I call Deputy Tom Hayes. I understand the Deputy is sharing time with Deputy Donohoe.
Social Welfare and Pensions Bill 2012: Second Stage (Resumed)
Question again proposed: "That the Bill be now read a Second Time."
I welcome the opportunity to contribute to the debate on the Social Welfare and Pensions Bill. This is one of the most important items of legislation to come before the House each year. I understand the importance of allowing Members to have their say on what is happening in the area of social welfare, especially in the context of protecting the more vulnerable in society, such as pensioners and others. In light of the difficult times in which we live, prior to the budget everyone was concerned that the Government, which is under severe pressure, would be in a position to protect the old, the vulnerable and the many people who are in receipt of social welfare benefits or pensions. The Government faced a particular challenge in coming up with ways of achieving its goal in this regard, namely, maintaining existing social welfare rates.
As it introduces austerity measures to try to reduce the budget deficit in the coming years, the Government is going to face another major challenge. I am pleased the Minister is present because I wish to put it to her that when difficulties arise in the period ahead in the context of trying to find money to pay pensioners, there is one area on which she must focus. This area has been neglected by successive Ministers but there has never been a more opportune time to take action in respect of it. I refer, of course, to social welfare fraud. I represent a rural constituency and I have heard some unbelievable stories about fraud of this kind. The Minister has a great opportunity - probably better than those which presented themselves to any of her predecessors - to take up the challenge in this regard, particularly as the people are on her side.
Social welfare fraud is having a major effect on the economy. I have been informed by people who want to obtain legitimate employment or to establish businesses in the area of construction or whatever that they cannot compete with those who are operating in the black economy. It is not popular for someone who represents a rural constituency, where a small and open local economy exists and where people are used to getting work done for the lowest price, to say this. However, the truth is that the Minister must tackle the problem of social welfare fraud because it is creating major difficulties for those who want to establish businesses and create jobs.
I must be careful with regard to how I frame my next point. I understand that non-nationals are engaging in major abuses of the social welfare system, particularly those who fly into the country to claim benefits and who then fly out again. The Minister needs to put together a team of investigators to examine the position in this regard. We will never have enough money to pay benefits to genuine claimants if those who are engaging in fraud are not dealt with. I do not wish to tar all of those to whom I refer with the same brush. However, I have been informed about people who are working in other countries and who fly into Ireland to claim social welfare benefits. Will the Minister indicate if the stories in this regard are true? We have a responsibility to ensure fraud of this nature does not occur. If necessary, people should be obliged to sign on three or four times each week to bring this type of fraud to an end.
There has been much discussion in this House and elsewhere with regard to wrongdoing in society. Those who are fraudulently claiming social welfare benefits are committing a wrong against society. I ask that in the coming months the Minister give consideration to the possibility of investigating social welfare fraud. If it proves necessary to appoint people from other parts of the public service to the investigation teams to which I refer, this should be done. In that context, I understand the type of pressure under which the staff of the Department of Social Protection are working at present.
Action must be taken to make it easier for those who are unemployed to take up training courses and return to mainstream employment. I understand many businesses are prepared to take people on for two or three days each week. There is no simple way of encouraging someone to work for two or three days a week, for ten days a month or whatever. However, a large number of employers have shown a willingness to take on people who are currently on the live register on a short-term basis. We could make matters much easier in this regard and thereby create benefits for the tourism industry, the agriculture industry and those whose businesses are seasonal in nature. When businesses of the sort I have highlighted come under pressure at certain times each year, they should be able to liaise with their local social welfare offices or use the Internet to retain the services of individuals who are prepared to work. A glorious opportunity exists to encourage even greater co-operation on this matter and employers' groups would certainly be prepared to put forward ideas in respect of it. The Minister must take up the challenge that exists in this regard.
I welcome the Minister and I thank Deputy Tom Hayes for sharing time. I wish to touch on a number of different themes in respect of the Bill and to make a number of points to the Minister with regard to the social welfare system and the way it is administered. I will focus on the Bill in the first instance, before proceeding to comment on some of the broader matters about which I am concerned. I will begin with the changes announced by the Minister for the payments available to lone parents and their children, and specifically the time at which they cease. As the Minister knows well, this is a very sensitive area to discuss but it is crucial to do so. It is not the ambition of anybody in this House to deepen a person's poverty or leave people in a position where they feel they cannot look after their children. We do not want to form a dilemma where people may have to take up a job that might not pay well - and will certainly not do so after tax is taken - and have to pay child care costs if they can find such a service. More often than not people would have to turn down job offers because the preferred child care facilities are unavailable. It is a very sensitive and emotive topic. There are a number of reasons for supporting the Minister's actions and we will not make the final change to the threshold to seven years of age until there is an array of child care options available to people that the State can afford.
