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Dáil Éireann debate -
Wednesday, 1 Nov 2006

Vol. 626 No. 4

Leaders’ Questions.

Later today the House will debate Report Stage of the Health (Nursing Homes) (Amendment) Bill 2006. My colleague, Deputy Twomey, has consistently raised the concern about certain provisions in this Bill which will require the Health Service Executive to take into account 5% of the value of an applicant's house when he or she is applying for nursing home subvention. I understand this rule is being put into primary legislation for the first time and it is the cause of considerable concern to a great number of elderly people, many of whom are frail and vulnerable.

Yesterday I noted the comments of Age Action Ireland that the application of the rule would effectively force many elderly people to dispose of the family home. The Taoiseach is only too well aware of the value of the family in our Constitution and the family home is part of that social bond. In the past decade the country has seen dramatic increases in house prices. For instance, the average price of a modest, average house in 2006 is approximately €300,000 compared to approximately €75,000 to €76,000 ten years ago.

The rule allows the HSE to calculate what it considers a notional income of 5% of the market value of the house. That means someone looking for nursing home subvention and living in a modest, average house would have a notional income assessed at over €15,000. The Taoiseach will be well aware that notional income, together with an old age pension, would see a person fail to qualify for subvention and, as a consequence, be forced to sell the home. The trouble is that one cannot buy anything with a notional income. One cannot buy groceries in Tesco, Dunnes Stores or elsewhere with a notional income, but the HSE can use it as a method to deprive a person of subvention for a nursing home.

Given the concern and the fact that this is causing anxiety to a great number of elderly people, is the Taoiseach prepared to withhold the section of the Bill dealing with the 5% notional income assessment until its implications can be thoroughly reviewed?

The subvention scheme is provided for under the Nursing Homes (Subvention) Regulations 1993, as amended. When carrying out a financial assessment for the purpose of subvention, 5% of the imputed value of the person's principal private residence is taken into account. There are exceptions, for example, where the house is occupied by a spouse, a child under the age of 21 or a person in receipt of certain social welfare payments.

The Health (Nursing Homes) (Amendment) Bill of 2006 is designed simply to put the current subvention scheme on a sound legal footing. It proposes no changes to the financial assessment process that currently operates. The position is that the HSE may make that assessment, which is the way it has been over the years. The Bill provides that the HSE, with discretion, can refuse to pay a subvention if the value of the applicant's assets exceeds a certain threshold or if the value of his or her principal residence exceeds €500,000 in, or €300,000 outside, Dublin. The limits were raised substantially, from €95,000 to €500,000, this year. This does not represent any change from the current practice.

The Government agreed on a number of principles contained in the report of the interdepartmental group on long-term care, which are reflected in the social partnership agreement, Towards 2016. Advanced discussions are being held to draw up proposals for a new policy on long-term care. I saw the newspaper article and the cases made, but this legislation aims to put on a sound legal footing what has been happening in practice for the past number of years.

I am sure the Taoiseach does not want a situation to arise where he and his Government are accused of forcing people to sell their family homes. This was part of regulation. Did I understand the Taoiseach correctly when he said that the HSE will still retain the right to exercise discretion towards a person in individual cases? He said that the HSE would have the discretion to refuse a subvention. Does that mean that the HSE will also have the discretion to approve a subvention, even in a case where the notional income is in excess of the 5% limit?

In the case of a person in a Dublin suburb, with a very average house, with children living in Derry, Belfast or Cork, the tradition would have been that those visiting their mother or father at the weekend would stay in the family home. However, the average assessment, notionally, of the value of a house in Dublin would now be well in excess of the limit for subvention. Therefore, the use of the family home to provide an income stream to pay for care will deprive the family of the benefit of having the social bond of being able to return to the family home at weekends. I ask the Taoiseach to clarify the situation in that regard.

