Barry Cowen
Question:15 Deputy Barry Cowen asked the Minister for Social Protection if she will confirm that there will be no cuts to current rates of social welfare payments. [21598/11]
Priority Questions
Social Welfare Benefits
The Government is committed to tackling Ireland's economic crisis in a way that is fair, balanced and that recognises the need for social solidarity. The appropriate level of overall expenditure by my Department will be considered in the context of budget 2012 and subsequent budgets. This consideration will be informed by the commitment in the programme for Government to maintain social welfare rates. However, sustainable public finances are a prerequisite for future economic stability and growth, as well as being a prerequisite for maintaining and developing our social protection system. To this end, the State must pursue a determined deficit reduction strategy. The Government believes it is appropriate, to enhance international credibility, to stick to the aggregate adjustment as set out in the national recovery plan for the combined period of 2011 and 2012. Accordingly, there will be an ongoing requirement to curtail expenditure in 2012 and in later years. This is necessary for many reasons, not least so that the State can continue to make social welfare payments at appropriate levels, sustaining social cohesion and treating people with dignity.
The priority of the Government is to get the economy moving, restore confidence, fix the banking system and support the protection and creation of jobs. The success of its economic plans will lay the foundation for the rest of its agenda for change. The jobs initiative is the first step in its recovery strategy and includes a number of initiatives that will be administered by my Department, including the recently-announced internship scheme, JobBridge. In addition, the Social Welfare and Pensions Act 2011 provided for the halving of the lower rate of employer PRSI, thereby making it cheaper for employers to take on and retain workers and thereby reduce unemployment.
There are considerable challenges ahead including the need to protect, as far as possible, the key income supports and services operated by my Department. This process will be informed by the comprehensive review of expenditure currently under way in all Departments and Government agencies, with the key decisions being made in the context of framing the budget for 2012.
I thank the Minister for her initial response. While I acknowledge I have asked this question in the past, I do so in the context of more recent developments such as last week's cut in fuel allowances and so on. The question also arises in the context of the statement made by the Tánaiste, Deputy Gilmore, on the Government's 100th day in office when he stated categorically that welfare rates would not be cut, as per the commitment in the programme for Government. When asked previously, the Minister stated that while she could not necessarily stand over that commitment, she would do what she could for it. Only last week at a meeting of the Select Sub-Committee on Social Protection, she spoke of the efforts being made to make further savings in respect of anti-fraud measures——
The Deputy should frame a question.
It is envisaged that only €50 million will be available in that regard over and above what was saved last year. This is what an official stated in the Minister's presence in response to an answer last week. Where does this sit in respect of the commitment made in the programme for Government or in respect of the Tánaiste's statement? Where does it sit in respect of the statement by the Minister, Deputy Howlin, who also entered the debate some weeks ago, to the effect that the Government would protect rates as far as possible? Does it remain the case that rates cannot be guaranteed as per the commitment in the programme for Government?
My Department, in common with every other Department, is engaged in the comprehensive review of expenditure. Budgetary decisions will be made in the context of that review and in the context of the budget for 2012. As I have stated to the Deputy previously and as he will appreciate, I am not in a position to make statements or announcements on budget 2012 or in respect of the comprehensive review, given it is under way at present. However, I point to two issues. The Deputy referred to reductions in respect of certain elements of the household benefits package. One legacy issue from the previous Government relates to certain indicative savings, as I discussed in this Chamber during Question Time previously, pertaining to social welfare which included savings in the household budget scheme. Those commitments related to 2011, but they had not been published. They had not all been identified by the previous Government, but the indicative headings had been.
I have a problem with the second legacy issue arising from the period in office of Fianna Fáil and the Green Party. In its budget plan for this year it made provision for an unemployment job seekers' figure of 405,000, which is way out of line with the actual average figure, 445,000. There are attendant pressures. The decision taken last week was very difficult. However, as I said this morning at the committee meeting, there have been savings; for example, the Department no longer pays for the rental of telephone handsets from Eircom for which it was paying a significant amount of money. A discount has been achieved and the service has not been altered for individuals, but there has been a saving to the Department.
