Dáil Éireann debate -
Tuesday, 1 Mar 2005

Vol. 598 No. 5

Social Welfare and Pensions Bill 2005: Report Stage.

Mr. Penrose

I move amendment No. 1:

In page 5, between lines 14 and 15, to insert the following:

"1.—The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the earnings disregards applicable to schemes operated under the Social Welfare Acts and the impact of transition to work on the recipients of secondary benefits attaching to such schemes.".

We had a comprehensive debate about this on Committee Stage. The Minister probably knows my views as they have been often articulated. I hate to harangue him continually with these views. There is an idea that getting people into work is the best way out of poverty. However, it is not good enough to point to relatively low unemployment figures and assume that someone who has a job will have no further problems. The Minister will surely agree that is far from the truth. Not everyone has a job that will leave them comfortable. Many of those who have jobs are not taken out of poverty. There is a plethora of policies by which the Government intends to encourage work and social inclusion. Many of these have become ineffective through not operating earnings disregards and liable inflation, tightening the regulations unduly for entering schemes and making it harder to retain secondary benefits. It is that situation at which the thrust of this amendment which was eloquently moved by my colleague, Deputy Seán Ryan, on Committee Stage, is aimed. Many vulnerable people who may have been unemployed for some time or have low levels of educational attainment are in low-paid, insecure, part-time temporary work. The same is true of many groups whose members suffer social exclusion. The Labour Party believes that everything possible must be done to assist them to move into the workplace by ensuring the work they obtain is decent. Income policy should focus on a combination of minimum-wage and tax policy to ensure work is adequate to remove people from poverty.

The survey on rent supplement undertaken for the social partners found that 54,000 children lived in houses in which rent supplement was paid. These households are the poorest of all as even increases in social welfare payments are clawed back in most cases to below the basic supplementary welfare rate. As proposed changes to the rental system will take years to implement, special interim measures are required to alleviate the impact of the claw-back on families in poverty. If the income threshold of €317.43, which has been in effect since 1996, had been index linked, it would stand at approximately €400. It has been in place for over eight years. Earning disregards which apply to long-term payments such as the one-parent family payment should be carried over to supplementary welfare to ensure that earnings up to a certain amount are completely disregarded while half of the remainder is assessable as means. The qualification for greater attention by access to back-to-work schemes should be eased. While a number of the savage 16 cuts have been tinkered with, they have yet to be reversed.

The policy of the Department of Social and Family Affairs to claw-back from the wills of old-age contributory pensioners whose assets exceed the means threshold due to the saving of pension payments was discussed ad nauseam on Committee Stage. The committee discussed the impact of the policy on health board residents who receive a refund of withheld pensions. Members of the committee wished to ensure that elderly residents of welfare homes in receipt of non-contributory pensions will not be penalised. The refunds made to them in consequence of the Supreme Court decision will be assessed as means. While I acknowledge that the Minister, Deputy Brennan, has increased the capital disregard threshold to over €20,000, the weekly pensions of the people in question may be reduced. This retrograde step would create tremendous difficulties and form the focus of everyone with an interest in fairness in the system. The matter is one the Minister should observe closely.

An alternative possibility could involve the Department clawing back in due course the sums it considers to be overpayments. The Minister has consistently made a fair point which used to fall on deaf ears when we made it to his predecessor. The barren ground has gone and we may have a little fertile soil whereby the Minister may allow an acorn to become an oak. If not we will harass him politically. Joined-up Government policy in the treatment of pensioners is a figment of the imagination. There is a plethora of step-in and step-out schemes, disregards and top-ups, but no comprehensive policy. The Minister must focus on pensioners. I accept there might be some validity in the Minister's contention that the claw-back must apply to all income as it will not be possible to trace sources. Assets accruing from pensions already paid by the Department, however, are readily identifiable as such.

There are still some people in rural areas, if not many, who live frugally and are self-sufficient in the supply of potatoes, onions and other vegetables. We should encourage more people to live like that. Such people may have saved over their lives sums of €30,000 and the executors of their wills have a fiduciary duty, rightly, to comply with tax law. The minute they do, however, the Minister's vigilant inspectors will identify circumstances in which a claw-back may be appropriate. A claw-back is fine if someone has sold land or is earning an undisclosed income from land. As the Minister pointed out correctly, the idea of social welfare is to distribute to those in need. It is right to raise barriers to people who are well off who attempt to obtain something from the system to which they are not entitled. The equitable principle of tracing was established in a 19th century case which I cannot exactly remember as I am no longer a student. It relates to banks and the intermingling of one's money with someone else's. It is not beyond the realms of the Department's ingenuity to identify as arising from a genuine source refunds of moneys originally paid out as pensions. While the people in question were already means tested to obtain their pensions, their heirs will have their inheritances assessed as capital.

Mr. S. Ryan

As time is limited and a significant number of amendments have been tabled, I do not intend to say too much on this amendment. As amendments Nos. 1 and 2 are related, I will make a much wider contribution when the second of them is moved.

The main problem in addressing the problem of poverty is to discover how to get people into education and work. In this context, the principle we wish to promote involves dealing with the earnings disregard. As long as there is an impediment to the realisation of the aspirations of the people who wish to enter education and the workplace, we will have a major problem. Community employment schemes provide education and work. While I acknowledge that a disregard of €60 per week has been provided, people on social employment schemes are still not eligible for rent supplement. It is a significant matter which must be considered in the context of the operation of the schemes. I look forward to hearing the Minister's response. Together, we must ensure that impediments to work are dealt with positively.

Mr. Ring

We have had much debate over the last two or three weeks on single parents. I read an article in The Irish Times in which criticisms of one-parent families were made by a journalist who should have known better than to make the comments he did. I have also listened to the last two speakers. If we are serious about helping people to escape the poverty trap, we must make it easier for them to move from social welfare to the workplace. Most people find it difficult to come off social welfare because they are afraid of the unknown. Many on social welfare quickly lose their secondary benefits once they enter the workplace. We must look at this issue.

Medical cards should be protected for low earners, regardless of their circumstances, particularly if they have only come back into the workplace after many years of unemployment. There should at least be a five-year barrier. They should be allowed to retain their medical card if they have been unemployed for the previous three years and they should be able to hold on to the card for the next five years regardless of their income.

Previous speakers mentioned the over-70s, and we gave medical cards to millionaires and billionaires. A problem now exists with regard to nursing homes. We have created one of the greatest disasters since the foundation of the State. We started giving back money to elderly people but the problem is rolling on because people with loved ones in nursing homes——

An Ceann Comhairle

The Deputy is wandering away from the Social Welfare and Pensions Bill.

Mr. Penrose

That was never known to happen before.

Mr. Ring

I am moving on to that matter.

Mr. S. Ryan

The Deputy has been missed.

Mr. Penrose

We all miss him.

Mr. Ring

I am making the point about nursing homes and the problem which has been created by the Government. I want to move on to a matter raised by Deputy Penrose, which I raised in my speech last week. I only know rough figures as I do not have them off the top of my head. A woman in her 90s was in hospital for over ten years and left behind €16,800 or so. The family then had to repay approximately €8,000 as agreed with the Department of Social and Family Affairs. It is a means-tested payment, but surely one cannot expect somebody on a pension to get their money on Friday and spend it by the following Thursday because if they die with more than €20 the State will want it back. There must be a decent disregard for these people. Where this is wrong they must go back ten, 20 or 30 years. This has created a big problem for many families.

As Deputy Penrose said, the legal people are now obliged by law with regard to probate. When probate goes through they must check with social welfare to ensure they were getting their pension rights at the time, whether they are on a contributive or non-contributive pension. The disregard in terms of that is not right and the Minister must examine the matter.

The whole system of disregard is too restrictive for those on social welfare. Many of these payments are means-tested, but these people are not getting a fortune from the Department. As I said with regard to the article in The Irish Times criticising lone parents, it is very difficult for a lone parent to live on €175 or €180 plus €16.50 for their child. There is no way they will have a great living on that amount. The problem of people claiming money from the Department of Social and Family Affairs who should not do so is an entirely different issue. We are referring to genuine people who totally depend on social welfare and have no other means. They want to get out of the poverty trap.

Every year, the Department of Social and Family Affairs spends a fortune on advertising. The previous Minister spoke about this issue but did nothing. The current Minister's photograph has not come through my door, as did the previous Minister's. Every time the budget was announced, I received photographs. The former Minister, Deputy Dermot Ahern, was the first to do so and it cost a fortune.

