I move: "That the Bill be now read a Second Time."
Social Welfare (Miscellaneous Provisions) Bill 2008: Second Stage.
I ask the Minister to wait until I have called the House to order. Deputies who wish to have conversations should do so elsewhere.
Tá an-áthas orm an Bille seo a chur os comhair an Teach. The legislation will implement the €515 million package of social welfare improvements announced in budget 2009. In very difficult economic circumstances this package will bring total expenditure on social welfare in 2009 to €19.6 billion, which is an increase of €2.6 billion or 15.5% over the Estimates allocation for 2008.
At a time when public expenditure must be tightly controlled, this increased provision for social welfare is a clear signal of the Government's commitment to protect the vulnerable and less well-off in society. The budget provides for increases of between 3% and 3.8% in the basic social welfare payments next year. These increases are above projected inflation for 2009 and so will broadly maintain the real value of these payments. They are also in line with the wage rises agreed by the social partners in the second phase of the national pay agreement. The schemes and other supports which the Department of Social and Family Affairs administers will benefit over 1.7 million people, including 440,000 pensioners, 345,000 ill and disabled people, more than 80,000 carers, 30,000 low income families availing of family income supplement and more than 580,000 families who receive child benefit payments.
The budget includes provision for an average live register figure of 290,000 in 2009. This compares to an average of 216,490 in the ten months to October this year and an expected average of 220,000 for 2008 as a whole. Providing for the expected increase in the live register alone accounts for €1.25 billion of the planned increase in spending for 2009.
In these extraordinary economic times, the Government has had to make some difficult decisions in order to secure our economic future. However, we have still made provision for an increase of €2.6 billion in social welfare expenditure next year and have kept expenditure control measures in this Department to an absolute minimum. I will now outline to the House the improvements in payment rates which will be given legislative effect in the Social Welfare Bill.
As regards older people, we are all aware that the price of fuel is an issue of major concern for many people but particularly for the elderly and the ill. I am pleased that the budget provides for an 11% increase in the value of the fuel allowance, bringing it to €20 a week from next January. The duration of the fuel season is also being extended by another two weeks from April 2009, bringing it to 32 weeks in total. These improvements to the fuel scheme will cost almost €30 million extra in 2009 and will benefit nearly 300,000 households.
The budget also provides for increases of €7 per week in the maximum personal rates of payment for State pension contributory and State pension transition from the start of January 2009. This will bring the new weekly rate to €230.30. The State pension non-contributory is also being increased by €7 per week bringing the new rate to €219 per week from January 2009.
While providing for increases in the State support for today's pensioners, the Government is also conscious of the need to develop a new long-term pensions framework to serve future generations of pensioners. I am pleased to be able to inform Deputies that we are close to the end of a very protracted policy review of issues in this whole area which started with the publication by the Pensions Board of its national pensions review and its report on mandatory pensions, Special Savings for Retirement, just over two years' ago. A Green Paper on pensions was published this time last year allow the debate encompass all aspects of pensions policy in this country. We completed a very successful consultation process at the end of May and to which some Deputies made submissions. We received a wide range of suggestions covering all possible avenues of reform with at one end of the spectrum, an earnings-related pension operated through the social insurance system, and at the other end, a continuation of the existing voluntary arrangements with enhanced tax incentives. While there is a general acceptance that we need to reform our pensions system, no consensus on the way forward has emerged.
The results of the consultation process are probably not that surprising and in the absence of an agreed approach the Government is now proceeding to devise a policy for the future of our pensions system. It bears repeating that there is no such thing as a free lunch when it comes to pensions. If we want a good system we will have to pay for it, whether it is organised through the social insurance system or by way of the private sector. The challenge is to strike the right balance between the responsibilities of all those who can contribute, including the State, employers and employees, and to ensure that whatever system is decided upon, the group who are most in need of pensions coverage, the low to middle-income earners. This is the challenge and the aim is to announce a framework for future policy by the end of the year.
With regard to social welfare payments to people of working age, the budget provides an extra €260 million for such schemes. The maximum personal rate of payment for all working-age schemes is being increased by €6.50 per week with effect from the first week of January 2009, with proportionate increases applying to people on reduced rates. This brings the lowest social welfare weekly payments above €200 for the first time to €204.30. The rates of qualified adult payments are also being increased on all schemes by €4.30 except for the invalidity pension scheme where a €4.60 increase will apply. About 733,000 people will benefit from these increases.
Budget 2009 also provides increases for families with children who are in receipt of social welfare payments. Social welfare-dependent parents currently receive an extra €24 a week for each child on top of their basic social welfare payments, through what is termed the qualified child increase. This is being increased by €2 to €26 per child, with effect from January 2009.
Improvements are also being made to the family income supplement which is paid to low-income working families. The income limits for the FIS are being increased by €10 a week in respect of each child, giving an average extra payment of €6 per child a week. It is estimated that a total of 29,000 families will benefit from FIS in 2009 and that approximately 2,000 additional families will become eligible for a FIS payment.
The income thresholds for entitlement to back to school clothing and footwear allowance are also being increased to enable 18,000 more families to benefit from the scheme. The Government decided in budget 2009 that with effect from January 2010, child benefit will no longer be paid in respect of children who are 18 years of age. This change is being phased in gradually and the Bill provides that a half-rate payment of the appropriate rate of child benefit will be made in respect of existing and future qualifying 18 year olds from 1 January 2009 to 31 December 2009.
Special alleviating measures are being introduced in respect of children aged 18 years who are in social welfare-dependent families or low-income families. A compensatory payment of €15 per week will be paid to families in receipt of social welfare payments which include a payment for a qualified child in this age group and to low-income families in receipt of family income supplement which include qualified children in this age group. This additional payment will also be applicable where an 18 year old is in receipt of disability allowance in his or her own right. Compensatory payments will be paid to the person who was receiving the child benefit for the 18 year old in question. In addition, the back to school clothing and footwear allowance will be increased by €215 to €520 per annum for eligible 18 year olds. These compensatory payments will cease on 31 December 2010.
While policy in relation to the early child care supplement is the responsibility of the Minister of State with responsibility for children, the Social Welfare Bill will provide the legislative basis for the change to the scheme as announced in the budget. The cost of the early child care supplement in 2009 is expected to be €397 million. The primary aim of the scheme was to help parents with the cost of preschool child care. The payment was introduced for children to the age of six, even though most children start school well in advance of their sixth birthday and the burden of having to pay for full-time child care ceases at that point.
The approach taken in 2005 was the most generous possible, to ensure that no child would lose the payment before starting school; however it is now considered that a more targeted approach is consistent with the current economic context. With effect from January 2009, the eligibility period for children qualifying for the early child care supplement will be reduced from six years to five years and six months. The supplement will also be paid on a monthly rather than a quarterly basis as at present. The combined effect of these measures is expected to result in savings in the Department of Health and Children Vote of some €93 million in 2009.