The Bill proposes that there will be an appeals mechanism set out. We do not know what that mechanism is, although I see the Minister for Health and Children is telling the Taoiseach now. We have not seen the details of that mechanism. This is a matter of very serious concern to a great number of elderly people. They do not want, under any circumstances, to be forced to sell the family home, if their families could find alternative means. What is the situation in this regard? There is no appeals mechanism obvious to us and the implications of this should be teased out more fully. By enshrining the 5% in primary law, the Government is giving vent to a great deal of angst, frustration and genuine fear among a great number of people. I ask the Taoiseach to clarify the situation, in light of enormous increases in house values in the recent years.

The value of the household under the regulations was €95,000 up to last December. The limit has been increased from €95,000 to €300,000 outside, and €500,000 inside, Dublin, which is a substantial increase. Deputy Kenny asked if the HSE has discretion in this area. The answer is that the HSE may, in either case, use discretion. If there is somebody living in the residence, for example, a spouse or child, the HSE has discretion. The Deputy is correct in that I said the HSE has the discretion to refuse to pay a subvention, but it can work either way.

The Bill is simply putting the current subvention scheme on a sound legal footing. It proposes no changes to the financial assessment process currently in operation. We had many discussions on this issue during the social partnership negotiations late last year and earlier this year. Advanced discussions are being held to help draw up proposals for a new policy on long-term care, based on the principles endorsed by the Government and the social partners. These include appropriate and equitable levels of co-payments by care recipients based on a national standardised financial assessment. The aim is to achieve an equitable, balanced scheme, for residential and community care and for public and private provision.

That ongoing work was commenced under social partnership talks and we must now take it forward. We have been examining a number of models, suggestions and analyses of how this can best be done. That work is not yet complete, but it is our intention to bring forward proposals for a new policy for long-term care.

The Minister for Social and Family Affairs recently said he was alarmed to find that so many poor people are in the grip of money lenders. He went on to say that the scale of the problem was alarming, given that the clients of the Money Advice and Budgeting Service are in debt this year to the tune of €65 million. The Minister said this was outrageous. In case the Taoiseach missed the interview, here is what the Minister said:

I've just discovered that a whole range of these people who are in debt, it's a new kind of debt. In the old days, it was money lenders, a back street kind of thing, but today these are official legal lenders and in one case they were charging 39% interest to people who were borrowing to pay for First Communion, bereavements, Christmas, family events or just to pay their rent.

He also said: "At the start of the 21st century, we still have an underbelly of debt in this country and I have instructed my Department to prepare legislation on this." The Minister went on to say that he was taking legal advice as to whether, in drawing up the new legislation, "outrageous and totally unacceptable rates of up to 39% can be curbed or even banned". I ask the Taoiseach when this legislation will appear.

I am delighted the Minister for Social and Family Affairs can be with us. I met a woman in Cork last week who told me that every time the Minister, Deputy Brennan, gives a television interview, her dog licks the television set.

I hope that is all the dog does.

Every time the Minister for Justice, Equality and Law Reform gives an interview, the dog barks uncontrollably.

What does the dog do when Deputy Rabbitte appears? Does he run around in circles?

He pays close attention.

Even the dogs on the street support the Minister for Social and Family Affairs when he puts on his sincere face. During this very sincere period, he promised legislation to curb and ban interest rates. When will the legislation be introduced and will it ban interest rates?

Since the interview, the Minister was corrected by his officials and told that he could not do what he proposed. The position has now changed to one where he is introducing new legislation to renovate the Money Advice and Budgeting Service. When will that legislation be prepared? The Minister has said he has instructed his officials to draw it up. However, if one examines today's Order Paper, No. 3 refers to the Money Advice and Budgeting Service Bill 2002.

The Deputy's time has concluded.

This Bill was published in March 2002, re-entered on the current Government's schedule and has remained there for the past four years without ever having been brought before this House. However, in his weekend round of interviews the Minister told Ursula Halligan that he has instructed his officials to the effect that poor people are in debt and that he would introduce new legislation to deal with it. What order is this new law and when will Members see it?

