Vol. 602 No. 7
48 Mr. Stanton asked the Minister for Social and Family Affairs the supports provided by the State for carers; his views on whether they are adequate and equitable; his plans to enhance these supports; and if he will make a statement on the matter. [17345/05]
Supporting carers in our society has been a priority of the Government since 1997. Over that period, weekly payment rates for carer's allowance have been greatly increased, qualifying conditions have been significantly eased and coverage of the scheme has been extended. In addition, new schemes such as carer's benefit and the respite care grant have been introduced.
I announced several improvements for carers in the last budget which will benefit existing recipients of carer's payments and will extend supports to carers who have not previously been eligible for those payments. Regarding the means test for carer's allowance, I have increased the weekly income disregards to €270 for a single person and to €540 for a couple, with effect from this month. That means that a couple with two children can earn up to €30,700 and receive the maximum rate of carer's allowance, while the same couple can earn up to €49,200 and receive the minimum rate of carer's allowance, free travel, the household benefits package and the respite care grant.
It is estimated that those changes will result in an additional 1,000 new carers qualifying for a carer's allowance, free travel, the household benefits package and the respite care grant. In addition, 2,400 existing carers who are currently in receipt of reduced carer's allowance will receive an increase in their weekly payment over and above the general rate increase that they would receive in the normal way.
In response to the Joint Committee on Social and Family Affairs, which stated that the greatest need identified by family carers is the need for a break from caring, I made provision in budget 2005 for major improvements to the respite care grant. That includes the increase of the grant to €1,000 and its extension to all persons providing full-time care and attention, regardless of their means.
Those persons in receipt of other social welfare payments, excluding unemployment assistance and benefit, will be entitled to the payment, subject to meeting the full-time care condition. That arrangement is being introduced to acknowledge the needs of carers, especially regarding respite, and it is estimated that overall almost 33,000 carers will receive a respite care grant from June.
With regard to carer's benefit, one of the conditions of the scheme was that while the carer might work for up to ten hours per week, he or she could not earn more than €150 per week. I improved that aspect of the scheme by increasing that income ceiling from €150 to €270 per week. That measure, which took effect from April, allows those carers who are in a position to work for up to ten hours per week to earn extra income and, equally importantly, it may keep the carer in touch with his or her workplace.
Another condition of that scheme was that the applicant must have been engaged in full-time paid employment as an employed contributor for the three-month period immediately prior to claiming carer's benefit. I have eased that condition with effect from April to make it easier for carers with an atypical work pattern to qualify.
Additional information not given on the floor of the House.
Government policy is strongly in favour of supporting care in the community and enabling people to remain in their own homes for as long as possible. The types of services which recognise the value of the caring ethos and which provide real support and practical assistance to the people involved will continue to be developed, and all allowances and systems of support will be kept under regular review.
One of the conditions governing the scheme, as I am sure the Minister is aware, is that a person may claim only one payment from his Department. Is he aware of the needs of old age pensioners and the widowed who are caring and may receive only one payment? Does he know how many such people there are? Has he carried out research into the area? How much extra would it cost to give them at least half the payment recommended by the Joint Committee on Social and Family Affairs? What moves has he made in that regard?
Does he feel that current supports are adequate and equitable, especially taking into account the group I mentioned, namely, old age pensioners and the widowed caring for adult dependants at home under trying conditions, who very often perceive that their payment is taken from them or stopped as soon as they reach 66. In their view, they are penalised for reaching pension age, since at that stage the carer's allowance is stopped and they must choose between it and the old age pension. Is that fair and right, and does the Minister plan to address it?
I could never put my hand on my heart and say that we are doing enough for carers, who deserve every support we can give them. We must continue to make improvements and, as I said, we have made substantial improvements, both in the budget and in the legislation that followed. The new respite grant will be paid to approximately 9,000 full-time carers who would otherwise qualify for nothing. From June €1,000 will be paid to an estimated full complement of 33,000 carers, 9,000 of whom will be additional because there will be no means test. It is not intended as a payment as such but as recognition of the valuable work they do.