The current Minister should start advertising the family income supplement. The Department should be encouraging people on social welfare to apply for this. If they cannot get into the workplace, they can qualify for FIS. Thousands of people in the State who are entitled to receive it and are not on social welfare are not collecting the supplement. Why does the Government not make an effort to target these people and encourage them to get what they are entitled to? The Minister and his Department should launch a campaign. It is very simple, RTE will take any money the Department wishes to give it. The Department should advertise and tell people what they are entitled to. If they have one child, they can get €446; if they have two children, they can get €472. RTE would do a good advertisement and people would begin to realise they qualify. The Minister should start up a proper campaign with regard to FIS.

Mr. Boyle

The Minister was thrown into his Department and not given much time to prepare either the original Social Welfare Bill or this legislation. In terms of assisting transition from work and the identification and elimination of welfare traps, this is a challenge and an opportunity which the Minister has, at this time, chosen to miss.

Following Inchydoney there would have been sufficient pressure within the Cabinet to ensure the €14 increase was the first priority. However, after that the Minister had alternative choices to identify and eliminate, on a case by case basis, the many welfare traps which still exist within the system. He has chosen to lessen the traps where they exist, which I accept is fully within his responsibility to do. Fewer people might be affected by particular traps, but the traps still exist. I and many Opposition Members would argue that a better strategy is the elimination, one by one, of these welfare traps and the taking of opportunities such as this legislation as and when they happen.

As with Deputy Ring, I can cite a specific example in my constituency of a woman working part time in what has been described as "yellow pack" employment in a large retail supermarket. Her husband became unemployed and she inquired as to the availability of the family income supplement. She was led through the bureaucracy which surrounds the application for this payment and was told she must conform with the work requirement of 19 or 19.5 hours. She, and thousands like her, do not work a standard 19-hour week. Sometimes they work 21 hours, sometimes 15 hours, depending on when their employer lets them work. Invariably they must work Sundays and bank holidays. The Department's inability to factor in the flexibility of modern working life and marry it with welfare payments has led to the low take-up of payments such as FIS.

Unlike Deputy Ring, I would go further. The best system to allow for maximum take-up of additional resources available to those on low payment is refundable tax credits. It should not be a person's responsibility to go through a bureaucratic system to claim for the additional payment. It should be a direct payment, made by the State, by way of the information that the State already has through the tax system. There would, therefore, be 100% take-up of a system that is already in place should we choose to use it, rather than a bureaucratic nightmare where there is only 30% take-up by people in need in our society. This is just one example of a welfare trap that continues to persist, but there are dozens more. The Minister should take the opportunity in future legislation to identify these traps one by one and make it a priority in the time he has left before the next general election to ensure that these are tackled as soon as possible.

Mr. F. McGrath

A number of Deputies have referred to the issue of poverty and getting people back to work, which is why I strongly support amendment No. 1. It is a very strong amendment which develops and furthers debate on poverty. Sadly, in broader society and many sections of the media, and even in this House, many think the debate on poverty is over and that we are suddenly living in an affluent and wealthy country and everybody is all right. The Minister is aware that the poverty debate is not over and that there are still pockets of this country where major disadvantage and poverty exist. We see the statistics and figures. There are children in poor areas who eat nothing but junk food every day. They have a packet of crisps or a bottle of coke for their lunch in primary school and go to school in the morning without a breakfast. Breakfast clubs provide such facilities, which is a reminder to us all that the poverty debate is not over.

On the north side of Dublin, including my constituency, some estates have an unemployment rate of 16%, which is four times the national figure. It is appalling that urban pockets are suffering such deprivation. The amendment seeks to deal with the supports that people require. The Minister has a major role in dealing with welfare traps. The amendment concerns this issue and seeks to add teeth to the legislation.

A section of the population is unable to work because of personal problems linked to social dysfunction. I would put the number of those affected at 50,000 to 60,000. The Minister should introduce a creative support framework for such people. I support other Deputies who have called for the removal of impediments to getting people back to work. I urge all Deputies to support the amendment which adds strength to the whole debate on poverty.

Mr. Crowe

I support the amendment which lies at the core of our attempts to encourage people back into employment. If people had a genuine choice they would opt for employment. There is a notion that people are happy to live off social welfare but, in reality, the longer one is in poverty the more difficult it is to break out of it.

I agree with what has been said about the family income supplement. We need to ensure that people are more aware of their entitlements. I recently came across a case of a woman who did not know she was entitled to the family income supplement. She had been working for a number of years but did not know how to apply for it. I was informed that if a person does not know they were entitled to the supplement, it is not a valid excuse for claiming back payments. Perhaps the Minister will examine that matter.

Deputy Boyle referred to the issue of tax credits which merits attention. We must examine the problem of poverty to discover whether it is diminishing. I welcome the fact that the Minister recognises the existence of poverty. Many of his predecessors argued that huge improvements had been made, but those working on the ground said that despite the Celtic tiger, the situation was deteriorating. The gap between rich and poor has widened in recent years. There are more millionaires in the country than ever before, but we also have more low earners living on credit.

There are many people working who are also living in poverty. That is the core of another debate that has not been touched on by The Irish Times or anyone else. Many people are working in bad employment conditions. I support this worthwhile amendment. It gets to the heart of the issue, which is that we should be encouraging people back to work. One of the means by which this can be achieved is through income disregard.

Mr. McCormack

I also support the amendment, particularly because we should not put obstacles in the way of people who want to return to work. I advise the Minister to accept the amendment. There is no use in debating different aspects of social welfare unless a Bill such as this one is before the House. This is the time to ensure that we obtain what we are seeking. The Minister agrees with us on some matters, but the measures are never implemented.

The amendment refers to the earnings disregard applicable to schemes operated under the Social Welfare Acts. I have reminded the Minister on a number of occasions of several incomes that disqualify people under the Social Welfare Acts. I have discussed several times with the Minister the trap a carer who becomes a widow can fall into — she cannot draw a double social welfare allowance and receives a widow's pension only. The Minister should correct that matter. If we do not do so in this legislation we will have no other opportunity to do it. For example, if a carer who is looking after an invalid full time suddenly becomes a widow, she will lose the carer's allowance when she gets the widow's pension because her income would be regarded as a double social welfare payment. Following this year's budget, that carer will obtain a respite grant in June, but that is not much good to someone who is a carer 365 days per year, yet has lost the carer's allowance. If such a change can be incorporated into the Bill, I would advise the Minister to do so, even if it cannot be done through this amendment.

Mr. Brennan

I do not propose to accept the amendment. I explained on Committee Stage that I appreciate the amendment is a semi- pro forma one which calls for a report. I confirm that I would have no difficulty in reporting to the House on this subject any time I am called upon to do so. Most Deputies will acknowledge that the pro forma nature of the amendment is to enable us to discuss the matter of earnings disregard. I take note of what Deputies have said. Some measures have been introduced in the social security scheme over the period to help people to return to work. A number of subjects that have been mentioned under this amendment will arise in other amendments as we proceed, but I do not want to stray into those until we get to them.

The first €146.50 weekly earnings of the one-parent family payment, plus 50% of the balance to €293 is disregarded. Deputies will be aware that budget 2005 also provided for a transitional 50% payment for six months after reaching the €293 level and after exceeding it, so that should help a little.

As regards unemployment assistance, 40% of net earnings from part-time work is disregarded. As regards the disability allowance, the first €120 earnings from rehabilitative employment is disregarded. Deputies will be aware that the rent or mortgage supplement and other secondary benefits are being retained on a tapered basis in certain circumstances.

Subject to an income limit of €317 per week, secondary benefits, such as rent, mortgage interest, diet and heating supplements, back to school clothing and footwear allowance and fuel allowances may also be retained in certain circumstances. Rent and mortgage interest may be retained on a tapered basis for up to four years — that is, 75% in year one, 50% in year two and 25% in years three and four.

Back-to-work allowances and family income supplement are disregarded in assessing household income for the purposes of the €317 income limit. From their constituency work, Deputies will also know that in addition to the tapered retention system, participants in the back-to-work, community employment and other approved schemes, who work less than 30 hours per week, have the option of being assessed for rent or mortgage interest supplement under standard social welfare rules. Deputy Seán Ryan mentioned that matter to me and the debate indicates that we must do more of this.

We are gradually drawing together social security payments and other benefits, which are major weapons in helping to ease the transition from welfare to work or education. By designing such a mixture of benefits we will not have any sudden falls or losses in income. All sides of the House are satisfied that is the way to proceed. We are certainly heading that way fairly rapidly.

Deputies also referred to the capital disregard. I remind the House that I have increased that from €12,000 to €20,000, which should certainly help anyone who has an SSIA. We will come to that matter later.