I will outline the changes being made to certain social insurance schemes. Deputies will be aware that Ireland's social welfare system is based on two different types of entitlement: a social insurance system for people who have paid sufficient PRSI contributions and a social assistance system for people without adequate contributions who have little or no household means of their own. Social insurance is intended both to enable people to insure themselves against adverse life events such as unemployment or illness and to provide for their State pensions and other benefits, through contributions to the national social insurance fund. Social insurance benefits are not means-tested; entitlement depends on having paid the required number of PRSI contributions relevant to the particular benefit being claimed. For the past 11 years the social insurance fund has been in surplus, with more than sufficient income to the fund to cover the payments being made from it each year, without the State having to provide a contribution. However, this is changing. As a result of further increases in the live register, expenditure is expected to exceed income to the fund by over €200 million this year and approximately €900 million next year. Although these current deficits can be met from the accumulated surplus, it seems likely that annual Exchequer subvention to the social insurance fund will be required again within a few years.
In this context it is appropriate to look at some of the instances where people with a very limited or distant contribution record have been able to qualify for very significant benefits, regardless of their household income. Currently, people who have paid just 52 weekly contributions in total can qualify for jobseeker's benefit, illness benefit and health and safety benefit. This means, for example, that recent migrants or young workers who have only worked here for a total of one year are entitled to claim jobseeker's payments for 12 months. This will change from next January, when the number of required paid contributions will be doubled to 104 for new claimants.
A further anomaly that exists at present is that some people who were previously working part-time can receive a higher rate of payment from these schemes than what they were actually earning while at work. Again, this is considered to be inappropriate and a disincentive to employment. From next January, therefore, this situation will be addressed by increasing the earnings thresholds which currently apply to the reduced or graduated rates of payment from €150 to €300 per week.
At present, it is necessary to have made 13 paid contributions in the relevant tax year in order to qualify for illness benefit. However, this condition does not exist for jobseeker's benefit, with the result that people who may not have paid PRSI contributions in the past number of years can qualify. Again, it is considered that this position does not adequately reflect the contribution-based rationale for social insurance and so, from next January, the Bill provides that new claimants for jobseeker's benefit will be required to satisfy the same conditions as those on illness benefit and must have paid 13 contributions in the relevant tax year to qualify for benefit.
The other two changes being made to jobseeker's benefit relate to the duration of the payment. At present, people who have 260 or more paid social insurance contributions can receive jobseeker's benefit for up to 15 months. The Bill provides that, with effect from 15 October 2008, this is being limited to 12 months for current claimants with less than six months duration on the scheme, as well as all new claimants. Where the claimant has less than 260 paid contributions, the maximum duration of jobseeker's benefit will be nine months instead of 12 if the claimant currently has been in receipt of benefit for less than three months and in respect of all new claimants.
In summary, the Bill provides that new claimants for jobseeker's benefit will in future have to have paid a total of at least 104 contributions to the Social Insurance Fund, with at least 13 of these paid in the relevant tax year, and the duration of the payment will be either 12 or nine months depending on the number of social insurance contributions they have made in the past. I stress that the people with limited means who will be affected by these restrictions in entitlement to social insurance benefits will be able to claim jobseeker's allowance or another social assistance payment, such as the supplementary welfare allowance. The maximum rate of jobseeker's allowance is paid at the same rate as jobseeker's benefit.
Deputies will be aware that changes to the Money Advice and Budgeting Service and the Combat Poverty Agency were also announced on budget day. The Bill is amending the Citizens Information Acts 2000 to 2007 to enhance the functions of the Citizens Information Board through the assignment to it of responsibility for the provision of the Money Advice and Budgeting Service. MABS staff provide a highly valued service to people who are over-indebted and need help and advice in coping with debt problems. However, it has been recognised for some time that the service needs a proper legislative basis and structure. After detailed consideration, the Government decided that assignment of the responsibilities to the Citizens Information Board would best achieve that outcome. The MABS and citizens information centres complement each other as both are involved in providing information, advice and advocacy services to the public. In addition, the Citizens Information Board has a long association with the MABS at both national and local level and was involved in establishing some of the original MABS pilot projects.
The proposals envisage that the MABS will be a separate and distinct service within the Citizens Information Board. There will be no change in the status of the 53 independent MABS companies with voluntary boards of management, nor in the employment status of their 240 employees who provide the local services. The Bill as published does not contain legislative provisions to give effect to the decision to integrate the Combat Poverty Agency with the office for social inclusion. As I will detail in a few minutes, it is intended to introduce such provisions on Committee Stage.
I will now outline the main provisions of the Bill. Sections 3 and 4, together with Schedules 1 and 2 to the Bill, provide for increases in the rates of social welfare payments. These include an increase of €7 per week for recipients of pensions and carer payments who are aged 66 years and over. The Bill also provides for an increase of €6.50 on all working age payments, including jobseeker's benefit, disability allowance, one-parent family payment and carers benefit and allowance payable to carers aged under 66 years. It further provides for increases in the allowances payable in respect of qualified adults and qualified children. These increases come into effect in January 2009.
Section 5 provides for increases in the weekly income limits used to determine entitlement to family income supplement. The new thresholds range from €500 in the case of a family with one child to €1,250 in the case of a family with eight or more children. These increases will take effect from January 2009.
Sections 6 and 7 provide for an increase from €50,700 to €52,000 in the annual PRSI earnings ceiling applicable to employees and optional contributors. This amendment comes into effect from 1 January 2009.
Section 8 provides that income from dividends arising from stallion fees, stud greyhound fees and profits from the occupation of certain woodlands will be taken into account in estimating reckonable income for PRSI purposes. This amendment is necessary to disregard the provisions of section 140 of the Taxes Consolidation Act 1997 when estimating reckonable income for PRSI purposes.
Sections 9 to 11 provide for amendments to various definitions. Sections 9 and 10 provide for the amendment of the references to a reformatory or industrial school and medical practitioner which are contained in the Social Welfare Consolidation Act 2005 by replacing those terms with the definitions "children detention school" and "registered medical practitioner", as provided for in the Children Act 2001 and the Medical Practitioners Act 2007 respectively. Section 11 amends the definition of "widowed parent" in order to provide that the grant will be payable to a widow whose child is born within ten months of the date of death of the deceased spouse.
Section 12 provides for the deletion of a provision which applied to persons who were in receipt of pre-retirement allowance prior to April 1993. This provision is obsolete as all recipients of pre-retirement allowance would have transferred to State pension payments before or during 2004.
Section 13 clarifies that, for the purposes of the one-parent family payment scheme, a "qualified parent" must be the parent, step-parent, adoptive parent or legal guardian of the qualified child. It also provides for continued payment to existing recipients who established entitlement under the current definition of "qualified parent".
Section 14 provides for amendments to the provisions governing payment of rent and mortgage interest supplement under the supplementary welfare allowance scheme. It provides that the maximum amount of rent supplement will be specified in regulations. It also provides that the amount and duration of mortgage interest supplement will be determined by the Health Service Executive having regard to the circumstances of the person concerned and subject to any conditions and so forth that may be prescribed.