Aengus Ó Snodaigh
Question:16 Deputy Aengus Ó Snodaigh asked the Minister for Social Protection if she will reverse her decision to cut the fuel allowance and household benefits package in view of the impact such cuts will have on thousands of vulnerable persons including older people and those with disabilities. [21600/11]
My Department will spend over €530 million in 2011 on the fuel scheme and the telephone, gas and electricity elements of the household benefits package which will benefit over 630,000 people. Difficult decisions have had to be made in the light of commitments made by the previous Government. Unfortunately, I am not in a position to reconsider the changes to the fuel allowance and household benefits package announced last week. From September, the fuel allowance is to be standardised at €20 per week, the current rate for the majority of customers, with no additional allowance payable to those living in a smokeless fuel area. The cost of the telephone allowance will be reduced following negotiations with Eircom which will ensure customers will receive €26.86 of value on their bills, at a cost to the State of €22.22 per month. The number of free units provided under the electricity and gas allowance scheme will be reduced to the level at the start of 2007 from 2,400 units to 1,800 per month. These three measures will generate savings of €17 million in 2011 and €65 million annually.
While we have had to implement these measures, the House should be aware that the savings were provided for last December in budget 2011 but were not specified or announced by the Government at the time. While, of course, we want to protect the basic social welfare payments which have very positive economic and social effects, regrettably there is an ongoing necessity to achieve savings owing to our commitments with the IMF-EU-ECB troika. There will be an ongoing necessity to curtail overall expenditure in 2012 and later years.
Energy poverty is a factor of income, energy prices and the thermal efficiency of the home. The most cost-effective means of protecting households from energy poverty is to reduce their consumption of energy through improving the thermal efficiency of the home. My colleague, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, and I are working towards this end.
The Minister's reply contains an amount of information but an amount of information is not contained in it. The Minister states €530 million will be expended this year, while the Estimates suggest a figure of €395 million; this is without taking into account the cut of €17 million which the Minister did not announce to the committee last week when we dealt with the issue. This is a time of rising prices and the Minister is cutting gas and electricity allowances by 20% and 25%, respectively, for pensioners in the main. In attempting to defend these indefensible cuts in recent days the Minister has repeatedly argued that 21% of those in receipt of the household benefits package do not use all the units included in the allowance. Will she acknowledge that neither she nor the Department knows anything about the circumstances of these 21% of recipients or, in fact, in many instances, the circumstances of the remaining 79%? Will she admit she does not know who they are, whether they are the ones sitting in the dark and the cold, scrimping and scraping and afraid to turn on the light and use up their allowance in case they exceed it? This is especially pertinent, given the recent hard winters we have endured. Many of them may be in hospital or even on holidays abroad, but we do not know. The Minister is basing a cut on the 21% on whom she has no information as a result of which the remaining 79% of recipients who exhaust their full fuel allowance will now be hit by a 25% cut.
In reply to the Deputy's first point and his justified concern about the rise in energy prices my Department supplies a number of units, in this case, 1,800. If the energy price changes and is increased, the Department will cover this increase. I reassure those in receipt of energy units under the household scheme that any rise in the cost of the units is covered by my Department. If there are exceptional needs, community welfare officers can provide additional specific exceptional needs payments for those who may have specific additional needs. I have also said that should there be a third bad or very cold winter — I hope this will not happen — I will be open to considering, as was done by the previous Government last year, additional payments.
Total fuel allowance payments amount to €228 million, while the amount for electricity, telephone, TV licence and gas allowance payments comes to €367 million. The free travel allowance is a separate allowance and not under discussion, but the total amount comes to €74 million. I do not know from where the Deputy got his figures. Perhaps we might compare them. It may be that they relate to people in receipt of allowances as opposed to those in receipt of benefits who may be counted separately in a different part of the volume.