Regarding earnings from part-time employment, Deputy Seán Ryan asked me the amount of additional income over and above the appropriate supplementary welfare allowance rate that can be disregarded in the means test for rent or mortgage interest supplement in respect of earnings. That has been increased to €60 per week. The disregard is not applied for the purpose of assessing the €317 household income limit relating to tapered retention of supplement. As Members are aware, employment scheme participants who work less than 30 hours a week can be regarded as being in part-time employment and therefore they can avail of the disregard when assessed under the standard SWA rules.

Deputy Ring asked me about advertising the family income supplement. He is correct about that; we need more take-up of it. The Department undertakes a number of measures to ensure that people are aware of the FIS which include advising all newly awarded one-parent family payment recipients and employers on an annual basis in PRSI mailshots, and examining entitlement in all awarded back to work allowance cases. Information on FIS is contained in all child benefit books and can be accessed on the Department's website. The scheme has been extensively advertised through local and national media outlets, including newspapers and radio, as well as through poster campaigns and targeted mailshots. I will examine the effectiveness of these measures and see if I can draw further attention to the scheme. I take his point on that matter.

Deputy Boyle referred to welfare traps. I have spoken about the gradual approach to moving from welfare to work. Deputy Finian McGrath referred to the debate on poverty not being over. He said that some people were of the opinion that the debate was over. It is far from over. I acknowledge that completely. The gap has widened and we need to narrow it. The famous rising tide has not lifted all boats. Poverty is not just, as is often thought by some people, a factor in households of unemployed people. There is a new working poor and coping class. That is a real issue. Increasingly, the evidence I have received points to a great deal of child poverty in homes where someone is working, albeit in difficult circumstances and on a very low income. We would be wrong to give the impression that the battle against poverty is over. It is an ongoing effort which we must sustain. Deputy Crowe commented on much the same type of subject.

Deputy McCormack asked me about carers and widows. He is aware that the Oireachtas committee recommended that 50% of the carer's allowance would go to widows when they took up caring duties. We examined that but we did not have a great deal of time to address it this year. We responded with the €1,000 respite grant which, as the Deputy stated, can now be claimed from June. That will help to some degree. It is not an enormous sum but it is recognition of the work many widows do in taking up caring duties. The issue of paying the full allowance or some portion of it is a matter I continue to examine. I will see what is possible. It is a matter which would require considerable financial investment. Having said that we will examine the matter closely. I will refer to other related subjects when we discuss carers later. I thank Deputies for their comments.

Mr. Penrose

I thank the Minister for his reply. I also thank my colleagues for their comprehensive contributions on this matter. It indicates that people are acutely aware that the debate on poverty is not over by a long shot. The Minister rightly identified that in some cases people who take up low paid jobs find it more difficult to survive. Much of the poverty to which the Minister referred in regard to children — whether there are 60,000 or 120,000 depends on the measure used — relates to such an environment.

The interface between part-time work and social welfare needs to be reviewed. I have a strong view on that matter. We are all in favour of promoting gender equality. If that is the case, women and men should have equal access to work and employment opportunities. Increasing women's participation in employment is also a key policy in alleviating child poverty. Many women have a very different social and labour market experience to men. We need to modernise the social welfare system to make it more friendly towards women.

More than 130,000 women are considered as qualified adults in social welfare terms in the sense that their spouses receive social welfare payments for them that are worth only 70% of a full adult payment. These women, who comprise 98% of qualified adults, are not only denied independent access to money but are also invisible in the labour market. It is not worthwhile for them to sign on and register as unemployed because of the limitation rule that a family cannot claim two unemployment assistance payments and can only claim for one adult and a qualified adult. Not only does this leave them poorer by about €45 a week, it also means that the qualified adult is not directly eligible for labour market or FÁS and education programmes. This is where the issue becomes jammed up. This is the route to poverty. If we can tackle this, we will get to the root of the problem. It is time to modernise the social welfare system to acknowledge that, for the most part, it is women who are in that position although there are also some men.

We developed the social welfare system in 1952 when things were different. In general, men were the breadwinners and women were recognised under the Constitution in that we paid lip-service to the tremendous work they did bringing up families and staying at home to do great work.

An Leas-Cheann Comhairle

Is the Deputy replying?

Mr. Penrose

I am.

An Leas-Cheann Comhairle

The Deputy is entitled to a two minute conclusion.

Mr. Penrose

I had better bring it to a conclusion. Obviously poverty is such an important topic that every Member of the Opposition would wish to reply for 20 minutes. The Minister is aware of that.

It is time to modernise the social welfare system to take cognisance of the reality of life in 2005. It is 53 years since the system was brought into being and it is time to modernise it.

An Leas-Cheann Comhairle

Deputy Ring has indicated that he wishes to contribute. Deputy Penrose will have to give way.

Mr. Penrose

I will withdraw the amendment if the Minister gives a commitment that he will draw up a report on how income disregards are applied. The Minister can produce the report in June or July. Surely the Department will have an opportunity to evaluate the matter in that interim.

Mr. Ring

I am glad the Minister will do what I asked in regard to the FIS and get the Department to spend some money on advertising it. I accept the Department has the information on websites, social welfare books and other places. However people still do not understand how it works. A simple advertisement on RTE would do the job.

I agree with Deputy Penrose that the social welfare system needs to be reformed. However there is a difference between reforming the system and taking money from people. Every time I hear of reform I know people will lose money. Any time a social welfare officer tells a client of mine he or she should receive more money, I know what will come next. He or she will come back to me in a month's time saying that the result was that he or she received less money. As a result, I am always afraid when I hear the word "reform". I would prefer to see people being told their rights. Both the Department and its clients should know their rights. I look forward to a strong campaign regarding FIS.

Mr. Brennan

All these amendments call for reports of one kind or another. I indicated to the House and to the committee that I have no difficulty in discussing these matters by way of parliamentary question, Adjournment matter and special debates or through legislative debate. I have no difficulty in making reports on these matters. We can discuss the best format for it later. I would be reluctant to commit to a range of formal reports at this stage.

Mr. Penrose

The Minister's bona fides have been sound up to now so I accept his commitment. However I hope it is not as slow as the report on the back to education allowance.

Amendment, by leave, withdrawn.

Mr. Penrose

I move amendment No. 2:

In page 5, between lines 14 and 15, to insert the following:

"1.—The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the impact of the social welfare system on one parent families and on proposals to remove the restriction on formation of a family unit which presently applies to recipients of such payments, and to alleviate the requirement that income disregard be assessed by reference to any particular week rather than averaged over a year or other period.".

This is a very important matter. Over recent weeks, the quoting of figures has gone out of control, particularly those relating to the number of young women who are drawn into the perils of early and unmarried motherhood, according to someone's apology on 10 February. However, those figures are totally false. The total number of lone-parent households in Ireland has remained a fairly constant percentage of total households in the past six years. They comprised 11.2% of private households in 1996 and 11.6% in 2002. A sizeable proportion of lone-parent households are headed by a man rather than a woman. Therefore, nearly one sixth of lone-parent households are headed by men. The total number of births to women under the age of 20, whether lone parents, has remained fairly constant over the past 30 years at approximately 3,000 per year.

The Minister will agree that, according to the recent CSO figures, the actual numbers and percentage of births to this group has fallen from 5.35% in 2001 to 4.55% in 2003. The age profile of women in receipt of lone parent allowance for 2002 shows that only 3.2% of them are under 20 years, while the majority, 51.4%, are aged between 30 and 59. In this context, the report by Camille Loftus entitled One Size Fits All? — The Irish Government's Failed Approach to One Parent Families 1994-2004, published by the One Parent Exchange Network, OPEN, is compulsory reading. I urge the Minister to ensure that it is mandatory reading for every official in his Department who deals with this topic. It is one of the best surveys or overviews of the issue and makes invaluable suggestions.

The Minister needs to do more than commission another report and suggest reform. I agree with Deputy Ring in that reform should include modernisation by, for example, making a woman equal to a man in terms of abolishing the age old qualified adult allowance, giving her 100% of the allowance and treating her as an equal, which would provide a boost of approximately €45. However, the minute one hears the Minister refer to reform, one must walk away because it is generally a nice way of referring to cutbacks. Nevertheless, I support positive reform which modernises and takes cognisance of the realities of the new millennium.

The Walsh-Myers scenario of an explosion of teenage births in recent years is absolutely false and has no basis. Few people choose to be lone parents since lone parenthood can arise through death, divorce, desertion, separation, imprisonment of a partner or through an unplanned pregnancy. Whatever the cause, it is usually a very traumatic event for both the lone parent and the affected children. The initial stages of adaptation to lone parenthood can be very difficult as can the long-term prospects for parents and children.

