Social Welfare (Miscellaneous Provisions) Bill 2004: Second Stage.

Minister for Social and Family Affairs (Mary Coughlan)

I move: "That the Bill be now read a Second Time."

I am pleased to bring the Bill before the House. As has been the case in previous years, the Bill is the second of two Bills to complete the implementation of the €630 million social welfare package of budget 2004, which brings the projected level of social welfare expenditure in 2004 to more than €11.26 billion — a 7% increase on the 2003 allocation.

A separate Bill was enacted in December last to give effect to the increases in weekly social welfare payments from the beginning of January. This Bill implements a number of key improvements in social welfare schemes, including increases in child benefit, improvements in the carer's respite care grant, increases in death benefit pension payable to recipients aged 80 years and over and improvements in the payment after death arrangements, in addition to a range of other measures.

I am proud that the legislation is another step in the Government's continuing commitment to fostering an inclusive society. Tangible evidence of delivering on this commitment includes a massive increase in spending on social welfare to more than €11.26 billion in 2004, almost double that available in 1997; substantial increases in child benefit, resulting in the rates of payment being more than three times that payable in 1997; increases in social welfare pensions with old age contributory pensioners receiving €167.30 per week compared to the equivalent of €99 in 1997; and an average increase, over and above the CPI, across all social welfare schemes of 3.43%, since 1997.

The Bill also provides for amendments to the Pensions Act 1990. In particular, I am providing for an amendment to Part VII of that Act which deals with equal treatment between men and women in occupational pension schemes. The amendments to this section are intended to meet this State's obligation to implement community initiatives provided for under Council Directives 2000/43/EC and 2000/78/EC adopted under Article 13 of the EC treaty, in so far as they relate to occupational pensions. The Equality Bill, due to come before this House shortly, provides for the transposition of the directives with regard to other employment matters.

Council Directive 2000/43/EC, the race directive, sets out the framework for combating discrimination on the grounds of racial or ethnic origin in both employment and non-employment areas. Council Directive 2000/78/EC sets out the framework for combating discrimination associated with employment and occupation on the grounds of religion or belief, disability, age and sexual orientation.

In addition to these six grounds, and in line with a commitment in the social partnership agreement, Sustaining Progress, it is also proposed to extend Part VII of the Pensions Act to include the marital and family status and the Traveller community grounds. Taken together with the provisions of the Employment Equality Act 1998 and the Equal Status Act 2000 which prohibit discrimination in these areas in employment and access to goods and services, the amendment to Part VII ensures a coherent and consistent approach to equality across our legislation.

I now wish to outline the provisions contained in this Bill. As Members will already have considered it in detail, I will focus on a number of key provisions.

Child benefit is a universal payment made directly to families and, as such, it is the most efficient and effective way in which the Government can channel support to children. The rate for the first two children is being increased by €6.00 per month, and for the third and subsequent child by €8.00 per month. These increases, provided under section 3 of the Bill, will bring the monthly rates to €131.60 and €165.30, respectively. From April next, a family with three children will receive €428.50 compared to €408.50 at present — an increase of €20 per month.

These increases will mean that, since 2000, child benefit rates will have risen by €77.64 per month for each of the first two children and by €94.20 per month for the third and subsequent child. This measure continues the strategy of reforming income support for children by making child income support more neutral in the context of parental employment and reducing employment disincentives. An estimated 524,000 families with over 1 million children will benefit from these increases in 2004.

The Government, over successive budgets, has introduced measures to develop the services and supports which provide practical assistance to this country's carers. An Agreed Programme for Government included commitments to expand the income limits used to determine entitlement to carer's allowance and to increase the value of the carer's respite care grant. Measures aimed at addressing these commitments were announced in budget 2004 and, accordingly, the amount of income disregarded in the means test will be increased to €250 in the case of a single person and to €500 in the case of a couple. These improvements will be provided for in regulations which I intend to publish in April. In addition, in section 4 of the Bill, the Government is continuing to honour its commitment to supporting the valuable work undertaken by carers by increasing the annual respite care grant by €100 from €735 to €835, with carers looking after more than one person receiving a grant of €1,670 — an increase of €200. These increases take effect from June next. This measure, which is highly valued by carers, will benefit some 24,300 carers and will cost an additional €2.48 million per annum.

The six weeks' payment after death arrangements were designed to cushion and support the financial transition for the surviving spouse or partner following the death of a recipient of certain social welfare benefits. At present, payment of the existing rate of benefit or allowance to the spouse or partner of the deceased continues for the period of six weeks immediately following the death. While these arrangements are applicable to the majority of social welfare schemes, there are a small number of exceptions and in these circumstances the surviving spouse or partner may not be in a position to benefit from the scheme. I am pleased to say that, as the final part of my ongoing efforts to reform this scheme, all such anomalies will be removed from the governing legislation. Accordingly, section 5 of the Bill provides that the six weeks' payment after death will be extended to those benefits and allowances which would heretofore have been excluded from this payment arrangement. This provision will come into effect in June 2004 and completes the restructuring of the scheme, initiated in 2000.

The Bill, in section 6, provides for an increase in the death benefit pension for recipients aged 80 years and over, to €173.70 per week. This increase harmonises the rates of death benefit pension, widow's contributory pension and widower's contributory pension for pensioners aged over 80 years, with effect from May 2004.

Section 7 of the Bill provides for an increase in the minimum amount of unemployment assistance payable where the claimant's means are derived from parental income. The payment is increased by €8.20 per week, bringing the minimum amount payable from €31.80 to €40.00, provided that the claimant establishes an underlying entitlement to unemployment assistance. This measure will come into operation in April 2004.

My colleague, the Minister for Justice, Equality and Law Reform established a working group to review and make recommendations on improving maternity protection legislation. On foot of the group's deliberations, the Maternity Protection (Amendment) Bill 2003 was published, and it provides, inter alia, for a range of improvements in the maternity leave arrangements. It is my intention that these improvements should be reflected in the social welfare code. Accordingly, this Bill provides for a number of amendments to the maternity benefit scheme, which is operated by my Department, consequent on the amendments to the maternity leave arrangements. The proposed new leave arrangements entail a reduction from four weeks to two weeks in the minimum period of maternity leave which must be availed of prior to the expected date of birth of the child. As the maternity benefit payments are scheduled to coincide with the maternity leave timeframe, section 8 of this Bill provides that a similarly amended arrangement will apply to maternity benefit payments. This section also provides the power to make regulations to permit the interruption of the normally continuous period of payment of maternity benefit where an infant is hospitalised. I propose that these measures will be brought into force by commencement order, timed to coincide with the implementation of the amendments to maternity leave arrangements.

The maximum duration of adoptive leave is linked to the maximum duration of maternity leave, exclusive of the period prior to the birth of the child. Arising from the proposal to reduce the minimum period of maternity leave required to be taken prior to the expected date of birth from the current four weeks to two weeks, the maximum duration of adoptive leave will be increased by to weeks, thereby rising from 14 weeks to 16 weeks. Section 9 of this Bill provides the legislative basis for the consequential increase in the duration of adoptive benefit, the income support payment made by my Department to qualifying adoptive parents. This amendment will also be brought into force by way of commencement order, timed to coincide with the implementation of the amendments in the adoptive leave arrangements.

Entitlement to short-term, insurance-based social welfare schemes such as unemployment or disability benefit is determined on the basis of social insurance contributions paid during the course of the contribution year. Prior to the alignment of the income tax and calendar years with effect from January 2002, the contribution year did not necessarily coincide with the calendar year. As a result, special arrangements were put in place to secure the continuity of entitlement to short-term benefits following the alignment of the tax and calendar years. Section 10 of this Bill provides for the continued application of these arrangements for the purposes of the social insurance schemes.

In An Agreed Programme for Government we promised to modernise public services to make them more relevant to the citizen. We gave a commitment to improve access to public services by providing them electronically. Progressing the use of the personal public service number as a public service identifier is a key element of our e-Government strategy. In that context, section 11 of the Bill provides for four new agencies to be added to the list of specified bodies which are authorised by legislation to use the PPS number in the course of their customer business transactions. The new agencies are the Companies Registration Office, Enterprise Ireland, the Private Residential Tenancies Board and Coillte Teoranta.

The Pensions Act 1990 requires employers who do not provide a pension scheme or retirement benefits for employees to facilitate access to at least one standard personal retirement savings account for such employees. Section 12 of the Bill provides that, where a social welfare inspector is conducting an investigation in relation to PRSI, the inspector shall also investigate compliance with the requirement to facilitate employee access to a PRSA, in accordance with the requirements of section 121(1)(a) of the Pensions Act 1990. The inspector will, where necessary, report issues involving non-compliance to the Pensions Board.

Budget 2003 proposed that PRSI should be applied to benefits-in-kind granted to employees with effect from 1 January 2004. This provision is important in enhancing the overall equity as well as improving the coherence between the PAYE and PRSI systems. Section 13 of the Bill provides for technical amendments to the definitions of PRSI contained in social welfare legislation.

Sections 14 and 15 of the Bill provide for the charging of PRSI in cases where an employer has reached an agreed settlement with the Revenue Commissioners on benefits-in-kind which are irregular in nature and minor in monetary terms. Contributions paid in accordance with this provision will not be reckonable for the purposes of establishing entitlement to benefits under the social welfare code, as they will, in general, reflect an underpayment of PRSI for which a contribution has already been recorded.

Section 16 provides for a minor technical amendment consequent on the changes of definition of PRSI contained in section 13 which I have already outlined

Sections 17 and 18 mirror the provisions regarding the assessment of cases where an employer has reached an agreed settlement with the Revenue Commissioners on benefits-in-kind which are irregular in nature and minor in monetary terms of non-cash remuneration. Accordingly, the sections in question provide for amendments to the Health Contributions Act and the National Training Fund Act to facilitate the application of health contributions and training levies to the settlement figure agreed.

Section 19 of the Bill provides for a number of amendments to the Pensions Act. As I have already stated, Part VII of the Pensions Act 1990 is being extended to apply to eight other grounds — age, religion, sexual orientation, disability, race, marital status, family status and the Traveller community ground. The extension of the equal treatment provisions is required under two EU directives and also on foot of a commitment in Sustaining Progress.

Where feasible and appropriate, section 19 implements the directives in a way which applies their provisions consistently as between occupational pensions and other conditions of employment. Nonetheless, occupational pensions are different from other conditions of employment and, therefore, notwithstanding the prohibition on discrimination based on age, sexual orientation, marital and family status, certain practices will continue to be permitted, for example, occupational pension schemes will continue to be allowed to set length of service or age for admission to the scheme or for entitlement to benefits, for example, normal retirement age; use age in actuarial calculations; set age or service-based contributions rates in defined contribution schemes, for example, an employer may pay a contribution of 3% of salary between ages 20 and 30, 5% over that age, the same will apply in relation to accelerated accrual based on service or age in defined benefit schemes; pay survivors benefits to the legal spouse only, however, where a scheme pays to partners of the opposite sex, they must also pay in respect of partners of the same sex; and pay enhanced benefits to persons retiring early on grounds of disability.

The practice of allowing schemes to pay to the legal spouse only will be reviewed in the context of the outcome of the review of this issue in public sector schemes, which was announced by the Minister for Finance, Deputy McCreevy, at budget time in the context of the report of the Commission on Public Service Pensions.

