I wish to share my time with Deputies Deasy and Catherine Byrne.
Social Welfare (Miscellaneous Provisions) (No. 2) Bill 2010: Second Stage (Resumed)
Is that agreed? Agreed.
I welcome some aspects of this Bill, but other aspects add to the confusion that exists about the Government's intentions with regard to FÁS. Instead of having one Minister with responsibility for FÁS, as was the case heretofore, there are now two. Responsibility for employment and community service schemes has been transferred to the Minister for Social Protection, while responsibility for training remains with the Minister for Education and Skills. All of this has come about because of a total failure on the part of FÁS, and the Minister with responsibility for FÁS, to keep control of the agency. What happened at the top management of FÁS was unacceptable and it was due to the failure of a Minister to take control.
It must be said that the people who delivered the services at FÁS, particularly employment and community services, have done good work throughout the country. During the times when employment was low, FÁS carried out valuable work. Many people who were involved in schemes during that time received good training and moved on to become self-employed, which was the original intention in the establishment of FÁS. However, many of those who were paid to provide training failed to deliver adequate and proper training to those who had, in good faith, agreed to be trained. This was especially the case in the north east where, as has been highlighted in the House numerous times, there was a complete failure on the part of the contractors that were engaged, probably without any supervision, by the Department or the FÁS management. FÁS has done valuable environmental work throughout the country and it would be remiss of anybody to ignore this.
It is unbelievable that a Minister for Social Protection who prided himself on the fact that he was engaged in an all-out war on social welfare fraud can stand over one provision in the Bill, under which people can register their unemployment electronically. The Minister stated that this would happen in the future, but therein lies a quagmire in the regulation of those receiving unemployment benefit. It is a retrograde step. We are talking about people familiarising themselves with voice mail and so on. We should consider the social welfare fraud that has taken place between Northern Ireland and the South. People presented themselves at social welfare offices, which was an important statement that they were actively seeking work and that they were currently unemployed. This provision is farcical. The Minister who was trying to eliminate fraud is now providing an opportunity to expand and perpetuate it.
I welcome one aspect of the Bill in particular. The landlords of tenants who are receiving rent supplement must now provide their PPS numbers for the purposes of regulation. This would regulate the system such that where the State is paying a sum of money to provide assistance towards rent for applicants, at least we could be sure the people are not avoiding tax. I trust this will be introduced quickly.
I thank Deputy Burke for allowing me a few extra minutes. I intend to discuss FÁS as well. I was interested to hear that the International Monetary Fund, IMF, showed an interest in FÁS and seemed to intimate that additional moneys should be given to the training agency. I was interested because at the same time I had been asking questions about the rate of job placement, in other words, the number of people who trained with FÁS and then ended up with a job.
It took three or four weeks to get the figures but I will read them to the House. As of now in 2010, only 13.7% of all trainees with FÁS get placements. That is the national percentage of placements in the country at present. The figure is down from a high of 37.1% in 2007. In 2008, the figure was 33.5% and in 2009 the figure was reduced to 16.4%. This year, there are 111,000 people training with FÁS and the figure is 13.7%. Some people may argue that the figure is very low because there is a great deal more unemployment at present.
I also asked about the figures for my constituency and the figures for Waterford are high compared to the national average. This year, the figure is closer to 20% for Waterford as opposed to 13.7%, the national figure. FÁS in Waterford achieved a 44% placement figure in 2007. This was reduced to 41% in 2008 and to 31% in 2009. For some reason, the standard in Waterford and the figures are a good deal higher than the national average. It seems the figures and standards are at variance in different parts of the country with regard to how they relate to people who train with FÁS and end up securing job placements.
The response to my parliamentary question contained a disclaimer or health warning. It stated that the figures are only the known placements whereby clients or employers have notified FÁS of the placement and, therefore, it should not reflect the total number of people placed by FÁS. I presume FÁS holds that the number could be higher because its clients or employers have not notified the agency of the placement or employment of trained workers. I am concerned because it is clear from the response that FÁS is unlike training agencies in other jurisdictions.
I contacted the Scottish training agency, which is able to determine the number of jobs achieved after a training or sustained employment lasting 13 weeks or more. That agency is aware of the number of jobs secured after training but we have no idea. The figures I received from the Skills Development Scotland agency indicate that from April 2009 to March 2010 some 48.7% of all trained leavers were placed in jobs. This is approximately the same period as that for the FÁS figures provided. Our national placement figures for the past two years were 16% and 30%. The percentage of all leavers, people trained into jobs, was 78.6% according to the Scottish agency, a remarkably high number. As far as FÁS and the overall labour market is concerned we may determine readily that the most successful programmes are those which can match graduates with companies which provide internships.
