Skip to main content
Normal View

Dáil Éireann debate -
Wednesday, 14 Dec 2005

Vol. 612 No. 3

Social Welfare Bill 2005: Committee and Remaining Stages.


I move amendment No. 1:

In page 3, before section 1, to insert the following new section:

"1.—The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of increasing the fuel allowance and living alone allowance to take into account the increase in the cost of living since those allowances were last increased.".

While I know the Minister will not have sufficient time to deal with them, I wish to point out some anomalies concerning the Bill. A person is awarded credits while in receipt of a carer's allowance, but this does not apply to people who are self-employed prior to being awarded the carer's allowance. This is in spite of the fact that they are paying a contribution, which is important to them for pension purposes. Such people will have a break in their contributions, which will count against them when they apply for the old age pension, widow's or widower's pension, as the yearly average will be reduced. A person who leaves employment, however, can avail of credits which keep their contribution alive. This is a disincentive for people to become carers.

The same applies to a self-employed person who becomes ill. A driving instructor who was paying a self-employed contribution has been diagnosed with cancer. He has no choice but to apply for the disability allowance as the self-employed contribution does not entitle him to disability benefit. He cannot now put on a credit stamp as he was self-employed prior to getting sick so he must go on disability allowance. This man has been sick for over two years and is being denied an invalidity pension because when he became ill he did not have 48 contributions credited in the last complete tax year. He had 268 stamps which he had paid for before becoming self-employed. This would have made him eligible for the invalidity pension which is not means tested. A small pension of €10 per week would not reduce his invalidity pension as it would do for the disability allowance.

Part of the carer's allowance is calculated for receipt of the back to school clothing and footwear allowance, but the Minister should exempt it. Deputy Paul McGrath referred to the same aspect regarding family income supplements.

I realise that I am straying away from the purpose of the amendment, but I want to try to help the Minister. The granting of additional paid and unpaid maternity leave is a godsend to all working mothers. However, the 1 March 2006 introduction date has confused and annoyed many women who are due to take maternity leave in January and February. New measures announced in the budget generally take effect immediately or on 1 January. One lady told me that women who are due to take maternity leave in January or February are left thinking they came so close yet remain so far away. She used a great analogy, stating "The last two days for us have been like hearing that you had won the lotto, and then hearing you'd got it wrong".

If each time the Department set up extended leave it produced new forms, a solution could be that women who take maternity leave after 1 January could reapply for the four-week extension while on maternity leave. This would surely be manageable for the relatively small number of women who are in this situation. They should have an opportunity to extend their maternity leave in line with national best practice. The Minister's good work could be undone if women are not afforded such an opportunity. He should examine that matter and try to address it.

Another anomaly involves a full-time student who was involved in a car crash on returning to Ireland. As a result he could not return to college or work so he took a year out. During that time he was horrified to find that he could not claim any social welfare disability allowance. He had worked in Ireland since he was 12 and had always paid his PRSI and other contributions, yet he could not believe that he was not entitled to any allowances. To cap it all, approximately a month ago, he was involved in another crash. This time he fulfilled all the relevant paperwork, including medical certificates, for a disability benefit claim. He received a letter stating that he was ineligible, but why would such a person not be eligible? I will furnish the Minister's staff with this letter which created an aura of resentment.

Now that Deputy Penrose has given us a full run through the social welfare code——

He knows it well.

——I will get back to the amendment, which refers to the fuel and living alone allowances. It would be useful to know where we are going with both allowances. That is the thrust of the amendment. I understand that the living alone allowance has not been raised this time around, but it would be useful to know what the Minister's thinking is on that allowance. Should it be subsumed into the social welfare code by including it and increasing it across the board? If it is useful it should have been increased, otherwise it should be subsumed into the social welfare code. Deputy Penrose has graphically illustrated the fact that the social welfare code is very complicated.

We must remember a small group of people at this time. Every year, when the Minister for Social and Family Affairs makes all these changes following the budget, community welfare officers and other social welfare staff have to grapple with changing rates. They must alter all their operating procedures which represents a huge amount of work. The Minister should simplify the social welfare code as much as possible to make it easier to understand. Where possible he should amalgamate allowances, while not decreasing them, so that the system is easier for people to grasp. The same applies to varying rates of payment.

As regards the fuel allowance, it would be useful to check the impact of dramatic fuel price increases. Perhaps the Combat Poverty Agency has information on that matter. Much will depend on the weather conditions this winter. Discussions take place every year on increasing the length of time for which the fuel allowance is provided. We are always told that it cannot be done because it costs so much, but I would like to see what benefit it would make if that contribution, as the Minister calls it, was available to people for a bit longer during the year. In other words, is it needed?