As I mentioned earlier, I believe it is important to ensure a coherent and consistent approach to equality both in our legislation and also in the way our legislation is administered and enforced. For this reason I have provided in the Bill that complaints that a pension scheme breaches the principle of equal pension treatment will be dealt with by the Equality Tribunal — the Office of the Director of Equality Investigations — under the same procedures and machinery as are used in employment matters. This will mean there is a seamless approach to complaints no matter what area of employment those complaints relate to. However, pensions can be complex and require specialised knowledge and, for this reason, I have provided that the Pensions Board will provide technical assistance, as required.

With regard to redress, again pensions are different in that what we do today affects our future entitlements rather than current or historical ones. Therefore, I have provided in this Bill that where a rule of a scheme is found to be in breach of the principle, it will be rendered null and void and the more favourable provisions must be backdated to December 2003 or July 2003 — the dates from which the relevant directives apply.

With regard to time limits, I believe it is not appropriate to have any time limit for the bringing of a claim while a person is still in the employment to which the claim relates. Therefore, the only time limit which I have introduced is six months from the date that employment ceases. This is consistent with other provisions of domestic law which apply to pensions and also with European Court of Justice law.

I am also providing in section 20 for a number of other amendments to the Pensions Act, which are mainly technical in nature and some of which are consequential on the equal treatment provisions.

At this point I would like to inform the House that it is my intention to bring forward amendments to the Pensions Act on Committee Stage to clarify the jurisdiction of the Pensions Ombudsman in relation to members of the North-South bodies pension scheme and to make a number of minor technical amendments, on the advice of the Parliamentary Counsel, to the existing section 19 of the Bill.

Members will be aware of concerns about access to the Irish labour market and the social welfare system following accession on 1 May. Ireland is in favour of enlargement of the European Union. We are champions of enlargement, as we have experienced at first hand the opportunities accession to a greater Europe have presented to our own country. I have no doubt that a similar opportunity will present itself to the ten accession countries, and equally we too will grow economically and socially as the EU horizon stretches further eastward.

After 1 May, citizens of the new 25 state European Union will be free to travel anywhere in that Union. Workers will be free to travel to any other State to improve their own social condition, to earn a wage and to contribute to their new country of residence. Ireland is a growth economy, and there is a need for workers, and those new workers are welcome to Ireland.

This Government gave a commitment that EU citizens who want to come and work here from 1 May can do so and we will honour that commitment. We have a strong economy and we will welcome people who want to come here to work. Last year Irish businesses depended on 47,000 work permits to be issued to non-nationals to help them meet their labour supply requirements. The Department of Enterprise, Trade and Employment estimates that after 1 May this year, as much as 70% to 80% of that requirement will be met by workers from the accession countries.

I have said before that I will not allow our social welfare system to become overburdened and I will be taking steps to ensure that the system is protected. Up until this week, both Ireland and Britain were alone in the EU in not restricting incomers from the ten new member states. Britain has now put in place a series of measures, which will restrict access, including a new workers' registration scheme and new conditions on qualification for social welfare payments. Due to our common travel area with Britain it is now important that we put in place some conditions. I have a duty of care to both the recipients of social welfare payments and those who fund such payments, the taxpayer. Consequently, I will be proposing changes to the social welfare code which will be no less robust than those introduced in Britain. These measures will be sensible, considered and reasonable. I advise the House that I will bring forward amendments to this Bill, on Committee Stage, to introduce these measures.

This Bill builds on the progress made in the social inclusion area by this Government. It is based on objectives contained in the programme for Government and the commitments made in the social partnership document Sustaining Progress, and reflects the principles of the revised national anti-poverty strategy.

I commend the Bill to the House and look forward to a constructive debate.

Mr. S. Ryan

As always.

Mr. Ring

With the permission of the House, I wish to share my time with Deputy Paul McGrath.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. Ring

The Taoiseach and the Minister for Foreign Affairs, Deputy Cowen, were in Europe during the past number of years telling the people in the accession countries there would be no restrictions of any type, whether work or social welfare, once they joined the Union. Now it is different. All the countries in the Union, with the exception of Britain and Ireland, had already put up barriers. Last week Britain introduced measures to ensure its social welfare system would not be drained and now we have to follow suit.

The Minister is correct in saying that we have a duty to ensure we protect the less well-off in society and that scare resources are distributed equally to those most in need. The Government has decided to bring forward an amendment on Committee Stage to deal with the problem we will face. At a meeting of the Committee on Social and Family Affairs last year, officials of the Department of Justice, Equality and Law Reform and the Department of Social and Family Affairs could not see any problems. Deputy Penrose and I pointed out all the difficulties they would face, but we were told no restrictions or barriers would be put in place to allow people to come to this country freely. That has not happened, nor will it.

We must protect the limited social welfare resources we have. As the Minister said, we welcome anybody coming here because the workforce requires them. Anybody who comes here should be protected. However, there is a danger that there are others who will want to come here to use our generous social welfare system. It must be protected. My point is that this is another broken promise. The ten accession countries were promised there would be no barriers to entry to Ireland. In this respect, the Government has acted no differently than it has acted generally since taking office.

Every Member has spoken about the promises on child benefit which the Government made in the context of last year's Social Welfare Bill. Every person and voluntary organisation dealing with poverty was appalled that the Government failed to honour its commitment. A clear commitment was given by the Minister for Finance, Deputy McCreevy, in the 2001 budget but the promise was broken and the Government is behind schedule.

I hope that, when the Minister for Social and Family Affairs and her officials sit down with the Minister for Finance, she succeeds in having honoured the commitment the Government gave to the mothers of this country. The commitment was given by the Minister for Finance from the very seat the Minister for Social and Family Affairs sits on today. That the promise was broken will not be forgotten by the people until it is honoured. The Minister has an opportunity in the coming year to ensure that what was promised in 2001 is delivered. It was not honoured in the previous or current budgets.

I do not wish to be negative. As the Minister knows, I am not a negative person. However, I wish to remind her that 2004 is the year of the family and that the international day of the family will fall on 15 May. In that context, I state my disappointment that the Government failed to honour its commitment on child benefit, although there are other anomalies in the social welfare system. For the ninth year in a row, there is no increase in child benefit. Every report and agency has acknowledged over the years that money given in child benefit is spent by parents on children. It is money well spent. The Minister had an opportunity this year to increase the payment.

Deputy Paul McGrath has raised on many occasions an issue which also upsets me. There are three categories of payment for dependants. As a mother, the Minister will know that, no matter what benefits one receives, every child should be treated equally. Every child represents the same cost and I ask the Minister and her Department to bring the three categories together once and for all. There were more than 20 categories at one time and that has been reduced. It would not matter if there were 30 categories; they should still be made one. Every child in this State should be given the same treatment.

Mr. P. McGrath

The Minister is not listening. The Government does not listen or deliver.

Mary Coughlan

We assimilate a great deal. Some of it is not easy to listen to.

Mr. Ring

I compliment Deputy Penrose, who is a member of the Committee on Social and Family Affairs, on the excellent report on carers. There is no doubt that it contains fine recommendations which I hope the Department will adopt over the next number of years. There are more than 170,000 carers in Ireland of whom 21,000 are acknowledged by the State. Of these, 14,000 receive carer's allowance of one form or another while the rest receive no recognition for the work they do. Even if they were not in receipt of the carer's allowance, respite grants would be a way to help them. All carers should receive the one-off payment respite grant and there should be some recognition of the service they provide and the job they do for the State. There has been wonderful interest in the report of the committee. The Department informs me that copies are sent out every day.

The Minister may remember 19 January, the day the 16 regulations were signed into law. I remind her that, in the budget in early December, ESB charges were increased and 5% was added to road tax. Every charge in this State has increased since then and whatever increases people on social welfare received were wiped out by inflation. The worst problem was the implementation of the 16 cutbacks. The back to education allowance has, in effect, been abolished. It was the case that one could qualify for the allowance if one had been unemployed for six months, but now one must have been unemployed for 15 months.

Mary Coughlan

On the question of adoptive benefit I am pleased to note the changes. That is a matter I raised many years ago before the Minister came to office. I am pleased that people who adopt children have almost the same rights as biological parents. However, they should have the same benefits, the same rights and the same time off. I welcome that move as a positive step by the Government.

I shall speak about inspection powers for pensions on Committee Stage. I welcome the changes with regard to pensions although the Minister was forced by the EU to make them.

On the issue of the personal public service number, I hope it will be used positively and will not be given out willy nilly to Departments or people who want it. It is private information for the people themselves. I hope it is used in a respectful way and that it is not used to turn us into a police state.

We shall discuss a number of the social welfare payments on Committee Stage. We have raised all the issues in the last Social Welfare Act. The three or four different items, the respite grant, the payment after death, the death benefit, and the changes to the pension, will be discussed on Committee Stage.

I hope when the Minister sits down with her departmental colleagues she will be a stronger Minister and that she has learned from the mistakes of last year. All the agencies have pointed out to the Minister, to me and to every Opposition spokesperson what is happening in regard to deprived people, particularly children. The Minister and I have a responsibility to ensure the weakest members of society are protected. The rich are getting richer, the poor are getting poorer, and the middle class are getting squeezed. The rich will always be protected by Fianna Fáil and the Progressive Democrats.

Mr. P. McGrath

I thank my colleague, Deputy Ring, for sharing his time with me. I welcome the opportunity to address the House on the Social Welfare Bill. On the issue of pensions and qualifying for contributory pensions I shall give graphic details of what is involved.

Two families living next door to each other in Mullingar — Deputy Penrose is probably aware of the problem — worked in England for some time and both returned home. One man is much younger than the other. One of the men came home and worked for a few months and went on FÁS schemes, signed on, came to pension age, retired and received the full contributory pension.He had not worked in Ireland prior to going to England and is also getting a British pension as well as a contributory old age pension at the full rate in Ireland.

At the minute, the fund is about €1.4 billion in surplus, and it is outrageous that the Minister would impose a cut on those on unemployment benefit from 15 months to 12. It is mean, ill thought-out and takes the rug from under the insurance scheme. The point of an insurance scheme is that one pays in on the basis of what one will get out. In this case, people are paying in but the Minister has moved the goal posts and has taken away some of what they were to get out of the scheme. She should not do this because it is unfair.

The Government deceived the public by stating two years ago there would be a certain increase in child benefit. Last year, the Minister gave an €8 increase and this year €6. The Minister has still not fulfilled the commitment given by her colleagues in regard to child benefit, nor taken into account the last two years when there should also have been rises. How can the Minister justify telling the public a particular payment will be made, and then changing her mind? Is it any wonder there is a distrust of politicians or of Ministers, when Ministers tell this House they will deliver and then fail to do so? How can the Minister stand over this while, at the same time, the Government spends money on all sorts of peripheral matters, not to mention the spin doctors it employs. The Government is prepared to spend money time and again in such a fashion, yet when it comes to solid commitments which were given in this House, it reneges on them.

Mr. Penrose

I am glad to have an opportunity to contribute on the Bill. It must be set against the backdrop of the "savage 16" cuts, which we have a duty to oppose, as representatives of the people, in particular the vulnerable who are hit by the ferocious, savage, mean-spirited and niggardly cuts, and against the fact that €56 million, which only represented one tenth of the current budget surplus at the end of the year, could have been taken in and got rid of.