Some 51% of lone parents are aged between 30 and 59 years and only 3.2% are under 20 years. There is evidence internationally and in Ireland that lone parents are at high risk of persistent poverty. Employment for lone parents in Ireland is low, as it is in England, Germany and the Netherlands. However, the key to raising lone parents out of the poverty to which their family circumstances often condemn them is to facilitate their move into work. This transition is what is dealt with by this amendment.

It is difficult for a lone parent to take up work. Children must be cared for and there is no second parent to share that responsibility. Work must be found which facilitates such requirements as when children need to be taken to and collected from school. Moreover, many lone parents might not have sufficient educational qualifications for many jobs and, therefore, find only relatively low-paid insecure employment. For many lone parents work will be impossible without having child care. For low wage earners generally as well as lone parents, the cost of child care can take up to the whole of an income earned and leave those low income and lone parent families no better off than when the parent was not working.

In 1996 the lone parent family payment was an innovative provision which allowed lone parents to work and earn up to €146.50 per week without losing any of their allowances. This graduated to €293 per week before social welfare payments were lost. A 12-month transition was available which was cut to six months by one of the "savage 16" cuts. The current position is that there is a six-month transition period, which represents half the "savage 16" measure.

The kernel of this amendment is that the thresholds were never increased from the 1996 eligibility barrier, with the result that lone parents can lose all State payments before they can even earn enough to cover Ireland's extremely high child care costs. Therefore, the incentives aimed at trying to get people out to work collapses because they lose their benefits. Whatever people earn in additional income is consumed by child care costs. This applies not just to lone parents but across the spectrum of many low-income employees.

The 2001 report of the National Economic and Social Forum, as well as Camille Loftus's 2004 report, highlight the fact that many employment supports, educational and training issues and employment schemes available are aimed at the unemployed in general and do not take into account the special needs of one parent families. It is often a highly complicated exercise to calculate whether an individual lone parent would gain or lose financially by availing of them. There is a lack of information available to lone parents about the social welfare system, with little attempt to explain what lone parents' rights are, which reflects Deputy Ring's point about people not knowing to what they are entitled. It is time to simplify the system.

In regard to child care, it is worth noting that the problems experienced by lone parents echo the experience of all the groups on social welfare and prove the need to simplify the whole system. I disagreed with the propositions at the centre of the recent press furore, which I set out in my Second Stage speech. The controversy gives us the initiative to reform these payments in a positive manner to facilitate the transition to work and to education.

This is why the abolition of the back to education allowance was an absolute disaster, although we cannot visit it upon the Minister. We must be honest. If we are not, we should not be in this House. The barriers to self-sufficiency for single parents was made worse by the "savage 16" cuts which were tinkered with in the most recent Finance Bill but not reversed. The abolition of the crèche supplement which allowed single parents the opportunity to take up education and training opportunities is another problem, as are the cutbacks in the back to education scheme, which represented another important avenue or opportunity. The eligible period was brought back from 15 to 12 months, although it had been six months. The excuse was that there had been a great deal of abuse of the system. However, I never saw this abuse. If there is abuse, the people responsible should be curtailed rather than bringing a sledge-hammer to crack a nut and killing the scheme so that it is no good to anyone.

Deputies Boyle and Finian McGrath will give examples of people who fall within an 11-month timeframe, but the Minister has set the regulation at 12 months. We want to bring it back to a minimum of nine, although it should be brought back to six months. For the sake of €1.5 million or €2 million, one could open up an avenue which would be very positive for lone parents as well as other groups. Further difficulties are caused by the restrictions in regard to entitlement to one parent family payment for those who are in employment on modest earnings as well as the rent allowance restrictions.

The €317.43 limit, formerly £250, which was set nine years ago, restricts the ability of lone parents and other low income families in private rented housing to improve their situation by taking up work. This means that a lone parent with two children on a community employment scheme, which has also been emasculated, would forego his or her rent allowance. I am sure Deputy Finian McGrath will speak with greater authority than | about the conclusions of the Vincentian Partnership's research. It concluded that the community employment scheme earnings meant the difference for most lone parent families on the scheme between buying fresh vegetables and yoghurt for their children and less nutritious food or between getting into debt on day-to-day living or not. These restrictions help to keep lone parents in poverty. It is high time the €317.43 limit was raised in line with the growth in average earnings since 1996 when the limit was set.

I wish to make a final point, although I believe the Minister took it on board. He has an agile brain and I hope his officials are keeping pace with him because sometimes he is able to sidestep me, which he would not have done at one time because I would have given him a good shoulder. The point I wish to discuss is the capital disregard in the means test for the one-parent family payment. I will take the example of a lone parent with a 12 or 13 year old child. She got the opportunity of a postal job with periodic casual payments. It pays approximately €350 per week or €400 per week with overtime. There are about ten weeks' work over the year, which means earnings of approximately €4,000. This would give the parent an opportunity to provide a better environment for the child. Perhaps there would be more clothes, more opportunities to go places, extra tuition or even a holiday, which most people take for granted.

However, as a result of the lone parent's income being over €293 for four weeks, she must go out of the system and get half her payment for those four weeks. That takes ages; she will be back in the system again by the time the half payment is paid. She might go out of the system again in the summer, go back into it afterwards and then leave it again over Christmas. The €146 multiplied by 52 is €7,500 to €8,000. The income should be calculated on a bulk or aggregate rather than a weekly basis. In that way, the young lone parent can take up the employment and improve her lot while retaining the one-parent payment.

That is preferable to yo-yo bureaucracy where one is in and out of the system. It involves a plethora of letters and, as Deputy Ring said, going to various places to find out one's entitlements and then returning again. It is a yo-yo, up and down system. Deputies table parliamentary questions on behalf of the person, which costs a fortune. A parliamentary question probably costs €250 to answer. It would be better to leave the person concerned with her lone parent's money which will only cost €150 to €160. It is tomfoolery economics.

This should be put on an aggregate basis. It should be based on the person not exceeding €7,500 on a per annum basis. That sum is roughly equivalent to €146.50 multiplied by 52.

Mr. S. Ryan

The Deputy does not even need a calculator.

Mr. Penrose

We were not allowed to have calculators at school. The Christian Brothers were great in that regard.

My point is that this requirement must be changed. It is provided for in the Social Welfare (Consolidation) Act 1993. It is Rule 1 of subsection (8)(a) of Part II of the Third Schedule of that Act, as amended by section 3 of the Social Welfare Act 1999. The quicker the Minister introduces the new consolidation Act, the better. It is all right for lawyers to root through the legislation but what about an unfortunate member of the public? It is time to simplify the gobbledegook in social welfare legislation. Often it is difficult to understand the language, which is always phrased negatively: “The person will receive their payment provided they do not...”. It is time to be positive. People are entitled to their payments. The system should be positive, facilitative and flexible to ensure they get them.

Mr. Ring

A recent EU study of one-parent families showed that 50% of lone parents find life difficult. The research for the report was conducted in Ireland and throughout Europe. The report shows there is a difficulty in this sector.

The Minister spoke about child poverty. Why was there no increase in the last ten years in the child dependant allowance? The person who wrote the article in The Irish Times should spend a week with a lone parent with two or three children and see how they survive. He will see the misery of what they go through. I and other practising politicians see it all the time.

When this controversy arose, the Minister said he would thoroughly examine the one-parent payment. Suggestions were made regarding cohabitation. What proposals does the Department have with regard to allowing people to live together and providing for a proper disregard? In some cases the social welfare system does not encourage families to live together but works against it. This is due to the restrictive guidelines about what they can earn. In situations where two people are on social welfare or where one person is on social welfare and the other is in a low paid job, they will lose their rent allowance, medical card and other payments to which they are entitled.

Last year, the previous Minister and the Government in general spoke about what they would do for lone parents and people living in poverty. However, they then imposed the 16 savage cuts. Deputy O'Dea was Minister of State at the Department which produced a study that showed that if these people were caught at an early stage, re-educated and sent back into the workplace, most of them would leave the social welfare system. What was done instead? A provision was introduced whereby a person had to be 15 months out of education before he or she could qualify for the back to education allowance. The current Minister reduced that period to 12 months. We sought to reduce it to nine months in this Bill but that has not happened.

The cut in the crèche supplement and the other savage cuts affected women. A woman who calls to my constituency office has made an important point to me on many occasions. It might be appropriate for the Minister to speak to the Judiciary about women and how they suffer. I can give a simple example. One of my constituents was, correctly, convicted of drunk driving. While the judge imposed a massive fine, the man's wife wished he had been sent to jail. It would have been easier for her to manage had he been sent to jail. The husband did not give a damn because he intended to drink anyway. However, his wife would still have to pay the fine out of her social welfare money. When judges impose such fines, they should consider it carefully and find out if the person is on social welfare. If the husband has a drink problem and is behaving irresponsibly, the judge knows he will not give a damn. He will drink each night regardless and the wife will try to pay the fine. She will try to borrow it from her family or from somebody else. That puts major pressure on the family, as I have seen many times over the years.