I am aware of all the arguments and I continue to consider them. There is a basic rule in welfare that one receives one payment, and I am examining what is possible there. Many widows provide full-time care and attention. Many old age pensioners also provide it. The Deputy is right that they either get the old age pension or the widow's allowance. By and large they do not move to the carer's allowance. The Joint Committee on Social and Family Affairs recommended that they get a half rate. There are substantial implications in moving from the concept of one payment. It throws up a number of anomalies across the board. We need to be sure it is the way to go given the implications in terms of welfare for a payment other than a single payment to a person. I will continue to examine that. I do not have a cost for it, but the cost of removing the means test is about €160 million per annum. A half rate payment would be very substantial, costing many millions of euro.
Does the Minister think it is right that someone caring for an adult dependant and in receipt of the carer's allowance no longer receives that allowance when he or she reaches retirement age? As the person gets older, the allowance is taken away. Will he address this given that his Department is, thankfully, saving millions in fraud detection and other areas? Can he give details showing the figures? How many people are affected by this and how much would it cost to move it at least to a half payment? Does he know when this further review will be finished?
I never apologise for reviews. One learns something every day as people move from one payment to another so it would be silly not to review it every day. I keep everything under constant review as we learn how things operate from dealing with people. The Deputy is wrong, although accurate, to phrase it in the way he chose. It is accurate to the extent that if one is on a carer's allowance and gets to a pensionable age, one has the option to hold on to the carer's allowance or move over to the pension. If one decides to hold on to the allowance, then it is not taken from that person, which gives the wrong impression. There is a rule in the social welfare code that states that a person gets one payment only, but we are currently working on that to see what is possible. This year I decided to give a one-off payment every June of €1,000 to everyone involved in full-time care irrespective of their means. I did this to give them a break because the all-party committee emphasised the need for people to get a break from caring.
There will be improvements in other areas and I will examine where additional payments are possible. There are many thousands of widows and hundreds of thousands of old age pensioners.
Many of them are carers.
The cost would be very substantial.
49 Mr. Penrose asked the Minister for Social and Family Affairs if his attention has been drawn to the recent report by the One Parent Exchange Network showing that the average debt for lone parents approaches €8,000; if the absence of affordable child care is a contributory factor to preventing many lone parents entering the workforce and means they must stay at home to look after their children; his plans to address this situation; and if he will make a statement on the matter. [17240/05]
The research into indebtedness among lone parents was commissioned by the One Parent Exchange Network with funding from my Department's money advice and budgeting service and the Society of St. Vincent de Paul. It focuses on the situation where debt has become a dominant aspect of people's lives and has come to carry serious social and health implications. The revelations on debt from an earlier study carried out by OPEN in 2004, entitled Living on the Book, prompted OPEN to seek a partner and launch further research into indebtedness among lone parents.
The issue deals with the extent to which the absence of affordable child care is a contributory factor in preventing many lone parents from entering the workforce. As part of the ending child poverty initiative under Sustaining Progress, a steering group has been established, chaired by the Department of the Taoiseach, to address the obstacles to employment faced by lone parents. This group is scheduled to report back to the Cabinet committee on social inclusion by the end of July 2005. The steering group will examine five specific topics to assess how they impact on employment opportunities and family circumstances. These are income supports, employment, education, child care and support programmes and information.
In addition, I have established a working group in my Department to review the income support arrangements for lone parents. Some of the main issues to be addressed by the working group include the contingency basis of the one-parent family payment, cohabitation, maintenance and the role of secondary benefits. As part of this review, 40 organisations dealing with lone parents were asked for their views. Detailed submissions have been received from OPEN, the money advice and budgeting service and from many of the other groups consulted. The Department is examining the submissions received and is considering the issues raised. It is intended that this review will feed into the work of the Sustaining Progress group.
The research conducted by OPEN found that the average size of arrears of a lone parent household is €1,092 and the average size of credit based debt was €7,862. The arrears relate to utilities such as rent, electricity supply, gas and telephone bills. Lone parents in debt are more likely to be using home collection credit or illegal moneylenders than mainstream providers. The money advice and budgeting service was set up to combat money lending and to assist people in managing their money with a view to regaining control of their finances. The service has been and remains a practical response to those in debt or at risk of getting into debt.