Section 15 provides for a number of amendments to the provisions governing the illness benefit scheme, with effect from 5 January 2009, as follows: the minimum number of qualifying contributions required will be increased from 52 to 104; illness benefit will be payable for 624 days — two years — in the case of a person who has more than 260 paid PRSI contributions; payment will continue where a person has been in receipt of illness benefit on a long-term basis, provided that the claim is not broken for a period exceeding three days; and existing special provision for claimants who participate in reactivation programmes will be maintained.
Section 16 provides for amendment to the provisions governing the health and safety benefit scheme by increasing, from 52 to 104, the minimum number of PRSI contributions required in order to qualify for benefit, and providing that the claimant must have at least 13 paid PRSI contributions in the relevant tax year.
Sections 17 and 18 provide for amendments to jobseeker's benefit. At present, the social welfare legislation provides for the disregard of certain periods where a jobseeker's benefit claimant participates in specified training and employment schemes. Section 17 provides for the extension of the linking period in respect of jobseeker's benefit to two years and six months in the case of a person who is participating in certain vocational training opportunities schemes.
Section 18 provides for a number of amendments to the jobseeker's benefit scheme as follows: an increase, from 52 to 104, in the number of PRSI contributions required in order to qualify for benefit; a requirement that the claimant must have 13 qualifying contributions in the relevant tax year; amendments to the duration of benefit, namely, 12 months in the case of a person who has paid at least 260 PRSI contributions and nine months in the case of a person who has paid less than 260 PRSI contributions; and special provision for claimants who were in receipt of jobseeker's benefit on budget day, 14 October 2008.
Provision was made in the Social Welfare and Pensions Act 2008 for the transfer of the administrative responsibility for domiciliary care allowance from the Department of Health and Children to the Department of Social and Family Affairs in 2009. While those provisions have not yet been given effect, section 19 of the Bill provides for amendments to the domiciliary care allowance scheme. These include reflecting the amendment to the definition of children detention school, as provided for in section 9 of this Bill; and providing an increase from €299.60 to €309.50 in the monthly rate of the allowance.
Section 20 contains amendments to entitlement to child benefit by providing that the benefit will be payable in respect of a child up to his or her 18th birthday. It also provides that a special payment of half the standard child benefit payment rate will be payable in 2009 only in respect of qualified children who are currently aged 18 years. Special provision is made to provide for a compensatory payment of €15 per week to families in receipt of social welfare payments, which includes a payment for qualified children in this age group, and low-income families in receipt of family income supplement, which includes qualified children in this age group. This additional payment will also be applicable to persons within this age group who are in receipt of disability allowance in their own right. This compensatory payment measure will cease to have effect on 31 December 2010.
Section 21 provides for a small increase in the rate of early child care supplement to €92 per month to facilitate transition from quarterly to monthly payments. It also provides that payment will be made monthly in arrears rather than on a quarterly basis, and that the supplement will be payable in respect of a child up to the age of five years and six months. These amendments will take effect from 1 January 2009. Section 22 provides for the deduction of any contributions payable under the income levy in calculating weekly family income for the purposes of family income supplement.
Part 3 provides for miscellaneous amendments to other Acts. Amendments to the pension Acts are covered in section 23. It clarifies requirements for the submission of an actuarial funding certificate for new schemes commencing on, or after the date, of transposition of EU Directive 2003 741/EC of 23 September 2005. The amendments also confirm that eight named schemes shall have an effective date for the submission of an actuarial funding certificate of 1 January 2009.
Regarding the Civil Registration Act 2004, section 24 removes the requirement for an tArd-Chláraitheoir to consult with the Minister for Health and Children when giving information to certain specified others. This change is necessitated in the context of the transfer of functions regarding the General Register Office from the Minister for Health and Children to the Minister for Social and Family Affairs.
Part 4, covering sections 25 to 28, inclusive, provides for the proposed transfer of the functions of the Money Advice and Budgeting Service to the Citizens Information Board. The purpose of the measure is to provide that the board will support the provision of the Money Advice and Budgeting Service. It will promote, develop and disseminate information and education about debt, money management and related matters. It will compile and publish data, undertake research and provide the Minister with information and advice on matters related to its functions.
I will be bringing in several amendments to the Bill on Committee Stage. These will include a saver provision, to preserve the duration of entitlement to jobseeker's benefit for a claimant who transfers temporarily to carer's benefit or carer's allowance. There will be a redrafted provision for the revised arrangements applicable to child benefit to more clearly set down the arrangements for the compensatory payment of €15. In anticipation of the transfer of administrative responsibility for blind welfare allowance from the Department of Health and Children to the Department of Social and Family Affairs, an amendment will be introduced to provide for an increase in the rate of the allowance.
An amendment will also be introduced to give effect to the Government's decision, announced in the budget, to provide for the integration of the Combat Poverty Agency and the Office for Social Inclusion within the Department. It is not my intention that the Combat Poverty Agency will simply be absorbed into the Office for Social Inclusion in its existing form. Rather a new strengthened division will be created which will make the best use of the considerable experience and expertise of the staff of both existing bodies. It will seek to address the weaknesses identified by the recent review of the agency to both. This new division will provide a stronger voice for those affected by poverty and social inclusion issues.
As the Combat Poverty Agency is established under statute, legislative changes are required to alter its status. The proposed legislative provisions will entail the dissolution of the agency and the transfer of the permanent staff, property and assets, any pending legal proceedings and any other liabilities of the agency to the Minister, as well as for final accounts of the agency to be drawn up and for related matters. Arrangements regarding the position of the agency staff will be finalised following discussions with the Department of Finance, the staff and their union representatives. It is proposed legislative provisions will be brought into effect by way of a commencement order to enable the smooth transition for the Combat Poverty Agency and the office for social inclusion to the new arrangement.
Pensioners who are paid by electronic methods will receive their increase in full from January 2009. Increases for recipients of jobseeker's benefit and allowance, illness and maternity benefit, one-parent family payment, family income supplement, farm assist and supplementary welfare allowance will be paid in full from January 2009. As has been the case previously, because of the lead-in time involved in the production of personal payable orders, recipients of certain long-term payments such as widows and widowers, carers allowance and invalidity pension will receive their increase in mid-February backdated to January along with their new payable order books. Increases for certain other long-term payments such as State pensions and disability allowance will be paid by a special once-off payment in mid-February to cover 12 weeks' payment to the end of March when new payable order books will be issued.
The Bill will provide the legislative basis for a range of improvements next year. These include €7 extra per week for State pensioners; €6.50 extra per week for welfare recipients of working age, such as jobseekers and those on illness benefit; an extra €2 per week on the fuel allowance, with payment also being made for an additional two weeks; increases in child-related payments to those dependent on social welfare and improvements in the family income supplement for low-income working families; and 18,000 more families becoming eligible for the back to school clothing and footwear allowance.