I will refer later to the number of meetings the Minister's officials had with officials from the Department of Finance from June to November. There was a plethora of meetings, although she only had one meeting with the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, who has responsibility for providing houses for those who had their rent supplement taken away at one fell swoop on 1 January.

The Minister referred to social welfare code restrictions in the context of the accession countries. We do not want to get carried away in a hysterical overreaction to supposed welfare tourists. We must be careful as we do not want to get carried away in the maelstrom of British reaction to this. We must be balanced and whatever measures we take must be proportionate and reasonable, as the Minister indicated. The Labour Party will not react to this until we see the proposals.

Out of respect to the House, we should have the proposed amendments by Friday, as we will take Committee Stage of the Bill on Tuesday. This is not a threat but, speaking on behalf of the committee members, we will not take the Bill on Tuesday unless we have those amendments by Friday so that we can give them due consideration over the weekend. We may also want to table our own amendments.

In that context I want to ensure we are not hauled before the European Court of Justice because of measures we introduce which may be perceived as an infringement of treaty law. That is a fair response.

I welcome the increase in child benefit although, as colleagues said, it is well behind the solemn commitment which was given. Statements in the House cannot just be for the gallery, and this commitment was one of the false promises on which the Government was re-elected. Distrust and cynicism are being generated by the failure to honour these commitments. If commitments cannot be honoured because of an immediate economic downturn which undermines the ability to do so, that is fair enough, but that was not the case. The country was booming and blooming and there was no bust.

Mr. P. McGrath

There was the social insurance fund.

Mr. Penrose

People were given commitments on child benefit and these are referred to by many at Labour Party meetings in Westmeath and elsewhere. Despite our phenomenal economic growth in the past decade, many families still live in poverty, as the Minister knows. Generous child benefits are the best way out of that poverty. Assisting such families while giving parents incentives to enter the labour force if opportunities arise, as Deputy McGrath said, is important. The Minister for Finance left the Minister for Social and Family Affairs with some egg on her face when it came to her ability to fulfil her commitments.

I welcome the extension of the period in which benefits are paid to a surviving spouse on the death of a person receiving benefits. I compliment the Minister on that. The death of a person receiving benefits often means economic hardship for the surviving partner, as Deputy Ring said. The income stops there and then, which may add further economic hardship to the grief those people obviously suffer. This provision will go some way towards alleviating that hardship.

I have always spoken on the subject of widows, although with our new love of equality I should include widowers. Couples in their thirties or forties, whether they are in urban or rural areas, can feel isolated if they have two or three children. They rely on their partners to get the children to school and so on but their right hand is effectively cut off by the death of the partner. I know the Minister is familiar with this. The loss of a husband, wife or partner in the prime of life is a huge problem. Although it is to be hoped that they have mortgage protection insurance, extending those social welfare payments for six, nine or 12 months would be a fundamental crutch to those people and would alleviate some of the hardship and isolation people feel when they are at their most vulnerable. I appeal particularly on behalf of widows and widowers aged 35 to 45, as often they have two or three children.

One of the most stressed and neglected groups in society are those who care for ill and disabled family members. They often make financial and social sacrifices to care for their relatives and the carer's allowance is still inadequate. It should be remembered that, without the efforts of carers, many people would have to be cared for in Government-funded care facilities at a cost of billions to the Exchequer. The Bill provides for an increase in the respite care grant to €835, which at most would buy a fortnight's care or respite in the cheapest private nursing home. Some of these homes charge €600 per week and I do not know where this will stop. While any respite is welcome, this provision is paltry and I hope the Minister sees fit to implement the recommendations on carers made by the Oireachtas committee I chair. I must go back to those recommendations, although I know the Minister is looking into setting up a committee to deal with them.

Our committee received approximately 70 submissions and presentations. We were impressed by the quality of submissions we received and were also moved by their contents. When working on our report, I as chairman was confirmed in my view that some of the best people in our country are involved in full-time care for people with long-term disabilities. I frequently hear concerns expressed that we are becoming a nation of selfish, self-centred materialists who care about nothing except our own increasing wealth and comfort. That claim is easily counteracted by reference to the number of people who give up their own comforts, ambitions and, in many cases, careers to devote themselves to caring for a relation or friend who needs full-time care.

While recognising the dedication and devotion of full-time carers, we must take some urgent initiatives to support them in their work. As we said in the preface to our report, although the situation for both carers and the disabled has improved in recent years, those families faced, perhaps unexpectedly, with the task of caring for a recently disabled family member still encounter a bewildering array of fragmented and inadequately publicised State services with many different types of rules, regulations and means tests. Our first recommendation was to abolish the means test. Approximately 90% of older people in Ireland have average incomes of €254 or less. Means testing is, perhaps, an appropriate income when there are widely varying incomes in a population with many rich people and a few poor people at whom resources can be targeted. The older age group to whom full-time caring applies, does nor conform to that description. Carers find the means test degrading, stressful and complicated. It would appear as such to the Minister if she found herself in the position of being a full-time carer, as would be the case for any of us who found ourselves in the position of having to become full-time carers of a relative or close friend. The problems associated with being a carer are ones with which we should easily identify. I urge people who have any doubts or misgivings about abolishing the means test for carers to examine the basic application procedures they would have to follow if they were suddenly thrown into the role of being a carer. The application forms are several pages long and different means tests are used for different services by the health boards and other agencies. Means tests are a cumbersome and high-cost procedure. Let us release the resources involved to benefit rather than burden carers.

The joint committee is also of the view that we should significantly shift caring resources towards home care and establish a home-based subvention system. We should seek, wherever possible, to maintain the disabled person in his or her own home. The support system currently in place has a built-in bias towards institutionalised care. This recommendation of the committee accords with the Government's view, as expressed in the health strategy documents, of the need to introduce an integrated care subvention scheme which maximises support for home care. The joint committee recognised that once one abolishes means testing and provides universal entitlement, one must have an effective and fair system in place to direct the resources towards those in greatest need of services and payments.

Other countries have established this system and we should benefit from and draw on their experience in implementing the committee's recommendation that a consistent and comprehensive system of needs assessment must be established in Ireland. Consistency, in this context, means that the various agencies, including the health boards, must operate such a system with a consistent set of criteria applied.

A further major recommendation of the joint committee is that while criteria and their application in regard to the needs system must be consistent, that does not mean the regulation of the provisions must be inflexible with a one-size-fits-all approach. A wide variety of circumstances applies to people with different types of disability. For example, families urgently need a variety of types of respite, both institutional and at home, and for varying time periods. The present inflexible regulations put enormous stress on carers. The administration of the regulations must be flexible and well-managed and the people administering the system must be trained accordingly. As the committee's report highlighted, greater flexibility is more a matter of attitude and the will to change, than of finance. However, the committee recommended a change in this area towards much greater flexibility.

We have got carers to work on the cheap and they feel strongly that we have failed to recognise their contribution. At a Labour Party meeting in Castlepollard, I was told that people still feel aggrieved at the failure to recognise their contribution by saving the State millions of euro. The abolition of the means test would give them that degree of recognition. It is only a small amount — €140 approximately — which would be essential to them and give the recognition to which they are entitled and feel due.

The provisions in regard to the rent supplement and the "savage 16" are miserly and insidious. For just €56 million the Minister has let the side down because she is only saving €2 million or €3 million here and there — scrapings from the rich man's table.

Mr. Ring

A day at the races.

Mr. Penrose

Some of them would spend that amount in a big bet at the races.

In regard to rent supplement, the Minister has put the cart before the horse with the promise of a strategy to provide measures to prevent homelessness, when the "savage 16" welfare cuts will have exactly the opposite effect. Prior to implementing the changes in the rent supplement scheme, she should have put those so-called strategies in place. Instead, she pushed ahead with no real thought or consideration for the effects of the measures. It makes no sense to introduce the measures without the backup which the Minister claims will prevent homelessness.

Local authorities are acting in an emergency fashion. Community welfare officers ask the local authorities if a particular person is on the list and, if he or she is not, they will ask that he or she be assessed. It is awful pressure. All these bodies should have been brought together in joined-up Government to ensure the Departments of Health and Children, and the Environment, Heritage and Local Government, the local authorities and the Minister's own Department were working together. Instead, these provisions are foisted on people through decisions made on an ad hoc basis, which is the worst type of legislation.

By the end of 2002, the Minister's Department announced an increase in tenant contribution from €6 to €12 per week — an increase of 108% in two years — and froze the maximum rent ceilings. In November 2003, more changes to the system were announced in the Estimates without consultation. The requirement to be in accommodation for six months in order to be eligible for rent supplement is unrealistic, arbitrary and mean. With 25% of rent supplement recipients being in receipt of UA or UB and a further 25% on SWA payments, how can these individuals be expected to save for a deposit on a property on the basis of six months' rent in advance? Under the new changes, if one person in a couple works full time — 30 hours — both are ineligible for rent supplement. This is creating huge unemployment traps for individuals. If Government policy stresses that employment is the best route out of poverty, why is the Minister trapping people in the welfare system?

Let us consider the following case study. John and Mary are in receipt of UA and qualifying adult benefit and have no children. If Mary takes up a job for 29 hours per week, which pays a minimum rate of €7 per hour, the household income will be €254.65. However, if the job is for 30 hours, their weekly household income will be €88.65. That is based upon their losing the rent supplement — which is €178 in the ERHA area. This is the difference in going from working 29 hours per week to 30 hours per week.

This is a real case, it is not off the top of my head. At 29 hours, the wages are €203, the adjusted UA rate is €64.65, the household income is €267.65 and they qualify for rent supplement. The rent payable less the rent supplement is €13, therefore, the household income is €254.65. However, if Mary works for 30 hours per week, her wages will be €210, the adjusted rate of UA is €56.65 and the total household income is therefore €266.65. However, they do not qualify for the rent supplement and must pay the €178 rent in full. Their income is therefore reduced to €88.65. How can any Minister justify that? Those are facts.

If the Minister thinks I am making this up, I will give another example. A man with a dependent spouse and four children is offered a full-time job — 39 hours per week — paying €380 per week. His family is subsequently ineligible for rent supplement which results in his household income being less than €150 per week, which includes a FIS top-up. How can a family of this size survive on that amount of money? If the man's wages were below €370, he would be able to keep his secondary benefits, including rent supplement, as this is the income threshold for the retention of these benefits. However, that threshold is unrealistically low.

The Minister may tell me we are exaggerating but I have the examples worked out to a tee. If her officials want to contradict them, let them show me where I have erred and I will present this paper to them. I am not wrong. This is the result of the most niggardly, mean-spirited cuts ever implemented in the history of the State. I studied the history of where this all came from. Is it the position that the Minister's plan to severely cut rent allowance, which has the impact to which I have referred, was presented to the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, as a fait accompli the day before it was publicly announced in the Estimates? Yes or no?

Mary Coughlan

No. The Minister for the Environment, Heritage and Local Government was at the Cabinet table.

Mr. Penrose

Deputy Noel Ahern is the Minister of State with responsibility for housing. The Minister should start talking to the Department of the Environment, Heritage and Local Government and brief him.

Mary Coughlan

He is not a Cabinet Minister.

