Vol. 528 No. 2
27 Mr. McGrath asked the Minister for Social, Community and Family Affairs when the fuel allowance was set at the rate of £5; the duration of the payment at that time; the changes that have been made since in that regard; the accumulated consumer price index since this £5 rate was set; and if he will make a statement on the matter. [30067/00]
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. Some £8 per week is paid in smokeless zones as and when these zones are introduced.
Up to 1988, assistance with fuel costs was provided through two schemes, the urban and the national fuel schemes. The assistance provided under both schemes was the same – £5 per week for 30 weeks. The rate payable was set at £5 from October 1985. The two schemes were rationalised and a single unified scheme was introduced in October 1988. The fuel season was reduced to 26 weeks but entitlement was extended to include 30,000 long-term unemployment assistance recipients.
The duration of the scheme remained at 26 weeks until this year's budget when the fuel season has been increased to 29 weeks. The current fuel season will be extended by two weeks in April 2001 and the start of the next fuel season will be brought forward by one week to the beginning of October 2001.
Every person who gets a fuel allowance also gets a weekly primary social welfare payment, such as unemployment assistance or old age pension. For this reason, the fuel allowance payment rate cannot be looked at in isolation from primary payment rates. It is important that the overall increase taking primary payments and fuel allowances together is sufficient to fully compensate for all inflation, including fuel price inflation.
Fuel price movements are tracked in the fuel and light component of the CPI. This shows that fuel price inflation was 25.3% in total between October 1985 and October 2000. The overall consumer price index rose by 52.1% in the same period.
Increases in overall weekly social welfare payment rates have compensated fully for inflation, including fuel price inflation, over the period. For example, the total weekly payment for a single retirement pensioner with a fuel allowance rose by over 79% while the total weekly payment for an unemployed person rose by over 106%.
Additional InformationThis does not take into account the increases announced in last week's budget which were the largest ever provided. These will provide a real increase after fully compensating for inflation.
Giving people a real increase for 52 weeks of the year is a more expensive option than increasing the fuel allowance payment rate for part of the year. However, I believe it is the correct approach to take as it gives people greater flexibility in meeting their needs. Also, it can be very difficult for people on low incomes to adjust to the loss of the fuel allowance in April when the fuel season ends. Those difficulties would be made worse by increasing the fuel allowance instead of giving a larger all year round increase.
I have opted, as was recommended in the review, for giving substantial all year round increases in this year's budget. All social welfare primary payments increase by either £8 or £10 per week. The qualified adult allowance will also be increased by amounts ranging from £7 to £15. This means that in 2001, a pensioner couple, where both are over pension age, will get a combined increase of between £20 and £25 per week. Furthermore, these increases will come into effect from April 2001, a month earlier than this year.
Is the Minister ashamed that the level of the fuel allowance introduced in 1985 has remained unchanged in the 15 intervening years? The Minister is good at telling us all the time how he has improved and changed things and how he has brought forward extra money. In this case, there has been no movement in 15 years. The consumer price index has changed by 52% in that time so the very minimum it should be is £7.50 and even if one takes the fuel cost increase, it should bring it to £6.20.
How can the Minister stand over a Department that fails to keep track of the consumer price index and the fuel price index? All the Minister is doing is marking time. In fact, the allowance was reduced in 1988 from 30 weeks to 26 weeks. Does the Minister agree that there is a decided need to change this fuel allowance and to increase it? Perhaps the best way to do it might be to give it all year round.
I would have thought the Deputy might have welcomed the fact we increased the period to 29 weeks—
Three weeks is miserly.
Mr. D. Ahern: —which again is more than the Deputy's party ever did. I looked at the issue of raising the fuel allowance this year.
The Minister was not allowed.
He was shot down.
I looked at this issue but I took the strong advice from my officials and from the expenditure review published about a year ago, or maybe more, which said that rather than increase the fuel allowance, it would be better to increase the general increases which is what I did. I put the extra money we had into the general increases because people get those for 52 weeks of the year instead of 26 or 29 weeks.
The other issue, which is very important, is that the more one increases the fuel allowance, the more the sudden death there is for a family in April. I do not have to tell Deputies that there are families who use this as a payment and do not use it just for fuel. In effect, the more one increases that payment, the more they lose and the greater the sudden death come April. I would be worried about families which rely totally on social welfare as there would be a severe loss in their income come April.
I would be inclined to agree with the Deputy and would far rather put the money into the general increases and give them for 52 weeks of the year. I agree with the Deputy in that if I had a chance, I would like to merge the fuel allowance into the overall payment and, in effect, do away with the fuel allowance so that it would be paid for 52 weeks of the year.
I think the Minister is actually conceding the point I made that people who have been on the fuel allowance for the last 15 years at £5 per week are sick of getting it at that level. He is agreeing that it should be extended to the whole year. What he is also admitting is that he did not have the clout at Cabinet to get that increase. We all know he brought forward a package of compensation for those on social welfare but, unfortunately, it was turned down. One of the items in it would have been an increase in the fuel allowance for 52 weeks – that is what he is saying – but all he got was a three week increase. That is not very good. It is a dismal failure on the Minister's part.
This is the largest social welfare package in the history of the State.