The Deputy is like a dog with a bone.

As for the two pieces of legislation, some time ago the Minister decided the legislation listed and the heads of that Bill were unsatisfactory. He announced some time ago that he would introduce a different, more comprehensive Bill to deal with the issue of loans. He was referring to legalised loans rather than to moneylenders, as many of the organisations in question are licensed. He stated he believed there was a different way of dealing with the issue and sought legal advice to do so. This is all that was engaged in this respect.

The new legislation is listed to come before the Government shortly. As we do this time every year, the Minister has been talking to all the relevant groups regarding their pre-budget submissions and hopes to bring forward the terms of his legislation to the Government shortly.

The point is that while Deputy Rabbitte raised a number of issues, poverty and social exclusion still has a significant impact on a certain group. It has been highlighted for some years that it is not good enough for us to deal with such matters simply on an administrative basis and that legislation is required. The question is whether it is possible to legislate for such issues and legal advice has been sought in this regard.

To the best of my knowledge this was considered approximately 20 years ago. At that time, the view was that one could not legislate for such issues, particularly as a number of the organisations in question are licensed. They operate under Acts of this House and must be examined under consumer legislation. I do not know the answer to the question as to whether one can act. The Minister believes he can bring forward this legislation based on financial advice and is committed to introducing a new Bill. He intends to bring its terms before the Government around the time of the introduction of this year's social welfare Bill.

I agree with the Taoiseach that a poverty problem exists and that some people are in the grip of moneylenders and pay high interest rates. In a society based on credit, some people cannot get access to credit from conventional institutions and therefore resort to moneylenders, for which there is a premium to be paid. I do not dispute any of that. However, I asked the Taoiseach about the legislation promised by the Minister to ban or curb such exorbitant interest rates and he now tells me that no such legislation is contemplated.

As for the refurbishment of the Money Advice and Budgeting Service, it is odd that the Government published a Bill in this respect in March 2002 that has never been introduced to the House on Second Stage and that Members are now informed that the Minister finds it to be defective. Although he did not do so in the past four and a half years, it is claimed he will bring in legislation in the four and a half months left to him.

The Deputy's time has concluded.

I find this lacks credibility. Although the Taoiseach stated that advice has been received over the years to the effect that one cannot legislate for this issue, why has the Minister claimed he can do so?

For example, the Money Advice and Budgeting Service could set up a scheme to extend the facilities of the credit union movement——

Absolutely.

——to have targeted and tailored loans available to those people who find themselves in a hole regarding money to pay for rent, for Christmas, for first Holy Communion or whatever.

The Deputy's time has concluded.

Forgive me for being somewhat sceptical that if the Minister has not done it in four and a half years, he will do so in four and a half months.

A Deputy

He got his headline.

As Deputy Rabbitte is aware, there are, on the face of it, powers to deal with a number of these issues under several legislative measures. However, they have not proven to be effective over a long time. While the Deputy noted that the Bill is from 2002, the Bill that we had approved is from the late 1990s as the issue was discussed in the late 1990s and in 2000. In the view of the Minister's officials, the Bill in question can be improved considerably.

As for the legislation regarding the Money Advice and Budgeting Service, while there are no rocket science issues involved, it is a question of being able to table a Bill with the legal powers to in some way curtail, prevent and control legally based organisations in such a way that they cannot levy punitive interest rates on those who are, as the Deputy correctly noted, marginalised, excluded or affected. I refer to those who find themselves with no alternative except to borrow what are usually relatively small amounts of money, but who pay exorbitant rates. It is a question of introducing legislation that can do something in this regard.

The Minister has advised me that he awaits this legal advice. However, the Deputy and I are aware that this has been attempted since the 1960s, back in the days when money launderers and moneylenders operated in this city and elsewhere. To my knowledge, an effective way of dealing with them — when legalised — has not been found. There is an effective way of dealing with illegal operators who operate outside the system. It is a question of whether this can be done. This is the point on which the Minister is waiting. The difficulty or delay does not lie with the remainder of the proposals regarding the Money Advice and Budgeting Service, other initiatives and whether credit unions can help — credit unions are already very helpful in this regard. It is a question of whether one can control or curtail such people. When the Minister receives his advice in this regard, he will be able to proceed with the Bill.