I met last week with the Irish Bankers' Federation as a result of the report's findings and received assurances that the legal requirements for opening bank accounts and accessing bank services will be communicated to counter staff, and that it would continue co-operation with related bodies, including the money advice and budgeting service. Later this week, I will meet the ESB and the Irish League of Credit Unions to discuss the report's findings on these groups. I look forward to receiving the report of the group of senior officials and my Department's review of income support arrangements. I also look forward to working with a number of groups and people, including the Minister for Justice, Equality and Law Reform who has responsibility for child care, in addressing these complex issues.
This report is a severe jolt to the system and a significant rebuttal of the fatuous and ill-founded comments that have emanated from certain quarters. There has often been a distortion of the facts surrounding lone parenthood. There is no crock of gold in lone parenthood and lone parents have been badly maligned by recent utterances by certain people. Such people, following a perusal of this report, should apologise for their facile statements which were grossly untrue.
Some of the acts carried out by the Minister's predecessor have contributed to this situation, including the savage 16 social welfare cuts. We are still waiting for the back to education allowance waiting period to be reduced to six months. What about rent allowance? I can give the Minister an example of a lone parent working on a FÁS scheme with four months left on the scheme. Due to a combined income of the FÁS scheme and the lone parent allowance, she is earning in excess of the figure allowed to claim rent allowance. This means she can no longer participate in the scheme and it is unfair that everything is taken from her when she is just a few euro over the eligibility threshold. This should be looked at on a pro rata basis so that the rent allowance can be paid pro rata. This is what has lone parents in poverty. There are 80,000 people in receipt of a one parent family allowance, along with 13,000 other lone parents as well as 150,000 children.
Lone parents have to micro-manage their money. They know what every item of household goods costs. When they succeed in getting maintenance from their partners, there is an immediate reduction of rent allowance so they are no better off. Does the Minister agree that lone parents, under the current structures, are effectively ensnared in a poverty welfare trap? Does he agree that affordability of child care is now acute for lone parents? A worker on the minimum wage has to work from Monday morning to 1 p.m on Wednesday in order to pay for child care before he or she earns a brass farthing to pay for the other household expenses. People who want to go to work cannot afford child care. They are ensnared in a vicious cycle of poverty. It is time to tackle this once and for all to ensure affordability of child care.
Does it worry the Minister that financial companies and money lenders are charging families up to 200% interest on loans? The report commissioned by OPEN, which represents 78 lone parent groups, referred to that fact. Is the Minister concerned that lone parents find themselves in the position of accumulating rolling debts? Is he surprised or shocked by the finding that the ESB charges up to 22.9% on hire purchase agreements, which is almost equivalent to a moneylender charge? It is time the Government prevented legal moneylenders from charging more than a 30% annual percentage rate of interest. This would be a start in helping lone parents and would represent a positive response to this excellent report from OPEN.
I am concerned that some lone parents and other welfare recipients appear to encounter considerable difficulties in opening accounts with banks and other financial institutions. As a result, they are often obliged to obtain loans at higher interest rates from finance companies outside the mainstream or from moneylenders. As I indicated, representatives of the Irish Bankers' Federation have responded to my concerns this week. These are issues of serious concern and I did not pull any punches in making this clear to the IBF.
I will meet ESB management shortly. The report points out that some ESB charges are up to 22.9% for credit purchases on certain products. I am informed that lenders who charge an interest rate of 23% must apply for a moneylender's licence. It is a source of concern that there are currently 50 licensed lenders who may charge more than 23%.
It is frightening.
Legal moneylenders are entitled to charge from 23% to more than 100%. We must examine this legal entitlement and warn people of its implications.