Pension Provisions
Tom Fleming
Question:17 Deputy Tom Fleming asked the Minister for Social Protection the way in which she will reform the systems of payments from her Department, through the provision of part pensions to persons nearing retirement age; the contacts that she has had with other Government Departments in attempting to draw up such schemes in an effort to reduce the numbers claiming social welfare; and if she will make a statement on the matter. [21029/11]
The presumption underpinning this question appears to be that, by enabling people within five years of retirement to reduce their employment and, presumably, have their income supplemented by the State, unemployed people will benefit from such an arrangement. Apart from the budgetary implications attaching to such an arrangement, there is no guarantee that job creation would result from such measures. In fact, recent research on intergenerational solidarity by the OECD demonstrates that the rate of employment of younger people has no relationship with the rate of employment of older people. The OECD states, "the idea that public policy can re-shuffle a fixed number of jobs between workers of different ages is simply not true in anything but the very short-term".
The critical factor is that if we are to deliver on our social contract to those in retirement, we need people to remain in work for as long as possible in order that we can deliver the supports necessary on retirement. In this context, the challenges facing the Irish pension system are significant. The population share of those aged 65 years and over is expected to more than double between now and 2050, from 11% to 26%. Thankfully, people are living longer and healthier lives with average life expectancy set to rise even further in future, up to 88 years for women and 83.9 for men. In contrast, the share of the working age population is projected to decline gradually from 68% to 58%.
There are currently six people of working age for every pensioner and this ratio is expected to decrease to less than two workers to one pensioner by the middle of the century.
Spending on public pensions, that is social welfare pensions and public service occupational pensions, is projected to increase from approximately 5.5% of GDP in 2008, to almost 15% by 2050.
Additional information not given on the floor of the House.
For these reasons, State pension age will be increased gradually to 68 years. This will begin in 2014 with the standardisation of State pension age at 66. State pension age will be increased to 67 years in 2021 and to 68 in 2028.
The introduction of a scheme which encouraged reduced participation in the labour market for older workers would, therefore, be inconsistent with the interaction of current working age and pensions policy. In regard to occupational pension schemes, the trust deed and/or scheme rules will determine the retirement date for such schemes. Any change to these provisions would be a matter for the pension scheme trustees and/or employer.
Regarding assisting those on the live register to secure employment, the Department of Social Protection operates a range of employment support measures designed to encourage and support social welfare recipients of working age to reduce their dependency on welfare payments. These measures are consistent with efforts being made to encourage and facilitate people to continue to work up to and beyond pension age.
I originally submitted this question to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, and it has been transferred to the Minister for Social Protection, Deputy Burton. The question has also been reworded. As there are approximately 450,000 unemployed people we need to promptly introduce some jobs initiatives. I proposed to the Minister for Jobs, Enterprise and Innovation that we should sponsor a programme across the private and public sectors whereby employees who are within five years of their normal retirement date could, with the approval of their employer, job-share with a person on a fixed-term contract. The scheme should be attractive to a person agreeing to a job-share arrangement for a specific number of years within the five-year period. Therefore the person opting to work should have each job-sharing year counted as a full year for pension purposes, whereas the person on the fixed-term contract, while not having pension contributions made for him or her by the employer would have the benefit of getting off the unemployment register and entering the workforce where he or she can develop and acquire new skills.
The Deputy should frame a question.
The Minister said some people would not avail of the scheme because of the age difference; it would not be relevant. In principle the scheme should be workable. Graduates coming from college cannot get to develop what they have and are losing what they acquired in education. It is very demoralising for these people and I believe many would avail of such a scheme which would allow them to go into semi-retirement and take up other recreations and so on.