I will discuss the trends for the number of lone parent payments paid out in comparison to other social welfare payments within the system. The Oireachtas Library and Research Service has produced a very telling table detailing the number of different people in receipt of jobseeker's allowance and jobseeker's benefit, as well as lone parent payments, over certain years. Over the past 12 or 13 years the number of people in receipt of jobseeker's allowance or benefit has varied by year in response to what happens in the economy. As we moved through the 1990s to the early part of this century the number of people in receipt of those allowances or benefits was quite low and became very low before it increased sharply. It is telling that the number of people in receipt of different lone parent allowances was relatively unchanged across the period, regardless of the different job opportunities which existed in the economy, the conditions within the labour market or other factors.
The sensitivity of that payment and the people in receipt of it in response to what happened in the rest of the economy can be compared to the different welfare payments, and it is very low. That should provide an insight on the way the payment is currently being handled and how it was structured in the past. It is not working in the way everybody would want, given that payments - especially like this - are more often than not intended to allow people to exit the payment system at some point if jobs or other facilities become available. That has not happened with this payment so we should examine its operation.
I met different groups of people campaigning against the changes due to be made and became aware of the amount of stigma and negative social comment evidenced with that particular payment. I am concerned about this, as are the people in receipt of the payment. Speaking to people in the community and raising the issue of welfare fraud, a number of different areas can be given as an example. Deputy Tom Hayes mentioned some of them. More often than not the availability of the lone parent allowance and the way in which people access it is raised. I know the vast majority of people in receipt of this payment meet the conditions and need it because of the circumstances of their lives. I am also aware of a study by the Minister when she prepared the fraud action plan. At that time a sample of different social welfare payments was investigated to ensure people in receipt of the payments met the required conditions, and just under one in three people in receipt of that payment did not meet the criteria. That is unfair on the people who need the payment and the vast majority who are in genuine receipt of it. It is also unfair on the people paying for it. The kind of changes sought by the Minister, although difficult, should be supported in order to tackle issues that have been left alone for so long.
I will make specific points about the Bill. There are provisions in the Bill relating to direct benefit schemes which are welcomed by people in the industry. There are also absent provisions relating to direct benefit schemes, and over time if a lack of payments means a scheme is not viable, nearly all the funding currently available will be left to people in receipt of direct benefit pensions. That means people who are due to receive the payment at a point in the future will be left out. It seems the scales in this regard are weighted in favour of people receiving a pension as opposed to people who may receive the pension either soon or at a further point in the future. I would like to see that addressed as the Bill moves through the House or in another piece of social welfare legislation.
Increased powers will be made available for social welfare inspectors dealing with rent supplement. I am absolutely certain this is a significant source of fraud within the system and, more worryingly, I am certain this is a source of exploitation. Tenants, particularly people in vulnerable positions, may be unsure of what homes they may be able to secure in the future and end up in substandard rental accommodation while in receipt of rent supplement from the State. It is a significant collective cost for the taxpayer and these people are being exploited. Unfortunately, I have come across examples of this in my constituency. People are living in unacceptable accommodation but do not feel in a position to bargain as they are in receipt of rent supplement. This Bill provides increased power and competence to social welfare inspectors so they can consider how the payment is being made, which is welcome. I would like to see this power deployed in conjunction with local authorities so when people from the authorities are trying to ensure that private rented accommodation meets the criteria laid down in law, it can dovetail with the power required by social welfare inspectors who check the payment of rent supplement.
There is also the issue of social welfare benefits for people who were formerly self-employed. People who worked in construction now fall into three unfortunate groups; they are people who have left the country, those who are hanging on by their fingertips and those who are unemployed. As a result of the system of PRSI payments, those unemployed people may not be able to access a jobseeker payment, and if they can, it may be a greatly reduced payment compared to that received by many others. When the people were working in the economy, they did not believe they could find themselves in such a position. Many of them did not understand that if they became unemployed, the level of welfare benefit they would receive would be far lower than that received by people who were not self-employed.
I know the Minister has indicated she will examine the matter during her term in office. We must consider how to overhaul the PRSI system so people who are self-employed can, first, understand the implications of becoming unemployed. We should also provide more options to allow people to make payments into the system in order that those who subsequently find themselves unemployed are able to access higher welfare payments than are available at present and are in a position to meet their needs.