The Minister should conduct a complete review of the one-parent family payment. It is not popular to say it but if cohabitation is taking place, the social welfare system should work with the people involved rather than against them. That will benefit both the State and the family unit. There are many cases where women could have a partner to live with them and help them raise the children but they cannot do it because of the social welfare code. It is time there was a debate on this. The Minister and the Department should examine this issue to find a way of improving the lot of these people. The debate has begun and should continue. The Department should watch it carefully.

As I have asked on many previous occasions, why are there three rates of payment for children? Someday, somebody will take a test case about this to the courts and they will win. There are three rates —€21.60, €19.30 and €16.80. Why can it not just be one rate of €21.60? The three children are equal. I have raised this issue on many occasions. What is the difference with the children who are getting €19.30 and €16.80? Under the Constitution we are obliged to treat all children equally. The Minister should examine this in the next budget and bring all the rates up to €21.60.

Over the years it has been proven by statistics that women spend their child benefit on children. It is important the money is targeted to deal with child poverty because much poverty and hardship exists and many on social welfare find life very difficult. It was stated that parents with one or two children on social welfare would receive approximately €200 per week. How can anybody live on €200 in this country, given the stealth taxes?

The most serious problem which I encountered this week in regard to Mayo County Council is that when claimants, particularly women, receive social welfare increases, the first form to come through the door is an income query from the local council, which takes a percentage of their social welfare payment from them. The second body to take from their payments is the ESB. I have asked the Minister to investigate this. I have never heard as many complaints about increases in ESB charges as in recent months. People find it difficult——

An Leas-Cheann Comhairle

The amendment refers to one-parent families.

Mr. Ring

One-parent families are suffering most from this; they are feeling the pinch. I ask the Minister for a real debate on the issue of lone parents. We must consider this matter to find out how we can improve their lives and how the social welfare code can assist them rather than working against them.

Mr. S. Ryan

I welcome the opportunity to contribute on this important issue. Controversy recently arose in the context of the article by Kevin Myers and the contribution of Dr. Ed Walsh. At the time, I stated that Kevin Myers's article was a despicable attack on lone parents and on children, and was based on many inaccuracies. However, I also acknowledged, given my work experience, that an issue requires to be addressed. Irrespective of what people might perceive or wish the situation to be, we must acknowledge Ireland is no different from a range of other countries where change is taking place in family life.

It is interesting to note that in 1972 the rate of extra-marital births stood at 3% whereas it is now almost 30%, a situation which must be addressed. Whether we like it, the one-parent family is now part of the diversity of family types and is increasing as a proportion of Irish families. Between 1991 and 2002, a 75% increase in the number of one-parent families was recorded, as highlighted in the recent census figures, which indicate that 11% of the population live in one-parent families. Deputy Penrose stated that lone parents come from a diversity of backgrounds in that 40% of sole parent-headed households are headed by widowed persons, 32% by separated or divorced persons and 24% by single people who were never married. Given some of the comments made, as few as 3.2% of lone parents are under 20 years of age. This information must be considered.

As we consider the issue of poverty and address it in a certain way in regard to amendment No. 1, the fact remains that one-parent families face a significantly higher risk and rate of poverty than their two-parent counterparts and the overall population. It is interesting to note that the EU survey on income and living conditions released in January of this year indicates that 33% of one-parent families live in constant poverty compared to 9% of the population overall. Moreover, 42% are at risk of poverty compared to 23% of the overall population. These facts must be considered. We must also consider welfare and poverty and how we link these aspects together to improve the situation for one-parent families.

Conditions for the one-parent family payment stipulate that any additional income will be assessed against entitlement to payment in excess of €146.50 per week. If we are talking about dealing with this issue and amending the income disregards, it is a scandal that these payment levels have not been increased for nine years. How are we to deal with this? At the same time, we have seen an increase in the average industrial wage, the introduction of the minimum wage and significant increases in social welfare payments. We must consider the issue in this context.

A matter to which I referred is how we get lone parents into a work environment, particularly given their low average educational attainment compared to married people. Significant evidence suggests that many lone parents do not have first level and second level education and very few have third level education. We must improve this if we are to get lone parents into the work environment. They must first be enabled to get education.

For many lone parents the real problem is the capacity to have children looked after when they try to return to the workforce. The cost of child care must be addressed. It is a fundamental issue, not only for lone parents but for many social welfare recipients and workers on low incomes who are trying to improve their situation. In this context, many people wonder how they can break into the work environment when, for example, their children have begun school and there is the potential to join a community employment scheme.

The Government's recent record on the construction of social housing is scandalous. The numbers on social housing lists have increased by almost 60% since the Government took office. People cannot get a house and cannot expect to get one. They could wait a further four to six years if they are lucky. We urge them to avail of a social employment scheme only for their rent supplement to be affected. The modest improvements made in this area do not go far enough and the matter must be examined.

I know that on Committee Stage the Minister referred to and took on board the strong case made by the Opposition to reduce the back to education scheme requirement from the 12 months stated in the legislation to nine months. In effect, the Minister said primary legislation would not be necessary to deal with the issue and that it could be dealt with by regulation. I had hoped that the Minister would have said today that he was working on such regulations and that they would be in place within a specified time.

Regarding lone parents and the matter mentioned by Deputy Ring, I draw attention to people working in low income jobs who cannot obtain local authority housing and who aspire to live together. Irrespective of views we may have, they want to set up a relationship and work. They might not take the traditional path but they want to set up a sound family relationship. They cannot get housing, however, and can only avail of the rent supplement option. In the context of the savage 16 cuts, the Minister confirmed that anyone who works is not eligible for rent supplement. People then have the option of trying to fool the system by giving the impression they do not live together even though they do, thereby abusing the system. None of us wants that, nor do the couples of whom I speak, but they are sometimes left with no alternative. Their other option is to live separately with no relationship between them and their children.

A number of issues are involved. The Opposition is prepared to work with the Minister and his officials to address this major issue positively and deal with the restrictions which inflict poverty on lone parents. We must do all we can to get people into education and jobs and generally improve the lot of a substantial and ever-increasing number of people in society.

Mr. McCormack

The essence of this amendment is simple and I am sure the Minister will accept it. It merely asks to bring before the Dáil the report on the impact of the social welfare system on one-parent families, and on the proposal to remove the restriction on the formation of family units which applies to recipients of such payments.

We cannot stress enough the importance of the family unit. As Deputy Ryan noted, that unit is quite different from what we envisaged when many of us married 20 or 30 years ago. Family units now are quite different. We know this from the people coming to our constituencies. Will the Minister bring forward legislation to allow both parents to live with their children because, currently, many single mothers are financially discouraged and disadvantaged by having the father of their children living with them? Will the Minister expand on his recent statement that he would examine the one-parent family situation and the benefits children get from having two parents in the home instead of one? That is the crux of much of the difficulty with single parents or with children born to a single parent.

We know from our office and constituency work that in some cases a blind eye is turned to situations where single parents have partners living with them and the situations are denied or ignored. If the Minister agrees with the amendment, which I think he does, when be brings to the Oireachtas the report on single parents and family units, perhaps he might expand on his recent statement which he subsequently left hanging. There was no follow-up on what he would do to help the situation whereby families could, within the social welfare rules or whatever situation obtained, have two parents instead of one, something from which children and families would benefit greatly. The Minister might expand on this in his reply because we must deal with the reality of the situation rather than what we might like it to be, especially in light of the statistics given by Deputies Penrose, Seán Ryan and Ring regarding the numbers of children now being born out of wedlock.

The Minister might also expand on his earlier statement in this regard and say what he proposes to do. If he cannot do so now and he accepts the amendment, when he brings the report before the Houses of the Oireachtas within six months, perhaps he might have found a solution which Deputies on all sides of the House could support. That solution might allow children to benefit from having two parents living with them instead of one.

Mr. Boyle

The Minister might think the Opposition ungracious in not acknowledging his partial retraction of the qualifying criteria for the back to education scheme. In reality, the Minister has merely engaged in a J-turn as he has not even gone the full distance of a U-turn. The criticism from these benches was also made outside this House at a recent seminar by the One Family group. The policy officer of that organisation was quite clear that it was relatively indifferent whether women in one-parent families had to wait in poverty for 12 months or six months to access the one route out of poverty many of them have, namely, accessing a back to education course. The Minister might bear that in mind when revisiting and reviewing the criteria.