Although the rates charged by the 50 licensed moneylenders are very expensive, I am even more concerned about unlicensed lenders. The money advice and budgeting service works hard in this area and has a budget for this year of €13 million. It deals with 16,000 cases on an annual basis in its efforts to help people escape the grip of moneylenders. In so far as I can, I warn anybody who cares to listen to avoid availing of the services of illegal moneylenders. People would also be well advised to avoid licensed moneylenders and the associated interest rate of 23%. The full force of the law will be brought to bear on the activities of illegal moneylenders.
50 Mr. Boyle asked the Minister for Social and Family Affairs the actions his Department intends to take on the recommendations of the survey undertaken by the One Parent Exchange Network, entitled Do the Poor Pay More? [17239/05]
The report into indebtedness, Do the Poor Pay More? was commissioned by OPEN with funding from my Department's money advice and budgeting service and the Society of St. Vincent de Paul. The report focuses on the situation of those for whom debt has become a dominant aspect of their lives and has come to carry serious social and health implications. The revelations on debt from an earlier study by OPEN in 2004, Living on the Book, prompted the organisation to seek a partner and launch further research into indebtedness, its prevalence and depth, among lone parents. The report has 13 key recommendations that are being examined by my officials.
To date I have met the Irish Banking Federation and the Irish Payment Services Organisation to explore ways in which those on low incomes can better access financial services. The meeting identified a number of areas in which progress could be made in facilitating wider access to financial services, including customer identification requirements and universal bank accounts.
In regard to customer identification, the IBF has agreed to communicate with its member retail banks to ensure staff is reminded of procedures for opening an account and the attendant customer identification requirements. It has further committed to liaising with the financial regulator, IFSRA, on this issue. The existing guidance notes on money laundering set out, as good industry practice, the measures to establish identity that might reasonably be expected of credit institutions. However, they state that any measures adopted should not deny a person access to financial services solely on the grounds that they do not possess certain specified identification documentation.
The banking industry has proposed the development of a universal bank account as an integral part of a national payments strategy. My Department will consider this issue as part of its review of current payment strategies. The IBF has assured me of its commitment in helping to deliver real progress on these and related issues. Since the introduction of the money advice and budgeting service in 1992, it has developed a good working relationship with the IBF.
The report found that 59% of lone parents surveyed were in arrears to the ESB. It also found that utility companies such as the ESB and Bord Gáis were not seen as totally transparent in their dealings with low-income families using pre-payment meters. I have invited the ESB to meet me to discuss the report and I also intend to meet the Irish League of Credit Unions.
Those who receive social welfare payments through the electronic payment option operated by An Post can opt to avail of its household budget scheme. Under this scheme, An Post makes regular deductions of up to 25% of a person's social welfare payment towards their household costs, such as rent or mortgage payments to local authorities, ESB, Bord Gáis and Eircom. This ensures people are not faced with a single large bill for these services.
I emphasise that I consider it a priority that those on welfare supports or on low incomes are given the opportunity to achieve financial inclusion so they can attain control over their own finances. This is an important step on the ladder to better prospects and an improved quality of life for them and their families.
I am surprised this question was not taken with the previous one. Why does it take the release of a report of this type for the Minister and his Department to react? Why were the deficiencies in the system, which the report identifies, not recognised earlier? Why is there no response to the obvious inadequacies in payments lone parents receive before they are exposed by representative bodies such as OPEN? At the launch of this report the consumer director of IFSRA, Ms Mary O'Dea, said it was obvious the title of the report, Do the Poor Pay More?, was a rhetorical question. She observed it is evident that the poor pay more and that the situation of lone parents in particular must be examined in this regard.
The Minister said he met the IBF and intends to meet the Irish League of Credit Unions. What does he intend to do about the greatest problem in this area? The legal moneylenders are the most significant problem in terms of indebtedness. The Government had opportunities to deal with this problem when the two Bills relating to IFSRA came before this House since 2002. The Minister for Finance was told the Consumer Credit Act 1995 must be amended and that the existing rules in regard to moneylending were causing untold hardship. The Government's failure to respond is a contributory factor to the misery many experience as a consequence of indebtedness.