A debate is taking place on the implementation of a proposal for a single working age payment. The Minister recently convened a seminar in her Department on the issue. It was also the subject of a recent report by the Joint Committee on Jobs, Social Protection and Education, for which Deputy Ó Snodaigh acted as rapporteur. I had an opportunity to read the committee's excellent report, which proposes moving from a social welfare system with many different payments, each of which has different conditions attached, towards one in which a much smaller number of payments would be made available at different points in people's lives, depending on age and needs. The Government is committed to carrying out the necessary review as part of the memorandum of understanding. Implementation of this proposal would make a significant improvement to the current system.
Many of those who are concerned about the proposed reform of the social welfare system argue it should not be undertaken until the labour market improves significantly and people can easily find a job and thus leave the social welfare system. I urge the Minister to use the coming period to plan for the implementation of such a system in future. Many of the difficulties we currently face, for example, the poverty trap, are the very problems people previously thought we would never face again. These issues cropped up in books on the social welfare system written in the 1990s, but until recently we believed we had put them behind us. Structural change to the social welfare system is needed if we are to ensure these problems do not recur. This is a highly complex task and the debate initiated by the Minister and joint committee is very welcome for that reason. I hope it will be followed by a period of planning which will enable us to identify what needs to be changed in the system and to build on some of the improvements being made at present.
I am glad to have an opportunity to speak on the Social Welfare and Pensions Bill 2012. I am surprised by the changes the Minister has made to the social welfare system because they appear to amount to a concerted attack on women in particular. An examination of her proposals shows the change to the averaging rule has made the position of many women much worse. I refer to women who worked for a period before leaving the workforce to rear children and returned to employment subsequently. The Minister's change will reduce payments for many such women because they will have a contribution average lower than 48 weeks. This is a surprising change because if I were to check the speeches the Minister made while in opposition, I suspect I will find she argued the social welfare code penalised women for being forced out of the workforce. I have no doubt she recognises, as I did while Minister for Social Protection, that while the system was correctly based on averages in its early years, it continued to be based on averages for much too long and became inherently unfair. I could provide her with details of cases which support that view. For example, I encountered a case of a person who, having worked for one week when she was 22 years old, left the workforce and subsequently returned to employment many years later. Although she accrued plenty of stamps and contribution years, her contribution average was approximately 24 because of the week she had worked when she was much younger. If she had a right to discard that week, she would have qualified for a full pension.
The previous Government had started to implement a decision to move to a total contribution system. This would have meant a person's total contributions amounting to 30 years would receive a full pension irrespective of the average contribution figure. While the averaging system was not great when my party was in power, at least it provided that if a person's contribution average fell below 48, his or her payment would not fall over a cliff, so to speak. The Minister's decision to penalise those who left the workforce to do the important job of caring for children or elderly people before returning to employment subsequently predominantly affects women, although I have encountered cases of men who were caught by this anomaly.
The Minister then moved on to lone parents. I believe 90% of one-parent families are headed by women. While many people believe single parents make up a homogenous group, they include people whose marriages have broken down, people who never married and many others. Single parents are a wide-ranging group of people. All the surveys indicate they experience the greatest levels of poverty and disadvantage. For the short time I was Minister for Social Protection, an informal group consisting of pensioners, lone parents and others used to meet in the Department every six to eight weeks. Some well-heeled pensioners, including people who had incomes of €70,000, €80,000 and €100,000 with contributory and private pensions to match, are good at making a great deal of noise. I used to impress on the pensioners in the group that statistics show lone parents are a disadvantaged group.
When I joined the Department there was considerable evidence that creating a distance between lone parents and the workforce was not good in the long term. I was also swayed by the arguments made by my predecessor and departmental officials that the social welfare system was deficient in not requiring those in receipt of one-parent family allowance to engage with the labour market until their youngest child was 22 years old. The evidence showed this was not the best system, although changing it would require putting supports in place. I recall the Labour Party being highly critical of the measures I introduced to change the system. I also remember pointing out that under the old system, a lone parent participating in second chance education could find herself in the same university class as her child. The idea a person would be required to baby sit a child of 20 or 21 years did not stand up to logic. For this reason, I was in the process of progressively reducing the age at which the lone parent payment ceased. My proposal to reduce the age to 13 years was sharply criticised by the then Labour Party spokesperson on social welfare. During the Committee Stage debate on the relevant social welfare Bill I listened carefully to the then spokesperson and later double-checked the position to ascertain the oldest age at which children move from primary school to secondary school. I found that if I were to raise the proposed age from 13 to 14 years, I would guarantee that every child would have jumped the bridge into secondary school where the school day is much longer. On foot of this finding, I amended the Bill on Report Stage to make this change.
