Question:
3 Mr. Hayes asked the Minister for Social, Community and Family Affairs his plans to benchmark all social welfare payments; and if he will make a statement on the matter. [15343/01]
Ceisteanna–Questions. Priority Questions. - Social Welfare Payments.
The issues associated with the development of a benchmark and indexation methodology for social welfare payments are being examined and considered by the social welfare benchmarking and indexation group – a working group established under the terms of the Programme for Prosperity and Fairness. The group comprises representatives from each of the pillars of social partnership, as well as representatives of relevant Departments, with an independent chairperson.
Specifically, the group's terms of reference require it to: first, examine the issues involved in developing a benchmark for adequacy of adult and child social welfare payments, including the implications of adopting a specific approach to the ongoing uprating or indexation of payments, having regard to their long-term economic, budgetary, PRSI contribution, distributive and incentive implications, in the light of trends in economic, demographic and labour market patterns; and, second, to examine the issue of relative income poverty.
The group has been meeting fortnightly since December 2000. It recently produced an interim report, copies of which I have placed in the Oireachtas Library. This interim report has also been distributed to representatives of the pillars of the social partnership and can be found on my Department's website. It highlights the key issues which the group is addressing in seeking to achieve a consensus position on the range of issues involved in developing a benchmark for adequacy of welfare payments, and the question of indexation or uprating of these payments.
The group is continuing with its work and intends to complete it by the end of July 2001. It will produce its final report shortly thereafter. Given that it was specifically established under the terms of the Programme for Prosperity and Fairness to examine the issues involved, the Deputy will appreciate that it would be inappropriate for me to seek to pre-empt its findings at this stage. However, careful consideration and account will be taken of the conclusions reached by the group once its work has been completed, both in the context of the 2002 budget and the wider context of the development of welfare policy generally.
Mr. Hayes
I thank the Minister for his reply. Does he accept that the new social welfare rises, effective from April this year, were predicated on a forecast inflation rate of just over 4%? We are already seeing cumulative inflation over the first and second quarters of this year running considerably ahead of this. We are also seeing food price inflation of nearly 8%, which has a most detrimental effect on low income families. Does the Minister agree that the benchmark he has set this year is now regarded as completely inadequate for thousands of low-income families? Will he give a commitment to the House that, between now and December, he will be prepared to reconsider the uprating of payments this year, given the continuous spiral of inflation which the Government has caused as a result of its inflationary policy? Will he consider this proposal, given the particular dilemma faced by many low-income families?
The Deputy referred to low-income families. From this month onwards the Government will increase child benefit for families by record amounts, something never envisaged in recent years.
Mr. Hayes
I am aware of that.
Four years ago a £1 increase was given for the first two children, whereas the Government is giving £25, and £30 for subsequent children.
So it should, with the money available to it.
(Carlow-Kilkenny): The Minister should compare like with like.
Mr. Hayes
The Minister should answer the question.
Do not talk to me, therefore, about assisting families because the Government has done much more to assist them in this context. As regards the procedure adopted, from year to year an estimate of inflation is given. If it turns out to be more than the estimated figure, account has to be taken of this in the following budget. I remind the Deputy that it works both ways.
Mr. Hayes
The Minister will not change it. He will not upgrade them.
Two years ago the expected rate of inflation was 2% and the outturn was 1.6%. The following year it was higher than the estimate, of which obviously account was taken in the last budget. Similarly, if inflation is higher than the estimated figure for this year, account will be taken of this in the next budget.
Mr. Hayes
The Minister is absolutely clear about this matter. He believes that poor people should wait 12 months to receive compensation in respect of inflation payments. He admitted this on Committee Stage. Does he accept that food price inflation is now running at 8%, that a substantial amount of the payments to those on low incomes is taken up purchasing food and the small increases he gave, effective from 1 April, have been negated as a result of the current spiral in inflation? Will he give a commitment to the House that he will review the position as we progress through the summer into the autumn? Despite the Minister thinking there is great cheer as a result of the small increases he has given, the reality is that there is little cheer among people on low incomes in our economy. Will the Minister define in one sentence what constitutes income adequacy?
The increases given by the Government are way in excess of anything given by previous Governments.
(Carlow-Kilkenny): Here we go again.
Mr. Hayes
Is inflation not a problem? We kept inflation down.
In the coming month a family with three children will receive an increase of £80 in its social welfare payment and we also have given a commitment that in the forthcoming budget there will be a similar increase for these families.
Mr. Hayes
What about child care costs?
The working group was set up to examine the adequacy of social welfare payments.
Mr. Hayes
What is the Minister's view? Does he have a view?