The Minister has been far too slow in counteracting the inconsistencies and contradictions in regard to payments and differentials within his Department. Another question I tabled today highlights the situation of a lone parent on a community employment scheme who would find herself €45 euro better off a week if she worked part-time in the private sector. However, her job does not exist in the private sector because it is social services-based. Another constituent of mine, a male lone parent who is participating in the job initiative scheme, finds his secondary benefits eroded so severely because of the recent rise on payment for this scheme that he is now worse off by €80 a week, or €4,000 per year. These cases arise as a consequence of rules the Department implements, which could be changed merely with the movement of a pen. However, no action is taken in this area.
The Government had advance notice of the content of this report. I had not been a Member of this House for long when the Free Legal Advice Centres produced a similar report, An End Based on Means, which highlighted the failures of Government policy on moneylending and in regard to those living in poverty. Some two and a half years later, there is still inaction. The Minister must address this issue with his Cabinet colleagues who have joint responsibility for this area. We should not have to return to this issue at Question Time in the future.
I do not accept that nothing was done in this area prior to the publication of this welcome report, for which MABS and the Society of St. Vincent de Paul provided funding. MABS has expanded over the years and now has more than 220 staff and a dramatically increased budget. This year alone we gave it €700,000 on top of the normal increase so that it could continue to advise people on managing money.
Deputy Penrose's remarks on legal moneylenders were fair. Three options are available to those seeking money. Ordinary lending rates are lower than 23% and most people take loans with single figure interest rates. Legally licensed lenders provide loans at rates above 23%, often involving hire purchase, credit cards and a range of financial products. To an extent this must be legal because the financial products provided are different from ordinary day to day lending. People should be warned that it is expensive to take this type of loan. I commented earlier on the third option of illegal lenders. I will continue to discuss this matter with the Ministers for Finance, Enterprise, Trade and Employment and Justice, Equality and Law Reform, each of whom has responsibilities in this area.
Interest rates for credit cards, hire purchase and other similar financial products will always be substantially higher than overdraft or mortgage rates. MABS ensures that this is understood, in particular by those who are vulnerable. Last week, I raised with banks their need to respond to this report because otherwise they will find that vulnerable people are forced to the second option of high rate legal moneylenders. We do not want to so force them when funds are needed.
I will consider the anomalies raised by Deputy Penrose, of which a significant number exist. As people transfer from welfare to work, a balance must be achieved so that pay is sufficient to support people and allow them to look after their families while also encouraging them to return to education or work. It is often difficult to achieve the correct balance. We will continue to work towards removing anomalies which arise occasionally and involve small sums of money.
51 Mr. Stanton asked the Minister for Social and Family Affairs if he will report on the guidelines issued to social welfare offices regarding the habitual residency condition; and if he will make a statement on the matter. [17346/05]
The requirement to be habitually resident in Ireland was introduced as a qualifying condition for certain social assistance schemes and child benefit with effect from 1 May 2004. A central unit was established to monitor policy in terms of the implementation of the habitual residence condition and to provide advice and support to scheme areas and social welfare local offices. Decisions to the effect that applicants satisfy the habitual residence condition are made in the majority of cases at claim acceptance stage by deciding officers. At present, decisions on complex cases are made in the central unit.
The main policy and administrative developments to date have included the drafting of guidelines overseen by the Department's decisions advisory office and the posting of these guidelines on the Department's website and on the internal computer network for access by staff. Administrative guidelines on the operation of the condition have also been compiled and furnished to staff in social welfare offices and scheme areas. In addition, training has been provided to 1,300 staff. A leaflet providing comprehensive information on the habitual residence condition has also been published.
While the primary function of the staff in the central unit is to make decisions on complex cases, they also provide advice and support on an ongoing basis to colleagues in social welfare offices. The management of the unit maintains contact with their colleagues in social welfare offices to assist them with policy and administrative issues which may arise with regard to the habitual residence condition.
The habitual residence condition is operated in a careful manner to ensure that Ireland's social welfare system is protected while at the same time ensuring that people whose cases are appropriate to the Irish social welfare system have access to the system when they need it. In the period from May 2004 to May 2005, 72% of cases were found to satisfy the habitual residence condition. The operation of the condition is under review within the Department.
