Vol. 636 No. 2
32 Mr. Stanton asked the Minister for Social and Family Affairs the action he has taken following recommendations by the Irish Human Rights Commission regarding the contributory State pension for self-employed persons; and if he will make a statement on the matter. [15573/07]
It is a fundamental principle of our social insurance system that those qualifying for benefits must satisfy a range of contribution and other conditions. In the case of contributory pensions, this involves commencing payment of contributions ten years before pension age, payment of a minimum number of contributions at an appropriate rate and reaching a minimum average annual contribution rate. The State pension — contributory — is a valuable benefit and the conditions are designed to ensure that those qualifying have had a sufficient and ongoing attachment to the social insurance system.
The case reported on by the Irish Human Rights Commission, IHRC, involves a couple who were over 56 years of age in 1988 when compulsory social insurance for the self-employed was introduced. Accordingly, they were unable to satisfy one of the basic requirements for pension as they did not commence paying insurance ten years before pension age. In 1999 a special half rate pension was introduced for individuals in this group based on the payment of 260 contributions and, again, the couple involved did not satisfy the qualifying condition. While one party of the couple could have qualified had the necessary contributions been paid, because of advanced age the other person would not have been able to make the necessary contributions before reaching pension age. A refund of part of the social insurance contributions was available to such people from 1996.
Having considered the case, the IHRC has recommended that a reduced benefit be paid to people who, because of advanced age, could not satisfy the conditions for the special pension introduced in 1999. The recommendations of the IHRC are based on its assessment of the situation under the European Convention on Human Rights, the International Covenant on Civil and Political Rights and the European Code of Social Security.
On the European Code of Social Security, the IHRC places particular emphasis on provisions in regard to the position of people who, by reason of their age when provisions are introduced, cannot satisfy contribution or employment conditions. The Department makes annual reports on compliance with this code to the Council of Europe, summarising changes to the social welfare system. These reports are then referred to the committee of experts of the International Labour Organization, ILO, for its examination. The Department's 1999 report included details of the provisions on the self-employed that are now the subject of the IHRC investigation. At that time, the ILO committee confirmed that Ireland met its obligations.
Accordingly, as an initial step in its review of the IHRC report, my Department has asked the ILO's committee of experts for its views on the way in which the IHRC has interpreted the relevant articles. The position will be reviewed in the light of the views received.
I thank the Minister for his response. Does he agree that it appears that the international human rights standards, such as the European Convention on Human Rights and the European Code of Social Security, have not been respected entirely in this matter? Does he agree that the advanced age of a person alone should not exclude him or her from entitlement to the State pension?
Is the Minister aware of the submissions of other organisations, such as the IFA's pre-budget submission of 2007, which expresses concern over the treatment of a relatively small group of self-employed people who were between the ages of 60 and 65 in April 1998? Will he state how many persons were affected adversely such that they could receive no benefits in spite of their having had to make contributions? What are his personal views and when does he or his Department expect to receive a report from the ILO on the matter?
My main point concerns the human rights standard. Does the Minister agree with the IHRC's recommendation that a reduced benefit be paid to self-employed people who contributed to the social insurance scheme but did not qualify for the pension only because of their age when the legislation came into force? Does he agree that this policy is ageist and should be reviewed? How many individuals are affected?
As I stated, I asked the ILO's committee of experts for its views on the way in which the IHRC has interpreted the relevant articles. I do not know when we will receive its views but as soon as we do, the Department will be well disposed to publishing the information.
There are obviously anomalies throughout the system and we have made good progress in recent years in ironing them out. A small number of people are affected. When I met the IFA, it raised issues similar to the one raised by the Deputy. One difficulty in addressing the matter concerns the implications for other schemes and the implications if one interferes with the basic principle of attachment to the social welfare system through making contributions from a certain date and meeting the necessary conditions.