Yes, but given the time constraints of Question Time I am not in a position to go into—
The Deputy should not intervene or interrupt without the Chair's approval. The Deputy should resume his seat while the Minister is in possession.
Mr. Hayes
I am doing exactly the same as the Minister. Will you also enforce that ruling on him?
Yes, only the person who has the authority of the Chair—
Mr. Hayes
I am glad you have established that precedent but it is four years too late.
One must take into account all the special increases that were given. A couple in receipt of the old age pension were given an increase of between £20 and £25 a week on 1 April. That was the largest ever increase.
Mr. Hayes
However, only £8 a week was given to the poor.
We must move on to Question No. 4.
I wish I had more time to put our record on record.
Mr. Hayes
The Minister would be exposed.
Frances Fitzgerald
Question:4 Ms Fitzgerald asked the Minister for Social, Community and Family Affairs the progress he has made on individualising social welfare payments; his policy in this regard; and if he will make a statement on the matter. [14599/01]
Individualisation already exists to a certain extent within the social welfare system. In the social insurance system, those who meet the contribution conditions receive a payment in their own right and also in the old age non-contributory pension arrangements whereby in the case of a couple, each over age 66, there is a joint means test and payment is then on an individual basis.
The report of the working group examining the treatment of married, cohabiting and one-parent families under the tax and social welfare codes published in August 1999, considered that individualisation of the system could best be achieved through the expansion of social insurance to enable individuals to establish their own direct rights and social welfare entitlements. Much has already been achieved in this area in recent years with coverage being extended to the self-employed in 1988, to part-time workers in 1991 and new civil-public servants in 1995.
We now have a very comprehensive system with almost all workers covered by social insurance and able to establish their individual entitlements. In addition, measures were introduced in 1994 in the form of the homemaker's scheme to protect the insurance records of those who take time out from the paid work force for caring duties. These latter provisions are being reviewed in the context of the phase 2 review of the qualifying conditions for old age (contributory) and retirement pensions which is under way.
One of the objectives of the Programme for Prosperity and Fairness is to develop proposals to progress the individualisation of social welfare payments in the context of the continuation of joint assessment of means. It also envisages the wider implementation of administrative individualisation within the system. This could, for instance, involve paying the qualified adult allowance directly to the spouse or partner of a social welfare recipient. This is available in certain circumstances, for instance, where the recipient is not maintaining his or her partner or spouse. The working group examining the treatment of married, cohabiting and one-parent families under the tax and social welfare codes suggested that this should be available on a more general basis.
A PPF working group on the implementation of administrative individualisation within the social welfare system was set up last October and is considering the issues surrounding this proposal. The Deputy will be aware that in budget 2001 I gave a commitment to increase the level of the qualified adult allowance for people over 66 years of age to the maximum rate of the old age (non-contributory) pension. As a first step towards this objective I provided an increase of £15 per week in the full qualified adult rate. Proposals relating to administrative individualisation will enhance this initiative and in the circumstances I am anxious to receive the report of the PPF group as soon as possible.
I thank the Minister for his reply. I refer to the ongoing issues regarding women's access to the live register. Why has the PPF working group, which is examining administrative individualisation in social welfare, not met since before Christmas? Women do not receive the full rate of unemployment payments and this means the number of women on the live register is understated. I am not sure whether the Minister is aware many women are having difficulty accessing FÁS courses, even though they should be able to, because they are not on the live register. Women who are taking up VTOS courses, for example, are being denied payment because they are not on the live register. Will the Minister outline his plans to allow women full access to signing on the live register so that they, in turn, can be made aware of the range of job, education and retraining opportunities that are available? There is still a barrier to women obtaining such infor mation because they cannot access the live register as freely as they should be able to.
As I have said previously on Question Time individualisation was examined during the PPF negotiations and a working group was established. I do not know how often it has met but that can be checked. The group is examining administrative individualisation which will not progress the issue as much as I would like. That is one of the reasons generally old age pensioners over 66, particularly women, are disadvantaged because their records discontinued when they stopped work and stayed in the home. That is why I increased the QAA payment in the last budget and will do so again in the forthcoming budget. The number of younger women participating in the work force is higher than the EU average and, therefore, ultimately all of them will be able to access their social welfare entitlements.
The Deputy also referred to access to the live register. A report was jointly launched by the Tánaiste and me regarding women's access to training and FÁS courses, etc. approximately a year ago. It contained approximately 42 recommendations. All those for which I was responsible have been implemented. The vast majority of recommendations came under the aegis of the Tánaiste. The Deputy should table a parliamentary question to her in this regard.