As Minister, I identified the four levels of child care support needed. It is not needed for students who have completed the leaving certificate. Although young people of that age need contact with their parents, they do not need a parent to be home at 4.30 p.m. or 5 p.m., and the chances are young people in third level education would not have returned home at that time. While it is important parents are available when children are in secondary school, informal arrangements can be made at modest cost for children to be cared for from the time they come home from school until the time a parent returns from work. However, I did promise that as we were introducing this over a number of years, I would act in good faith as long as I was there, but there had to be child supports and after school arrangements made, particularly in areas where there was a high concentration of lone parents.
When we look at the care that a child needs when in primary school and when we look at the time at which primary schools close, we come to a completely higher level of support. The Minister suddenly decides in the budget, at a time when the jobs are not there anyway, that we must have a whole lot of one-parent allowance recipients on the dole queue, even if they do not wish to take up employment and they want to be full-time parents. I think that is regressive. I do not believe that the Minister has the child care arrangements in place to cover this. Child care costs are quite expensive, so this is negative.
It is interesting that when I spoke to the various representative organisations about the change I made, I think it would be fair to say that there was a certain amount of concern. Some of them had been supportive while some of them were concerned, but they basically agreed that it was workable in the timescale I had outlined, as long as the Department honoured the commitment in respect of after school care and so on. It is fair to say that the reaction of these bodies is totally different this time, and a new body, SPARK, has been set up. That group would share my concerns that the child care arrangements are not in place at an affordable cost to make this possible. I think the Minister will be well served by withdrawing this proposal and bringing it back when she has got the agreement of the one-parent family organisations on child costs.
It would be interesting to hear what a court would declare if somebody challenged the constitutionality of this on the basis of the provision in the Constitution in respect of women not being forced by economic necessity to engage in labour outside of the home, to the detriment of their children. It is a provision in the Constitution which I would like to see updated to state "parents" rather than women, but it is one which, in spite of the derision in which it is held by many, could come to the aid of women who feel this is exactly what the Minister is trying to do. I would be interested to see what the Supreme Court would make of a case brought by a parent of children aged seven, eight and 12 and who is being forced to take up employment.
We then have to add the Minister's decision on the CE schemes to all of this. It is fair to say that in an objective world, we should never have given the two child dependant allowances. It should never have happened. I am sure at the time there was probably a big row and I have no doubt the Labour Party Members were roaring at us that we were in some way being unfair to one-parent families in the CE schemes, and the double allowance came in. I often believe that if even a thing has a flaw, it is like giving a child ice cream and then suddenly taking it away. If the child was never given the ice cream in the first place, he might not miss it, but he will sure miss it if it is given to him and then taken away. Many people had come to depend on this level of payment and suddenly swiping €29.80 per child per week just like that was callous and disregarding. The Minister then moved and said that those with a disability and one-parent families could not claim the part social welfare payment and the full CE payment. There is a lot of logic to that, except we know that again we do not have the provisions yet put in place to facilitate the one-parent family to go on the CE schemes due to the child care costs. While it is a perfectly rational decision for children over 14 and 15 and there is no significant child care costs, especially on a 19 and a half hour week or a week on and week off basis, it is completely different when young children are involved. Since the one-parent family payment will now be confined to those with children under seven, this was an unnecessary move because the accessibility of one-parent families to the double payment would have been seriously curtailed in its own right, and effectively over time would only have been available where children were under seven and where there were significant child care costs.
It seems the Minister is very determined to make targeted changes against women. I might also say that she joined the rest of her colleagues in the targeting of rural Ireland when she changed the means disregard for farm assist from 70% to 85%. Ministers tell us - all the experts told us too - that if the tax rate is raised to over 60% or 65%, it becomes a complete disincentive. Under farm assist and most of these means tested schemes, the disincentive level is now 85%. It used to be 70%. In other words, it is effectively a tax. People say it is social welfare, but it is the effective thing. The amount taken out of every euro was 70% and now it is 85%. I did not understand any of this until I went to rural Ireland, and I was shocked to find that when I went there, they took 100% of everything earned and then they wondered why there was no incentive for a person to improve his farming situation. The Minister is now going back to this Dickensian view of social welfare and believes that it is quite right for her to take 85 cent out of every euro earned and that there is still some incentive to get involved in self-employment.