I am confused as to what I am speaking to, but I will use the amendment as my springboard to discuss the fuel and living alone allowances. The central point of the amendment is the need to address properly the living costs of those dependent on welfare payments. In his summing up, the Minister referred to my contributions, including my belief that the fuel allowance should be index linked. He rightly pointed out that the fuel allowance was never intended as a 100% subsidy towards fuel costs for those on social welfare. The reality, however, is that the existing fuel allowance has less impact as a subsidy than when it was first introduced. It certainly has less impact than when it was frozen at 2002 levels.

We are now entering a period of huge uncertainty over future fuel costs. In my original contribution I said that that uncertainty is not helped by the fact that the fuel allowance is a non-statutory payment. We should work towards having it included in future social welfare Bills so that we can discuss mechanisms like index-linking and, in particular, how we can put in place the means to recognise cost of living realities, including heating costs. I would not be averse to some creative thinking in this area. It is a sad reality that the poorest in our society can only avail of the most expensive fuels, which are also sometimes the most environmentally damaging. Perhaps the fuel allowance could be staggered in some way to favour more heat-effective and environmentally friendly fuels. The Minister should consider that possibility.

The Minister also referred to the fact the Bill and the budget have allocated a €2 million fund to help with the insulation of houses of social welfare recipients. That is welcome, but €2 million is but a puddle in the ocean that is the annual expenditure of the Government. If we are really serious about fuel efficiency, the Government will need to embark on a major programme worth hundreds of millions of euro to look at the nation's entire housing stock. The sum of €2 million is an exercise in dipping one's toe, however welcome it is.

Deputy Stanton has noted that the living alone allowance has not been increased this year. However, we must prepare for the changing demographics of our society. It is yet to happen to a large degree, but as this generation, which is more solitary and lives on its own more than any previous one, gets older, we must recognise a massive problem down the road. The next generation of senior citizens in this country will be more divorced from social contact and extended families as well as from the ability to interact with the wider community than those who preceded us. We must confront the sad reality that there will be many more elderly people living on their own in our society. How can we plan for that?

The only other point that I would like to make at this stage concerns something said on Second Stage regarding the need to control increases in social welfare payments and to protect them so that the bite-back in increased local authority rent does not have an immediate impact for recipients. I am aware of a guideline document issued by the Department of the Environment, Heritage and Local Government that discourages local authorities from doing this, but apparently the directive does not have any impact.

We must consider specific legislation that would say that if social welfare payments are granted in any given year, no more than a set percentage may be used for an increase in payments to State agencies for rent and other services. Unless we do that, in the Estimates being discussed in local authorities in the next month, much of the impact of these additional payments will unfortunately be watered down. The Minister and his Cabinet colleagues must respond to that.

All the points made have one thing in common, namely, that they all cost a few bob. I had to make choices in this budget, as one does in every one. I have made those choices and will have to stand over those as priorities. Regarding carer's allowance for the self-employed, that group is not specifically banned from receiving it, but they may only work up to ten hours a week, a figure that has now risen to 15. One will not be able to engage in much self-employment in ten to 15 hours per week. They are not specifically excluded, however.

On exempting family income supplement from the means test for the back to school allowance, FIS is part of one's income, albeit a top-up. As such, it is probably all right to consider it as part of one's income. I am not sure what scope I have left to pay maternity benefits from January, given that the sums are locked into the budget arithmetic.

Deputy Stanton asked why the living alone allowance was not being increased. That has not moved for a long time, and not only I but successive Ministers have preferred to put money into the rate. There is also a social issue. Even saying this out loud can land one in all sorts of trouble, but if one is on a living alone allowance and we keep raising it, one suffers the effect of losing it more if one later resides with someone.

The question is whether we should promote living alone as a social strategy. That argument has certainly put me off for the moment. If elderly people who are obviously living alone by choice need extra funds, I would prefer to give it to them in fuel allowance or directly in the rate rather than giving them another payment and stipulating another requirement about how they must live, namely, that they may not have a partner in the house if that is their choice. I am aware that even putting it like that can be emotional, but that is the thinking behind leaving it alone for the moment. We want to get the money to the same person in an unconditional manner whereby he or she receives it simply by virtue of being of pensionable age.

I agree with the Deputy regarding simplification. Some of it is a nightmare. All one need do is listen to Deputy Penrose for five minutes——

Two minutes.