To fund these improvements, along with making payments to increasing numbers of people on the live register, it has been necessary to make savings in some areas. However, we have kept these expenditure control measures to a minimum. At a time when public expenditure must be tightly controlled the extra €2.6 billion being provided for social welfare in 2009 is a clear signal of the Government's commitment to protect the vulnerable and less well-off in society.
I commend the Bill to the House and look forward to a constructive debate.
I do not welcome the Social Welfare (Miscellaneous Provisions) Bill 2008. Fine Gael will vote against it and table many amendments on Committee Stage to address what it sees as an attack on some of the most vulnerable in our society.
The Government has tried to make a virtue of taking tough decisions and sought the patriotic support of the public to do this. The reality is that it has made harsh decisions which will not solve the economic problems and will hurt those least able to cope with them. People must remember that the Government shoulders a large portion of the blame for where the country finds itself today. It will not be forgotten.
Everyone knows the elderly received several knocks in the budget. The withdrawal and then the partial re-instating of the medical card for the over 70s will never be forgotten. The same applies for the State contributory and non-contributory pensions. The budget increases for welfare rates have been set at between 3.1% and 3.3%. The Government forecasts an inflation rate of 2.5% for 2009. Whether people are willing to accept any of the Government's forecasts is open to debate. This forecast is, at best, optimistic. Other commentators have suggested an inflation rate of approximately 3% next year. This year's inflation rate is 4.5% while food and energy costs have increased by far more than the average rate of inflation. Food inflation this year stood at 6.4% while Ireland has among the highest energy prices in the EU.
In September, electricity prices rose by 17.5%, gas increased by 20% and home heating oil has also risen dramatically. Bearing this in mind, for the Government to state that the welfare increases will keep in line with inflation is subjective at best. Pensions should have been increased by at least €10, which Fine Gael stated prior to the budget. Instead, the €7 increase will be wiped out by the increases in VAT, petrol, accident and emergency department charges and the continual rise in cost of food and fuel. This is the same Government that is committed to achieving a State pension of €300 per week by 2012. To achieve this between the next three budgets, the Government will have to provide a total of €70, or an average of €23 a week in each of the next three years.
The Minister likes to point out her Department was one of the few that got an increase in this year's budget. She fails to remember that the promises made on the rates of increase were not fulfilled. She fails to remember that one of the main reasons for the rise, or the necessity to seek to increase in her Department's budget, is that unemployment is rising at the rate of one job every three minutes, a far higher rate than in any other European country.
Like the rate of increase in the pension, contributory and non-contributory, the rate of increase in the jobseeker's allowance and jobseeker's benefit will do little to help families. When Deputy Richard Bruton outlined Fine Gael's tough but fair budget proposals to help ensure getting the economy back on track, it addressed the underlying weakness in the economy as well as providing scope for positive action for those most in need. Jobseeker's payments should have been increased by €9 instead of scapegoating weak and vulnerable people because Fianna Fáil did not manage the public purse for so long.
It is disingenuous of the Minister to pretend her changes outlined in section 18 are to do with ending a dependency culture. They are far more to do with making cuts which will alter the lives of many very vulnerable people.
It is particularly ironic that this decision is being made at a time when employment is becoming harder and harder to find, with 260,000 people on the live register. No longer can the Minister claim that the Opposition is being "a little bit dramatic" when we discuss the live register figures. The solution as outlined in this Bill does not give people any opportunity for further education and training and simply makes it harder for more vulnerable people to access benefits to which they were entitled heretofore.
When the Minister spoke about unemployment last July in the Dáil, she said:
Behind these figures lie real families experiencing real difficulties — people with children, with mortgages and with worries about the future. These are people whom the Government is determined to prioritise.
How hollow her words ring now for those real families with real difficulties. Take the employee from APW Engineering in Oranmore who was told last Friday, with his 120 colleagues, that they no longer had jobs. His major concern was where he would get money for his family the following week, as the union representative had told them it might be 12 weeks before they got their entitlements. He and his colleagues had better hope they have the required number of contributions to ensure they are entitled to support for themselves and their families. It is little comfort to him and his colleagues to see the Minister smile and talk about people who have jobs, as though that somehow makes it less painful for those who do not.
Listening to the Minister saying her main priority is to get people into education and training, some people probably thought she had a plan. She does not. In fact, her only plan is to ensure that a young person or migrant who has only worked for one year cannot access social welfare too quickly, that a person cannot get more on social welfare than he or she ever got when working and, if a person is going to start in the social welfare system, that he or she has at least worked in the economy. However, she has no plan to ensure that people have an opportunity to do this. She clearly does not see the poverty traps that sometimes ensure one is better off on social welfare than in low-income employment. Does she realise there are 54,537 people in this country under the age of 25 who are unemployed? She intends, through legislation, to make it even more difficult for these people, yet she gives them no other option.
The changes in the eligibility criteria for jobseeker's benefit will push more people into applying for jobseeker's allowance, which is a means tested payment. This will have implications for many people, particularly young people living at home. If a young man or woman, for example, was trying to save for a deposit on a house and did not have the required number of contributions for jobseeker's benefit, he or she possibly would not satisfy the new criteria when these savings were taken into account.
In addition, what about the Department's commitment to providing a high-quality service to all its customers, as stated in its own reports? In parliamentary questions we are constantly told that applications are processed and decisions on entitlement issued as expeditiously as possible, yet there seems to be no uniformity in the length of time it is taking to process these applications around the country. We get pre-written, regurgitated answers and there is no change in the timeframe in the particular offices where delays are occurring. For example, the average processing time for jobseeker's allowance in Ballyconnell is 13 weeks, and in a reply to a parliamentary question it was explained that 102 such applications were awaiting decision in that office. In Trim, the processing time is 15 weeks and there are 282 applications. This is in contrast to Blanchardstown, where the average time for processing was six weeks although they had 536 applications on hand, or Cork where the average time was seven weeks and they had 1,684 applications on hand. Why does the Minister not insist that her Department sort this out and that there are equal practices around the country so that people wait a similar amount of time regardless of where they happen to be from?
The people of APW Engineering in Oranmore will be concerned to know that the average processing time in Galway is 11 weeks for jobseeker's allowance and six for jobseeker's benefit. This will be of little consolation to them as they struggle over the coming weeks. Surely there are enough civil servants in the Minister's Department and other Departments who could be transferred to ensure this work is done. We have heard nothing from the Minister as to how she intends to address these anomalies, and from her previous replies on this issue I am not even convinced that she intends to address them.
The changes in the criteria for illness benefit will also cause similar and undue hardship. There seems to be a notion that as this was not intended to be a long-term benefit, it is acceptable to change it. I accept that it was never intended to be a long-term benefit, but the Minister stood over its evolution into such. The reason for this was the vacuum between the illness benefit and the disability allowance. While illness benefit attracts no secondary benefits, it has filled that vacuum, especially in cases in which people cannot get disability allowance because they are unable to prove that their illness will last for one year.