From a cursory glance at these figures, I suspect we should concentrate on more long-term strategies with regard to the labour market. It seems too many people are engaged in what I would term low-intensity generic courses. As a result, their prospects for long-term employment are not greatly enhanced. I am unsure whether the IMF examined the structures in FÁS but, considering what the organisation stated some days ago, if FÁS does not have a handle on the number of people it trains and where they end up, then do we need a more rigorous cost benefit analysis of the schemes and courses? How much does training cost? What is the return to the State? Are we training people for the sake of it? That is the question. On the face of it and when one considers the response I received to the parliamentary question, to some extent the answer is "Yes". We simply do not know how effective these courses are either on a financial or a personal basis. One can throw as much money at FÁS as one wishes, but until one is aware of the labour market trends, until one adapts training courses accordingly and understands how effective training is, it is simply a case of spending money without knowing the effectiveness of that spend. As a country, we cannot afford to do that any longer.
Many speakers have referred to self-employed persons, or class S employees as they are referred to in the system, during the past week. Several people made contributions but I did not hear any plans or proposals from speakers with regard to how to deal with the problems, especially the problem of why and how class S workers are deprived of or excluded from job training, the back to education allowance and other such schemes.
I have examined how class S employees are treated within the social insurance and social welfare system. Class A refers to the typical PRSI worker. Class S refers to a self-employed person. Class A workers receive a non means-tested payment or jobseeker's benefit of €196. This is based on 104 weeks or two years. If a self-employed person loses his or her job, he or she may apply for the jobseeker's allowance, which is means tested. If a self-employed person's spouse earns more than approximately €400 per week then he or she does not qualify. This is significant because not only does one not receive the payment, one does not qualify for the back to education allowance, the work placement, retraining schemes or the back to work allowance. Many of these people are simply becoming statistics and are leaving the system completely. Such people are becoming totally disenfranchised. I wish to accentuate the disparity between self-employed workers and others in the social insurance net. If a regular PAYE worker's spouse earns €500,000, he or she would still receive the jobseeker's benefit payment.
Contributions made by self-employed workers are based on a percentage of their income. I propose that we consider raising the percentage of contributions by self-employed people on a voluntary basis such that they may at least avail of retraining and subsidies such as the back to education allowance. Let us allow such people the option of an increase in the rate of their contribution such that they could be included in retraining, the back to education allowance and other such schemes and then, if they lose their jobs, they would have already paid an additional sum of money voluntarily and could avail of these schemes. These people are entrepreneurs. They are self-starters and are the people who create and have created jobs in this country. They have never had to ask the State for any assistance before and when they did recently, the State showed them the door.
Surely it is in all our interests to invest in the very people who have proved they can provide a return on the money spent on them. We should consider increasing the rate of that contribution on an optional basis for the self-employed to ensure more money is fed into the social insurance fund which could allow these workers to avail of re-training if they happen to lose their jobs.
This Bill comes before the House at a difficult time for us all, particularly with the economy in crisis. Communities and families have fears as to how they will fare over the next several years. The Government announced it will cut social welfare by €2.8 billion between 2011 and 2014 in its four year recovery plan. Over the past several weeks, however, we have seen that retiring Ministers and Members will receive huge pensions and golden handshakes while a man who has worked 47 years on a building site will be lucky to get €30 a month in a pension from the Construction Industry Federation.
The Bill seeks another €350 million in a Supplementary Estimate to the €21 billion already paid out this year. Many people on social welfare do not want to be on it. They want to work and live in a society in which work means something. They also want to contribute to their communities and their families. The social welfare system is preventing this because it can be more beneficial to stay at home on social welfare. The system needs to be taken apart and revamped to allow people who want to work the option of working rather than sitting at home.
FÁS is a failed agency. My colleague, Deputy Burke, spoke about how FÁS has contributed to many communities through community employment schemes. I have seen many people in communities who would never have got into the workplace if it were not for these schemes.
A larger issue around FÁS, however, is the fate of the many apprentices who find themselves in employment limbo. If they decide to enter a course, they will be asked to pay €140 for fees and €170 for materials at a time when, this week, many young people were informed by letter that their social welfare will be reduced to €100 a week. For many of them, they cannot go back into the workplace because the jobs are simply not there. Many apprentices have no workplace to finish their 13 weeks training and get the next certificate.
I met a young man recently who was waiting to finish his plumbing apprenticeship. He only needed 13 weeks work on the job. When I telephoned him last week to see how he was getting on, I discovered he had been admitted to St. Patrick's University Hospital. He fell apart because he simply could not manage. It is a sad state of affairs when young people who want to work or go back into education cannot do so and find no alternative but to self-harm or worse.
I do not understand the provision in the Bill for a mobile telephone sign-up facility for the dole. It might have been a good runner on "The Late Late Toy Show" and come top of the list for many children. It is ridiculous that we have been trying to sort out a social welfare system in which people turn up and a human face is seen across a counter. It reduces people to statistics and will only worsen social welfare fraud.
I welcome the reform of the rent supplement benefit, particularly that landlords will have to provide their tax reference numbers which should have been introduced long ago. For many who receive rent supplement, the quality and the standard of the accommodation available to them is very poor. People with young children are often put into single rooms, sharing bathrooms and other facilities. It is wrong to ask people to share such accommodation. Inspections must be included in any changes to the rent supplement scheme to tackle poor accommodation and fraud. Two weeks ago, I overheard a man getting the house-to-rent supplement saying he was renting out one of the rooms for €500 a month. Tackling that type of fraud needs to be examined carefully.