There are 3,500 people in receipt of the special half rate pension for the self-employed; there are 28,000 people in receipt of the pre-1953 pension; there are 13,300 people in receipt of the pro rata pension on the basis of EU and bilateral arrangements; and there are 1,800 people in receipt of mixed insurance pensions, at the modified and full rate. There is no precise estimate of the number caught in the manner the Deputy describes and we await the views of the ILO on the matter.
Does the Minister agree there are approximately 500 individuals affected altogether? What is his personal view on the matter? Has any thought been given to paying a pro rata pension? We know individuals received the half rate pension if they had paid contributions for more than five years. Some had paid for nine years, yet they only received half the pension, which seems unfair. In this day and age, given the super-duper computers in the Department, it should be possible to arrange to pay people the pro rata pension. In the case in question, doing so would be fairer.
The number who could benefit from the recommendations of the IHRC is limited. The people in question were over 61 in 1988 and could not satisfy the conditions for a standard pension at that time and, because of their age, they were not in a position to make the 260 contributions required for the special pension, which was introduced in 1999. It appears from our records that more than 700 people became insured for the first time in 1988. This is the best estimate we have. To pay a half rate pension to such people would cost approximately €4 million per annum and this can obviously be considered in a budgetary context following the advice of the ILO's committee of experts.
33 Mr. Penrose asked the Minister for Social and Family Affairs if his Department has received the second actuarial review of the social insurance fund, provided for under the Social Welfare Consolidation Act 2005; the main findings of the review; when the review will be laid before the Houses of the Oireachtas; and if he will make a statement on the matter. [15384/07]
The second review of the social insurance fund, SIF, which is required under section 10 of the Social Welfare Consolidation Act 2005, has recently been completed. The review was undertaken in accordance with the requirement that such reviews be carried out at five-yearly intervals, and the previous review was completed in June 2002. The legislation also requires that the report be laid before the Houses of the Oireachtas within six months of its completion.
The SIF provides insured contributors with pension benefits on retirement as a result of old age or incapacity, in addition to a range of short-term benefits. The fund covers almost all employees and the self-employed in Ireland, although some contributors are only covered for a limited range of benefits. The review examines the financial condition and sustainability of the fund at the end of 2005 when social insurance fund expenditure was €5.6 billion, income to the fund was €6.1 billion and there were some 2.8 million contributors. The aim of the review is to establish the medium and long-term financial position of the social insurance fund.
The review covers the period from 2006 to 2061. A key objective of the review was to consider the adequacy or otherwise of the current contributions to finance social insurance fund benefits. The review investigated the likely impact of different increases in benefit rates and contribution limits. In addition, the effects of adjusting the retirement age are explored and assessed. The report examines the potential financial impact of a number of possible future developments to the social insurance system.
The review was overseen by a steering committee comprising representatives of my Department along with representatives of the Departments of Finance and Enterprise, Trade and Employment. Economic assumptions relating to the period of the review were agreed between the steering committee and the consultants who also engaged an independent economist to assist in this process. Migration projections, based on the projections of the CSO, were developed in a similar fashion.
It is anticipated that the review will play an important role in ongoing consideration of appropriate social insurance contribution rates, payments and possible future subventions to the social insurance fund. I look forward to presenting the report to the Houses of the Oireachtas once the Government has considered its contents.
The reason the report has not been published is that it runs contrary to what was proposed by the Taoiseach at the recent Fianna Fáil Ard-Fheis. The report is being concealed. How long has the Minister had the report? What does the report contain? Does it call for sharply increased PRSI contributions to finance the future pensions of an ever-ageing population? Was a similar warning issued in a report in 2002? What is the proportion of workers to pensioners? Is this steadily declining? In 2002, some 5.3 workers paid PRSI for every pensioner. What is the figure per pensioner now? Has it not declined?
Social welfare benefits are financed entirely from the social insurance fund. That is sacrosanct and cannot be touched. It was run on a significant surplus except for when Mr. McCreevy raided €635 million from it in 2002. There will be a surplus of €1.3 billion this year and the accumulated surplus will be approximately €5 billion. It will take more than this figure to finance future pensions according to the report in the Department. Deputies are entitled to ask questions to ascertain the position.