The Minister, his predecessor and his Department put in place an unnecessary barrier as part of their intransigence on the issue of child dependant allowances. The argument made more by the Minister's officials than anyone else is that the effects of child dependant allowances are better achieved through large increases in child benefit such as those made in recent years. However, the child dependant allowance was intended to recognise that children in these circumstances had additional needs which the universal child benefit payment could not meet. If the Minister and his officials are not prepared to accept that reality, I take with a pinch of salt his recent statements that he is prepared to examine this issue in terms of how the role of families and the lot of one-parent families are defined. The Minister needs to focus on this. I would like him to devote more resources to this area to justify the statements he has made recently. Unfortunately, they are not provided in the legislation but the Minister should seek to attain these goals in his remaining two years in office.

Mr. Crowe

I support the amendment. The area I represent has one of the highest concentrations of single parents in the State. Recent media reports suggest that many of these young parents are parasites living off the State. They did not go as far as saying they do not love their children but the reports feed the perception that these people are taking the State's money. The reality is different. Many of these young mothers had unplanned pregnancies and, in the majority of cases, they all love their children. They would jump at the opportunity to work and many of them are interested in returning to full-time education but they cannot do so because of financial considerations or a lack of child care support.

The Combat Poverty Agency states families with children are at a higher risk of poverty, with those consisting of four or more children or of only one parent with children having a one in two chance of being poor. In addition, a quarter of those aged under 18 live in poor households while Ireland has a relatively high level of child poverty.

Previous speakers called for the extension of the back to education allowance. I argued with the Minister's predecessor that the cutback in the allowance was a major setback for one-parent families and that it was a miserly sum in the context of the overall budget. However, the futures of many people were destroyed because they had prepared to take up courses but could not do so. It was ridiculously asserted that many EU citizens had moved to Ireland for the craic and were claiming this allowance. Representatives of AONTAS recently appeared before the Oireachtas Joint Committee on Education and Science and they said they had never come across such individuals coming here for the craic. This was an attempt to denigrate the problems faced by social welfare recipients. The cutback in the back to education allowance was a major setback for them.

We need to debate why many young lone parents find themselves in this situation. Many of them in my area are looked upon as children rearing children. Their first option, which should be encouraged, is to stay at home with their parents, but this results in gross overcrowding in some homes. This means that a number of lone parents do not have an option. The majority of young single parents in my local authority area are trying to get houses but the supports are not in place. Suitable housing for them is not being built.

We must also examine the issue of cohabiting couples and the lifestyle they must lead. They are afraid, they must look over their shoulders and so on. Many of the fathers want a role in rearing their children and I presume that is where the Minister is coming from on this issue. The State must respond to the real as opposed to the imagined situation. People have lives and are trying to move on. They are in long-term relationships in a number of cases but cannot be recognised for financial reasons.

There are significant problems. If one is a single parent, there is a greater chance that one will live in poverty. If one lives in poverty, one's focus is on trying to get housed. Previously, if a single parent left home, he or she had a problem getting approval for rent allowance, although changes have been made in this regard. The debate on this issue has not taken off. Media reports do not address the overall problem while the Minister is hoping to examine this area. However, we would like to hear his ideas. This is an increasing problem. New family formations exist and the State needs to wake up and recognise that.

Mr. Brennan

I thank Deputies for their contributions on the amendment but I prefer to decline making the amendment on the understanding that I am happy to discuss the issue in the House whenever they wish.

The one-parent family issue goes back to 1997 when the structure of the allowance was reorganised. A one-parent family can result from death, separation, divorce or being unmarried but I am determined to address the perception that lone parents are seen as a problem, which Deputy Crowe captured well. They should be seen as an asset or resource the State must use and can ill afford not to provide with the full range of employment and education choices. If we approach the issue in this manner rather than as a difficulty, problem or a burden, we will come up with exciting solutions. That is the space I am in as I try to work through the issue.

Entitlement to payment is contingent on not cohabiting. However, that can be an obstacle to a parent getting married or otherwise living with a partner, which can be also be difficult for the child or children involved. I have queried the social policy advantages — there do not appear to be any — of State officials enforcing a non-cohabiting rule when sensible social policy dictates, given that children are involved, joint parenting should be encouraged with both parents being available to support the children while not necessarily living together.

State policy has been designed to the contrary with officials knocking on doors to ensure the child's father is not in the house. I do not have an easy answer to this problem but Members are correct to pursue me on this and ask what I am doing about it because I have referred to this issue previously. An interdepartmental group is working on a number of issues relating to lone parents and it will report in the middle of the year. I am considering how to address the cohabitation issue. If Deputies have any thoughts on the matter, I would genuinely welcome them since I also agree with Deputy Ring. When I talk of welfare reform, I approach it from the perspective of simplification, modernisation and bringing sensible social policies into play. I am not talking about touching anyone's income — quite the contrary. Given our anti-fraud measures of recent years, I believe that we have applied enormous pressure where necessary to combat the problem. No one on welfare is making a great living. Anyone who is not on welfare should try it; they would know very well just how difficult it is. I assure Members that no one is living it up. Most incomes are very modest.

Mr. Ring

The Minister should tell his officials that.

Mr. Brennan

Anti-fraud measures maintain the pressure since it takes funds from those who deserve them, and they must be available to them. I have made this point many times, especially in the area of lone parents. We cannot simply throw money at a social issue and hope that it salves our conscience. We must get behind the payment and see what the social issue is and whether we can solve the basic problem, which is to ensure that such parents can get to work through the provision of child care, another area to which we must apply much more work and thought.

This area spans five Departments. The Government has been discussing moving on the area at recent meetings and I believe that we are set to make some real progress. Child care was one aspect, and the other is one on which Deputy Penrose has spent some time, writing about it recently in The Irish Times. He has called time and again for improvements in disregards. Lone parents have a disregard significantly greater than any accorded in other means-tested areas. To that extent, the system is designed to encourage them back to work.

Having said that, we have not achieved the same level of employment participation secured by lone parents in other countries, something borne out by EU and OECD studies. The latter found that employment participation among lone parents in Ireland is among the lowest in the organisation. Where they are working, they tend to be in low-paid employment. All those findings indicate that the current arrangements might not be the most appropriate to facilitate a real choice of employment and, ultimately, better standards of living. That is why the Cabinet committee on social inclusion has a senior officials group and sub-group, which were to report to me by the middle of this year, having examined earnings disregards and a range of other issues to do with lone parents.

I intend to seek other professional advice on what to do about the cohabitation rule specifically. I must also be fair and not upset other arrangements regarding other types of families. One cannot simply remove the cohabitation rule without thinking matters through. One must ensure that the people involved get the same amount of money but that, at the same time, payments to a family cohabiting in the ordinary sense are not upset. One obviously has to watch that. I make this invitation genuinely: if there are thoughts on how we might do that, I would welcome them. I never liked social policy on the cohabitation rule. Even leaving the parents aside, it is wrong for the children, and the State will have to figure out a better way of doing it. Until then, it will remain a little like the old argument regarding the points system on the leaving certificate examination. It is not great, but until one finds something better, one cannot mess around with it. At this point, I say that I do not like it, since it is not good social policy. Between us, we must find a better way. The group will do some of that work and I look forward to hearing Deputies' thoughts on it — I would certainly welcome them.

We should also approach with caution some of the myths regarding lone parents. It is simply not fair that the prevalent image is of teenagers getting pregnant, while they account for only 3% of lone parents. That means that 97% are not teenagers, and we must get that into our heads as a nation for a start. There has been too much pub talk about that and it is neither right nor accurate. The average age is approximately 26, 27, 28 or even a little higher, and that shows a clear element of choice. That is something of which we should take account.

There is another myth, which is also pub talk, that somehow youngsters, who, as I said, are not so young, take this path time and again because the benefits are so luxurious. No one does that. The figures I have show that only 15% have more than one child. That means that 80% or 85% have one child. The vast majority have one child and are not engaged in any practice seeking to secure funds. I certainly cannot think of anyone with that philosophy, and the figures bear that out.

The back to education grant has been raised, and since it arises later, I will not go into it in any detail. In response to Deputies' demands, I have changed the qualifying period back to 12 months. I have said that I will keep it under review with the intention of reducing it further.

Mr. S. Ryan

A little further.

Mr. Brennan

I have come some of the way and I gave very good reasons for that. Next September is the key date and between now and then we will make final decisions on it. That is the month of the application to go back to education, and in the meantime we will make some decisions in that regard. I will take account of what is being said here.

Mr. Penrose

It will only cost a couple of million.