Will the Minister tell me how many people were told that their claims did not satisfy the condition over the period 2004 to 2005? Is it true that migrants who have been invited to work here but lose their jobs and fall upon hard times, as has been reported in the media, have no supports? How are these people supposed to eat or find shelter? Has the Minister any knowledge of the extent of this problem?
A total of 13,776 cases were decided between 1 May 2004 and May 2005. Of these, 9,895 or 72% were found to satisfy the habitual residence condition. Of the 13,776 cases which were decided, 3,500 were Irish, 2,244 from the UK, 1,716 from the EU 13, 1,887 from new member states and 4,395 others. Affirmative answers were given in 72% of cases and 28% were refused. Approximately 10% of Irish applicants were refused because the two-year rule is not the only factor involved in the habitual residence conditions. Before qualifying for welfare, five tests are applied to determine whether a central connection with Ireland exists.
I again ask the Minister about those who came here in good faith to work but lost their jobs and are on the side of the street. Without support, how are they expected to eat and find shelter? Is the Minister aware of the extent of this problem? Has he or his Department investigated this issue? The answer to a recent parliamentary question indicates that this issue will not be subject to one of the famous reviews which he continually mentions. Does he plan to review this scheme? How are these people supposed to live, eat and find shelter? How many such individuals exist? Does the Minister have any contact with non-governmental organisations which have informed us that they are snowed under by the growing numbers of stranded migrants seeking help? What are his plans in this area?
I am sorry to disappoint Deputy Stanton but, as I said in my reply, the scheme is being reviewed by the Department.
I was not informed of this in the answer to my parliamentary question last week.
I inform the Deputy now that the operation of the habitual residence condition is under review within the Department. That is the case.
An unofficial rather than an official review is being conducted. I asked about this matter last week.
It proves that the Labour Party was correct to oppose this policy vehemently from the outset.
Why did the Minister not provide me with the correct information last week? Everything and nothing is under review.
Does Deputy Stanton want me to conduct a review?
Will he conduct a review? He did not give me an answer on this last week.
I am conducting a review. I take it that the Deputy wants me to do so.
Of course. I ought to have received the appropriate information last week when I asked about it.
I said earlier that five factors are taken into account when deciding whether somebody who arrives here is entitled to welfare: the length and continuity of residence in a particular country, the length and purpose of absence from Ireland, the nature and pattern of the employment, the applicant's main centre of interest and the future intention of the applicant concerned as it appears from all circumstances. Every circumstance, not only the two-year requirement, is taken into account. We have received a number of queries on this matter, some of which were from the European Commission.
A death will occur among these people before action is taken.
I have also received the advice of the Attorney General on this matter. These factors will be taken into account when action is being considered. We must protect Ireland's social welfare structure at the same time as being humane and fair to people who come here.
That is not happening.
It is my job to find that balance.
The Minister's predecessor was mistaken. She said that the floodgates would open. Fianna Fáil was lucky that she was removed from the Department.
People will die. The policy is media-driven.
52 Mr. Penrose asked the Minister for Social and Family Affairs the reason the Turkish construction firm Gama received a Government exemption from paying millions of euro in PRSI contributions here over recent years; the number of PRSI exemptions that were granted to Gama; the value of these exemptions; and if he will make a statement on the matter. [17241/05]
A total of 1,416 PRSI exemption certificates have been issued to Gama since 2002. The certificates were granted under regulations which provide for exemptions from PRSI contributions for up to 52 weeks per year to be granted to employees not ordinarily resident in the State but who are temporarily employed here. The purpose of the legislation is to enable workers sent by their employers to work for temporary periods in another country to remain subject to social insurance in their own country. Similar arrangements apply under EU legislation to workers moving within the EU and to workers covered by bilateral social security agreements with Ireland.
When a request for an exemption certificate is processed, a signed declaration is obtained from an employer to confirm that the person for whom the certificate is being sought has been retained in the social insurance regime of his or her home country while working in Ireland. The procedure is intended to confirm that an employee has been posted and is covered for social insurance in his or her home country while covered by an exemption certificate in Ireland. In randomly selected cases, independent confirmation is sought from the authorities in an employee's home country that social insurance payments have been made during the period covered by an exemption certificate. This control complements an employer's declaration that an employee has been retained in insurance cover in his or her own country.