An Ceann Comhairle

Deputy Penrose without interruption.

Mr. Penrose

I invited that comment and I will give way to the Minister.

Is it correct that the Minister had two meetings and other contacts at senior official level with the Minister for Finance in the five months or so prior to introducing this savage cut? However, the Minister does not appear to have had any intensive or, of necessity, abrasive discussions with the Department of the Environment, Heritage and Local Government, in particular with the Minister of State, Deputy Noel Ahern.

The Estimate was introduced on 12 November. Did the Minister, Deputy Ahern, only find out about this on 11 November? It is his Department which must deal with the fall-out of this measure dealing with the provision of necessary shelter and accommodation for people who will be deprived of the rent supplement. A decision of this magnitude should surely have necessitated detailed discussions with the Department which is already under strain trying to meet the needs of an increasing number of homeless people and which will be expected to take up the slack in dealing with the far-reaching consequences if the rent supplement is discontinued.

I had a suspicion all along that the genesis and driving force behind the cut was the Department of Finance, and what I have discovered proves this is the case. The Minister, Deputy McCreevy, when Minister for Social Welfare in 1992, set out to break social welfare. The "dirty dozen" was his legacy to social welfare. What is happening now is a repetition of this and we are on the same track again. The Minister is a willing ally to what is happening. We must reverse the cuts because they will have an impact down the line. People have been telling me that they are already having an impact. Perhaps people think I am a bit of a fool, but I think they will have a serious impact. There are 50,000 already on the housing waiting list, which is growing. I understand we will save €10.5 million while approximately 4,000 people will be affected. It will be interesting to see how many people will be affected by the end of the year.

I want to deal with secondary benefits thresholds. The threshold for the retention of secondary benefits such as rent supplement, back-to-school clothing and footwear allowance and fuel allowance has remained at €317 since 1994. It has not kept pace with inflation, which has increased by more than 30% in the intervening period, or wages. It is totally outdated, causing unnecessary unemployment traps for people wishing to move from welfare to work. This is the essential issue. Welfare is just a support for people who find themselves in difficult circumstances. I understood the Minister's aim was to facilitate people who have an opportunity to better themselves by going from welfare to work. If this initiative is strangled by ensuring the secondary benefits threshold is maintained at a low level, we will be in trouble.

The €20 increase received by the job initiative participants from FÁS brings them above the threshold. The €10 increase for CE participants brings some workers, especially lone parents, above the €317 threshold. Both the job initiative and community employment schemes have proved to be valuable in assisting participants to enter or re-enter the labour market. However, now current and potential participants who benefit from these schemes are unlikely to participate because if they lose their secondary benefits they could find themselves living on €90 or €100 a week. Why has the Minister not addressed this issue? How can this be seen as making work pay? A number of groups have campaigned for a long time for this threshold to keep pace with inflation to ensure such poverty traps and unemployment traps will not arise.

My colleague, Deputy Ring, referred to the back-to-education allowance. Following the other changes made to the back-to-education allowance earlier in 2003, the changes arising from the Estimates now extend the qualifying period from six months to 15 months for third level options. This is another attack on unemployed people trying to break the poverty-unemployment cycle by returning to education. What is the rationale for keeping people on welfare longer and ultimately costing the State, instead of providing assistance to improve their employability chances that will then see them coming off welfare and contributing to the Exchequer? Are the policy initiatives emanating from the Minister's Department poverty-proofed? Is a cost benefit analysis carried out on every initiative undertaken by her Department? There must be a wider analysis of the benefits three to five years down the line when people emerge from third level institutions and play a positive role in the workforce by contributing to the local community, particularly rural communities which need all the vibrancy they can get. The back-to-education allowance affected approximately 1,200 people.

The Minister is saying that all the other cuts, including the crèche supplement, will be taken up by the health boards or someone else. Is anyone else taking up the slack? What is the policy of the Department of Justice, Equality and Law Reform in regard to the MABS cuts? This small amount of money helped people out of the jaws of moneylenders. People were able to set up a repayment system and improve their lot. These cuts will come back to haunt us at some stage.

Deputy McGrath referred to aggregation. The Minister will be more aware than anyone in the House of this issue — I am speaking to the converted. Will she ask the review group to examine the issue? In the late 1950s, 16 and 17 year olds got a job prior to getting a one-way ticket to leave the country. My uncles always told me that they got one great legacy, namely, a one-way ticket out of Ireland, and they are still living in the heart of London. Perhaps these young people should not have been working. At the time people were breaking stones or working in a pit. People were pleased to get any work. People were working in Bord na Mona, which was just being set up, or in the Board of Works. The stamps these people earned were recorded before they went to England.

Some of these people may have come back in the 1970s or 1980s after being working for 40 or 50 years. The timespan from 1956 or 1957 would amount to 47 or 48 years and these people would have just 17 or 18 stamps. Therefore, these people's contributory pension contributions are being reduced. On the other hand, someone who earned more stamps over a shorter period of 15 or 20 years would have a much better pension. I am aware of the cases in Mullingar outlined by Deputy McGrath. The person who went to England feels deeply aggrieved. These people worked very hard. They did not go out of choice, they went because they had to go.

As the population ages we constantly hear alarming references to the pensions time bomb and successive Governments have been making provision for the increasing numbers in the pensions age group over the next 20 years. The PRSA has been put forward as the main solution to the pension problem and every day we hear advertisements on the radio warning employers that they will be prosecuted if they do not provide access to PRSAs for their employees. Section 11 empowers social welfare inspectors to carry out inspections. I know from small employers who have been in contact with PRSA providers that these providers are not coming back to the small employers with the speed the Minister would like. I ask the Minister to contact the PRSA providers in this regard. Many shopkeepers and so on want to provide these pension schemes while many employees do not wish to take up the offer. PRSA providers should be more helpful to small employers who find themselves in this position.

Mr. Crowe

I wish to share my time with Deputies Gregory, Cowley and Boyle.

An Leas-Cheann Comhairle

That is agreed.

Mr. Crowe

I thank the Minister and her staff for facilitating a meeting with Opposition spokespersons and giving us an opportunity to go through the Bill. There are positive aspects to it. However, they cannot and should not be seen in isolation but against a backdrop of a society where the gap between rich and poor continues to widen.

A true measure of any society must be based on how it treats its poor, elderly and those in bad health. If we were to listen to those groups and individuals who campaign on behalf of these sections of society, they would tell us that, instead of conditions improving, especially during a time of significant wealth creation, they are much worse for the less well-off.

Many of the positive proposals in the Bill will not significantly alter or change the conditions or lifestyle of the most vulnerable people in our communities. At a time of unprecedented prosperity a quarter of our children and a fifth of our adults still live in households in receipt of less than half the average income, which represents the most unequal distribution of wealth of any industrialised state outside the USA. There is a simmering crisis in our unreformed, two-tier health service in spite of increased spending. Some 50,000 households are on local authority waiting lists. Our education system continues to fail and deny equality of access to children of lower income families. Our public transport system is inadequate, which further marginalises the poor and less well-off. We have unbalanced regional development which leaves disadvantaged regions lagging behind. This is the context in which we must address the Bill.

The Minister for Finance, Deputy McCreevy, told my colleague, Deputy Ó Caoláin, last week that he gives away so much money in tax exemptions, allowances, loopholes and breaks that he cannot keep track of it. Hundreds of millions of euro are lost to the Exchequer and the Minister has not bothered to do a cost-benefit analysis of the tax breaks he hands out. Some 300,000 children live in poverty according to the Combat Poverty Agency and the Minister for Finance does not consider it necessary to find out how much he is giving away in tax breaks. We are told that increases in child dependant allowance are not being considered because this would be a disincentive to work. What is the value of economic development if the children of the nation are not properly cared for? Surely as a society we must ensure children receive the best of care at all times.

One in five families with at least one member working live in poverty according to the ESRI, but there is no change in the Government's mantra that jobs are the one and only solution to poverty. A representative of the Society of St. Vincent de Paul has said that the numbers seeking help have doubled in the past year. Does this not suggest, even to the most cynical observer, that something is radically wrong with the Government's policy and how it addresses poverty and social inclusion?

The Bill will be seen by many as another missed opportunity. The Minister will say that she has to work within her budget. We in the Opposition will continue to argue that there are elements in our society who do not pay their fair share of tax and that they should provide those extra resources for the less well-off. Prior to the previous general election, the Government committed itself to increases in child benefit totalling €1.27 billion over three years from 2001 to 2003. This would mean a child benefit rate of €149 for the first and second child in the 2003 budget. A year later, we are still almost €18 short of the Government's target. We are told it has not broken its promise; it has just rewritten it. The rate for 2003 is promised again for 2005. In real terms, its value will have declined over those two years and the poorer sections of society will once again have to try to catch up.

I wish to comment on a number of the sections dealing with the changes to the Pensions Act. I thank the Minister and her staff for the briefing provided to Opposition spokespersons yesterday.

While I welcome the expansion of the grounds of discrimination, even if I note that it only seems to be happening in some cases as a result of EU directives, I am sure the Minister is aware that the grounds of discrimination now contained are the same as defined by the Equality Authority. In the past the authority has often expressed its desire to expand those nine grounds to include making illegal discrimination against individuals on the basis of political opinion, trade union membership socio-economic class or previous criminal record.

The changes in the Bill are the result of EU directives and the terms of Sustaining Progress. In other words, far from taking positive action, the Government has been forced to do so in one way or another. Will the Minister consider taking progressive, proactive measures to widen the areas of discrimination contained in this legislation to include the grounds to which I referred? Surely she would agree that discrimination on those grounds is unacceptable and that there is no protection for people who might suffer from different treatment for those reasons.

The Minister could also make some changes to some regressive legislation outlined in the Bill. Section 72(3) deals with an issue I raised a short time ago on Report Stage of the Civil Registration Bill. Under this section it is not discrimination to provide more favourable occupational benefits to a deceased member's widow or widower. As I pointed out to the Minister previously, marital status in this State has implications for rights in regard to residency, property, adoption, taxation and pensions, the last being the most pertinent in regard to this Bill.

The glaring inequality that exists in this State where we refuse to provide for some sort of registration of same sex partnerships is highlighted again as members of the homosexual community are cut off from equal treatment in terms of pensions. Same-sex couples continue to be discriminated against in this State and this legislation, at the same time as introducing sexual orientation as grounds for discrimination, recognises again that, when it comes to survivor's benefit, it is acceptable and legal to discriminate against same-sex couples. It is a shameful state of affairs.

At some point the Government will have to stop running away from this issue. According to a report from the Equality Authority published in 2002, various EU states, including Holland, France, Denmark, Germany and most Nordic states, have some form of legal recognition of same-sex marriage or some sort of process for registration of same-sex partnerships. The Government cannot continue to prop up institutionalised discrimination against people on the basis of their sexual orientation. Will the Minister address the specific issue of pension entitlements in the context of the ongoing discrimination against same-sex couples and outline her proposals to end it? If she is making changes to the Pensions Act, why would she not make this change? Why should we not begin to make the positive inclusive changes that are needed here?