With the weather so bad over the past several weeks and temperatures of -10° Celsius predicted for the next few days, I am concerned elderly people in receipt of social welfare are still not adequately heating their homes, afraid to turn on the extra bar in their electric fires because it will cost too much. Social welfare must be about looking after people in such circumstances. Many elderly people are fearful of what will happen over the next three weeks coming up to Christmas, particularly with the loss of the Christmas bonus. They depended on this payment coming up to Christmas time, not only for buying presents but having a little bit extra heat or buying some extra food.
I wish to share time with Deputy Johnny Brady.
Is that agreed? Agreed.
I welcome this Bill. Its provisions are a step forward in many ways. The electronic certification of jobseeker's allowance and benefits is to be welcomed. As everyone knows, we live in difficult times and more must be achieved with limited resources. I strongly believe those resources must be focused on those most in need.
In that regard, the steps taken to stamp out welfare fraud are of immense benefit and must be implemented. I have already spoken in the House on what I perceive to be widespread abuse of the social welfare system. A previous speaker referred to the urban myth of people claiming social welfare benefits while living and working abroad. That is no urban myth but reality. I have had personal experience of it myself when it was brought to my attention by people in receipt of social welfare benefits. Anything that can be done that will prevent or lessen fraud is to be welcomed.
I have, however, some concerns about the use of technology in this regard. While the use of voice recognition is laudable, it is not foolproof. The implementation of such technology will be expensive. Some years ago there was a hullabaloo about using voice recognition to dictate letters and other correspondence. Not being the best at typing, I welcomed this development at the time. However, when I looked into the application of voice recognition, I found it to be expensive and, unfortunately, was not always as accurate as it was pertained. With that one proviso, will the Minister look carefully before the Department invests considerable amounts of money in that sort of technology?
I agree with Deputy Catherine Byrne on the small number of unscrupulous landlords in the rent supplement scheme. We all know of cases which amount to fraud too. Anything that can be done to prevent this is to be welcomed.
I have always found it intriguing that community welfare officers, charged with the implementation of rent supplement, carry out this function on behalf of the Department of Social Protection but are employed by the Health Service Executive. The HSE should concentrate only on health matters. It defeats me how an officer involved in ascertaining a social welfare benefit has to be employed by the HSE. They do work of immense benefit to our State. It is becoming increasingly difficult with the passage of each day that they should be diverted from their true work by carrying out work for the Department of Social Protection. Surely that should only be a function of the Department of Social Protection.
I welcome the transfer of FÁS services. FÁS has suffered an enormous amount of negative publicity. Unfortunately, most of it was brought on itself particularly by the actions of some very senior people. We must always remember, however, that in the current recession reskilling and retraining are more important than ever. Work of great value has been done by the vast majority of FÁS employees. Everybody in the House is aware of that happening in their own localities. That work must continue and it is important that the clients, who, at the end of the day, are the most important people in this equation, are able to move from unemployment to being trained or reskilled in order to take on jobs, which is the next stage.
I draw the attention of the House to community employment schemes and rural social schemes. Both of these schemes were brought to fruition by the Minister, Deputy Eamon Ó Cuív. They were of immense benefit to the public and that sort of community involvement will be an important step in getting the unemployed back to work.
I am delighted to speak on this Bill. My party in Government has always worked very hard to protect the most vulnerable in our society. When resources were available, we invested heavily in improving social welfare rates. Over the past 12 years, unemployment benefits increased by almost 130%, pension rates increased by approximately 120% and child benefit payments went up by a massive 330%. The price of goods and services increased by 40% during the same period.
In 2000, our social welfare expenditure was €6.7 billion, while today it stands at almost €21 billion. It is no secret that this position is unsustainable. Given the current state of our public finances, it would not be feasible to leave this budget untouched. At all times, however, we must ensure we that we protect the most vulnerable in our society. Put simply, we are taking a small step backwards in order to protect welfare services for the future. In any debate on social welfare it is important to point out that even after the adjustments last year, our rates compare extremely favourably to our neighbouring jurisdictions.
The Bill before us will transform the provision of social welfare by providing for the full transfer and integration of employment services and community services programmes of FÁS from the Department of Education and Skills to the Department of Social Protection. This means that, as well as providing income support, the Department of Social Protection will also focus on helping people to find work. This marks a more proactive, employment-focused and customer-centred approach by the Department.
The best way to reduce the social welfare budget is to get people back to work. Therefore, it makes sense that the Department should play a pivotal role in the provision of employment and community service programmes, as well as progressing people to participate in the workforce. It is envisaged that trained staff will work together with individuals on a one-to-one basis with clearly defined milestones and targets. For its part, FÁS will now focus primarily on the provision of training services.
I was pleased to hear the Minister, Deputy Ó Cuív, say last week that the practical arrangements to support this transfer of functions are now largely in place and that there has been a lot of co-operation between the Department and FÁS. This shows that public sector reform, as facilitated by the Croke Park agreement, is well under way.