——and one realises what a nightmare it is. We continue to work on that.

According to the Central Statistics Office, the overall consumer price index increased by 12% from the start of 2002 to November 2005. In the same period, energy products increased by 41%. Liquid heating fuel is up by 70%, and solid fuel by 20%. The 41% figure is something of a crude average. The budget increase that we have introduced is 55%.

Regarding Deputy Boyle's point on indexation, one must be careful. If we had indexed welfare payments years ago when people in this House on all sides made strong pleas regarding payments of all sorts, without improving on them those payments would now be substantially lower than they are. The CPI in the last 11 years went up 35%, and old age pensions rose by 85%. Wages went up 63% in that time. Over that 11-year period, old age welfare payments have increased by at least three times as much as the consumer price index. One should be very careful about indexing something since it can have the opposite effect, holding back what people might otherwise receive. Future Governments might take the view that something is indexed to the CPI and leave it. We try to ensure that all payments reach a point where they are more related to average earnings than to the CPI. If one does any indexing, one must try to index them to earnings. Then they are at least raised in line with them.

I know the Deputy means well and wishes to ensure that we do not fall into the trap of a few years ago when we did not touch the fuel allowance for many years. However, the reason for that too was that we wanted to put money into the rates. We hoped that, by increasing them strongly and leaving people themselves the income, they could decide what to spend it on rather than be too prescriptive and say that one must have a certain amount for fuel and other matters, with conditions attached. If one gives them the main rate and gets the maximum into their pockets, one can let them make decisions about how they want to spend money. That was the policy of recent years. It was with some reluctance that I reversed that this year and went for the fuel, but I could see the pressure in the House, and Deputies were adamant. I took the point that the 41% increase was quite exceptional. The rise was 20% for solid fuel, and we tried to respond.

However, we must discuss whether that is the way to proceed in future and whether we should continue to prescribe all those little bits and pieces that people must get and how they must qualify for €20 here and €30 there. We could also take a giant leap and give them the money up front, saying that they are all old and wise enough to spend it on whatever services they need for themselves.

The Minister seems to think that 41% is an annual increase, whereas the fuel allowance is not available on an annual basis. Someone needs to go back and do the sums on that.

Amendment, by leave, withdrawn.
Amendment No. 2 not moved.

What amendments are being taken together?

Amendments Nos. 2 and 24 are together.

Perhaps I might speak very briefly on amendment No. 24. I wish to reiterate a point concerning carers. I know that the Minister has taken this on as a major project. We must have some sort of national strategy for carers, and perhaps the Minister might take that on board.

I ask the Deputy to be brief, as, strictly speaking, when amendment No. 2 is withdrawn, we should move through the others.

That is all right.

Amendments Nos. 3, 22 and 23 are related and may be discussed together.

I move amendment No. 3:

In page 3, before section 1, to insert the following new section:

"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.".

One-parent families are extremely important. I told the Minister yesterday that this area must be examined with great care. I know he wants to be innovative and has some forward thinking ideas in this regard but it is important that we do not create a plethora of traps in terms of the way families are treated in the constitutional context. Sole parents are increasingly disadvantaged as a group in terms of poverty, social welfare dependency and access to services that help address these issues. Many lone parents have not benefited from the Celtic tiger boom due to the lack of necessary supports. Indeed, many children in one parent families are more at risk of ongoing poverty and social exclusion.

We need a coherent policy framework for one-parent families that reflects the reality of their lives and those of their children. That framework policy needs to be co-ordinated across all Departments and there must be co-operation on implementation across Departments and agencies.

Consistent poverty levels for one-parent household families are at approximately 33%, and 75% of those on local authority housing lists are one-parent families. The real value of child dependant allowances has fallen by approximately 35% since 1994. We must provide flexible and positive support for lone parents who wish to return to education, training and employment and ensure that lone parents and others wishing to increase their participation in the labour market are supported and rewarded. We must develop and pilot suitable supports for lone parents wishing to progress from community employment schemes and an effective mechanism to enable CE jobs serving ongoing community needs to become long term and sustainable. The back to education allowance should make self-employment a realistic option for lone parents, particularly in regard to interaction with other benefits.

The earning disregard in regard to one-parent family payments was equivalent to 18% of gross average industrial earnings when it was introduced in 1997. I acknowledge that the Minister has increased that significantly in the budget, and OPEN and other groups have welcomed it. I compliment the Minister on taking cognisance of the issue I brought to his attention last year that income should be disregarded by reference to any particular week and should average over a year or other period. The new section the Minister is introducing in the Bill deals with that position. This is a forward thinking approach on the part of the Minister which allows him to prescribe regulations.