I thank the Deputy for the question. He indicated he had submitted a proposal to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton. I would also be very happy to receive the submission. There is an issue of balancing. Many older people wish and need to work longer to build up their pension entitlements for when they are retired, particularly women who might have been out of the labour force because they were on family duties during part of their working years. Some older people may wish to reduce the number of hours they work, but there are also older people who definitely want to stay working. The Polish Presidency of the EU has been holding a number of discussions on the issue. There is no absolute link between older people retiring and those jobs being made available and created for younger people. In some cases the jobs may simply be suppressed entirely.
I understand the Deputy's motivation and perhaps the watchword is to try to produce a flexible system for what people may wish to do as they approach retirement. Up to approximately 2007, there was a pre-retirement payment that was abolished by the previous Government in 2007. That payment recognised that people who left work at a certain age were unlikely to resume working again or perhaps for health or other reasons did not. I understand and share the Deputy's concern.
Regarding jobs for young people, we have just created the national internship scheme, which is designed to do some of what the Deputy is suggesting. We are beginning to roll it out and seeing the first people getting six and nine-month internships with employers in a variety of occupations throughout the country. I would be delighted to receive the Deputy's submission and I share his concerns. However, I am not sure it is possible to match older retiring workers exactly with younger people.
Social Welfare Benefits
Barry Cowen
Question:18 Deputy Barry Cowen asked the Minister for Social Protection if she is satisfied that there are sufficient supports in place to help people struggling to pay their electricity fuel and other utility bills. [21599/11]
I am satisfied that there are sufficient supports in place to help people with their electricity, fuel and other utility bills. Energy poverty is a factor of income, energy prices and the thermal efficiency of the home. The most cost-effective means of protecting households from energy poverty is to improve the thermal efficiency of the home. The Sustainable Energy Authority of Ireland has administered an energy efficiency programme for privately-owned low-income households, the warmer homes initiative, since 2001. More than 65,000 such households have benefited to date, with a further 15,000 expected to receive energy efficiency upgrades this year. A similar upgrade programme is also in place for social housing with the Department of the Environment, Community and Local Government supporting local authorities to improve the energy efficiency of older social housing stock.
On income supports, my Department assists low-income households with their energy costs through their basic payments, through the means-tested fuel allowance scheme and the household benefits package. The fuel allowance of €20 per week is paid to people who are dependent on long-term social welfare and unable to provide for their own heating needs. It is paid for 32 weeks, from late September to the end of April. The household benefits package, comprising telephone and electricity or gas allowance, as well a free television licence, is available for all those aged 70 or over; those in receipt of carers allowance; those who are 66 to 70 and in receipt of a qualifying payment and generally living alone; and those aged under 66 and in receipt of a disability or caring related payment.
Under the Department's supplementary welfare allowance scheme, a special heating supplement may be paid to assist people in certain circumstances who have special heating needs because of ill health or infirmity. In addition, exceptional needs payments may be made to help meet an essential, once-off cost which an applicant is unable to meet out of his or her own resources.
Additional information not given on the floor of the House.
Unfortunately, because of commitments made by the previous Government it was necessary last week that the Government approve changes to the fuel, telephone and electricity or gas allowances which will generate savings of €17 million in 2011 and €65 million annually. While this Government has had to implement these measures, the House should be aware that these savings were provided for last December in budget 2011 but were not specified or announced by the Government at that time. While we want to protect the basic social welfare payments which have very positive economic and social effects, regrettably there is an ongoing necessity to achieve savings due to our commitments with the IMF, EU and ECB Troika.
I still believe last week's measures will have a detrimental effect on many vulnerable people. In her earlier response pertaining to the issue I refrained from asking a second supplementary question, because I wanted to put this question in context further to the answer just given. The Minister mentioned in her earlier response that this was a legacy issue upon which the Government was forced to act and the Tánaiste said the same thing in the Chamber last week.