I also strenuously object to section 73 of the Pensions Act, as it will be amended by the legislation. It legalises discrimination against a person on the basis of his or her disability because of his or her work output. It takes no account of difficulties people might have in their working environments because no measures have been taken to cater to their impairment. A disabled person might be able to work as well as any able-bodied individual if the company or business concerned were willing to take the appropriate measures to facilitate him or her. Regrettably, some businesses are not prepared or not financially able to make such provision.

The social model of disability is a different way of perceiving the disabled issue in Ireland. It does not see the person concerned as being disabled but as society disabling that person by not providing the appropriate facilities.

Another missed opportunity in this Bill is the failure to address the State's discrimination against women who returned to work. The women concerned were compensated, but a previous speaker spoke about their lack of social welfare credits. Many of these women are nearing retirement. What steps will the Minister take to address this matter? Does she believe the Government has a moral responsibility to address this matter? Many of these women were forced out of employment through no fault of their own. Failure to address this matter in the Bill represents a missed opportunity and this matter needs to be addressed urgently.

Mr. Gregory

I want to make a few brief comments on the level of social welfare payments referred to in the Bill. I want to place these payments in their overall context, in the Ireland which is now one of the most affluent countries in the world. Ireland's per capita income is one of the highest in the European Union, yet in contrast, its record in social provision is far below the European Union average.

I refer particularly to the extremely unequal income distribution which, with the constantly increasing gap between rich and poor, more than anything else demonstrates the alarming neglect in social provision in this affluent country. In the context of continued economic growth, the opportunity to address this deficit remains available, but the Government, the Fianna Fáil-Progressive Democrats coalition, has consistently chosen not to avail of that opportunity.

The CORI justice commission, in its analysis and critique of budget 2004, said that Ireland's poorest people have again been told to wait. CORI points out that Ireland has the widest gap between rich and poor of any country in the European Union, a gap which is increasing. What a record, after the years of the Celtic tiger's surpluses of billions. More importantly, the CORI analysis predicts that if the Government continues with the same approach — all the indications are that it will — Ireland will be an even more deeply divided two-tier society than it currently is, and that is saying quite a lot. CORI says this situation is unjust, unfair, unacceptable and unsustainable, and I agree. CORI concludes that ultimately the Government's choices are based on its vision for the future, a short-sighted vision. The Government maintains an increasingly deeply divided two-tier society at a time when the opportunity and the resources are available to redistribute wealth and in so doing, create a more just and equal state. Instead, the clear message is that the political will to attain that goal of social justice is not there.

Regarding social welfare payments, an analysis shows that the gap between rich and poor has widened by almost €300 per week in the period covered by the seven budgets since the Fianna Fáil-Progressive Democrats alliance came to power in 1997.

Mary Coughlan

Consistent poverty has been reduced considerably.

Mr. Gregory

I have only five minutes, if the Minister will bear with me. It is worth putting this critique into the record because it shows how a combination of inadequate social welfare payments and budgetary measures which consistently favour the better off creates a divided people. Consider the disposable income of a couple who are long-term unemployed after seven of these Fianna Fáil-Progressive Democrats budgets. That couple is €89.43 better off per week. Alternatively, a couple earning €50,000 per year is €310 per week better off, that is, €16,000 per year better off. One can add a further €14 per week, as that latter couple has most likely joined the Government's special incentive savings scheme.

It follows that the higher the income, the greater the gap between the affluent and the least well off in Ireland. This ongoing trend is unjust and very bad, to put it mildly, for social cohesion. It should be reversed, but that would require a change of Government, because the trend is the direct result of conscious decisions and choices made as part of the philosophy of the Fianna Fáil-Progressive Democrats coalition.

Dr. Cowley

I am glad to speak on the Social Welfare (Miscellaneous Provisions) Bill 2004. I am disappointed however in what the Bill does not address, in particular the problem of the low-paid worker regarding eligibility for the medical card, which is essential for adequate access to health and social services for those on the bread line, and their children. Where is the hope for the 200,000 people who were promised medical cards but did not get them? It was fine to give medical cards to all those over 70, if we could have afforded that, regardless of whether they were of millionaire status. The problem is that so many older millionaires have got unlimited free access to the GP and to chemists' prescriptions, while such deprivation and lack of access exist for poor adults and children.

Anyone would assume that someone on the national minimum wage would qualify for a medical card, but this is not true. To qualify, a single person must be earning no more than €136 weekly. For a couple, the weekly income limit is €200, and €250 for a couple with two children, or €1.70 per hour individualised. People legitimately on the highest level of social welfare may exceed the medical card eligibility limit but still qualify for a medical card, while working people on lower incomes may not. Is it any wonder that people are driven to work in the growing black market? The medical card means so much in additional benefits too, such as the back to school allowance. This is the terrible Government of glaring contrasts, where working people on incomes lower than people on social welfare do not qualify for medical cards, though everyone in the know, people who work on the coalface, recommend that eligibility levels should be increased.

Does it make sense to deprive people of less costly primary care when they will eventually be driven into more expensive secondary or tertiary care, because their condition has been neglected so much, and complications have developed, requiring hospitalisation? When a chest infection becomes a raging bronchial pneumonia requiring hospitalisation, does that make sense? I do not think so.

This is the same Government which plans to build expensive radiotherapy units in the big cities, whereas the more regional distribution which is recommended would ensure adequate access and greater survival for people. What good are these major units if people cannot access them? This is the same Government which plans to take away secondary care hospitals and force people into more expensive tertiary care. It does not make sense, especially when there are no additional facilities to take care of those people who are on trolleys.

Mary Coughlan

That has to do with health. The Deputy is at the wrong debate. The matter before us relates to the Department of Social and Family Affairs.

Dr. Cowley

If that Department had done its job, I would not be speaking here. What about the treatment purchase fund and the situation whereby private orthodontic services are being provided for people on the waiting lists, while the population could be treated adequately if the service that is there were properly supported? The Government has poured millions into a treatment purchase fund, while if one put in local consultants, the service could be provided permanently. It brings to mind the old saying: "Give a man a fish and you feed him for a day; teach him how to fish, and you feed him for life." The Minister should give back the local services, rather than taking them away in the manner of her colleague, the Minister for Health and Children, by means of the Hanly report.

The Government is paying highly for subsidised rents while it has failed, through the local authorities, to provide sufficient long-term housing to accommodate people in the long term. I am sure the Minister will agree with that, because she has said it herself. I compliment the Minister on speaking out on this matter. She might have a word with her friend, the Minister for the Environment, Heritage and Local Government and her other Cabinet colleagues, and ask them about a defined Revenue funding scheme, which would encourage people to recognise the enormous potential of voluntary housing and the value of being allowed to stay in their local areas instead of being subvented in expensive nursing homes. At least 25% of them could return to their communities. That would be possible through a defined revenue funding scheme.

There is a great myth about a black hole in health and social spending. There is much less poverty in countries which spend on their social services. We need less poverty and more spending on social services. I agree with supporting people to go back to work and providing child care services thereby allowing people who are able to go out to work to do so and not to be burdened with a lack of child care services and with the care of older people. If people got those supports, they would be able to work and we would have a better economy as a result.

Mr. Boyle

The Social Welfare (Miscellaneous) Provisions Bill is the secondary legislation introduced by the Minister each year on foot of commitments in the budget but this year it seems to be different in a number of respects. Not only does it seek to introduce the legislative measures for the staggered payments — payments made at different times of the year under the various parts of the social welfare code — there is an attempt to amend pensions legislation. There is a third as yet unspoken part of the Bill about which the Minister spoke this morning, namely, amendments to be made in regard to the likely treatment of people from the EU accession countries in terms of social welfare. In regard to that third area, it is unfortunate that we are operating in a vacuum without those amendments which I hope will be supplied as soon as possible so that, as Opposition spokespersons, we can react and amend appropriately.

In regard to the traditional aspects of the Bill, I will go through some of what is proposed. There is an increase in child benefit, the 2003 and 2004 increases combined being less than the Government promised in its three year commitment prior to the last general election. There is an increase in the annual respite care grant which has been doubled if a carer is caring for more than two people. It is a small sum of money but at least it is a move in the right direction. I would have liked additional measures to have been considered in terms of qualification for the respite care grant because the real barrier for many people looking after people in care is evidenced in the low take up because of the restrictive nature of the qualification for not only the care grant but for the carer's payment. I hoped the Government would have come up with proposals in that area.

The six weeks' payment after death arrangements are welcome and have been called for by many in this House. It will help people in a difficult situation by not having to deal with a significant loss of income immediately. It will give them breathing space to sort out payment arrangements while overcoming a bereavement. The linking of the death benefit pension to the widower's contributory pension for pensioners over 80 years of age eliminates an anomaly in the system.

I refer to the increase in the minimum payment of unemployment assistance from €31.80 to €40. It is almost like pocket money. The Minister will probably be aware that there are teenagers who eke more than €40 out of their parents each week.

Mary Coughlan

I am not at that stage yet.

Mr. Boyle

One of the unfortunate aspects of the social welfare system is that the young person who is unemployed and finds himself or herself in an accommodation bind living with parents is assessed on the parents' means and thus receives a derisory payment which is neither an incentive nor a disincentive to change his or her life circumstances because it does not recognise him or her as an individual.

The maternity leave proposals are welcome and a Bill is proceeding through the House in that regard. Everyone welcomes the fact the payment is being readjusted to the period before birth and after birth and that the same will apply to adoptive leave. However, I am concerned the legislation has not been dovetailed better. The legislation was not introduced in the House early enough so we could make definite decisions and have definite dates as to when these changes would be made to the social welfare code. That will be a disadvantage to those who want these changes to happen sooner rather than later.

Most of the changes to the traditional part of the Bill are welcome but I would have thought the opportunity would have been taken to reduce, if not eliminate, the idea of staggered payments throughout the social welfare system. In many respects, we have moved to using the calendar year for the payment of social welfare benefits and the introduction of increases on a January, April, May and June basis. It might help the Minister's budget but it creates a false impression that payments are annual when they may only apply to two thirds or half the year in some cases. When we reach a situation where all increases are made on 1 January, it will be a more honest approach to payments being made.

The second part of the Bill, the new section we would not have seen in previous Bills, concerns the review of the pensions Act. Some of it is necessary in terms of implementing EU directives, even though specific exemptions are being considered. I have qualms about seeking the exception on the age ground. That is the most controversial aspect of the exemptions being sought. People are living longer and their ability to contribute should be increasing not decreasing. How that is done, whether on a voluntary basis or through some other incentives, is a matter for political debate. There is a perception — it is not fostered by the Minister because she came quickly out of the traps to knock it on its head when it arose a few months ago — that the retirement age should be looked at and that it should be increased. We have had the report from the Society of Actuaries. There is a case for people who are over 60 or 65 years of age and who want to continue to contribute to do so. Structuring a payment and a pension system around that is something we could do.

I argue there is a case for tax incentives for people who voluntarily and willingly stay in the work force because of their experience in their given fields. They could be looked at differently in the tax system. My party has long argued for a combination of the tax and welfare systems to maximise the incentives in this area. That said, we need to implement the directive and most of the exemptions can be justified in terms of Irish cultural habits as much as anything else. However, I put down a marker on the exception on age grounds which will require considerable debate on Committee Stage.