The Bill also introduces a provision which will allow for certain people who receive the jobseeker's allowance and jobseeker's benefit to complete their certification or signing-on process by electronic means. This will see local and branch officers collecting signatures by means of a digital signature. It is also envisaged that the signing-on process could at some stage in the future be conducted online or by using a mobile telephone. In this day and age, when most people of working age are technologically savvy, it makes sense to look at these options.
These new channels will make the signing-on process more efficient, while delivering better customer care. It will also result in cost savings and reduced pressure on local offices. This means that staff resources will be freed up to work in other areas such as client, claim and payment issues. It is important to point out that the necessary levels of control will at all times be maintained.
Another important provision of the Bill is that, from 1 January 2011, landlords will have to supply their tax reference number to the HSE before rent supplement can be awarded to new claimants. Meanwhile, landlords of existing claimants will be requested to supply their tax reference number at the time of their next rent supplement review. The main objective is to ensure that landlords are tax compliant. Those who are paying their taxes have nothing to worry about.
Time constraints prevent me from listing all the other changes being introduced in this Bill. However, I welcome the clarifications being introduced on the calculation of claims. I also welcome the Minister's comments that he intends to introduce an amendment on Committee Stage which will provide for the introduction of a partial capacity scheme. Currently, the social welfare code categorises people with long-term illnesses or disabilities as either "fit for work" or "unfit for work". The introduction of greater flexibility in this area shows that the Department is determined to focus on capacity rather than incapacity, marking a "can do" approach.
At a time when our State finances are under huge pressure, I welcome the sensible measures in this Bill, which make the provision of welfare and employment services more cohesive.
I agree with Deputy Catherine Byrne's comments on the elderly and less well off sectors of our society at this particular time, given the severe weather conditions. I appeal to the Minister to do everything possible to protect the weakest in society. People in rural and urban areas should call on elderly neighbours to ensure they are all right during this severe cold snap. Their neighbours should ensure that elderly persons have the necessary items, including milk and water. As we all know, many pumps are frozen and water pipes have burst. Elderly people in rural areas could thus be left without any drinking water to make a cup of tea or cook the dinner. We should all ensure that such people are looked after.
I welcome the Minister of State, Deputy Brady, but I was hoping the Minister, Deputy Ó Cuív, would attend. I want to bring one issue to his attention. I cannot understand the case of a man applying for a non-contributory pension. He was in a small business all his life. He lost his wife, was in very bad health and was in and out of hospital for long periods. He sold his business to a family member. He divided the money he received from the sale of his business among all family members. Everything was done legally and his taxes were paid but because of the way he had divided it, he was denied an old age pension. The social welfare officers maintained that the way he had divided the money among six or seven family members was done in order to receive a pension.
This man was well into his 80s after having been in business and paid his taxes and done everything legally. He could have signed over the property to one member of his family. The property was worth a few hundred thousand euro, not millions. If he had done so, he would automatically qualify for a pension. He tried to help out all his children and because of this effort he was deprived of a pension. I have been in contact with the Department of Social Protection and I have written to the Minister because this matter should be examined. It is very unfair that a person who has done everything legally, paid his taxes and worked very hard is treated this way because he had no option other than to sell his business as a result of ill-health. I appeal to the Minister of State to bring it to the attention of the Minister. I welcome this Bill.
In the 25 years I have been in the Dáil, I have spoken on social welfare Bills on a number of occasions. Some of the points I made through the years must be made again. I refer to the context of social welfare legislation in this country and the extraordinary inability to debate issues of rights, a social floor or inequality. In his opening speech the Minister stated:
In the current economic and financial crisis the Government's main priorities must be to restore stability to the public finances and to deal with the jobs crisis. Tá an Rialtas bródúil as an méid atá curtha i gcrích [agus mar sin de].
It is interesting to contrast such a statement with the statements of his grandfather, who led so many Fianna Fáil Governments at a time when there were many decent people in that party who introduced many decent policies for the best of reasons.
In the 1922 Constitution of this country and in the time between that Constitution and the 1937 Constitution, Bunreacht na hÉireann, it is interesting that equality was mentioned in the democratic programme of the first Dáil and it can be inferred in the 1922 Constitution. The grandfather of the Minister, Deputy Ó Cuív, went further, suggesting the rights to equality in a republic, which this country was not at the time, were fundamental rights. We were not only going to be equal, we were going to be republican as well.
The 1937 Constitution, in an interpretation of Article 41, prohibits Irish citizens from being conferred with titles of honour without the prior approval of the Government. The period we are coming out of sought opportunities to confer titles of honour and badges of privilege on some of the unsociable aspects, and members, of this community. I have listened to several speakers mention fraud and the potential that, if electronic means are used by recipients of social welfare to contact the office, there is a danger of fraud. I invite the people who make those speeches to concentrate on the empirical reality, the fraud conducted at the top of the banking system, the fraud committed by those at the top of building societies and by accountants and auditors, firms that received millions of euro from the State in Government approved contracts. That marks the change in politics between the first generation de Velara and the third.