The Government claims the shared ownership scheme between first-time buyers and local authorities to be one of the successes of its so-called housing policy. Is the Taoiseach aware that the price limit for a housing unit that may be purchased via this scheme in the four local authority areas covering this city and its environs is between €210,000 and €275,000? Does the Taoiseach share with Members the despair of those first-time buyers, given the limitations that apply under this scheme? The set figures deny people who aspire to shared ownership via this scheme and close it off for them entirely across the greater Dublin area.

Last week, Sinn Féin conducted a survey in the four Dublin local authority areas. A total of 24 estate agents across Dublin were surveyed and we found only 12 properties across the four areas for sale within the limits of the shared ownership scheme as laid down in each of the authority areas. A total of 11 of the properties were located within the Dublin City Council area. No suitable accommodation was found in the Fingal or South Dublin County Council areas and only one was found in Dún Laoghaire-Rathdown. Of the 11 properties found in the Dublin City Council area, three were so-called apartments. They were little more than one room and one bedroom facilities. Seven of them were one bedroom apartments, ranging in price from €195,000 to €260,000. We only found a single two bedroom house, which was priced at €259,000.

The Deputy's time has concluded.

Does the Taoiseach accept that there are thousands of people on the social housing list in Dublin and hundreds of these have applied for the shared ownership scheme? Will the Taoiseach acknowledge that applications from these people are, to all intents and purposes, a waste of time, given the restrictive ceiling figures that apply for this scheme in the respective four authority areas cited by me? What will the Taoiseach do to tackle house prices and to tackle the need of the many thousands of families — over 44,000 identifiable household units — across this State, many of whom are in the city of Dublin? Will he, for instance, reinstate Part V of the Planning and Development Act, that he diluted in 2002 at the behest of developers and speculators? Will he also consider compulsory purchase orders in respect of land for the provision of much-needed housing, as is done for the provision of roads?

In respect of shared ownership and other schemes, the Minister of State at the Department of the Environment, Heritage and Local Government with responsibility for housing examines the thresholds for these schemes on an annual basis and continually adjusts them based on what is happening in the market. It is true that in the first half of this year, there was a very steep increase in prices in the third quarter, particularly in the second-hand market in Dublin. This increase has stabilised to great extent. The Minister of State will examine the figures, as he does every year.

Approximately 17,000 units will be delivered for various affordable housing schemes between 2007 and 2009. That is in line with what has happened in the past few years across a range of schemes. There are approximately six different national schemes administered by local authorities that assist people in that regard. Last year, we established the affordable homes partnership to add impetus to the delivery of affordable housing in the greater Dublin area, where price pressures, as the Deputy rightly pointed out, are greatest.

As well as producing some very good and easily understood information, particularly for young people and people on affordable housing, which sets out the various local authority papers and position in very clear language and has proven to be very helpful, the partnership group has advanced a number of projects. It has exchanged sites like Broc House for affordable housing and has continued with other schemes. It began with the Harcourt Street deal, invited proposals to bring forward additional land, mainly for affordable housing, provided high quality guidance on affordable housing schemes and produced a range of other initiatives.

Approximately 70 sites have been identified for State or local authority lands. There is an output from Part V, which has the potential to deliver a target figure of approximately 10,000 units. Members will have seen the information on Part V produced by the Department in the past few days which shows that far greater output is received from Part V as the old planning permissions have run through the system. As the Deputy will recall, changes were made to Part V because it was stated in this House and elsewhere that because Part V was so restrictive, it would stagnate the market when we needed to create supply.