A couple came into me recently and the husband was self-employed. The Minister's good officials will know how much I argued against all of this stuff in my short time in the Department, and regretted that I was not there for a longer period to do more about it. Every euro he earned from self-employment will take a euro out of his jobseeker's allowance. However, if he or his wife was in employment, the Department would disregard the first €60 and take 60% of the balance. What have we against self-employment in this country? What is our hatred of self-employment that for one person, we give some kind of a break - although in reality it is high taxation - but for the other, we claw back a euro from every euro?
In the case of the CE schemes, it is ironic that the rug of the disability payment was pulled at a time when the partial capacity allowance was being brought in, and I understand the Minister is at last progressing on that. The idea was that people in receipt of an invalidity pension would be measured for their disability, as it were, and allowed keep a proportion of the payment, depending on the severity of their disability, and to work in the commercial economy. While that is being done for people who have a job, manage to make contributions and be entitled to a non-means tested payment, the exact opposite is being done for people with disabilities who never had the opportunity to get a full-term commercial job and have depended on schemes. They are being told they cannot keep any of their disablement payment even though they are working for the rest of the payment for a very low wage and there are also other costs, such as the cost of getting to and from work if they do not own their own transport.
I would love to have an opportunity to talk about pensions. I want to ask the Minister what happened to the sovereign bonds and-----
That is a question we are all asking.
-----the idea of having Irish pension funds invested in Irish sovereign bonds instead of invested at a much lower and inferior rate in German bonds. Since becoming Minister, Deputy Burton will have found that a great deal of the money in the banks derives from pensions, life insurance and bonds and that it was not as simple as was made out by the Government parties in the old days to burn bondholders.
On the matter of the mortgage interest supplement, will the Minister abolish the 30-hour rule? It is ridiculous that a person is disqualified from mortgage interest supplement purely on the basis that the person is one of a couple or an individual who works a number of hours even if the person's income and financial situation warrants the payment. Will the Minister say to the subprime lenders, to Permanent TSB and so on, that she will pay mortgage interest supplement on an interest only basis directly to them on behalf of the customer only if they charge or apply a low interest rate and that she will not be willing to pay it if inflated interest rates are charged. That would save her a great deal of money that she could use to good effect.
I would like to call a quorum.
Notice taken that 20 Members were not present; House counted and 20 Members being present,
The next speaker is Deputy Catherine Byrne and I understand the Deputy is sharing her time.
I am sharing time with Deputies John Paul Phelan and Tom Barry.
I welcome the Bill and congratulate the Minister on taking the lead on this issue and making changes to the social welfare system, which is in need of mindful and urgent reform. This reform is just the first steps on the road to recovery for social welfare. Many more changes are needed to make the system work better and to support those people who need financial supports to survive on a day to day basis.
I will not say what I thought of the input from the previous Deputy across the floor of the Chamber, but the previous Government has left us with a legacy of reckless overspending.
Its electioneering tactics saw social welfare payments and benefits increased significantly to gain public support, with no thought for the future and how these massive bills would be paid for by the State. One such payment was the €1,000 early childhood payment, which was withdrawn after three years as it was simply not sustainable in the long term. Now, unfortunately, many other payments are becoming more and more unsustainable.
Our annual social welfare budget is currently approximately €21 billion, and savings have to be found, as this figure will only grow, especially given our ageing population and the increasing number of people who will draw the State pension. Compared with the population in other countries, the Irish social welfare system is generous. Our old age pension, jobseeker's payments and child benefit payments are considerable in comparison to those of other first world countries such as those of our nearest neighbour, the United Kingdom. Many people in low income jobs compare their financial situations to those of their neighbours who are not working and in receipt of social welfare. The people in low income jobs feel aggrieved that they are taking home the same - in some cases even less - amount of money as their neighbours who are not working. This is why it is important to promote work and above all non-dependency on social welfare. The majority of people in this country want to work. They have a genuine work ethic and do not want to be dependent on benefits. We need to work to break the cycle of dependency and offer people a way forward towards becoming financially independent if they are capable.
I welcome the reform of the one parent family payment and the restructuring of age limits. This is a difficult but necessary decision, and it will bring us into line with other countries. The one-parent family payment cost the state €1.11 billion last year and we cannot afford this bill in future. We have been fortunate in this country; up to now, lone parents received a payment for their child up to the age of 18, or 22 if they were in full-time education. We seem to be the exception as the situation in other countries is very different. In Britain and Northern Ireland, lone parents are obliged to seek work when their youngest child turns seven. Our friends in Sinn Féin in Northern Ireland support this. It is important that these measures are phased in over time and that existing recipients will not be affected until 2013.
