.
This is a complex issue which will involve a comparative examination of UK and other international models and require input from all Departments, including my own. Obviously measures which are capable of advancing the interests of low paid workers with families, including the self-employed, will be viewed positively by the Government.
Does the Minister agree that his answer is similar to responses he has given over the past three years and that he has made no progress in extending this to the self-employed? Regarding the working group set up under the Programme for Prosperity and Fairness, can he give us an idea of how that work is going, what progress is being made and when it is likely to report? The Minister mentioned the system in the UK and seemed to imply that it would be too difficult to operate that system here. How come if it operates successfully in the UK it cannot operate here? The Minister said that those on low incomes, even if they were self-employed, can get UA but he totally misunderstands the system if he says so. The benefits that would accrue to people on low income through FIS are different from what might accrue under the UA system. UA would be far less than what they might qualify for with the same income under FIS. That is something the Minister will have to look at. Does the Minister agree that many shopkeepers and postmistresses in rural villages who are on very low incomes trying to support familles and who would benefit significantly from extending this to the self-employed?
My reply is different in that the Programme for Prosperity and Fairness contains a commitment worked out with the social partners to look at the issue—
What progress has been made?
—of tax credits. The Deputy should bear with me. The examination will involve the possibility of paying FIS through the tax system and a progress report will be prepared by the end of 2000. That is the PPF commitment, so the issue is being examined. I have said before that FIS started out to help employees on low incomes—
By Fine Gael.
—not the self-employed or farmers. I need only quote my predecessor in this office, who was vehemently against extending FIS. Deputies McGrath and Broughan supported him in Government. Deputy Broughan is not hopping up and down about this.
He represents farmers now.
He said "the farmers were rolling in it" and he did not have much respect for the farmers. I did the opposite. I brought in the very successful farm assistance scheme, which is not FIS for the self-employed—
He represents farmers now.
—but is a very good scheme which has been welcomed by the farming associations. The average net increase for farmers who have gone on farm assist, having been on smallholders' dole, is approximately £18. That has been put in place by the Government.
Is the Minister aware that an all-party committee of the House made a strong representation that FIS be extended to the self-employed? Members of his party are members of that committee and they fought very strongly to include that recommendation. Is he now going to ignore that?
The Minister quoted the policies adopted by previous Ministers. It must be clear that the Mini ster is going along with that policy if he is not prepared to do something about it. He is telling us what a great man he is in improving payments to the low paid but he is not doing anything for the low paid self-employed. He is making no progress there and is failing at Cabinet time after time to get any benefits for those on low incomes, yet he tells us he is delivering. Unfortunately, his record is very poor. Will he try to do something about that at this late stage before the budget?
Deputy De Rossa, when he was in Opposition and not a Minister, expressed grave reservations about extending FIS to the self-employed. I have indicated that I have grave reservations about extending FIS to the self-employed.
What about something the Minister did?
Regarding farmers, I have adopted a new scheme which has proved very successful. As for all other self-employed people, many of the people the Deputy referred to would be in the category of those who entered PRSI when over 56 years of age and did not qualify for a pension when they became 66: small shopkeepers, postmistresses and so on.
(Carlow-Kilkenny): They are all retired.
They are benefiting from changes made by this Government and that was an issue Opposition Deputies could have lobbied for when in Government. Deputy De Rossa nearly swallowed his tongue when the Minister of State at the Department of Agriculture, Food and Rural Development, Deputy O'Keeffe, announced—
I am calling Question No. 6.