The nucleus of Part V is working. The initiative has delivered and hopes to deliver several thousand units over the next few years. It is estimated that approximately 2,250 units will be provided under the initiative this year and that over 3,000 units will be provided next year. As Members can see from the information provided by the affordable homes partnership, the partnership has identified a large amount of housing, admittedly mainly apartments, that are within the range of affordable houses on the fringes of the greater Dublin area, which should certainly help the 44,000 household units referred to by Deputy Ó Caoláin. In addition — the Deputy did not raise this matter — there is provision this year for approximately €2 billion to be spent by local authorities on social housing, which is more than double the expenditure of six years ago.

One would have to point out to the Taoiseach that Part V of the Planning and Development Act 2000 was brought in some years ago. We are now heading into 2007. The five-year position in respect of planning approvals kicking in would surely have shown before now. Much of the response the Taoiseach has given this afternoon is clearly from a briefing note prepared last year, which did not kick in this year either and I fear will not do so in 2007. It is stale and needs to be revisited.

There are 44,000 identifiable household units across this State, including a great number of people in the city of Dublin, who are anxiously waiting for the provision of social or affordable housing. Only 5% of the houses completed across this State in the first three months of this year were in the social or affordable housing category. Does the Taoiseach agree that this is a very poor number, given that there is a real crisis, identified by a raft of organisations and commentators in this area?

The Deputy's time has concluded.

Does the Taoiseach not agree that we need to see the restoration of Part V of the Planning and Development Act, which was introduced by his Government and supported by me? This measure was innovative and courageous, yet the Government buckled under the pressure in 2002 and amended it to suit the interests of a particular sector.

In the course of his reply, the Taoiseach neglected to address the ceiling figures I identified as a result of the survey we have carried out that clearly shows that the shared ownership scheme is a non-runner. It is a dead duck across the four local authority areas in the city of Dublin. Will the Taoiseach ensure that the threshold for qualification for the shared ownership scheme is increased adequately in line with the situation that is real outside this House for so many people in this city?

I thought I had answered the Deputy's last point, but to clarify matters, the thresholds for people applying under the various schemes are examined on an annual basis and I understand they will be examined again this year. They are based on what happened in the market during the previous year and are examined annually.

Will the Taoiseach push them?

Yes, I will raise that issue. I do not wish to debate Part V, but when we introduced Part V of the Planning and Development Act, the cry from everywhere was that it was overly restrictive and unworkable and would not provide us with a supply so we made changes to it. We were told at the time that there would be a run-through of approximately five years before those planning permissions were dealt with and that we would not get the benefit of this measure for a number of years. We are now beginning to obtain the benefits, as I demonstrated with the figures I quoted earlier.

The most up-to-date figures show that we are heading this year for approximately 90,000 completions. In Towards 2016, we committed ourselves to producing 17,000 affordable houses over a three-year period. The needs of approximately 60,000 households will be met through the various schemes. These were the figures agreed under the social partnership process, towards which the Department of the Environment, Heritage and Local Government is working.

We are examining issues surrounding developers who have land with planning permission but are not building on that land. There is an argument about how extensive this problem is but we are examining the relevant legislation to try to find a legal method of forcing people who sit on planning permissions and watch prices escalate to build on those lands. We are at an advanced stage in respect of legislation on that issue.

As we head into November, the affordable housing schemes, the affordable housing partnership, the housing programme itself and social programmes are well on target in respect of the commitments in that regard at the beginning of the year. Approximately 6,500 local authority houses will be acquired this year, including units provided under various regeneration schemes. A total of 14,000 household units will be acquired from a range of social and affordable housing schemes, representing an additional investment for the period ahead. There has been an acquisition of a further 4,000 housing units, bringing the total number for the latest period on which the Department worked up to 27,000. That is quite an increase. The Deputy stated there are 44,000 people on the housing list but that is almost a 10% decrease on the last housing statistics. That is a considerable decrease. The income threshold for eligibility under the grant schemes will be examined. They are usually considered at the end of the year but I will raise the issue with the Minister.

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