When I was studying economics, accountancy and commerce, it meant something to sign off on the books of primary account, the profit and loss trading account or the balance sheet. In the period we are coming out of, the partner of the firm went for lunch with the clients and then put people on slave wages to do the books. Then, there would be another meeting with the partner to take the money from the client. That was widespread among the principal accountancy firms in this city and internationally. Eminent people in the legal profession, some of whom were senior counsels, required €250,000-€500,000 to take positions as non-executive directors.
Is there not something very sick in a society that becomes obsessed about whether a mobile telephone will be used by someone to defraud the Department of Social Protection while their tongues are stricken into silence on what surrounds them? I refer to the long delay as forensic examinations are made in the little poker club known as Anglo Irish Bank before anyone can be brought to trial. There is nothing republican or egalitarian about that, nor is there anything about it in the 1922 Constitution or the republican statement of 1916.
On the other hand, as we move into a new period, the new Government, of which I will not be a part, will celebrate the lockout of 1913, the 1916 Easter Rising and perhaps the centenary of the founding of the Labour Party in 2012. It is interesting to reflect that the participation by James Connolly in the Easter Rising was on the basis that one could have an egalitarian agenda, suitable for a republic, where we can aspire to equality and that one could join this aspiration with the worst and most regressive forms of nationalism. What we got after that was a nationalism that rejected the likes of Connolly, rejected artists, chose censorship rather than intellectual work and an obsession with sexual behaviour in private rooms rather than the morality of business or governance. That is the shabby atmosphere from which we have come. I put the discussion on fraud into the real context of the fraud that has nearly brought us down.
Other windy sections in the Minister's speech include his reference to the crisis by drawing images to the Second World War. I would be intellectually and morally dishonest if I did not point to the real crisis, which is global and European. It is of unaccountable speculative clouds that fly over one country after another. It is in the hundreds of trillions of speculative money that is doing damage in the world at present.
Yet in the international institutions, even though it was envisaged after the Second World War, there was no attempt to make such international hot money accountable. When I first came into the Dáil we had a discussion about proposals such as the Tobin tax. The Government would never agree to that, given its particular hue, because it would have made a real contribution, at 0.01% for example, that one could have gathered from hot money that would have been used for the task of development and the famous millennium development goals.
I am coming back home rather rapidly in just a moment on the detail of the Bill. I welcome many of the provisions, but I would be crazy not to address the context of other provisions. There is a global crisis in terms of the accountability of international speculative finance. There is a crisis too in Europe because the thinking of Angela Merkel and some of the people who speak on behalf of France is capable of destroying not just the eurozone, but the European Union itself. The European Union now has a choice about whether to give priority, rather like the Minister does in his speech, to the issues of fiscal adjustment or to creating a social Europe. If it does not go down the road of giving the preference to valorising a social Europe, it will drive hundreds of millions on to the streets in European countries who will feel that there is no response to the reality of their lives but that there is an inordinate response to the demands of speculative capital.
It is an Irish Minister saying in the current economic and financial crisis that the Government's main priorities must be to restore stability to the public finances and to deal with the jobs crisis. If he means that we should address the deficit, there is not a Member in this House who is not willing to address the gap between total receipts and total expenditure. That is something else. The suggestion is that there is only one single way of making that adjustment but that one is not free to do so on its own terms. One must join it to the inherited legacy that we have from an evening in September 2008 when every party in the House except the Labour Party voted for an unconditional guarantee that propped up the poker club known as Anglo Irish Bank. That legacy has now been visited upon us and people who look at the Social Welfare (Miscellaneous Provisions) Bill and the budget on 7 December will see noughts being put after the amount of money that is being made available to supposedly save our banking system because it affects our reputation internationally.
One does not have to believe me. On 28 to 30 September in response to questions we had the lies of the heads of the banks as they came into Government Buildings and the con job they pulled on the members of the Government not only at that meeting, but at succeeding meetings again and again where they piled one type of evasion on top of another. In colloquial language that is called lies. On top of that, as the sums are added up the suggestion is that the deficit issue is now joined at the hip with bank debt. Therefore, the people do not know the full story of what misery they and those who come after them must now pay. That is the context of the Social Welfare (Miscellaneous Provisions) Bill.
However, there is another ideological piece of inheritance and that is the hostility. Not only was there bogus republicanism and bogus commitments to equality, but, lest people think that I am inventing all of that, we should recall the Government that involved the Progressive Democrats Party contained the former Minister for Finance, Mr. McCreevy, for example. It also contained the former Minister, Mr. Michael McDowell. On page 47 of the Irish Human Rights Law Review 2010 Mr. Colm O’Cinneide refers to Mr. McDowell as saying that a dynamic, liberal economy like ours demands flexibility and inequality in some respects to function. He went on to say that driven to a complete extreme, the current rights culture and equality notion would create a feudal society, a society so ordered and static, where the Government tries to alter everything by law. It would become as atrophied as a feudal society.