We are all committed to providing a pension of €300 per week over the next five years. Does that not require a significant amount of funds from the social insurance fund? If there is a decrease in contributions to the PRSI fund, can the Minister guarantee that the €635 million deficit will be financed by general taxation to ensure that commitments to pensioners and others are met? Is that the position or was this announcement, like many others at the Ard-Fheis, a surprise to the Minister? Was the Department consulted?
Allow me to clear up the timeline. This is the second review of the social insurance fund, required under section 10 of the Social Welfare Consolidation Act 2005. It has been completed and is before Government. Under the legislation, the review must be laid before the Houses within six months of its completion and clearance by the Government. From a legal point of view, the Government could wait until the end of the year to publish the review. There is no delay — we are ahead of schedule and should not be considering this for many months to come. This is due to the excellent work of the steering group, the consultants and officials involved.
There are now 2.8 million contributors to the fund. The fund, established in 1953, was in deficit until 1996. It had to be topped up by the Exchequer, as must be done by law if the fund is in deficit. The pension review and the Green Paper, which is almost ready for publication, makes it clear that the ratio of people of working age to those of pension age is continually falling. There is increased pressure on the fund. The cumulative surplus in the social insurance fund was €2.4 billion in 2005. The provisional outturn for 2006 is over €3 billion. It is capable of meeting its commitments and this review will enable people to see where the fund is heading. At present, it has a cumulative surplus.
Will contributions fall short of the benefits paid out from 2012? Will the cumulative surplus disappear? A significant input from general taxation will be required to cover the outflow arising from commitments on pensions, with which we all agree. The commitment made by the Minister's party will lead to an immediate shortfall of €635 million. In order to maintain the surplus general taxation must be used. What is the position? Will contributions fall as a result of proposed changes?
The number of people at work is increasing all the time. The number of people contributing is growing steadily and is currently at 2.8 million. Assuming the economy keeps growing, in line with the Central Bank and other independent projections, the income to the fund will increase. Any proposals made in the context of the election campaign and manifestos are the subject of hot and heavy debate in the coming weeks. From my side of the House, we have recommended reducing the employee PRSI rate from 4% to 2%. We also propose adjusting self-employed PRSI from 3% to 2%. There is a cost involved and such costs must be provided from the Exchequer so that the fund will not be short as a result of policy proposals that the public may support.
34 Ms C. Murphy asked the Minister for Social and Family Affairs the reason there is an average of 15 weeks delay in processing applications for the carer’s allowance; if his attention has been drawn to the fact that such delays cause hardship to persons who are caring for elderly or incapacitated relatives; the action he is taking to deal with the backlog; his views on the optimum time for processing such applications; and if he will make a statement on the matter. [15491/07]
It takes 15 weeks on average at present to finalise claims for carer's allowance. During 2006, the average was just over ten weeks and in 2005, the average was almost 13 weeks.
The reason for the current increase in average claim processing times is the increase in the number of claims being submitted. The number of claims submitted in 2006 was more than 20% higher than the total for 2005. A number of steps were taken to deal with this, including the deployment of additional staff and a revision of processing procedures to improve efficiency. As a result, the number of claims finalised in 2006 was 9% higher than the total for 2005.
While this led to an improvement in average claim processing times compared to the previous year, it did not keep pace with the increase in the volume of new claims. As a result, average claim processing times have lengthened in 2007. The number of claims submitted so far this year shows a further increase of more than 5% compared to the same period last year. There are over 28,000 carers' allowances in payment at present, compared to 25,000 at the end of 2005 and 23,000 at the end of 2004. There are currently 2,977 cases awaiting a decision, of which 67% were received within the past eight weeks. The majority of claims currently on hand will be processed within 15 weeks. With regard to the optimum claim processing time, my Department's aim is that 70% of claims for carer's allowance should be decided within nine weeks of submission.