There should be an opportunity to look again at personal retirement savings accounts, PRSAs. I recently asked the Minister how employers indirectly benefit by sponsoring or encouraging their employees in this regard. The employee makes a payment but the employer is not directed to make an equal payment yet he or she still benefits from the fact the employee is contributing to a PRSA. This is a double handed incentive in that the employee benefits and the employer benefits without making a direct contribution. It goes against many of the principles of pay related insurance and what we are trying to encourage here, namely, pay related pensions.

I refer to the third element of the Bill we have yet to see. The Minister and I have already debated this issue on the national airwaves. I have not seen the amendments but I still argue that it is a reaction to a problem which we do not know will exist to any great extent. We do not know the number of people who will come to this country to work or to live and to try to benefit from the social welfare system. Given the length of time it takes for people and their means to be assessed and to receive a first payment and secondary payments in terms of accommodation, which has been suitably adjusted by the Minister in the changes made before December, I do not know what incentive exists for a citizen of an accession country to come here to avail of our social welfare system and to see it as a means of support. I cannot see what incentives exist for any citizen of an accession country to come here to use our current social welfare system as a means of support. They would be starting from a minus level in the first instance, by travelling over and seeking to become established here, in addition to living on unemployment assistance payments as low as €138, which are well below what we agreed they should be, at 30% of the average income. In those circumstances, I would argue whether the Minister needs to introduce any amendments in that area. I will be arguing against her on Committee Stage when, hopefully, she will be of a mind to withdraw those amendments or to accept the advice of the European Commission that they may not be legal.

Mr. Dennehy

I welcome the opportunity to contribute to the debate on the Social Welfare (Miscellaneous Provisions) Bill 2004. As I did last year, I again wish to compliment the Minister, Deputy Coughlan, for the job she is doing. Her remit covers a wide area of responsibility, given the number of clients, if we wish to use that term, including the elderly, widows, lone parents, the disabled, carers and others on low pay. Her Department has a huge budget but she is doing her job extremely well. She deserves our compliments, although I appreciate that there will always be negative comments and less than complimentary charges may be made at times.

I wish to refer to a number of things that were said at the outset by Deputies Ring and Paul McGrath. Both Deputies referred to people — in the case of Deputy Paul McGrath it was a neighbour — who had accumulated a number of stamps from 1953 or 1954. I have mentioned previously the decision by the Minister for Social and Family Affairs and the Minister for Finance to make allocations for pre-1953 social welfare stamps to Irish people living abroad. I did not spell out all the details of that scheme at the time but I would like to put them on the record now. As of August 2003, some 18,699 people in the UK, 15,978 in Ireland and 4,573 between the USA, Canada and Australia have availed of this generous gesture. That makes a total of 43,804 elderly emigrants who are now benefiting from this Government's decision to allocate full credit for pre-1953 contributions.

Members will be aware that there was not an insurance element in that but in seeking to look after the elderly, the Government has made that magnanimous gesture. It was the most positive approach to emigrants that I have seen since my time in politics began in 1974. It is in line with arguments that we made back in 1991 when I chaired one of the committees dealing with this matter at the British-Irish Interparliamentary Body. To date, the cost of that humane gesture has been €209.9 million, which comprises €26 million in 2000, €70 million in 2001 and €113 million in 2002. It was a historical reaction to the plight of these elderly emigrants, all of whom are now at least 65 years old.

I mentioned this matter previously because of the extremely negative reaction a few weeks ago by Opposition Members who, on paper at least, purported to be so concerned about emigrants. I was sickened by some of the comments of Opposition members at the Committee of Public Accounts.

Mr. Connaughton

The Deputy is easily sickened.

Mr. Dennehy

My comments are on the record of the proceedings of the Committee of Public Accounts. I wish to reiterate that if the Minister for Social and Family Affairs and the Minister for Finance can expect such a reaction from the Opposition to that kind of gesture, it is no encouragement to them to do anything similar in future. Members from both sides of the House have sought concessions at times when difficulties have been brought to their attention. The reaction of the two Deputies who expressed their concerns about an individual — and I know all these figures are made up of

They are tiny figures. In fairness to Deputy Ring, however, he did make an important point that the money could have been saved elsewhere in the Department, although he was very careful to avoid any suggestions in that regard. I was surprised because I thought he would list them out carefully. I am as concerned about my constituents as any other Deputy. We need to be positive about such issues and if Deputy Ring has ideas where money could be saved he should point them out.

Deputy Ring also mentioned what he called "a measly euro" change in the rent subsidy scheme. I had to fight and campaign to stop some of the Fine Gael members on Cork City Council from tabling a proposal to scrap the rent subsidy scheme. Some of my own colleagues on the Government side also had doubts about it but the scheme is a very important one. I will refer to it later if I have time to do so. We should be realistic, however, and tell the truth, which is that changes were needed. Every Member of the Oireachtas was aware of certain difficulties and abuses concerning the scheme. It could not continue to expand, particularly in the Dublin area where we were being ripped off left, right and centre, not by the poor constituent who was applying for the scheme but by the people receiving it. Something had to be done and I feel it was done correctly. Despite what Fine Gael councillors in Cork, and others, may have argued for, the important thing was to maintain the scheme. The scheme is necessary because it compensates those who are entitled to housing but who we cannot currently house.

The question of broken promises on child benefit was raised, which I found fascinating and I will revert to that point later. Over the years, there has been much discussion as to whether universal social welfare benefits, including child benefit, should be paid to all parents, regardless of their income. The question is often posed, fairly, as to whether we should pay benefits to parents who may be millionaires, when we could means test the benefits and provide a larger payment to lower income recipients. I personally believe that would be the wrong way to look at the question. The State has an interest in the welfare of all its citizens who should be in a position to contribute to and benefit from the system. The child benefit system, where a payment is made directly to the mother in the home, guarantees an income to the mother, independent of her spouse or partner. In the past, when the level of female participation in the workforce was a lot less than it is today, child benefit was often the only direct payment such women received. For a long time I have encouraged the retention of the current system, so I would oppose any means testing or taxation of child benefit. Fianna Fáil members in general will agree with me on this issue.

It is important to remember that at different times in our lives we may be net contributors or net beneficiaries of the social welfare system but that we are participants at all times. I was contacted recently by a couple from Dublin whose son was disabled. He died last week and I attended his removal, although I never met him. He was a young doctor who got an aneurysm and ended up a paraplegic. He was scrambling to try to get a chair lift installed in his home. His wife was also a professional but she left her job to care for him. Anybody could face a similar scenario. We must be mindful that we might be on the other side of the equation as a recipient.

Budget constraints necessitate that means testing will be required in certain areas of the social welfare system, but I am glad the current system maintains almost universal public support. When I first entered local government in 1974, a demeaning and degrading scheme was in place which provided for scrutiny by local councillors of applications for the old age pension. I did not have major philosophical hang-ups but I boycotted the scheme on the basis that it was demeaning for elderly people that I could invade their privacy and review their incomes. The scheme was wound up shortly afterwards.

One way to judge the budget and the Social Welfare Bill is to make direct comparisons. Deputies Ring, Paul McGrath and Penrose referred to the "disgraceful level of child benefit". However, the record shows that, when Fianna Fáil resumed in power in 1997, child benefit was €38.10 per month. It has been increased by a significant 245% to €131.60 per month since. There can be no argument about this fact, yet these Members have the audacity to argue about the "disgraceful level of child benefit". That is a straightforward comparison, which is evidence of a significant commitment on the part of the Government to the welfare of children.

I refer to the allocation of the available resources. I am happier with a direct payment by the Exchequer to all families rather than using the tax system to provide a subsidy for child care. A universal payment to all families allows each family to decide for itself the appropriate form of child care for its children. This issue will be revisited. Without making promises in this regard, I have consistently said people should have a choice. If they have children, they should receive an allowance out of which they can provide for them and make decisions accordingly. Deputy Paul McGrath instanced his horror at the notion of reneging on promises.

It is often forgotten that PRSI stands for pay related social insurance and it is important that people who pay into the system can easily access the benefit to which they are entitled. One area of concern relates to dental benefit and the number of dentists who undertake PRSI-related work and whose books are open for new patients. I have received representations from a number of my constituents who say they find it difficult to avail of the dental benefit to which they are entitled. This is a problem throughout the State. It should not be a problem in Cork given that a dental school and hospital is located there, but the problem is as bad in Cork as anywhere else.

Last year's dispute between the Minister for Social and Family Affairs and the dental practitioners highlighted the problem that exists within the system. A significant increase in the number of dentists operating under the scheme is needed and I am anxious that qualified Irish dentists working in the UK should be enticed to return to the State and establish practices here. The logistical impediments that prevent them from doing so should be tackled urgently.

I refer to the ongoing debate on immigration in the aftermath of 1 May when ten new member states will join the EU. I would welcome suitably qualified people from these countries participating in our workforce. There is a touch of Tadgh an dá thaobh about a number of contributions to this debate. The media, in general, have taken a balanced view on the issue of new regulations that might need to be implemented in this area, especially following the British decision. The Opposition has stated something should be done but it will watch the Government closely. Nobody has suggested what should be done. A common-sense approach is needed and the issue must be examined. It is not the case, as Deputy Ring stated, that the Minister for Foreign Affairs is galloping around Europe telling people they can come to Ireland to claim social welfare.

The British decision has changed our position on this issue. It is our nearest trading partner and, in the bad old days, 90% of our trade was with the UK. However, when the British Government makes such a significant decision, Ireland must react and there has been a practical reaction. Many of my constituents have expressed concern about this issue and they think EU citizens will enter Ireland and dawdle on the social welfare system. That will not be the case because these people have the right to come here to work and it should be upheld. I was glad to work in England and Wales in the bad old days with people of various nationalities and that broadened my view on these issues. However, the right to work must be upheld and there are opportunities for these people. Ultimately, our sails must be trimmed on the question of social welfare. The system could not sustain a deluge of people, which will not happen anyway on the basis of previous evidence. The number of people who have entered the State from the ten accession states is available.

The current requirement under the dental benefit scheme that one must have five years' of class A contributions to qualify for benefit is too restrictive. While I acknowledge the limitations on the Minister's budget, I tabled a parliamentary question in which I asked her to undertake a study to ascertain the cost of relaxing the rules so that a person qualified for such benefit having paid contributions for two years. I hope the Minister will consider this. This is different to the orthodontic issue which we have been trying to untangle for the past number of years. The methodology used for training and related matters has created a closed shop which has resulted in a substantial increase in the price. However, the provision of such facilities should be different.

It is important that everybody can benefit from the social welfare system and, in so doing, to ensure it commands maximum public support. Similarly with PRSI, it is essential that all persons who pay into the system understand the benefits they can derive from it and it is not regarded as a supplementary income tax. The less well-off are often not aware of the potential benefits of the system and the family income supplement is an example of this. The phrase, "poverty trap", has been used a great deal in recent years. The long-term unemployed find it difficult to take up a job because the wages they are offered do not make up for the loss of unemployment assistance and related benefits. That has been referred to by other speakers.

My fellow Corkonian, Father Seán Healy, has done considerable work in this area and I respect his opinions in this regard. One of the best ways of removing a poverty trap is to have a system of smoothing the transition from social welfare back to employment. The family income supplement is an excellent way of achieving that and the income threshold for qualifying for the supplement has been made much more accessible. This scheme improves every year but we need to advertise it more widely and explain it to people.