He was at the heart of the Government that allowed regulation with a light touch, that allowed a property bubble, that allowed a Financial Regulator to be part of the club that ran banking and that allowed a Central Bank chairman to stay silent in the face of what was happening in front of him. The Secretary General of the Department of Finance who found it tedious to sit in the bull pen — in all my time in the House he was there perhaps twice a year for the budget and the finance Bill — has now gone off into the sunset garlanded with bonuses and pensions. The former Minister, Mr. McDowell, loved all of that and suggested we were harming the country by speaking about equality. He had his fan club in different parts of the media. The notion was that speaking of equality was not in fact the thing one should do. On it went.
I wish to refer to something that was said by a speaker on the previous occasion when the Bill was introduced. He is a decent Opposition Deputy and I admire his concern. He spoke about many thoughtful things but he said he could not accept the principle of universality. I speak as president of the Labour Party. I am in favour of the principle of universality. I would like at this Stage of the Social Welfare (Miscellaneous Provisions) Bill for us to define the social floor below which people will not be allowed to sink. Then we equally could go on to debate where that line might be. We might decide, for example, that all of the disability categories would be given a minimum of such adequacy as would enable them, as Amartya Sen would say, to participate without shame in society.
I attended a meeting on disability last week which had 30 politicians in attendance. A woman held up orthothic braces that her child needed but had grown out of, and she told how long it would take to replace them. In this Republic — following 1916, 1922, 1937, De Valera one, De Valera three — we are looking after the financial markets. I remember what Owen Sheehy-Skeffington said in 1966 on cherishing all the children of the nation equally, when they were still in industrial homes, when women were in Magdalen houses, many other children were sent out of the country and people of unapproved sexual tendency were driven to England. If we are to respond to where we are now economically and socially, it is a time for building a real Republic based on inclusion and the social floor. After that, as circumstances allow and the economy recovers one can raise the bar, but let us agree on that. Instead of that, we get all these bits and pieces.
If they had time, all Deputies would tell one about how much of their office time is spent dealing with cases about habitual residence. It is rather like talking about angels dancing on the top of a pin. Was one out of the country? When did one come back? Where was one? Does one have proof of that? Good, serious, well-qualified people are forced to waste their time answering all of those questions. There are elaborate appeal processes and cases go to the Ombudsman. The Minister for Social Protection, Deputy Ó Cuív, had a woman visit him at his clinic not so long ago at my suggestion. She had been to see me. I am not interested in politically partisan advantages so I suggested she go to see himself. It was an interesting case. The woman had attended an IT course when she was a member of the Garda Síochána. It enabled her to do her job better. She left the force after perhaps 12 years to look after her elderly father until he died. She wanted to return to education. She was told that the course she did when she was in the Garda Síochána ruled her out. She was told the rules could not be changed. I do not know whether the Minister replied to her in Irish, English or Swahili — ní féidir liom aon rud a dhéanamh. That is the grandson of the great liberator. That is exactly what we are dealing with now.
For the reasons I have outlined, I believe in universality and the social floor.
One could do all of that and still be a republican. One could be in favour of equality.
It is not only in terms of the principle that we have been granted this inheritance. Every single influence of Michael McDowell in Cabinet was against the principle of equality assertion. This is why the Combat Poverty Agency is gone. It was a critical voice, so it needed to be absorbed into the Department. It is also the reason the Equality Authority and so forth are gone. Not only were we not to advance concepts like equality, we were not to discuss them either.
An interesting point follows on from my comments about 1916, 1922 and 1937. In 1975, we all went to Kilkenny and discovered poverty in Ireland. Sister Stanislaus Kennedy gave an inspiring address and off we went to found the Combat Poverty Agency. However, when the bogus riches were being puffed up to their greatest height, people believed they needed to get rid of the agency. This is exactly what occurred.
When one is as long in politics as I have been, one notices something. I do not admire the majority of those in the media who treat all of this with cynicism. It is as if members of the media, having been at the trough themselves, are involved in voyeurism. Thus, when a colleague retires, like the person on the Government side who made such an announcement yesterday, on the basis of medical reasons or whatever, the media has no interest in the why. Instead, the interest is in how much that person is getting and so forth. We have dragged ourselves down to a point at which we can hardly speak anymore about the decencies associated with a society that is a republic. There are exceptions like Fintan O'Toole and so on.
There is an interesting notion about, namely, that when one knows how deeply one is in trouble, the courage to say "left" or "right" no longer exists, as if I had the same politics as Michael McDowell, I had the direct opposite. They do not refer to politics of the left, politics of the right or Government politics. They refer to the "politicians" because this is as safe, gutless and cowardly as it sounds. If someone is a bit of an intellectual, he or she can give it a bit of a spin and refer to the "political class" and so forth as if discussing ancient Rome. The fact is that many members of the media are afraid to point the finger at those with whom they have their conversations.
I will turn to a practical example of the two different types of Ireland that exist. A campaign has just been run to save the universal State pension. We know that more than €9 billion is spent on pensions, but €3 billion is given in tax concessions to 20% of earners. If Members want, I will go through the numbers. For example, 5% or 6% of firms have taken advantage of this concession. The figure could be as high as 50% among company directors. Modest directors might have fired €100,000 into this little tax scam. A large number have invested more than €250,000, yet there are even people with €1 million invested. St. Michael Fingleton of Irish Nationwide has sailed away with his pension pot.