Much kite flying took place before the budget while the Government was trying to decide where it stood on the issue of universality. It attempted to gauge public opinion by talking about the possibility of taxing child benefit or introducing means testing to the payment, and I hope its members realise they got their answer on this through the medical card debacle.
One in nine children in this country is living in consistent poverty. We must focus on this issue. Fianna Fáil, in addition to paying child benefit, needs to implement a targeted approach to children in need. It is time to examine the introduction of a second tier child payment aimed at those most in need, particularly the 20% of all children who are at risk of poverty and who must be assisted in getting out of these circumstances. The Government's tinkering with the child benefit system in the budget and this Bill will do nothing to help those in poorer families. I believe the Government clearly realises this and has introduced a compensatory payment measure up to 31 December 2010 in the hope that it will blunt the impact of its decision. However, the fact that it is ignoring the difficulties faced by poorer families in which a child opts to participate in third level education or is still in school after the age of 18 is deplorable. This will make the option of further education more inaccessible to these families after December 2010.
According to an assessment by the Combat Poverty Agency, the combined budgetary changes in respect of child poverty result in an increase of only 2% to 3% in the child income package for welfare dependant children, and it has pointed out losses in respect of children aged 18 and those aged five and a half to six because of the aforementioned restrictions and eligibility changes to child benefit and the early child care supplement. It concludes that these will result in losses of between 20% and 50% in the value of child supports for welfare-dependent children in these age groups — equivalent to between €21 and €38 per week — which will ensure these families remain trapped in poverty. In addition, the Government has ensured that its strategy has become even more bureaucratic.
There are now six different rates of child income support depending on the age of the child and the level of support decreases from a high of €85 to €90 for younger children to a low of €32 for dependent children in the 20 to 22 age category. A survey by the Vincentian Partnership for Social Justice which researched minimum essential budgets found that households containing older children have income shortfalls of between €44 and €123 per week compared to similar household types with younger children. The Combat Poverty Agency has stated it believes the at-risk-of-poverty rate for older children is 1.5 times that of younger children. I am not sure what was achieved in bringing everyone together before the budget to consider the changes that needed to be made.
While it is not a feature of this Bill, it is important to highlight the scandalous decision by the Government to withdraw funding under the school book scheme for low-income children attending non-DEIS schools, which will result in losses for affected schools of between €25 and €55 per child. While a token gesture was made by widening eligibility for the clothing and footwear allowance, this will be directly negated — even more than negated — by the losses in the school book allowance.
The Government's decision to increase the threshold for the family income supplement, FIS, by €10 per week from January will only bring approximately 2,000 more families into the scheme, despite the high numbers who are in poverty or at risk of poverty. I received a reply to a parliamentary question today which stated that 26,300 families were in receipt of FIS, yet in 2007 the Department received 36,900 new FIS applications. Some of these applicants were ineligible, but the number making the application shows how many people are struggling out there. The amount by which the band has been widened will not allow for the inclusion of all those who were not able to receive the supplement previously.
I will now deal with the issue of lone parents, or one-parent families. The Minister spoke much over the summer about lone parents being in a welfare trap and I agree with her. However, despite her platitudes, the budget did nothing to assist or change the circumstances of lone parents.
The increase of €8.50 in the one-parent family payment for a family with one qualified child will help keep them treading water and that is all. The €2 increase for qualified children will barely even do that. Last July, the Minister said the fact that we pay lone parent benefit until the child is 22 is no incentive for them to get into steady relationships, marry or get into employment, and that a new strategy is needed on lone parents. Lone parents have heard enough from the Government about them without doing anything to help them. The Minister's two immediate predecessors also highlighted this issue, but we have yet to see one concrete proposal on how the Government intends to help one-parent families.
In the same interview last July, the Minister also said the Government is strongly pushing support for the family, and that it has responsibility for supporting the family. The Government has not shown it values the family and until it assists lone parents to get out of poverty traps, nobody will believe it either. Pilot schemes in Finglas and Kilkenny for lone parents reported to the Minister some time ago, yet these reports still have not been published and we are none the wiser on how effective the schemes were or how they worked.
Earlier this year, I sought a flow analysis from the Department on lone parent assistance for the past five years. The purpose of seeking this was to ascertain the true position regarding lone parents and to see how many are consistently on this payment and how many come in and out of the system. I was astounded to discover that the Department does not maintain a flow analysis of this system. It knows the number of lone parents who claim and receive the payment but cannot provide any statistical information on when they come off the payment or if they re-enter the system. This is from a Department which spent over €11 million on e-Government related projects last year and intends to spend €9 million on them in the coming year.
I am not asking the Minister to re-invent the wheel in assisting lone parents. There have been successful projects. Organisations in this country have done significant work which has been externally evaluated and published, for example, the new futures project under the equality for women measure, which was published in April of this year. It was a partnership between one family and the local employment services network in six RAPID areas, bringing together the complementary expertise of front line service providers.
One-parent families comprise 18% of all families in Ireland and 85% of them are headed by women. The number, 190,000, has increased by 35,350 since 2002. One is four and a half times more likely to live in poverty if one lives in a one-parent family. The 2006 census showed 36% of lone parents were single, 30% separated or divorced and 29% widowed. A number of issues must be looked at if the Government truly wants to assist one-parent families. Token increases barely in line with inflation show a piecemeal, disengaged and unresponsive reaction to the situation by Government. Introducing facilitators who are supposed to work on a one-to-one basis with lone parents, but appointing only 50 to deal with just under 86,000 lone parents in receipt of social welfare and 260,000 unemployed people, will not deal with this issue.
One parent's report clearly outlines that the role of a key worker who is based in the relevant community setting is critical to the engagement of some lone parents in moving away from welfare dependency and that this engagement must be sustained at each stage of the service delivery model into the early stages of employment. It also highlighted the critical role played by the project key workers and facilitators in participant outcomes and pointed to the need for ongoing training and development of these staff and the critical role played by the co-ordinator in sustaining and developing inter-agency co-operation. It also pointed to the need for the development of a pre-engaging programme for the hardest to reach clients, addressing a range of information and support needs before progression to the programmes. It also said that the payment of participant costs, such as child care and transport, at a fixed rate directly to project participants is particularly important to enable them to access flexible, local and informal child minding in the absence of community child care facilities.
The Government has not addressed these issues not only in this budget, but in previous budgets. The haphazard way the early child care supplement was introduced does not deal with this in a way that truly allows lone parents to engage in education, training or employment. Had the Government properly introduced this supplement and ensured that the money was to cover the expensive cost of child care in Ireland, it would have saved more than enough money to ensure that the parents of children getting child care in this country would have been able to retain that payment for the full term.
Many people on the live register and working in low paid jobs were extremely disappointed that the Government did not use the opportunity of the budget, and that the Minister is not using the opportunity of the Social Welfare (Miscellaneous Provisions) Bill, to change the criteria for the back to education allowance. This is a really important payment, particularly for those in receipt of State payments, to give them the opportunity to return to education. The rules governing it are forcing potential recipients of these payments onto the live register instead of allowing them to continue in employment, at least for a particular period, prior to returning to education.