Is it not a fact that the previous Minister met providers and other stakeholders to secure a better deal on electricity and communications elements of the household benefits package, which would have been a win-win situation? As the Minister said, we are paying approximately €500 million per annum in guaranteed payments and it was not unreasonable to seek a discount of approximately 10% which would have resulted in savings for the Exchequer but would not have affected the package of benefits. This is even documented on page 24 of the budget brief for 2011 from the Department of Social Protection. In the context of those savings being sought, which were not pursued by the Minister or her officials on the Minister assuming office — she took the soft option of informing the House it was a legacy issue — is the Minister willing to confirm that the previous Government at no time proposed the reduction in the free electricity units and had instead proposed a reduction similar to the Eircom reduction to be negotiated with the electricity suppliers?
In the 2011 budget, the previous Government included indicative headings of savings that it did not announce or, in some cases, specify. I have advised the Deputy of this fact previously.
The Department is a major purchaser of utility services. Upon becoming Minister, I was surprised to learn that the Department did not get much in the way of discounts. The change to the telephone allowance is effectively a discount, with free rental of telephones provided by Eircom. The previous Minister may have been affected by this problem and I do not know whether he entered into negotiations. The nub of the problem seems to be that, according to the advice of the Chief State Solicitor's office, the Department of Social Protection does not have the right to go to the market to procure electricity as it is not the customer in the first instance and, therefore, has no entitlement to approach the market. To make matters even better, the Competition Authority stated that it is more important than ever that any scheme administered by the Department should not favour one electricity supplier over another.
I am obtaining legal advice on this matter. I do not know whether the previous Minister did so. Effectively, the current advice means that, although the Department is spending more than €500 million purchasing gas, electricity and other utilities for its clients, we have no right to get bulk discounts. I am confident that previous Ministers must have been aware of this feature of competition law, but we may need to change that law.
I must interrupt because the Deputy may want to ask a further question and we are running out of time.
I want to narrow it down.
Briefly, please.
According to the Minister, she has sought legal advice.
I am seeking it.
Yes, on her Department consulting providers to seek discounts. Is the Minister now saying she is unaware that the previous Minister and his officials were also seeking discounts, irrespective of the legal opinion? Despite the fact that this matter was referred to in the budget briefing, is she claiming that she is unaware of those negotiations and intentions? Did she disregard them when making last week's cut?
The Deputy will understand that I will not speak for the previous Minister or his opinions.
I am not asking the Minister to do that. The officials are the same.
For example, he had conversations with the late Minister for Finance regarding the family income supplement. However, nothing occurred as a consequence. I do not know what the previous Minister did——
He instructed his officials.
——but I was astonished upon arriving in the Department that, despite being a large bulk purchaser of utilities, we did not get discounts. I must seek legal advice to determine how to get better value through discounts for those who rely on the package of household benefits.
Employment Support Services
Mick Wallace
Question:19 Deputy Mick Wallace asked the Minister for Social Protection the criteria by which placements offered by organisations in the national internship scheme are judged appropriate and posted to the JobBridge website; her views on introducing a clear set of rules that must be adhered to by all organisations providing internships in order for them to avail of free labour; and if she will make a statement on the matter. [21818/11]
The objective of JobBridge, the national internship scheme, is to assist individuals to bridge the gap between unemployment and the world of work. It will provide those seeking employment with an opportunity to undertake a six or nine-month internship in a host organisation. Participants will benefit from learning new skills to complement their existing skills. Participation on the scheme will assist in breaking the cycle of unemployed people being unable to get a job without experience, either as new entrants to the labour market after education or training or as unemployed workers whose existing skills will not be appropriate to the types of jobs that will emerge in post-recession Ireland. On completing their internships, participants will have improved their prospects of securing employment.
A host organisation participating in JobBridge must be in a position to provide a substantial commitment to its intern to ensure the provision of a quality internship. To this end, a clear set of rules has been developed to protect the intern and safeguard JobBridge from potential abuse. In addition, potential host organisations can avail of the JobBridge guidelines, toolkit and other helpful facilities available on the JobBridge website.