I also agree with the Minister that other supports must be in place to allow this to happen, such as allowing more people to go on CE schemes, to have proper training places and, above all, proper child care facilities. Many single parents were very young when they became parents, and some had to give up further education and training opportunities to mind their child. It is important that these parents are now supported to return to education or re-enter the workforce. It is also important that they are encouraged to reach their potential and enjoy new opportunities which may have seemed beyond their reach in the past.
This will also have a positive influence on their children in the long run. That is why the Minister for Social Protection has introduced new schemes such as Pathways to Work, JobBridge and plans to expand CE schemes. We do not want to see people living in poverty and we are committed to supporting those who most need help from the State. Parents whose entitlements to one-parent family payment cease can apply for jobseeker's allowance. They many also be entitled to family income supplement or back to education allowance.
I also welcome the special provisions for people in receipt of domiciliary care allowance, that the one-parent family payment will remain until the youngest child reaches 16 years, after which the child will receive a payment in his or her own right. For those recently bereaved, the one-parent family payment will be paid for two years or until the youngest child is 18.
There has been much attention in the media recently surrounding the exceptional needs payments paid out by community welfare officers. It should be noted that the majority of these payments are made in the greater Dublin area. In my own constituency of Dublin South Central, across three community welfare areas, €1.9 million was given out in exceptional needs payments in the first six months of 2011 by the Department of Social Protection. This figure included €22,617 on buggies and prams, €211,193 on communion and confirmation and €211,193 on adult clothing. I reared five children and I used the same pram and the same cot for all five of them. I do not understand how in Dublin South Central, the constituency with the largest number of single parent families, every time a new baby is born, a new pram is bought. I accept that people often need a helping hand when unexpected expenses arise but the exceptional needs payments are now seen by many as simply another allowance. This is where change and reform is needed.
I also support the idea of a single social welfare payment, which the Minister has already spoken about, that would target the individual needs of the unemployed and those in financial distress. I am fully aware of the difficulties facing many people in my own constituency because of the downturn in the economy. Many have huge personal debt because they have lost their jobs or are in negative equity. For these people, this is their first encounter with the social welfare system and they want to get out of it as soon as they can. We must support these people and help them get back on their feet. The bottom line is that social welfare is not designed as a long-term solution, except in a small number of cases, where people are not capable of work or training, and have no other source of income. We need to continue to reform the system and not commit another generation of young people to a life of dependency.
I recently made representations to the city council for a number of people I have on a housing list. I noted to my horror that 37 flats are available in a flat complex in the inner city. The housing officer told me the flats are ready to go but no one will move into them. I am continuously meeting people at my clinics who are looking for houses but who will not move into flats. I am regularly meeting young parents with up to four children who do not want to be housed in a flat, who only want to be housed in a house. Many young people where I live, however, bought properties that are now worth less than half what they paid. They are disillusioned with the social welfare situation where they are in negative equity while someone they went to school with has a house with a very small rent. This must be addressed.
I have worked all my life in my parish and my community and I constantly fear the young people I meet on a daily basis will see being a single parent as the only opportunity they have when they finish school. These first steps to reform the welfare system should be welcomed by everyone. We must ensure the poor and those most in need of help are looked after.
I welcome the chance to speak on the Social Welfare and Pensions Bill 2012. The major issues to be dealt with are the one-parent family payment and the phased reduction of the age limit of the youngest child from 14 to seven for the purposes of the entitlement. The Bill also extends the list of bodies authorised to use the personal public service numbers. The rest of the Bill provides for amendments to the Pensions Act 1990. The changes require defined benefit pension schemes to hold a risk reserve, which is only sensible, to meet funding requirements in future.
The rule on the lone parent allowance scheme is quite clear: the applicant must not be living with a spouse, a civil partner or cohabiting. This is where it all breaks down. The cohabiting element of this has been forgotten. This part of the scheme is being abused left, right and centre. Unfortunately it has become difficult to tease out who is genuine and who is not. Once a person gets the entitlement, a suite of allowances with a financial value are also provided. Apart from the €188 per week and €29.80 per qualifying child, there is the fuel allowance, rent supplement, medical card, family income supplement, back to education allowance and a half a dozen more.