I urge the Minister to ensure that when he is prescribing the regulations — I know that some of the Minister's senior officials are very aware of this — it is done on a per annum basis. That will ensure that the weekly basis will be taken out of the equation whereby if somebody is only €1 over the weekly prescribed limit, they would lose their lone parent allowance for that period. They would then have to reapply only to lose it again after another six or eight weeks if periodic employment or holiday work became available. This was an administrative nightmare which cost the Minister's Department a fortune. There is no net gain but the person who wanted to take up, say, the An Post holiday job with a view to being made permanent in the long term or a similar type job lost out. They could not participate, but this new section will deal with that anomaly. The Minister should ensure it is not undermined by anybody before it reaches the regulation stage. I salute the Minister for addressing that anomaly, and one-parent families throughout the State should be grateful to him for what he has done in this regard.

Amendment No. 22 in my name endeavours to draw attention to the need to focus on one-parent families. There are more one-parent families now than ever before and in my constituency work, and that of colleagues, we find that more one-parent families are under unbelievable pressure. They are three and a half times more likely to be in poverty than two-parent families. Will the Minister tell us what the income disregard will do for thousands of lone parents who would like to return to education or work? Many lone parents have major housing needs also in that they are paying exorbitant rents of €700 or €800 per month. There is not much left after paying that amount. Many lone parents depend on the Society of St. Vincent de Paul and other charities to keep going from week to week, and their situation is getting worse. The Minister should carry out an in-depth study of the needs of one-parent families because it is a serious issue. I understand the proportion of lone-parent families is ten times that of two-parent families with the same need.

The welfare to work transition is very difficult for one-parent families because they have children to mind, take to school and so on. That is a major issue. If they get increases in welfare such as those proposed here, they might lose their medical card. That is another problem they must face. One size does not fit all in terms of the child care infrastructure. Lone parents have particular needs because there is no one available to look after their children. They are on their own and if they want to return to work or education, they are faced with the major obstacle of getting somebody to mind their child. Paying for that is a major issue also.

The recent CSO study indicated that 48% of lone parents were at risk of poverty in 2004. I encourage and support the Minister in bringing forward a more family friendly child payment for one-parent families. I agree with what the Minister said in the past about our code encouraging parents to live apart. It goes back to what the Minister said earlier about the living alone allowance, paying people to live alone. The same applies here where fathers are often seen sneaking back home at night to stay with their families, with neighbours reporting that he is visiting his partner and children, and the payment is then at risk, with all the stress and strain that involves. There is a huge area of work to be grappled in that regard. The Minister has been saying for some time that he intends to do something about it. I know he is genuine about that but time is getting short. The Minister has done a certain amount of work in this area and I encourage him to see what else can be done.

I am supportive of the sentiments expressed in these amendments. Whether the timeframe is three or six months there is an obligation on the Minister to bring forward his ideas on this area because, unwittingly, through his creative thinking out loud in the past, he has caused concerns for lone parents and, more particularly, organisations that seek to represent the interests of lone parents. Some of that was thought to be delivered in this budget but for various reasons it has not been given the priority talked about in the past.

The Minister could use this opportunity of presenting a report in three or six months to give clarity on the general debate he sought to initiate in recent months on whether lone parents should be encouraged to come out of poverty through achieving employment and the way that conflicts with their role of caring for their children. It is an element of workfare that could be introduced. On those grounds I would like to be more certain of the Minister's attitudes. Perhaps he will be more accommodating towards thinking that any of these three amendments are worth considering in the context of making such a report to the House in the coming months.

Making reports to the House poses no problem. We regularly answer parliamentary questions so we should be able to find time to produce the reports envisaged in these amendments.

I hope more lone parents can be persuaded to join the back to education allowance scheme. The number of people availing of this scheme has doubled in the past six years, with the number of lone parents participating in the scheme in 2004 and 2005 standing at 1,309. I would like to increase this figure dramatically and we will examine the best way to do this. From 1 December 2005, the qualifying criteria has been reduced to nine months. We need to attract more lone parents back to education.

The income threshold was increased from €293 per week to €375 per week, which amounts to a yearly salary of €19,500. It is difficult to quantify but this reform will allow thousands more lone parents to go back to work. These substantial reforms of the back to education allowance scheme and the upper limit on earnings should make it considerably easier for lone parents to get back to education or work.