Where pensions were concerned, consciously introduced legislation benefited 20% or less of earners and 80% of the tax relief, which costs €3 billion in any one year, went to those people. It was they who were a class. They ate and played golf together. They numbered fewer than 100 and they dragged this country down to the dregs. They contaminated the body politic because senior people who should have been regulating and not invigilating supped with them. We and future generations will pay the price for that.
I am glad that, in the course of this debate, tribute was paid to one of the two classes of employee in FÁS, namely, the decent, hard-working employees who are trying to help people. Deputies know them in their constituencies. The other class of employees were at the top and became part of the culture, the same culture of senior counsels who wanted to attend bank meetings a couple of times per year for €500,000 and of people who wanted to be movers and shakers. Newspapers changed their style to glossy paper. Statements to the effect that we were no longer second to anyone and that everyone else was trying to be like us were made in surprising places. This was the message that came from the political right. This is the reality in which we are discussing this Bill.
I am always reluctant to interrupt the Deputy, but he has gone way over his time.
I thank the Acting Chairman. I welcome the transitions that will make the delivery of services efficient for young apprentices, people seeking jobs and so on. It is fair and honest to say that good service has been given to those who need employment and that most people would choose to work rather than be on social welfare. Let us be clear, however. When Deputies speak in the House to the public and on their behalf and when we envisage our responses, it is important that we shine the lamp on fraud where it has been greatest. To date, that fraud has existed at its greatest with impunity.
During the course of this debate, Deputies raised queries in respect of the illness benefit, in particular section 3. This section deals with the method of calculating the cumulative number of benefit days for illness benefit purposes. Customers who have fewer than 260 PRSI contributions may claim illness benefit for periods up to 312 days while those with more than 260 PRSI contributions may claim illness benefit for periods up to 624 days. Periods of illness benefit not separated by more than 26 weeks are added together in order to arrive at the cumulative number of reckonable days. Only benefit days within the preceding 12-month period are counted for 312 day cases while benefit days within the preceding 24-month period, or from 5 January 2009 if shorter, may be counted for 624 day cases. Therefore, a situation may arise where the 312 day cases could be treated more favourably than the 624 day cases even though the 624 day customers have paid more contributions. The section addresses that anomaly.
Current illness benefit claims are not affected by this change. Section 3 comes into operation on 3 January 2011 and only a small number of new claims made after that date, which are linked to an earlier claim, will be affected. This year, we expect to award approximately 250,000 illness benefit claims. Approximately 52% of illness benefit claims are linked to an earlier claim. When the change is introduced, less than 0.5% of such claims will be affected, that is, approximately 600 over the course of the year.
No costs arise from this change. Indeed, there will be a small saving on expenditure estimated at €200,000 per annum. Nearly 82,000 customers were in receipt of illness benefit at 12 November and we spend approximately €77 million per month on this benefit. To the end of October 2010, we spent €772 million. In 2009, we spent nearly €918 million.
Clarification was sought regarding the impact of section 10 on the requirement to satisfy the habitual residence condition for carers allowance. This section amends the rules relating to the means test for the carers allowance scheme so as to exempt any foreign social security payment, up to the appropriate level of the Irish State contributory pension, that is paid to the carer or the spouse of the carer. It will ensure a more equal treatment of those in receipt of foreign welfare payments. The amendment will mean that all income regardless of source will be assessed against the income disregards currently provided for under the carers allowance scheme. This change will not impact on a carer's requirement to satisfy the habitual residence condition. The requirement to be habitually resident in Ireland was introduced as a qualifying condition for certain social assistance schemes and child benefit with effect from 1 May 2004. A person who does not satisfy the habitual residence condition is not eligible for specified social welfare payments regardless of citizenship, nationality, immigration status or any other factor. The purpose of this condition is to safeguard the social welfare system from abuse by restricting access for people who are not economically active and who have little or no established connection with Ireland. Under EU rules which prohibit discrimination on nationality grounds in relation to social security, it is not possible to exempt Irish citizens from the HRC, either in general or for carer's allowance, without extending the same treatment to all EU nationals.
I now turn to the implication of changing the HRC condition in relation to carer's allowance claims. Fewer than 1.5% of applications for carer's allowance are refused on habitual residence grounds. Given the continuing rise in applications for carer's allowance, there could be significant cost implications in any change to the qualifying criteria. A proposal along the lines of transferring the habitual residency requirement from the carer to the person being cared for, has previously been examined in the Department. While such a change could be of benefit to the small number of applicants who are refused on the grounds of HRC, it would have significant administrative, financial and legal implications. For example, it would be necessary to establish the means of a person whose centre of interest, spouse, partner, family and property are abroad, which could be difficult if not impossible. It would transfer the burden of proving habitual residency onto the person being cared for which could lead to situations in which a care might not be eligible for carer's allowance if the person for whom he or she cares has recently arrived in Ireland. This might include elderly persons returning to be cared for by their adult children.