Mr. Brennan

Several Deputies spoke of reform. With a social security system the size of this, which accounts for one third of all Government spending and which has risen from €6 billion to €12 billion in four or five years at a time when unemployment is approximately 4%, and economic growth of 3%, 4% or 5% per annum is predicted, one must continue reform. That means simplifying, modernising and targeting funds where necessary, and doing so in an atmosphere in which it is clear that we are dealing with people's entitlements rather than hand-outs, charity or generosity. They are people's legitimate entitlements and we will conduct our reform in that context. The absence of reform would be wrong and would trap people in institutionalised poverty and difficult family circumstances. One must continue changing, reforming and amending so that we support a better quality of life and more choice for people rather than locking them into traps from which they are afraid to budge, almost as if dazzled by headlights, lest they lose some allowance or other. That is what I mean by reform, but I start that reform on the basis of not reducing people's incomes. That is not reform. Focusing income to bring about a better quality of life is our intention.

Deputy Ring asked me about the child dependant allowance. I have raised the three rates several times. I will make two points on that. First, the number of different rates has been reduced from 36 to the current three. The Deputy said that I should complete the process and remove the last three.

Mr. Ring

It is two, I think.

Mr. Brennan

I will give the Deputy my advice. To introduce a standard rate and change the three to the one of which the Deputy speaks would mean that approximately 336,000 payments would be brought up to the higher rate, which is what the Deputy is advocating.

Mr. Ring

There should be one rate. The Minister should go the whole way since all children are equal.

Mr. Brennan

The current cost of that would be €60 million annually.

Mr. Ring

The Minister will have the money spent on spin doctors, booklets and photographs. It will be a one-year wonder.

Mr. Brennan

I believe that all sides of the House have agreed that, though that may be too strong a word. I do not get the sense that Members are pushing the argument that child dependant allowances should be the focus of our increases. They have deliberately not been increased since 1994 by successive Governments. I came to the issue with an open mind, examined it and listened to the arguments. I came to the same conclusion reached by three, four or five former Ministers, namely, that they can be a disincentive to employment because they are related to employment and that the funds available should go into child benefit which is universal, employment neutral and has become the major instrument of the State in getting income for children.

On the child dependant allowance, successive Governments were of the view, and I accepted the argument, that it is not the most appropriate way because it is linked to employment and the more child dependant allowances are paid, the greater the disincentive for breadwinners to go into employment. That is the reason successive Governments have left that alone. If we had €60 million I would be interested in the Deputy's views. Would we be better off if that €60 million went directly to child benefit or should we——

Mr. Ring

That promise was broken in 1992. The only year it was honoured was the year before the election.

Mr. Brennan

If I could be convinced that child dependant allowances were better than child benefit, I would listen to that argument but——

Mr. Boyle

The Combat Poverty Agency thinks so.

Mr. Brennan

I have met a large number of the 30 or 40 groups involved in this area and the vast majority of them opted for child benefit, which has increased dramatically in recent years. They opted for that as the main focus because it goes to all homes irrespective of employment whereas child dependant allowance is linked primarily to unemployment and, therefore, one has to be unemployed to get it. That means that by being unemployed, the child dependant allowances go up in that home. One does not need to be a sociologist to understand that child benefit is a better payment but I have an open mind. I have been convinced at this point that that is the better way.

Mr. Penrose

I am glad we initiated this debate because the total number of lone parent households has remained at a constant percentage over the past six years. It was 11.2% in 1996 and 11.6% in 2002. A sizeable proportion of lone parent households, about 15%, are headed by men but 85% are headed by women.

I agree with the Minister. The total number of births to women under 20, regardless of whether they are lone parents, has remained fairly constant over the past 30 years at about 3,000. Over the past few years both the actual numbers and percentage of births to this 20 year old age group has fallen, from about 5.35% in 2001 to 4.55% in 2003. The majority of lone parents, therefore, 51.4%, are between the 30 and 59 age cohort.

We must develop the debate on this area and examine in a wider context the way women are treated generally in the social welfare code. The social welfare system was developed in 1952, a time when males were the main breadwinners. At that time, women stayed at home and it was considered socially acceptable to deal with them only as their husband's dependants.

It is time that a new model of social welfare is examined and rooted in the social insurance principles of benefits as of right while acknowledging the complexity of women's lives. We have a Constitution which pays lip service to women who had to stay at home, bring children into the world and look after them, yet we never acknowledged the contribution of those women. Their contribution should not be measured just in terms of paid work but also through the care those women gave to children and the elderly. We must recognise that concept. There is little point in having a Constitution that pays lip service to the role of women in terms of bringing children into the world and rearing them if we then ignore them when it comes to addressing their social welfare entitlements. Only when we treat women equally in the social welfare code and get rid of the qualified adult dependant allowance, where they get 70% of the original payment, will we get equality. What was acceptable in a male dominated society in the 1950s is no longer acceptable in this age of equality in 2005. In initiating this debate we should try to develop and formulate a positive policy in that regard.

This will not be easy. There are legal matters which have to be examined in respect of one-parent families, cohabitation and so on. I have had correspondence from people who are married with two children and so on. I was the eldest of ten children. My father had not much of a wage in the county council but he got tax free allowance for each child and because there were ten of us it meant that he never paid tax. The county council's wages were a miserable sum. The staff only got paid every fortnight and we would be looking out the window on a Saturday morning for the postman.

I know all about the Murphy decision in 1981, but the Murphy decision will be revisited in the context of the social welfare reforms we all want to initiate. We should ensure, however, that in bringing in a measure that is positive in one area we do not create disadvantage in terms of the marital situation. That will be a real test of how we progress.

Mr. Ring

I want to make three points to the Minister, and I will not hold up the debate. I was delighted to hear Deputy Penrose say he is one of a family of ten. I came from a family of 13. My father spent a lot of time in England but he spent a lot of time at home as well. We waited on the Thursday evening for the cheque to come — at that time it was wired.

An Leas-Cheann Comhairle

The Deputy should speak to the amendment.

Mr. Penrose

He is in full flow, a Leas-Cheann Comhairle. Do not disturb him.

Mr. Ring

I want to raise three issues, particularly in regard to women. The Deputy is right, people often come into our clinics, particularly women when they reach pension age, whose husbands have worked all their lives and they get the qualifying allowance of 70%, but that is not the issue. I am aware they can apply for it in their own right but in any review of pensions the question of giving women their own pensions should be considered. They should not have to depend on their husbands. If they are entitled to one through the husband's earnings, that is fine, but it should be paid to the women and they should not have to make application for it. Many women come into my clinic who have to make application because their husbands may be very well off but very mean and they may not get the portion of the pension to which they are entitled. Rather than women having to apply for this, the pension is paid to them automatically. If a woman is entitled to a portion of her husband's pension it should be paid to her.

Coming back to the debate on child benefit and child dependant allowance, child benefit is paid to every child in the State and child dependant allowance is paid to people on social welfare. Child dependant allowance has not been raised in ten years. I would argue in favour of child dependant allowance. It is very difficult and costly to rear a child now. Every year they get the €16.80, €19.60, €21.60 or whatever the rate is, but I have been asking the Minister for many years to increase the three rates to the higher rate. A family may get a €10 or €12 increase in the budget every year but if there is no increase in the child dependant allowance it is very difficult for them. It holds back their payment. Everybody gets the child benefit. Even millionaires are entitled to it, but I have to make the argument regarding child dependant allowance.

I want to ask the Minister a question and he may not be able to respond today but he may respond in a committee. I hear people talking in pubs and in the media about abuse of the lone-parent payment. How many people have been prosecuted for abusing the lone-parents law? Does the Minister have that statistic available to him? How many have been brought to court and prosecuted for drawing the lone-parent allowance when they should not have been doing so? I would like the Minister to answer that question.

Mr. S. Ryan

I welcome the Minister's contribution. In my contribution I referred to access to education and training for parents in one-parent families. The Minister did not respond to it but I know it is not a deliberate omission on his part. Some of the facts are stark in regard to that. The NESF report of 2000 indicated that 23% of sole mothers have no formal qualifications compared to 9% of married mothers. Some 38% of sole mothers attained only a junior certificate or equivalent level compared to 25% of married mothers.

That is a major problem which must be addressed in some way. It is indicative of the difficulties that arise in trying to deal with this matter. We must try to get the balance right in respect of people who live in a regularised relationship or who are married and who might inquire whether they are losing out as a result. We will be obliged to discuss this matter again between now and the laying of the report before the Houses in six months' time.

Mr. Boyle

When the Minister assumed that everyone agreed with him on child dependant allowances, I interjected and stated that the Combat Poverty Agency and the End Child Poverty coalition, which represents several bodies, does not hold that position. One-parent representative organisations such as One Family have also articulated views contrary to those of the Minister on this matter. The failure to increase child dependant allowances since 1994 means that the relative income of people whose children depend on such allowances has disimproved. The latter is regardless of what the Government has done in respect of child benefit.