This was the opportunity and the time to create specific measures to minimise the time people were unemployed and reform the criteria for this allowance. These are the people we need to target with re-training and re-education and to whom we must give opportunities to get back into the workforce. Instead of decreasing the numbers claiming jobseeker's allowance, the Government's rules on the back to education allowance, BTEA, are forcing more people onto the live register. Its poor policies have led us into the position we are in and they are ensuring that our unemployment numbers are increasing. The Minister needs to see the reality of this situation.
To claim the full BTEA for third level, one must be claiming a social welfare payment for a full 12 months. In this climate, where people are rapidly losing their jobs and people on the minimum wage are particularly vulnerable, it does not make sense to deny people on the minimum wage the BTEA. The Minister must examine the figures. It is estimated that there is only €1 a week difference between those on a minimum wage and those in receipt of jobseeker's allowance who get rent supplement and other secondary benefits, such as a medical card. Somebody on the minimum wage earns €1 per week less than somebody on a social welfare payment receiving all the benefits, who receives €347 per week before these changes. What choice does this give someone? As a result of this Fianna Fáil policy, a person who wishes to return to third level education in the hope of increasing his or her skills and employment prospects and ensuring he or she will be able to stay in the workforce in the long term, is being told to quit work and go on the dole to become eligible in a year's time.
The long term savings as a result of changing these rules are huge because these people will have the opportunity of staying on in the workforce with greatly increased employment prospects and earning potential. They will contribute more to the economy through tax in the long term. The Minister, Deputy Hanafin, has refused to change any of these eligibility criteria. It is a serious and deeply unfair mistake on her part.
Another anomaly in the BTEA system is that if a person does not qualify under the other criteria, he or she can qualify by being in receipt of illness benefit for at least two years. However, if a person fails to satisfy the two year requirement on illness benefit, unless he or she has other qualifying social welfare claims, he or she is not entitled to the allowance. Where is the logic in this? Why is it one year for jobseekers and two years for illness benefit when the person has been out of work anyway, albeit for a different reason?
The Minister is very anxious not to allow people to receive the BTEA if they are out of school only a year or two, but the Minister needs to open her mind to the reality. I have numerous examples, as have other colleagues, of people around the country aged 19 and 20 who have been deemed ineligible for the BTEA and, as a result, have dropped out of the education system altogether with the result that all they are doing is claiming jobseeker's allowance. They may now discover that they are not able to claim that either. The Minister is failing to solve the problem that they are getting dependent on jobseeker's allowance and that the criteria are forcing them into this situation, yet there are no alternatives available to some of them. How does this fit in with the promise last July to tackle the worrying increase in under 25 year olds signing on? She said then that now is the time for people to start planning and applying for courses starting in September, yet many who did this found that they had no chance of fulfilling the criteria. The Government claims it does not want a continuing trend where more and more young people start depending on welfare payments as their only income. However, it completely ignores the fact that 22% of those on the live register are the very same young people.
I want to discuss the changes proposed under section 14 to the supplementary welfare allowance, in particular, rent supplement and mortgage interest supplement. Focus Ireland recently published an extremely informative document on the changing context of the private rented sector. Rent supplement, like fuel and energy poverty, is an issue which straddles a number of Departments and seems to continuously cost more without any evaluation of how it can be improved or changed. Some effort has been made with the introduction of the rental accommodation scheme, RAS, but the numbers receiving rent supplement remain relatively constant. The Department of the Environment, Heritage and Local Government, local authorities, the Department of Social and Family Affairs, the Private Residential Tenancies Board and the Revenue Commissioners all have an extremely important role to play in this regard.
It remains the case that there are problems like low-quality housing and insecurity of tenure at the lower end of the market, despite the establishment of the Private Residential Tenancies Board. Focus Ireland has indicated that there are doubts about the portion of existing private residential units which have not been registered with the board, particularly at the lower end of the market. The Comptroller and Auditor General has made the point that no adequate system is in place to ensure that the ultimate recipients of rent supplement, which is funded by the Department of Social and Family Affairs through the HSE to tenants and then to landlords, pay income tax on it. That absence means there is a serious potential loss to the Exchequer, which is particularly unacceptable in a climate in which the Minister's many frugal decisions have left many vulnerable people suffering.
I appreciate that rent supplement was originally designed as an emergency intervention. In practice, however, it is a long-term payment to people living in the private rental sector. It is possible that this need will increase. Local authorities have been relying on developers to provide houses through the social and affordable housing schemes. It appears that fewer such houses will come on stream in the immediate term. While it is necessary, in theory, for the amount of rent supplement to be specified in regulations, this House does not always get an opportunity to debate such regulations. It is important that we should have such an opportunity. I do not doubt that people are paying top-ups to their landlords in addition to the rent supplement and the amount stated on their application forms. Focus Ireland has outlined numerous case studies of this type. They prove that people are finding themselves in difficulties.
The entitlement to rent supplement also needs to be examined. While there have been changes in terms of eligibility, there is room for further improvement. It is time for the Minister to examine the possibility of making rent supplement available on a different basis to ensure that the working poor can continue to work without falling into the poverty trap. We need to make it easier for people to remain on social welfare, rather than risk losing their rent supplement payment, when they secure full-time employment. It has been brought to my attention that the fact that rent supplement is paid in arrears, rather than in advance, is putting some people at a disadvantage.
I note the Minister's statement that it is not necessary to make legislative changes to provide for an increase in the duration of fuel allowance payments. The reality is that token increases have been made. Some 227,000 households in this country experience fuel poverty. In the Combat Poverty Agency's briefing on the budget, it compared the measures relating to fuel and housing costs in budget 2009. If one compares the combined fuel allowance increase and the general increase for a single person household to the increase — by €5 per week to €18 per week — in the minimum contribution to rent and mortgage supplement, one will observe that these changes, in effect, negate the improvement in the personal welfare rate for the 72,000 households that are in receipt of the supplement. What the Government gave with one hand, it took back with the other. It is a pity the Minister did not provide for the option of receiving fuel allowance in two lump sums, rather than on a weekly basis. This would be particularly important for those with oil fired central heating systems.
I would like to speak about the Government's decision to abolish the Combat Poverty Agency and to integrate it with the Office for Social Inclusion. Fine Gael has long held the view that far too many agencies are replicating work that could be done by civil servants. I refer to work that should be under the direct control and responsibility of individual Departments and, particularly, Ministers. When Fine Gael examined every State agency, it decided where it would begin to make savings. While the Government took some of the theory of our proposals on board, its practical implementation was different, unfortunately. Rather than looking for duplication, overstaffing and waste, the Government decided to examine those agencies that are directly responsible for commenting on the success or failure of Government initiatives and outlining what needs to be done to protect the most vulnerable people in society. The hypocrisy of the Government is evident when it constantly talks about protecting the vulnerable while doing the opposite. It was no great surprise that the Government decided to amalgamate the Equality Authority and the Human Rights Commission and abolish the Combat Poverty Agency. Each of these bodies has a direct responsibility in terms of commenting on Government policy and protecting those who most need our help in society.