This year, as of 15 November, we have received 16,519 applications for carer's allowance. Some 572 of those cases were sent for further assessment on habitual residency grounds and 245 of these were refused on the basis of habitual residency, of which 46 were Irish nationals. This means that fewer than 1.5% of all applications are refused on habitual residency grounds.
The supplementary welfare allowance scheme, SWA, which includes rent supplement, is administered on behalf of the Department by the community welfare service division of the Health Service Executive. The purpose of rent supplement is to provide short-term support to eligible people living in private rented accommodation, whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. Under the relevant legislative provisions, the Department's relationship is with the tenant; who makes the application for rent supplement and payment is made to him orher.
Rent supplement is specifically for the benefit of tenants to assist them with their accommodation needs. Legislation provides, however, for the making of a rent supplement payment to another person — for example, a relative, a landlord or landlord's agent — on behalf of the recipient, at the tenant's request and is subject to the consent of the HSE. The most common use of this provision is where the executive make rent supplement payments to landlords. Where an applicant nominates another person to receive their rent supplement this does not alter the HSE's relationship with the applicant. Where a person is unable to manage his or her financial affairs with respect to accommodation costs, the executive may appoint some other person to act on behalf of the applicant, exercising any rights or powers on behalf of him or her. The appointed person may receive and deal with any sum payable by way of supplementary welfare allowance, which includes rent supplement.
The efficiency of the scheme would be significantly affected as CWOs would potentially have to deal with some 96,000 additional clients. This would involve greater complexity and significant resources to deal with a new set of third parties. In particular, it could result in CWOs being drawn into disputes between both landlords and tenants.
I will not deal with the 30-hour limit rent and mortgage supplement. In recent years, a significant number of people have come to rely on rent supplement for extended periods, including people on local authority housing waiting lists. One of the measures introduced to address the issue of long-term rent supplementation is the rental accommodation scheme, RAS, which gives local authorities specific responsibility for meeting the long-term housing needs of people receiving rent supplement for 18 months or more. Rent supplement is not payable where a person or his or her spouse or partner is in full-time employment, that is for 30 hours a week or more. However, provision was made in 2007 whereby a person on rent supplement who is accepted as eligible for accommodation under RAS may return to full-time work, subject to a means test, without losing the entire rent supplement payment. Those who transfer to RAS and engage in employment will have the advantage of the differential rent scheme which is administered by the various local authorities.
The specification of 30 hours as the upper limit for part-time employment is unique to the rent supplement and mortgage interest supplement schemes. On the basis of a normal 40 hour full working week, 19 or 20 hours a week is used in a number of social welfare contexts to determine full-time employment, for example, FIS, insurability, etc. The 30 hour per week limit has been in place since 1977 when the SWA scheme came into operation. The use of 30 hours as the part-time limit for SWA is designed to be as advantageous as possible to individuals returning to the employment market without including those in full-time employment, thus reflecting the scheme's original purpose of a short-term income support payment. Support for those in full-time employment and residing in the private sector is best provided through the RAS and other social housing schemes.
The 30 hour limit was considered as part of the expenditure review of the supplementary allowance scheme. The review, recognising the short-term nature of the scheme and acknowledging that support to those in full-time employment and residing in the private rental sector is best provided through rental assistance arrangements, was satisfied that the 30-hour rule should continue to apply at least until the full implementation of the new rental assistance arrangements have been achieved.
As regards electronic certification, at present in order to qualify for job seeker's benefit or job seeker's allowance, an applicant must fulfil a number of conditions, including being available for and genuinely seeking work. To fulfil those conditions job seekers must, at regular intervals, make a declaration to the effect that they are still unemployed, available for and actively seeking work. This is what is known as the certification process or signing on, and is currently carried out by a job seeker going to his or her local social welfare office.
One of the provisions the Minister is including in this Bill will be to allow certain people who receive job seeker's allowance or job seeker's benefit to complete the certification process by electronic means. We will be changing the current signing on process in our local and branch offices to collect signatures via a digital signature pad, and we are exploring the possibility of using electronic channels for certification, such as on-line through the Internet or by use of a mobile telephone. These new channels are being introduced to enable us to carry out the certification process more efficiently, while delivering better customer service and maintaining the necessary levels of control inherent in the current manual process.
We are currently engaged in a project to examine the potential to develop an additional channel for job seeker's certification via mobile telephone. Before committing to a full-scale deployment the mobile telephone certification solution must be evaluated by the Department from both business process and technical perspectives, to test how it may work in practice to ensure necessary levels of security and control. Deployment will not proceed unless it offers a sufficient level of control in line with existing processes.
The project is scheduled to conduct a life trial at the end of 2011, in which a number of customers will be invited to participate. The selection of customers to be invited has not yet been finalised. The mobile telephone facility is intended to be made available on a risk assessment basis and will have high levels of control built in. Customers will be invited to use the channel and it will not generally be available other than on request.
I thank all the Deputies for their contributions on Second Stage.