In the case of Gama, a random sample of exempted cases has been referred to the relevant overseas authorities via the Department of Foreign Affairs to confirm that the employees involved have been retained in their home country's social security regime during the period of the exemption. Efforts continue to confirm the status of the workers in question. Granting of an exemption certificate is linked to the existence of a valid work permit which confirms that the employee is not ordinarily resident in the State and is entitled to work here.
The value of exemptions to Gama cannot be quantified by my Department. Information on the wages of workers for whom exemption certificates are sought is not a requirement of the application process. It is, therefore, not possible to calculate the amount of PRSI which would arise if the exemptions had not been applicable. The workers in question remain subject to social insurance in their home countries during the period covered by the exemption certificates.
The needs of the Irish economy have changed significantly since exemption legislation was originally enacted. There have been significant changes in working patterns and skill levels while the enlargement of the European Union has also affected the labour market. Against this background and having regard to the circumstances of the matter in question, I have commissioned a review of the policy and legislative provisions on exemption certificates of my Department. I will bring forward any necessary measures to change the current arrangements in light of the review.
The treatment of Gama workers represented one of the most shameful episodes of the systematic exploitation of workers in the history of the State. The failure to put in place measures to enforce our labour laws to prevent such outrageous exploitation represents a shocking failure of the Minister and former Minister for Enterprise, Trade and Employment, Deputies Harney and Martin. The treatment by Gama of its workers was, simply, shameful. That Gama has been allowed to run rings around the institutions of the State has exacerbated the entire matter.
A company at the centre of an alleged worker exploitation scandal has been granted an exemption from paying social insurance for more than 1,400 employees for three years. Gama received three quarters of all PRSI exemptions granted over the past three years. Of approximately 1,900 exemptions granted, Gama received more than 1,400. The Minister said a random selection process applied to checks of the exemptions. Irish employers must look askance at such provisions as they are subject, rightly, to detailed examination. What efforts has the Department of Social and Family Affairs made to confirm that social insurance payments were being made in Turkey? Will we ever know the value of these important exemptions? Do we know what PRSI would have been payable had exemption certificates not been granted?
It appears the Exchequer may have lost many tens of millions of euro in PAYE and PRSI deductions in respect of Gama's employees. Many Irish firms which must take on direct employees on a sub-contracting basis are at a severe competitive disadvantage to an employer which, like Gama, can, in effect, opt out of the Irish PAYE and PRSI systems. Is the Minister concerned? When can the House expect the legislation framework which underpins the exemptions to be updated to ensure that a scandal like the one which has been brought to the fore by my colleague, Deputy Joe Higgins, for which he is to be complimented, and pursued by my party leader, Deputy Rabbitte, will not happen in the State in future? It is an indictment of us all that these events took place.
The total number of exemptions issued since 1998 is 2,449. Of these, Gama received 1,416. The reference to a random sample was made in respect of the Department's approach in contacting authorities overseas. The Department decided to take a random sample of 40 of Gama's 1,416 employees but, disappointingly, has yet to hear from the social security ministry in the country concerned. We will follow up the matter to ensure we receive a response.
It is important not to leave the impression that exemption from PRSI represents a loss to the Exchequer. The system also works in reverse. Where an Irish company is working abroad, it does not pay PRSI in respect of its Irish employees if it is confirmed that it is being paid here. The principle is that a company pays PRSI in one country or another, but not in both. This system has been in place for decades — it is not a recent measure — to avoid double taxation.
I have a copy of the inspector's report commissioned by the Minister for Enterprise, Trade and Employment. My Department is examining it very carefully to determine whether breaches of social welfare legislation have taken place. It should be noted that the purpose of the exemptions system is to ensure that people do not get caught for PRSI in more than one country. We seek to ensure that no one slips through the net.
That concludes Priority Questions. We now come to Other Questions.