The assertion about child benefit being universal is also untrue. It is no longer universal because the children of asylum seekers do not qualify for payment. I presume the children of EU workers who have failed to meet the two-year criteria in terms of living and working in this country also fail to qualify. There are entire categories of children living here who do not qualify for child benefit. The Minister is wrong, therefore, on two grounds. There is a demand that child dependant allowance be paid because it is meant to be a child-centred payment. Children have no control over whether their parents are unemployed. To freeze the child dependant allowance for ten years and state that child benefit is a compensating factor is not acceptable, particularly to those whose job it is to identify and cater for the needs of children, especially those in one-parent families, who live in poverty.

I ask the Minister to give more consideration to this matter. He should not be as adamant when it comes to making decisions in preparation for next year's budget and social welfare Bill.

Mr. Brennan

The NESC is considering the possibility of a new payment which will represent an amalgamation of FIS and CDA and which can be targeted at child poverty. We expect to receive a report from the NESC on the matter in the coming months. Like me, the NESC is of the opinion that something else is required. In that context, it has been suggested that a new allowance should replace both FIS and CDA for people on a certain level of income and that this should be targeted at children on the margins. The details have to be fleshed out and the NESC is working on them. We might be able to retain the objective of the CDA in this area. That might help us to resolve the argument, which has been ongoing for a number of years, as to whether CDA is better than child benefit. I will keep an open mind on the matter. However, I have, for the moment, accepted the argument that we should await the NESC's research on it. In the interim, we should adhere to the child benefit increases.

I meant to place on record that the number of recipients of one-parent family payments at the end of last year was 79,000. This is up from 58,000 in 1997.

Mr. Penrose

The Minister has been fair in terms of the way he confronted this issue. He provided quite an expansive and comprehensive response to a merited debate which dispels some of the myths and gives lie to some of the various assertions that were made recently in respect of one-parent families. Lone parents do not have access to pots of gold and must continually struggle to make ends meet. This should not be a state of permanency for them. We should try to facilitate their transition from it to one where they gain employment or return to education, a move which will ultimately lead to their obtaining work and improving their financial positions.

The Minister should give careful consideration to the child dependant allowance and FIS. In light of the fact that the take-up rate for FIS is less than 40%, surely there is an excellent opportunity for the NESC to consider the amalgamation of the two schemes to ensure the maximum take-up rate. The universality principle of child benefit will be maintained but there will be an additional payment which would be targeted at those whose incomes fall below a certain threshold. This would focus it on those, children and others, who live in consistent poverty. In light of this, I withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Penrose

I move amendment No. 3:

In page 5, between lines 14 and 15, to insert the following:

1.—The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the social welfare treatment of income from SSIAs.

The Minister has reacted positively to this matter that was brought to public attention by my colleague, Deputy Lynch, who was particularly eagle-eyed in respect of it. She was sharper than her spokesperson in the area in that regard and articulated the difficulties that would arise in respect of the social welfare treatment of income from SSIAs. This is a Government-backed scheme and those on social welfare payments who have invested whatever small amounts they can afford in it are entitled to obtain the same benefits as anybody else. Most of them will not contemplate having a pot of gold at the end of their rainbows but it would be a grave injustice if the small amounts of capital they would have accumulated during the scheme prevented them from qualifying for something in respect of which they would normally have qualified.

We appreciate that the Minister could not treat income from this source differently from income derived from sources such as credit unions, financial institutions or whatever. To be fair, he did flag the difficulties that might arise. He and his officials have brought forward, in the Social Welfare and Pensions Bill, a mechanism to deal with the problem. I will, therefore, withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Penrose

I move amendment No. 4:

In page 5, between lines 14 and 15, to insert the following:

1.—The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of providing that accrued savings from old age pensions should not be regarded as means for the purposes of payment of the old age non-contributory pension.

I raised this matter previously with the Minister. Some of the ways we have of effecting social transfers are not effective in terms of reducing poverty. A large proportion of our social protection payments are means tested. The average for the 15 states in the EU before enlargement was that approximately 10% of social protection payments were means tested. In Ireland, the figure is 28%. Means testing is supposed to be an effective way of targeting resources to those most in need. In reality, however, complex means testing leads to a low take-up of services by those most in need. We referred earlier to those who accrue money from pensions that have already been means tested. When these people pass on to the next world, someone is waiting to initiate a clawback. This matter has been raised on numerous occasions and I await the Minister's reply in respect of it.

Mr. Brennan

I appreciate the Deputy's comments on SSIAs in respect of amendment No. 3. We drew up what is probably a practical way to deal with the matter and I appreciate the support of the House on it.

The Deputy knows the answer in respect of amendment No. 4. However, I appreciate why he is raising the matter. This comes down to the source of any capital held by a pensioner, which can include savings from income received while formally working, those derived from the sale of property or other assets, those derived from occupational or social welfare pensions, gifts, inheritances, accumulated interest or dividends, or a combination of these. There is great difficulty in distinguishing between the different forms of savings and the sources from whence they come. I was also making another point, about accrued savings for old age pensioners.

An Leas-Cheann Comhairle

As it is now 7 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Minister for Social and Family Affairs and not disposed of are hereby made to the Bill, Fourth Stage is hereby completed and the Bill is hereby passed."

Question put.

The Dáil divided: Tá, 69; Níl, 37.

Tá

• Ahern, Dermot.
• Ahern, Noel.
• Andrews, Barry.
• Ardagh, Seán.
• Blaney, Niall.
• Brady, Martin.
• Breen, James.
• Brennan, Seamus.
• Callanan, Joe.
• Callely, Ivor.
• Carey, Pat.
• Carty, John.
• Collins, Michael.
• Connolly, Paudge.
• Coughlan, Mary.
• Cowen, Brian.
• Cregan, John.
• Cullen, Martin.
• Curran, John.
• de Valera, Síle.
• Dempsey, Tony.
• Dennehy, John.
• Devins, Jimmy.
• Ellis, John.
• Finneran, Michael.
• Fitzpatrick, Dermot.
• Fleming, Seán.
• Glennon, Jim.
• Grealish, Noel.
• Hanafin, Mary.
• Haughey, Seán.
• Hoctor, Máire.
• Jacob, Joe.
• Kelleher, Billy.
• Kelly, Peter.
• Killeen, Tony.
• Kirk, Seamus.
• Kitt, Tom.
• Lenihan, Brian.
• McDaid, James.
• McDowell, Michael.
• McEllistrim, Thomas.
• McGuinness, John.
• McHugh, Paddy.
• Martin, Micheál.
• Moloney, John.
• Moynihan, Donal.
• Moynihan, Michael.
• Mulcahy, Michael.
• Nolan, M. J.
• O’Connor, Charlie.
• O’Dea, Willie.
• O’Donnell, Liz.
• O’Donovan, Denis.
• O’Flynn, Noel.
• O’Keeffe, Ned.
• O’Malley, Fiona.
• O’Malley, Tim.
• Power, Peter.
• Power, Seán.
• Roche, Dick.
• Sexton, Mae.
• Smith, Brendan.
• Smith, Michael.
• Treacy, Noel.
• Wallace, Dan.
• Walsh, Joe.
• Wilkinson, Ollie.
• Wright, G. V.

Níl

• Allen, Bernard.
• Boyle, Dan.
• Breen, Pat.
• Burton, Joan.
• Crawford, Seymour.
• Crowe, Seán.
• Deasy, John.
• Ferris, Martin.
• Healy, Seamus.
• Higgins, Joe.
• Hogan, Phil.
• Kehoe, Paul.
• Kenny, Enda.
• Lynch, Kathleen.
• McCormack, Padraic.
• McGinley, Dinny.
• McGrath, Finian.
• McGrath, Paul.
• McManus, Liz.
• Mitchell, Olivia.
• Naughten, Denis.
• Neville, Dan.
• Ó Caoláin, Caoimhghín.
• O’Dowd, Fergus.
• O’Keeffe, Jim.
• O’Shea, Brian.
• Pattison, Seamus.
• Penrose, Willie.
• Quinn, Ruairí.
• Rabbitte, Pat.
• Ring, Michael.
• Ryan, Seán.
• Sargent, Trevor.
• Sherlock, Joe.
• Timmins, Billy.
• Upton, Mary.
• Wall, Jack.

Tellers: Tá, Deputies Kitt and Kelleher; Níl, Deputies Kehoe and S. Ryan.

Question declared carried.

An Ceann Comhairle

As the Bill is considered by virtue of Article 20.2.2° of the Constitution to be a Bill initiated in the Dáil, it will be sent to the Seanad.