The Minister, Deputy Hanafin, claimed earlier that the Combat Poverty Agency has not been abolished. She suggested that it is merely being subsumed into the office for social inclusion. We have yet to receive clear information on how this process will work. Since its inception, the Combat Poverty Agency has been independent and has had the capacity to advise on anti-poverty policy and develop responses to tackle poverty. The board of the agency has received assurances from the Department that the new division will have a strong anti-poverty focus and will retain the expertise and ethos that has been built up by the Combat Poverty Agency. It is noteworthy that no mention appears to have been made of the independent nature of the agency. The Minister has not spoken about its ability to decide its own focus and tackle the real issues, rather than the pet issues of any Administration. No reference has been made to its role in working with other State agencies and, above all, publishing critiques without the interference of the Government. I do not think anybody believes this crucial independence will be retained when the agency is subsumed into the Department.
The Minister for Social and Family Affairs has dealt with this matter with utter cynicism. I refer in particular to her proposal to introduce the amendments abolishing the agency on Committee Stage. Surely she could have dealt with this issue when the Bill was published last week, rather than cynically and manipulatively waiting until Committee Stage in the hope that it would gain little or no attention. Can the Minister give us any guarantees that the research that will be carried out by the Office of Social Inclusion will have any independence? Can she guarantee us that the new body will be able to work with the community pillar, as the agency has been able to do before now? Can she guarantee us the research that has been carried out will be published? Can she tell us what savings will arise from this measure? Can she tell us how the workers' transition from public servant to civil servant will work? Can she tell us whether the transfer of undertakings legislation will come into play in this regard? Can she ensure that the State will not lose the expertise of the staff of the Combat Poverty Agency? I refer to people with qualifications and expertise in social policy research, health research, community development and local authorities.
There will be seven vacancies in the agency at the end of the year. The vacancies have been filled with temporary staff only. What will happen to those positions? If the Minister introduces amendments on Committee Stage, she will need to outline exactly how the consultation process will happen. Before the Bill proceeds to Committee Stage, she needs to clarify the accountability frameworks which will be put in place. To put it bluntly, I do not think anyone believes there will be any independence in the office of social inclusion. There has been a lack of consultation on this issue. There is a lack of democracy in the way the Minister is attempting to silence the agency. It is as if the Minister believes she is part of a permanent Government — she does not think anyone should be able to offer an alternative point of view. I do not have time to speak about the issues of carers and pensions, but I will do so on Committee Stage.
I move amendment No. 1:
To delete all words after "That" and substitute the following:
"in view of the series of measures announced in budget 2009 and proposed in the Social Welfare (Miscellaneous Provisions) Bill 2008 which target the unemployed, children, the poor and people with disabilities resulting in the fact that
unemployed people will lose over €2,500 due to changes to jobseekers benefit,
parents of 18 year olds will lose almost €2,000 due to changes to child benefit,
parents of 5 year olds will lose approximately €800 due to changes to early childcare supplement,
tenants dependent on rent supplement will effectively get no increase at all in 2009 due to increases in the minimum contributions they must now make to their rent,
fewer unemployed people will qualify for jobseeker's benefit because of new restrictions on entitlement,
fewer people with disabilities, injuries or illnesses will qualify for welfare support, and for those who do, the duration of payment has been capped,
part-time workers will receive less when they claim jobseekers benefit because of a new cap on their rate of payment,
Dáil Éireann declines to give a Second Reading to the Bill.".
The Labour Party is vehemently opposed to the Social Welfare (Miscellaneous Provisions) Bill 2008 on the basis that it contains several cuts which can only be described as savage. The most cynical aspect of the manner in which the Government has dealt with the budget and the Bill before the House has been the campaign it engaged in for a number of weeks in advance of the budget. It engaged in an active campaign of spinning, to the effect that whatever else would happen in the budget, it would protect the vulnerable. It is clear that such comments have been shown to be a complete lie. This budget and this legislation have been set out specifically to target the weakest and most vulnerable sections of society. I do not doubt that the result of this legislation will be the imposition of severe suffering on the unemployed, children, the poor and those with disabilities. It is a shameful Bill, just as it was a shameful budget.
One of the most serious aspects of the provisions of this legislation is the manner in which the Government is proposing to treat those who find themselves unemployed. Having emerged from a period when the Government over relied on receipts from the construction industry and the housing boom in spite of warnings on many occasions of the dangers involved and having concentrated foolhardily on the construction industry, an additional 100,000 people are on the live register compared to this time last year. In addition, those who need to turn to the State for assistance at one of the most difficult times of their lives when, through no fault of their own, they are unemployed will discover the State is not there to provide the safety net they thought it would. It is particularly cruel that the Minister has decided to target those claiming unemployment or jobseekers' benefit by introducing changes for new claimants, which she will impose on current claimants who had a legitimate expectation that they would be able to claim over a certain period.
She is kicking the unemployed when they are down. They expect to look to her for assistance to help them cope with the traumatic circumstances in which they find themselves as they try to provide for their families at a difficult stage in their lives, but she is kicking them when they are down, which is reprehensible on her part. One can contrast that treatment with the Government's treatment of the banks in recent weeks. The Government parties have been generous by stepping in to provide them with a safety net at huge expense to taxpayers, yet all they can do is show the cold shoulder to those who find themselves unemployed and target them with cutbacks. It did not have to be like this. It is cynical of the Minister to essentially state in her contribution that at a time when public expenditure must be tightly controlled, she had no choice but to target the vulnerable. That is a lie.
The Government parties had difficult choices about how they would balance the books. They had a number of options which she chose to ignore. My party leader, Deputy Gilmore, has identified a number of different areas in which they should have raised revenue or imposed cuts on people who did well and became multimillionaires over recent years. They left these people unscathed and chose to leave them with their money. Instead, they targeted the weakest and the most vulnerable and the Minister should take responsibility for them because they look to her for income support. She should protect them but she has utterly failed to do so.
The Government could have raised up to €2 billion a year if it had decided to target those who paid little or no tax in recent years. For example, landlords who receive tax breaks worth more than €500 million remain untouched. Property developers can avoid stamp duty and if the Government had closed off that tax dodge, it could have raised €250 million but they remain untouched. More than 8,000 people are in small self-administered pension schemes to which they have contributed more than €500 million, much of it tax free, but they were left alone.
The budget was shameful, as is this legislation, because the Government has gone out of its way to target the most vulnerable. As well as hitting the unemployed, I have many other difficulties with this legislation. For example, it provides for an increase of approximately 3% in most social welfare payments. Inflation is running at 4.3% and food and fuel costs have increased at more than the rate of inflation. An increase of 3% will not enable people to keep pace with inflation. All social welfare recipients will suffer a reduction in the value of their payments. They will receive a paltry increase in the fuel allowance. As Age Action Ireland pointed out, the miserable increase of €2 a week will not even buy a packet of firelighters. There has been no mention of the long promised strategy to tackle fuel poverty. This is a huge problem facing people on low incomes because of their inability to pay the increased cost of fuel and because many live in poorly insulated houses. No progress has been made on producing a strategy in this area.