Essentially, however, the burden of proof needs to be moved. I have spoken with social welfare officers and they are very frustrated by this. They know people are not adhering to the rules of the scheme but they cannot prove it because it is very difficult to prove. They need more people to tackle this situation and I am glad the Bill will give them more powers.
I do not believe the report that stated fraud levels were between 2% and 4% as I believe they are much higher than that.
That is not to take away from the genuine claimant who needs social welfare and for whom it is designed, but to identify these people. The people who are not complying with the rules of the scheme are not only disenfranchising the taxpayer but also the people who actually need this money. Disincentives to fraud will also help to reduce the long waiting lists. The people who need to get onto social welfare schemes are being hindered by the amount of incorrect applications.
Social welfare is not meant to be a disincentive to work. It is meant to tide people over until they get into the workforce again. The problem, however, is that there has not been an exit strategy for them. We know all about getting onto social welfare but I do not see a great deal being written about getting off it. It is desperate, because when people get into the routine of taking these payments they become entitlements. Their mindset is that they are entitled to the payment. However, we are also entitled to get up and work. This country needs people to work at present so we need to work our way out of this system. One thing is certain - we will not get out of this economic mess by sitting down. The entire system needs to change and people must comply with the schemes as they were originally drafted.
The jobseeker's benefit, as I have seen in my work, does not help people who want to get off it fast for periodical work. If there is a job available for somebody for four weeks and if it takes eight weeks to get back on the benefit, it will not be worthwhile for the person to leave the social welfare system. That is not the fault of the recipient. We need to introduce measures whereby people can sign on and sign off quickly. In this age of computers and information technology, it should be quite simple. It is an absolute disgrace that this is not allowed because people want to get back to work. The rules of the scheme state that one must be available and genuinely, actively looking for work. Some people are not genuinely seeking work and they should be removed from the system. As with the housing system, if one is offered work a certain number of times and one refuses it, one should be told one's payments will reduce. I find myself doing all sorts of work in my job and that is fine. One just adapts to it.
What really got me thinking about this was an e-mail I received from a constituent. It struck home. Her husband is working and getting a reasonably good wage. They have quite a large mortgage and as they cannot afford a child-minder she is at home minding her children, and is delighted to do it. She says in the e-mail that they did all the right and sensible things: "We got married, bought a house, had beautiful children, and thank God for that, but we are being punished." She concludes by saying: "We were standing outside our house the other day and there is a family in the house across the road. They are on social welfare and the Government is paying for them to live in the same house as we have. Their medical expenses are paid and they have all the other benefits. We thought that if we got separated and I got a house with the children, how much better off would we be? How sad is that?" The system is also hurting people who genuinely wish to comply, be good citizens, to work hard and stick with it, because they see it as a two tier society.
Our taxes are funding the social welfare scheme, and it is fundamental that our taxes be spent properly. Most people would agree with that. With regard to the mortgage problems I mentioned, it is worth noting that the Keane report has done considerable work on mortgages. I have spent quite an amount of time on this with our pillar banks and solutions will be forthcoming, possibly as early as this summer, for people in arrears or on interest-only payments or in pre-arrears. Pre-arrears was a new word for me. It means they are struggling to meet the payments and are barely hanging on. Hopefully, there will be some interesting developments in this area in the next few months which will help many people.
I smiled when I heard Deputy Catherine Byrne refer to the new buggies being distributed and so forth. My children range in age from 12 to three years, which is a number of years, but we have had the same buggy for all of them. In fact, the tyres on it are worn. The last boy is three years old so he will no longer need it. I doubt that many people on social welfare would have buggy tyres as worn as ours. It is because we do not like waste; I cannot stand waste and have never put up with it. However, when something is given and no value is put on it, waste is a consequence.
On the issue of sharing PPS numbers, this is absolutely correct and should always have been the case. I would go further and suggest that we should consider the use of biometric data. If one has nothing to hide, one should have no worries about this. Biometric authentication techniques such as retinal scanning is used by many employers on their employees. It would ensure that people claiming social welfare are the people who should be claiming it. It is a way of verifying their identity.
When I first canvassed for election to the council a number of years ago, I did not know a great deal about the social welfare system. It was late at night when we reached a house for our last call. We were met by a lovely girl who had two children. She told me she wanted the house across the road. When I asked her what she meant, she told me that she had met somebody and wanted to increase the size of her family but the house was not big enough. "I want that one across the road", she said. She went on to tell me that the plumber had not called to fix the shower even though it had been damaged for quite some time. The conversation went on for quite some time. The girl who was canvassing with me had bought a house in the same estate and was listening attentively. However, it turned out that the person we were talking to was getting married, which was fair enough, but they were off to Las Vegas for it. I have never been to America. Social welfare schemes are not meant to pay for flights to Las Vegas.