Tapering rent supplement will also help lone parents because they will retain it for a longer period of time when they take up employment. I presented the paper on lone parents to the Cabinet's social inclusion committee, which generally endorsed my view that I should publish it for discussion. This should come before the Cabinet next month, after which I hope to publish the paper. The paper will set out a number of options for helping lone parents. There will be a short debate on it, after which I will return to the Cabinet with solid proposals.

Amendment, by leave, withdrawn.

I move amendment No. 4:

In page 3, before section 1, to insert the following new section:

"1.—The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of extending the social welfare free schemes to widows and widowers who do not currently qualify in that regard.".

Deputy McGrath once likened himself to a long-playing record due to the number of issues he raised in the House. I have been lobbying on this issue for almost the same length of time. The Minister stated that extending the household benefits scheme to widows and widowers under 66 who do not currently qualify for it would involve a considerable level of expenditure. I would like to discover the actual numbers of widows and widowers under 66. One could then calculate how many of them would avail of the household benefits scheme.

The loss of a spouse is very traumatic. The trauma is magnified if the spouse was the sole earner and the surviving spouse is left with two or three young children to raise. I acknowledge that the new payment for children under six years is an additional support for parents. The loss of a spouse who was the sole earner is a very significant financial blow because a significant portion of the income the surviving spouse relies on has gone. The surviving spouse is left to cope with an increasingly stressful situation. He or she suffers the emotional blow of losing his or her spouse and parent of his or her children and also loses a significant portion of his or her income. The standard of living the surviving spouse is accustomed to is severely diminished or dismantled.

As a compassionate society, we should extend household benefits to a vulnerable group. Benefits could be extended on a three-year trial basis to widows and widowers under 66 while they are still finding their feet after their initial loss. I cannot see how extending household benefits to this group on a continuous basis would be too expensive. If I was Minister for Social and Family Affairs, I would like to extend household benefits to this group, many of whom care for disabled relatives. It is worthwhile exploring whether household benefits could be extended to widows and widowers under 66. Catering for widows and widowers in this position would demonstrate that we are a truly compassionate society.

The Minister is aware that widows and widowers under 66 constitute another group that often experiences great hardship. As Deputy Penrose noted, losing a spouse, who was possibly the family breadwinner, is very stressful. Wives are often left to care for children with a dramatically reduced income and no emotional supports. I am not sure of the numbers of widows or widowers under 66. A person in his or her late 40s or early 50s who finds himself or herself in that situation needs that extra support. It has been said that we should pay more attention and give more support to widows and widowers.

Deputy Penrose made the wise suggestion that household benefits could be extended to widows and widowers under 66 for a short period or until they could return to work if they were not previously in employment. Many widows who gave up work to rear children face financial pressure.

Could the Minister tell us whether the Department has carried out research into the possibility of extending household benefits to widows and widowers under 66 as the matter has been raised over the years? It is a very important proposal and it is a pity we do not have more time on Committee Stage to tease out these issues. I look forward to the Minister's response to this amendment.

I support the amendment. Anecdotal evidence and personal experience indicate that a considerable portion of the cohort of people to which we refer consist of women widowed in their 50s who fall short of retirement age and fall into an income hole they did not expect at this stage of their lives. If some consideration could be given to offering some or all of the household benefits on a tapered basis to this group, it would go some way towards meeting a shortfall in needs experienced by them.

The estimated cost of extending the household benefits scheme and free travel to all widows and widowers, irrespective of their age, would be €45 million. We are obviously talking about widows and widowers under 66 because approximately 66,200 widows and widowers over 66 receive free travel. A total of approximately 12,900 recipients of the widow's-widower's non-contributory pension receive free travel. A range of proposals to extend the free schemes to other groups, including widows and widowers, have been made from time to time. One must constantly keep matters under review.

A large number of people already receive household benefits. A total of 285,000 people receive the electricity allowance, while a similar number of people receive the free television licence. A total of 297,000 people receive the telephone allowance, 24,000 people receive the gas allowance and 624,000 people receive free travel. There is obviously an overlap because the same people avail of the different schemes but these numbers are very significant. We will periodically examine how the household benefits scheme could be extended if such a policy decision is taken. We must make choices and try to focus them.

As it is now 10.30 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 for Committee Stage and not disposed of are hereby made to the Bill, in respect of each of the sections not disposed of, that the section or, as appropriate, the section as amended is hereby agreed to on Committee Stage, that Schedules 1 and 2 and the Title are hereby agreed to on Committee Stage, that the Bill, as amended, is accordingly reported to the House, that Report Stage is hereby completed and the Bill is hereby passed."

Question put and agreed to.