The living alone allowance was not increased. Additional help has not been provided to this most vulnerable group since 1996. If the payment had kept pace with the consumer price index, it would now be worth €15 per week. Instead, the Minister has chosen, like her predecessors, to ignore the fact that it costs a single pensioner 70% of what it costs a pensioner couple to live. The Vincentian Partnership's research is valuable in this regard. The Minister has chosen to ignore that it is more expensive for a single pensioner to live than one member of a pensioner couple and that is not recognised in the welfare provisions in the legislation.
More than €1 billion in additional spending will be allocated to pay for new claimants rather than for improvements to schemes or rates. The Minister made a great deal of the increase in the allocation to her Department while conveniently ignoring the fact that the bulk of the additional spend will be devoted to new claimants and will not benefit those dependent on welfare. The welfare package is only half of what it was last year. Overall, it is extremely disappointing.
The proposals relating to the Money Advice and Budgeting Service appear rushed. For example, I could find no reference to financial mediation services run by MABS, which is one of its core services. I wonder whether the proposal has been properly thought through. Perhaps in her reply, the Minister might outline how much will be saved by this measure, where the savings will arise, the potential job losses and the consultations, if any, in which she engaged both with the Citizens Information Board and MABS.
I have serious reservations about the new definition of a "parent"vis-à-vis the one-parent family payment contained in section 13. Departmental officials explained at a briefing that the move is to deal with irregularities in how such a parent is defined, but I am concerned that in trying to include additional categories of parents, others will be excluded. I will come back to this later but I thank the officials for providing a briefing earlier, which was worthwhile.
The Bill, along with regulations, will result in ten principal cuts that will severely affect welfare recipients. I will go through them because it is important that all Members are fully aware of the nature and extent of these cuts. I am tempted to circulate details on them to members of the Government parties, and particularly to their backbenchers, so that they are aware of what their constituents will be complaining about at the start of January when the public realises the extent of the cuts being imposed by the Government and how their entitlements have been restricted. It is important that all Members of the House are fully aware of those cuts so that they can make up their own minds tomorrow night when it comes to voting for or against this Bill, and that everybody is clearly on the record as being aware of the extent of the cuts and either voting for or against them.
The first cut will mean that all future jobseeker payment recipients will receive three months less benefit and will each lose over €2,500 in entitlement. The second cut will mean that several existing jobseeker claimants will receive three months less benefit and will each lose over €2,500 in entitlement. Whatever about the Minister imposing such swingeing cuts on new claimants, I cannot recall a situation where cuts of this extent were imposed on existing claimants. Somebody coming up to his or her sixth month in receipt of jobseeker's benefit was legitimately expecting, having paid into the Social Insurance Fund and having qualified under the existing legislation, a further nine months' payments. However, as a result of what Minister is proposing here, such a person will find he or she is only entitled to an additional six months. I cannot remember that happening previously, where people who were already in receipt of a claim found their entitlement cut.
The third cut will mean new applicants, especially those with intermittent work records, will find it harder to qualify for jobseeker's benefit, health and safety benefit and illness benefit. The fourth cut will mean the entitlement of the sick or people with a disability to illness benefit will be restricted to two years.
The fifth cut will mean more restrictions on how the mortgage interest supplement operates, including the possibility that the duration of the supplement will be restricted by the HSE and a maximum amount set. The sixth cut will mean that welfare claimants who rely on mortgage interest supplement and rent supplement will only receive a net increase of approximately €1.50 per week because of increases in the minimum they must contribute to their housing costs. This is one of the most shameful aspects of the budget. The Minister, Deputy Hanafin, should be seriously embarrassed to be the person introducing a provision whereby a significant number of welfare recipients will only receive an increase of €1.50 per week in the coming year. It is shameful how the Minister could impose such a significant cut in real terms in the welfare payments of the most vulnerable, the poorest, in society.
The seventh cut will mean that fewer people will qualify for the one-parent family payment because of changes to how a single parent is defined. The eighth cut will mean that parents of an 18 year old will lose almost €1,000 in 2009 and almost €2,000 in 2010 and in future years. The ninth cut will mean the parents of a five year old will lose roughly €800 because of the series of changes to the early childhood supplement. The tenth cut will mean low-paid part-time workers, typically the school caretaker, home-help worker or office cleaner, will have their entitlement to the maximum rate of jobseeker's benefit restricted.
By any yardstick, they are ten savage cuts and ten good reasons to reject this legislation. In short, the cuts mean the Bill will result in increased emigration, in many people finding themselves destitute and in devastation for many dependent on welfare payments. I refer again to what the Minister proposes for those who find themselves unemployed. They will lose out significantly under this Bill and I really do not know what is the justification for that.
The Minister, Deputy Hanafin, is inclined to be flippant. She is relatively new in the Department of Social and Family Affairs, but she has shown no understanding whatsoever for the situation in which people find themselves when they lose their jobs. If she can stand here and tell me it is acceptable that people who find themselves in that difficult situation can afford to lose €2,500, then she is living on another planet. Do people not come to her clinic and explain the difficulties they encounter surviving on the meagre payments available to the unemployed? They certainly come to my clinic and I think they come to most people's clinics. It is exceptionally difficult for such people to survive. The Minister is saying that not only must they continue to so survive, but that she, through measures proposed in this legislation, will actually reduce their entitlement by €2,500. Similarly, the Bill is particularly vicious in how it treats other categories of people who find themselves unemployed.
Regarding the specific targeting of children in this legislation, a number of the measures are shameful. Earlier, during Question Time, I raised the issue of the proposed cuts to child benefit. The first point is that this year, for the first year in my memory, there is no increase in the amount of the child benefit payment. That is extraordinary. With increases in the cost of living and increasing numbers of families finding it difficult to survive, there is no increase whatsoever in child benefit and, in fact, a serious cut for 18 year olds. As I told the Minister earlier, she has experience of the Department of Education and Science and, of all people, she should know that this will have an extremely negative impact on the participation rates of 18 year olds from poor families.
The Minister will be aware that the financial pressures on 18 year olds, and on teenagers generally, in poor families are extraordinary. Although she knows that in many cases financial pressures drive young people out of education, the Minister has decided in this legislation, and in the budget, that those poor families can afford to be hit to the tune of €38 per week.
During that important year when a teenage child aged 18 from a poor family is struggling to stay in school to do the leaving certificate, the Minister is telling that family she will dock it almost €2,000. On what basis does she think those families can take that kind of hit? I do not know that there is any basis for that decision. That is why I asked her earlier if she had given any consideration to the likely impact of this vicious cut on the participation rates of poor children in second level education. I can only conclude that she has given no consideration whatsoever to it because there is no justification for this vicious cut.