In order for an application from a host organisation to be put up on the JobBridge site, it must meet a number of criteria. The placement must not allow the intern to work unsupervised, he or she should accrue significant experience throughout the entire placement and an internship will not be approved where, in the absence of the intern, the organisation would need to recruit an employee to carry out the tasks identified in the internship.
Following this application process, in order for an internship to commence, a standard internship agreement must be signed by the intern and the host organisation. It specifies a number of conditions, including the number of hours worked, rest breaks and so on. To ensure compliance with the scheme, the Department of Social Protection and the employment services division of FÁS, which is operating the scheme with my Department under the national employment and entitlements service, are monitoring internships to ensure they are of sufficient quality and that both host organisations and interns are abiding by the spirit and the rules of the scheme.
Additional information not given on the floor of the House.
In this regard, each host organisation will be required to submit monthly compliance reports verifying that the internship is proceeding as set out in the standard internship agreement. The employment services division of FÁS will also undertake random site visits of internships as part of this process. In addition, a whistleblowing feature has been introduced whereby any individual who suspects that an internship may be in breach of the scheme's criteria may contact the national call centre. All such claims will be investigated. The control mechanisms and conditions have been put in place to protect the integrity of the scheme and to ensure the intern and host organisation both benefit from the arrangement.
I thank the Minister or her reply. Will FÁS check to ensure job placements meet the criteria?
Yes.
I have a concern. I saw an advertisement on the Internet for a forklift driver who must have a forklift licence. Such a person would replace someone who should have a job. Given that the State is paying all the money, the employer is getting someone to drive his forklift for nothing. Another advertisement was for someone to help a gardener weed. That helper will replace a labourer and will not learn much from weeding flowers.
I must call the Minister.
The guidelines listed on the website state that the work environment should provide practical tasks to enable an individual to apply the particular skills he or she wishes to learn or enhance and the opportunity to obtain wider product or service knowledge in established networks for future employment. Should this not be a compulsory condition rather than a general guideline imposed on participating organisations, given that the entire scheme is paid for by the State?
I thank Deputy Wallace and other Deputies who are following the website and closely monitoring the positions on offer. Their efforts are important and I have a number of volunteers, departmental staff and people in the labour services side of FÁS doing likewise. Some 1,100 opportunities are available on the JobBridge website. Given their range, the Deputy will agree that many of them are good and there has been a significant number of expressions of interest in them from people wishing to become interns.
I recognise what the Deputy is saying. In some situations, people might try to migrate an ordinary job, one that is not an internship experience as most people would understand it, on to the website. I do not have the exact figures, but approximately 30 or 40 such advertisements have been taken down from the website. We must continually monitor the site to try to ensure the quality of job offerings.
The Deputy asked why the regulations were not more specific. We are trying to provide a general template for a range of different internship opportunities without being so restrictive as to prevent people, whatever their level of training or educational qualification, from taking up interesting internships. The people interested in being interns range from postgraduates to those who have completed various levels of FETAC training.
The Minister can see where I am coming from. There must be a follow-up. Unless the intern is picking up a skill, the scheme is being abused by employers to get cheap labour.
We could create a few internships monitoring the website.
The Department monitors the website, as do the people in FÁS. This is an important job.
Internationally, internships have a good history of filling in the gap for someone who has qualified at a certain level but in a recession cannot get a job because he does not have experience and cannot get experience because he cannot enter a job. We want to stop that catch-22 situation.
There is monitoring at each stage and, ultimately, when an intern is matched with a host employer, an agreement is made between the two of them, including an agreement to be monitored and to check, for instance, on the intern's side if he or she shows up, because he or she will get his or her social welfare and an extra €50 per week, and on the employer's side that the internship delivers what it said it would deliver. In addition, if interns have problems they can complain and if an employer abuses the internship scheme, he or she will not be granted further internships.
We are still at the start-up stage but I appreciate Deputies monitoring this. It is helpful because it is the first time we have done it and there has been a hugely positive response. I want this to work as well as possible.