I have a particular interest in the carer's allowance. It is universally recognised that Deputy Michael Woods, who is one of the country's foremost authorities on social welfare, made great reforms in this regard and put systems in place which will stand as a legacy to his work in that Department. I am glad his successors, Deputies Dermot Ahern and Mary Coughlan, are continuing his work. Benefit for carers is something we all support. I work with the Irish Carers Association and I am aware of the great work it does, taking the pressure off the State. Anything we can do for carers should be done. I ask the Minister to look at this aspect.

Mr. Connaughton

Social welfare provisions are undoubtedly better now than they were. This is what the Government tells us and it is what one would expect the Government to tell us. However, because of the inflow of funds into the country and the Celtic tiger economy, the gap between the rich and poor has widened to an alarming degree. I have always accepted Father Seán Healy as an honest broker. There are times when I do not agree with everything he or his organisation, CORI, say but he and his associates are the only people on whom those who live on or below the poverty line can depend. Every couple of months CORI issues well researched facts and figures. These are much needed. We can argue about whether the old age pension is adequate but our arguments must be based on an understanding of what poverty means. There is a certain level of income below which no family can operate with dignity. I am not talking about going around with a torn jacket or having one meal a day.

One could argue that substantial progress has been made in the past ten or 20 years but can we balance our prosperity against the poverty which still exists? The CORI critique of the budget argues that the gap between rich and poor has widened by €294 per week since 1997 when the Government came to power. CORI presents facts and figures to back up that statement. It is, surely, a damning indictment of any Government or society that the gap between rich and poor should be so wide.

The new personal rate of unemployment assistance is €134.80 per week. It increased this year by €10. The Minister of State and I know people who would have no trouble spending that amount on an evening meal in this city. Deputy Dennehy and I may not have time for that sort of thing, given the job we do, but I know people who would have no trouble spending €134 on a meal, and some of them would say they had got off lightly. Nevertheless, we ask a human being to live and be fed, clothed and sheltered on that basic payment. I accept that other ancillary benefits are built into the payment. If they were not, one Friday would be a very long way from the next. This is the point CORI makes. Until those basic rates of benefit are increased to a level where people can operate and live with dignity, we are failing.

Many people who have to work hard for a living and who pay their taxes will argue that people are unemployed because they want to be. There are some people in that category but most people would not be unemployed if they could help it. The amount of money we pay people who are disabled or genuinely unemployed and must depend on the State for their income is very small, compared with what they are entitled to. Great care must be taken that the social welfare system is not subject to fraud or the funds drained. However, the argument must always return to the €134 per week, on which a social welfare recipient is expected to survive.

We now find ourselves in a new dilemma, and it is ironic that it should happen while Ireland holds the EU Presidency. I share the view that the question of citizens from the ten accession countries becoming part of our social welfare system must be handled in a balanced way. I fully appreciate that the United Kingdom's decision of a few days ago changed the goal posts. Will the citizens of the existing member states be included in whatever new legislation we introduce? I had not understood that would be the case. There appeared to be no problem in this regard at the time of the last EU enlargement and I assumed that new legislation would apply only to the ten new accession countries. Most Members of this House will accept that legislation is necessary, given the new conditions created by the United Kingdom action. Because of our many connections with the United Kingdom it is necessary that we protect ourselves, but we must do so in an even-handed way. A hallmark of the European Union since the Treaty of Rome is the ethos of togetherness and inclusiveness. Since joining the then EEC in 1973 we have voted in several referenda about the ethos built into the treaties. We need to ensure that whatever decisions we take do not work against us in the future.

We are an exporting country, exporting our goods and services all over the world. Fortunately, we are not now exporting people as we did in past generations. Great care needs to be taken to strike a balance so that there is no bar on people who want to work in Ireland. I think that is the ethos of the EU and a principle we should adhere to.

While we do not know what will be in the new legislation, it has to be handled in an even-handed way yet couched in such a way that it would cover the eventuality of a massive influx. I have no idea whether that will happen.

If the rate of social welfare payments in the accession countries is much lower than ours, it may be advantageous to come to Ireland. However, we must tread carefully, because cohesion is extremely important in the European Union. A foundation stone of the Union is the freedom of people, goods and services to move unhindered throughout the Union. This will become a national issue and will be debated wherever people congregate. I think that most people will view the proposed legislation in the light of what happened in Britain, which left little option but to take action.

The guiding principles of the carer's allowance is to allow a person to stay in his or her home. To put it in a nutshell there are basically four options open to people when he or she gets old. First, if he or she is lucky enough to enjoy good health and own his or her home, he or she is able to remain at home and look after himself or herself. I hope that for myself and everybody else who is listening, that is what will happen to me.

Mr. O’Connor

It will not be for a long time yet.

Mr. Connaughton

Hopefully, there is a lot left in the tank.

Second, that the old person will be able to remain at home but will need to have the services of a carer. Third, that the elderly person will have to go into a private nursing home and, fourth, that the State will look after him or her in a State-run geriatric home. If we start at the final option, where the State is involved, that is by far the most costly option for the care of old people in their final days. The staff running that service are doing an excellent job but by its nature it is extremely costly. One would have assumed that we would be gearing ourselves to ensure the other option would be the preferred choice.

The private nursing homes that have sprung up all over the country are a very useful addition to this service. However, for a variety of reasons, on which I will not elaborate, it is becoming extremely expensive to stay in a private nursing home. Even with the payment of the subvention, a person in receipt of a non-contributory pension or its equivalent would not be able to afford such care unless the family were wealthy enough to bridge that gap. I know of a great many families that no longer can afford to have a parent in a nursing home and will have to care for the parent at home. I know that Deputy Moynihan-Cronin who is in the Chair has spoken on a number of occasions on the carer's allowance. I can see no valid reason that the Government would not ensure that the carer's allowance is realistic, because a person may have to give up a job from one to five years to care for a parent in his or her home. Unless something is done very shortly, the private nursing homes and State-run geriatric homes will be in difficulties. It is easy to evaluate the carer's allowance. In most cases families want to care for their parents. I am making a case for the evaluation of carer's allowance by the Department to be brought to the fore as this is the only way we will solve a potential problem that will cost millions of euro of taxpayers' money.

Mr. Callely

We have made progress on it.

Mr. O’Connor

I should mention Tallaght since I listened to all my colleagues talking about their constituencies. As Members know, I represent Dublin South-West which includes the major population centre of Tallaght as well as Firhouse, Templeogue and Greenhills. I mention that in the context of my wish to talk about the services provided in my area. Members referred to services and unemployment benefits. I came to the Dáil at a later stage than some colleagues would wish to, but I am happy about that. I often say in meetings in Tallaght that I used to be normal, did normal things and worked in normal jobs. I lost jobs in the normal way by being made redundant on a number of occasions and it was always very upsetting. At that time people signed on for social welfare benefits at the local Garda station in Tallaght. I make that point in the context of the regular criticism of the Minister and the Department, some of which is unjustified.

I am always positive about the Department of Social and Family Affairs and its predecessors, and its achievements in major population centres like Tallaght. I invite all Members to Tallaght where they will find a very modern social welfare complex beside the Square which was opened in 1997. It provides social welfare and local employment services and houses FÁS. The South Western Area Health Board's CWO services are provided there, as is the family mediation service. The customer services information section of the social welfare office operating from the complex deals with up to 700 personal callers on any given week. It is important that the Department continues to provide such first class facilities and services for people. Colleagues are correct to point out that people who are vulnerable and under pressure should be able to access services. We should be creating an environment in which the public can feel comfortable calling to the modern office in Tallaght to conduct business confidentially.

In his excellent contribution, Deputy Dennehy reminded the House of the Private Members' debate of a few weeks ago on services for emigrants. As a former emigrant, like Deputy Dennehy and others, I support the view that over the past 50 to 60 years many people abroad made a significant contribution to the economy by sending moneys home. The UK has been referred to as it is in close proximity. I was abroad for only a little while and I did not send all that much home, but the concept was there. Many families were kept going with this money. It is right that we should consider the conditions in which emigrants now find themselves. The Government should continue to offer strong support to the services for Irish people abroad who need our assistance. I have no hesitation in supporting that view. I was glad Deputy Dennehy reminded us of the matter.

Any contribution on social welfare matters this week will deal with the social welfare challenge of 1 May which is being discussed in the media and the House and on the streets. I am very glad the debate all week has been responsible and controlled because I was concerned about that. I was on a radio programme last week with two colleagues who are greater personalities than I would ever claim to be, and I am glad we are being responsible on an issue on which people could easily say the wrong things.

I am very supportive of what the Government wishes to achieve and of what the Tánaiste has said. The Tánaiste's commitment that EU citizens can come here to work from 1 May will please people. People in all our constituencies are watching this space with a great deal of interest and hoping the matter will be dealt with directly and responsibly.

There is a great deal of talk about what Britain is doing. We are proud of the fact that Ireland has shown that not only is it independent from the UK but that it has progressed enormously during the past 80 years. Some say that because the British do one thing we may have to do the same. We have demonstrated our independence and that our Government is capable of making independent decisions. Somebody said to me today, "Thank God we have a Taoiseach who is much more popular than his British counterpart." The Irish Government will make its decisions, it will be responsible and the public will support those decisions.

There are challenges out there and people will watch us. There will always be criticism and people will come to politicians. They certainly come to me as I move about the streets of my constituency and to my seven clinics each week. People talk about these issues and express different views. Sometimes the views are more contrary than others. It is right that there should be a debate and that people would be confident that the Government will handle this situation properly. I am confident that will be the case.

I am pleased to note that the Bill provides for the introduction of a range of social welfare improvements announced in budget 2004. Listening to some of the debate today, some of my colleagues opposite must have listened to a different Budget Statement because there was general agreement last December on the Government's objectives. Today we heard many different views which would not add up if my colleagues opened them up to scrutiny.

The Bill provides for increases in child benefit and respite care grant. On the announced arrangements for maternity leave, the minimum period of leave to be taken prior to the expected date of birth is being reduced from four weeks to two weeks. I am happy to note that the Bill provides for the increase in child benefit which was announced in December. The increase of €6 in the lower rate payable in respect of the first and second child and €8 in respect of the third child and subsequent children is welcome. It brings the monthly rates to €131.60 and €165.30. In many of our constituencies we get much positive reaction to that increase. It must be remembered that more than 24,000 families will benefit from those increases. Research has shown that child benefit as a universal payment made directly to families is the most efficient and effective way in which the Government can channel support to children. That is at it should be and we should always treasure our children.

At a time when the country was beginning to enjoy great economic affluence as a result of previous Fianna Fáil policies, the pre-1997 Government provided no significant financial support to parents, implementing a child benefit increase as low as one euro. However, I will not make any strong party political points. I listened to a Minister answering questions yesterday and a Dublin colleague on the Opposition benches, for whom I normally have a great deal of respect, said it was several years since the rainbow coalition Government was in power so that it did not matter much. That was a strange political point to make.

When Fianna Fáil came to Government with the Progressive Democrats in 1997 we had to start practically from scratch so far as that process was concerned. Child benefit was payable at a rate of €38.09 per month for the first and second child and at a rate of €49.52 for the third child and subsequent children. Perhaps that is the last party political point I will make for the evening. If Members want to deal in figures and talk about history, that is fair enough. The history is there and everybody knows it. Fianna Fáil backbenchers are just as entitled to stand up for the Government as anybody else and I am always happy to do that.