Entitlement to carer's allowance is based on an applicant satisfying medical, means and residency conditions. In determining entitlement to the allowance there are, in certain cases, unavoidable time lags involved in making the necessary investigations and inquiries. Delays can also arise if persons applying for the allowance are not in a position to supply all the necessary information in support of their claim.
Many applicants for carer's allowance are already in receipt of another social welfare payment while their claim is being processed. Such payments will normally continue until entitlement to their carer's allowance is determined. Claimants who are not in receipt of any other social welfare payment may apply for supplementary welfare allowance in the interim period.
The resources available to my Department must be deployed to ensure good customer service, prevent fraud and abuse of the schemes and achieve value for money. My Department is engaged in an ongoing process to ensure that available resources are prioritised to the greatest extent possible on frontline service delivery and to ensure that the best possible standard of response is provided across the range of schemes and services. The position will be kept under review to ensure that the best possible level of customer service and customer response continues to be provided.
This approach brought about an improvement in claim processing times in 2006 compared to 2005. I am confident claim processing times will improve in the coming months.
This was raised with me by constituents who found it would take 15 weeks to process their claim, something they did not expect. They pointed out that their circumstances had disimproved because they had taken on the role of carer. At this most vulnerable time in their lives, they expected State support and were disappointed to find such a long delay in securing an allowance.
I understand there can be complex cases but the vast majority of cases are straightforward. Is there any explanation for the increase in the number of claims? Could it be related to people being concerned about keeping their relatives out of hospital because of their worries about the health service?
Nine weeks is a long optimum time. I can understand that there will be cases that will take nine weeks because investigation is necessary, but I am surprised that most cases take more than four weeks. Why is that the case?
It is partly my fault because I have made so many changes in the area in the past two and a half years, putting enormous pressure on the system, by relaxing the means test and improving the different allowances and their levels. On top of that, there is this year's decision to pay a half rate carer's allowance to anyone in receipt of another welfare payment. There has been enormous pressure on those dealing with the carer's allowance and benefit in the Department. Those involved must satisfy medical, means and residency conditions. The number of claims submitted in 2006 was 20% higher than in 2005, a direct result of us ensuring more people are eligible to claim the allowance by relaxing the means test so more people are taken into the system.
All applications that can be automatically approved medically are being fast-tracked. Special arrangements apply in cases of extreme or serious illness as part of the medical assessment procedure. Priority is being given to claims where a decision on entitlement has been outstanding for more than eight weeks. Processes and procedures within the decision section have been examined to eradicate any processes that can contribute to the delay. Every effort is being made to address the backlog. I regret the delays but they are the direct result of an enormous increase in applications brought about by a relaxation in conditions and trying to ensure more people are eligible for carer's allowance and benefit and respite care grants.
Obviously, if there is a relaxation of the means test, it would be anticipated that there would be additional applications. Were additional staff deployed specifically for this purpose? What does the Minister mean by fast-tracking cases? Does the Minister agree that family carers play a critical role at a time when they could be a drain on public resources? Extra attention must be paid to them to ensure such delays no longer happen.
Staff are deployed throughout the Department wherever pressure points arise. Upwards of 5,000 people are spread across the Department and they work under substantial pressure on the new schemes, making changes and improvements they are asked to implement on a daily basis. I cannot say that staff were specifically deployed to carers but the Secretary General deploys staff wherever pressure points arise as he sees fit.
By fast-tracked I mean the Department will bring good judgment to bear on claims. Those that are outstanding for over eight weeks will receive earlier attention, as will those where there is serious illness involved, the medical evidence is clear or documentary procedures can be expedited by intervention by the Department. All cases are important but we want the most urgent to be dealt with first.
I will not rehearse my view on carers; I agree entirely with Deputy Murphy on their social value. It behoves all of us to make improvements for carers who look after those who require it.