It is good to note that the social welfare improvements in the budget will cost €630 million in a full year. It means that social welfare expenditure for the year will be double the level which was set in the pre-1997 period.

A number of colleagues referred to the carer's allowance and our relationship with carers. In my constituency I have a good deal of contact with carers, both directly and with the carers association. The needs of carers was always stressed to me. Several years ago when my elderly father was ill for a little while and was looked after by my sister it gave us an opportunity to bring my dad, who was born in the inner city, out to Tallaght. It gave me an insight into the great work done by carers and the efforts made. There is no question but that all of us should support in a positive way what is being done by carers.

Mr. Callely

Hear, hear.

Mr. O’Connor

Certainly I am able to do that and I am glad the Minister has that commitment. That is what we should do.

During the period when I was a member of the health board, with my colleague, the Minister of State at the Department of Health and Children, Deputy Callely, we were very strong on that issue. In fairness to many colleagues in the House, many health boards have done that. I hope in the post-health board period efforts will continue to be made to ensure carers are able to do the work they want to do. They do a huge amount of work and it is right that we would support them. There will never be a time when the carer's allowance will be enough. It does not matter what assistance is given to carers, it will never be enough because of the great work they do.

I am glad the Government continues to recognise this and that the Social Welfare Bill provides for an increase in the annual respite care grant, payable to recipients of carer's benefit and carer's allowance, as announced in the budget. I am pleased that my party in Government has implemented a programme of development to assist carers, which has gone considerably further than the record of any previous Government. That the programmes should continue to benefit thousands of people and families is recognised across the House. The historical lack of provision for carers requires us to pay special attention to this area.

In introducing these measures we are continuing to honour the commitment to support the valuable work undertaken by carers. The Joint Committee on Social and Family Affairs, of which I am happy to be a member, has done much work in that area and has paid much attention to the needs of carers. I am happy to acknowledge the work of Deputy Penrose, chairman of the committee. I hope we will continue to have an opportunity to do such good work.

I wish to refer briefly to maternity benefit. I am pleased that the regulation that a woman who is entitled to 14 weeks' maternity leave must take four weeks of this before having her baby has been changed under this Bill. Many of my constituents will welcome that.

I spent considerable time reading the Bill and listening to today's debate. I was very affected by the contributions — entertained by some and frustrated by others. However, it is important we listen to what is said. I am always delighted to participate in this process because it is important we understand the great contribution made in our communities by the Department of Social and Family Affairs, and I am happy to put that on record.

The Minister should understand that we will continue to bring to her attention the legitimate concerns which are regularly brought to our attention. Where we can improve systems, programmes and, ultimately, benefits, we should do so. There are signs that the economy, which has been well managed by the Fianna Fáil-PD Government, is improving and, therefore, more money may become available. I hope the budget in December will hold more good news for social welfare recipients, as it should.

Mr. Perry

I am delighted to speak on this Bill in which an undercurrent of cutbacks is very evident. The back to education allowance will be all but abolished at third level. There is an increase in the qualifying period for back to education allowance from six to 15 months in respect of the third level option. This measure will affect approximately 1,200 claimants and the estimated gross saving will be €2.2 million. This will have a major impact on many students. Some may decide not to return to education. The impact is regrettable because it was an effective scheme.

Conditions for the rent supplement will be severely curtailed and restricted. There is an increase in the rate of the minimum contribution for rent supplement to be made by the recipient from €12 to €13 per week. This will affect approximately 60,000 recipients and result in a saving of €3 million for the Department.

It was estimated that pre-1953 pensions would cost some €8 million per year but the eventual cost was €130 million. While most would support the pre-1953 pension entitlements and the scheme was advocated by many Members, this was a major miscalculation by the Department, the level of which impacts greatly on essential services, which is regrettable. Many people returned from the UK — a result of the massive emigration of the 1950s, 1960s and 1970s — but the Department was not aware of the impact this would have. The extra cost is now impacting on the level of cutbacks taking place.

The measure regarding exclusion from rent supplement where either of a couple is in full-time employment will save €1 million and will affect approximately 150 recipients. Discontinuance of entitlement to rent supplement is also proposed, with certain exceptions where the applicant has not already been renting for a period of six months, with provision for exceptions for the homeless and people who are at risk. It is expected that some 2,000 applications for rent supplement will be affected by this measure with an estimated net saving of €10.5 million. This is a most severe measure which will clearly have a major impact. It has been debated extensively in the media. I thought the Minister intended to bring in some amendment to this heartless imposition, which will mean that people must stay at home in the context of the pressure of single parenthood and overcrowding. This will cause huge tension in family homes and is an issue the Minister should revisit.

Referral of rent supplement claimants to local authorities to have their housing needs assessed, and refusal of rent supplement, are intended where applicants have left or refused offers of local authority housing. It is estimated that approximately 100 such cases may arise in a year, which will generate savings of approximately €600,000. The total budget of the Department is €1.6 billion, a huge sum. I know from chairing the Committee of Public Accounts of miscalculations in regard to rent supplement, as already stated, but also in regard to the effectiveness of departmental spending. The savings in this case are small when compared to the total budget of the Department.

It is regrettable that the crèche supplement will be discontinued as this measure will affect approximately 1,600 people while generating a saving of €2.3 million. The supplement has been effective to date in terms of the level of community crèche benefits and I regret the cutbacks in the level of the Department's support to communities in regard to child care facilities. It is also regrettable that both parents are forced to work due to the cost of child care.

The earnings threshold for disability and unemployment benefit will rise from €88.88 to €150 and, as a consequence, increase the thresholds for the three bands used for the purposes of these graduated rates. This measure is, in effect, an adjustment of the threshold in line with inflation. The gross saving is estimated as €14.3 million while the net saving, having regard to the number of persons who will otherwise qualify for unemployment assistance or supplementary welfare allowance, is €7.4 million. The approximate numbers of persons affected in 2004 will be 10,300. Therefore, this measure has a major impact and hits the most vulnerable.

The duration of unemployment and disability benefit has been reduced from 15 to 12 months. Entitlement for new claimants to half-rate payment of disability benefits and unemployment benefits, where recipients are already in receipt of widow's or widower's pensions or one-parent family payments, will be discontinued. The estimated saving will be €5.8 million in 2004 and the approximate number of persons affected will be 2,000. When we consider the caveats in the budget and the level of cutbacks, this measure is quite severe.

Dietary supplement is to be phased out with expected savings of approximately €1 million, with 1,700 recipients affected, which is severe. When one considers each case, it is clear that this attacks the most vulnerable, who Members encounter daily. It is quite mean of the Minister to hit the dietary supplement which will affect those receiving medical treatment.

The transitional half-rate payment for lone parents is to be discontinued where a recipient of one-parent family payment takes up employment with earnings in excess of the upper threshold of €293 per week. That is a very low salary. From being in business I know that €100 is practically valueless when it comes to making purchases in a supermarket.

To qualify for a full higher education grant for maintenance and fees, where applicable, a parent's gross salary must be under €34,400 for 2004-05. For a 50% grant it is €38,700, for 75% it is €36,500 and €40,800. These limits were increased by 9.9% in the last budget if one has more than three children and by 19.3% if one has over seven children. They are also increased by €4,160 for each family member one already has in third level education. Those figures apply to gross salary.

The fact that people are still paying tax on the minimum wage is very unfair. We have a two-tier economy in which the rich are getting richer while the poor remain trapped. Parents on social welfare face huge problems in educating their children through second and third levels, while those on the minimum wage of €7 per hour, or €280 per week, are still paying tax. That is wrong. When we refer to the minimum wage it should be a minimum wage, excluding tax. Recipients should get all of their wages in their pay packet but unfortunately they do not. We have introduced tax bands and increased income levels at the higher end of taxation but it is regrettable that we have not taken people out of the lower tax bracket entirely. It is unfair that those rearing children on lower incomes must still pay tax.

As I said, the transitional half-rate payment for lone parents is to be discontinued where a recipient of one-parent family payment takes up employment where earnings are in excess of the upper threshold of €293 per week. That is very unfair. The estimated average weekly number of persons affected is 300, with an estimated saving of €1.3 million.

The half-rate child dependant allowance in respect of unemployment benefit and disability benefit claims will be discontinued where the claimant's spouse or partner has a gross weekly income in excess of €300. That €300 per week amounts to €1,200 per month or approximately €16,000 per year, which is a very small gross salary. This is an outrageous move for which the estimated savings are €10.4 million.

Increasing the underlying number of paid contributions required from 39 to 52 for entitlement to disability, unemployment and health and safety benefit, is also unfair. The estimated gross savings involved are €2.5 million, while the average weekly number of recipients affected will be approximately 400 in 2004.

A supplement given to recipients of supplementary welfare allowance who have been supported by the Money Advice and Budgeting Services in brokering a deal with creditors is to be discontinued, which is very unfair. The Money Advice and Budgeting Service has been very effective in working with people who have been unable to deal with their finances. People are aware of this service, which has saved many families. Approximately 370 people will be affected, generating savings of €0.7 million in the SWA budget.

Increasing the underlying number of paid contributions required from 39 to 52 for entitlement to disability benefit, unemployment benefit and health and safety benefit is very unfair; the estimated gross savings are €2.5 million and the average weekly number of recipients affected will be approximately 400, which means many people will be affected. Increasing the period within which claims are linked with a previous claim from 13 weeks to 26 weeks is equally unfair. The estimated annual savings are €2 million and the average weekly number of persons affected is 275. That is another unfair stealth tax.

When one goes through the hidden agenda one sees this Bill is draconian and unfair. Reducing the maximum duration of unemployment benefit from 390 days to 312 days where less than 260 PRSI contributions have been paid since first entering employment is another unfair move. The estimated savings are €5.2 million and the measure will affect an average weekly number of recipients of approximately 700. Those are people on benefits — people who have paid stamps.

When one goes through these cutbacks and includes the fact that the Department miscalculated the pre-1953 stamp amount by an estimated €8 million, which costs the State €130 million per year, it is clearly unfair that the most vulnerable people in society should pay for those miscalculations. It is not a matter of the pre-1953 people fighting for their case, but the Minister should have got additional funding from the Exchequer to ensure the cutbacks evident here do not affect the most vulnerable.

The levels of entitlement are also unfair. At 18 a single person living at home who has left school can apply for unemployment assistance but will be assessed with 17% of their parents' disposable income. That is very wrong, as is the provision that no assessment of one's parents' income applies if one is 27 or over. When one comes to 18 and is entitled to vote, people may leave the family home or their parents may have no income to give them. It is unfair and unbelievable that people are assessed on their parents' income until they are 27 and this situation should be changed.

Last Monday a case involving dental benefit was brought to my attention. A person who retired last year, after paying all his welfare stamps for 40 years, went for dental treatment and was making a claim on his contributions. He was told he was no longer entitled to benefit because he had retired. There must be an anomaly in that situation. He worked for 40 years and retired, though he has gone back to work.

Debate adjourned.

Dáil Éireann debate - Wednesday, 25 Feb 2004

Social Welfare (Miscellaneous Provisions) Bill 2004: Second Stage.

Dáil Éireann debate -
Wednesday, 25 Feb 2004