In conclusion, this Government is doing much good work in this area. The Pathways to Work document is a fine piece of work while the Action Plan for Jobs 2012 is a seminal document. In time, as it works its way through each year, people will realise that this Government is really putting jobs at the centre of everything. If we can create enough jobs and work towards growth, we will be able to tackle many of the problems in social welfare along the way. We should not forget the entrepreneurs whose businesses fail. They have nothing when they fail; there is no handout for them. They are broke. We must address this issue. If we wish to encourage new business and entrepreneurial spirit, we must ensure there is a safety net for those people. They are good citizens as well.
I support the Bill. It opens up a very sensitive area in our society but one that must be discussed thoroughly and fairly.
I welcome the opportunity to speak on this important issue. Sinn Féin will oppose the Social Welfare and Pensions Bill. There are two parts to the Bill, one of which deals with pensions. Overall, that part would be welcome but the fact that its provisions are tied to changes in the Bill to the one parent family payment means my party will oppose it.
I welcome the announcement by the Minister, Deputy Burton, that seven years of age is far too low to cut the payment. However, what age does the Minister consider acceptable for a child not to have access to adequate child care? If the Minister believes this, why does the provision still remain in section 4? The simple solution is to remove it with immediate effect. This morning the Tánaiste spoke about reform of the social welfare system. This Bill is not about reform. It simply seeks to attack not only lone parents but also the children of lone parents.
There appears to be some confusion and inconsistency within the Labour Party. Less than two years ago, the Fianna Fáil Government reduced the cut-off age for lone parent payments to 14 years. Along with Sinn Féin, the Labour Party objected to this, on the grounds that the necessary supports and services were not in place. Deputy Róisín Shortall outlined the Labour Party position:
The problem is that the Bill is not about activation. It is about cutbacks and the optics of doing something about long-term welfare recipients. How can one call it activation when, in the first instance, there are so few jobs of any description available. That is the big issue. The jobs just aren't there.
I find myself in agreement with most of what Deputy Shortall had to say on that occasion of the introduction of the legislation by the Fianna Fáil-Green Party Government. That reality has not changed, but now a Labour Party Minister is dropping the cut-off age further to just seven years. Where do they think these seven year olds will go after school? Out-of-school child care provision is practically non-existent.
We are emerging from a decade of child protection scandals but the Government parties have learnt little. The Government clearly believes that a child does not need parental care and supervision beyond the age of seven. The arguments being made are that this will cut the expense of the social welfare bill. Realistically, how will it do this? These measures will ensure that people who have part-time jobs will be forced into full-time employment. Unfortunately, these full-time jobs do not exist. There are not 90,000 full-time jobs available over the next three years. Lone parents who are now in part-time employment want to ensure they remain there. They want to support their families as best they can. They want to both earn and learn.
I have been appalled by the comment that becoming a lone parent is a lifestyle choice. I assure the Minister and others that becoming a lone parent is not a lifestyle choice. More than 35% of lone parents are in that situation due to the fact that their relationship or marriage has broken down. This country, unlike others, does not impose a statutory maintenance system. This is a huge mistake which needs to be addressed immediately. There is legislation in place that would ensure that the maintenance recovery unit could collect money and that people who abandon their children would be liable to pay their way. This, of course, has not been done. Instead, the Government has taken the decision to attack lone parents and their children.
The Bill follows in the wake of the 2012 budget which was a targeted attack on lone parents. It made cuts to their earnings disregards, payments while on CE schemes and qualified child payments. The cuts to back-to-school allowance, rent supplement and fuel allowance also have a disproportionate impact on the children of lone parents.
A 2011 report published by the UCD school of social justice demonstrates that even during the so-called boom years after-school child care provision remained sparse. The report states that between 2002 and 2007 the proportion of households using non-parental child care for pre-school children increased from 42% to 48% whereas the comparable proportion for primary school children remained unchanged at 25%. If anything, as the recession deepens the availability and affordability of these services is getting worse, not better.
The Government is continuing the policies and ideals of the previous Fianna Fáil-Green Party Government. I expected more from Labour. These attacks on lone parents are due to the fact the Government presumes they will not fight back. I can assure the Minister that she is wrong. The Bill reveals the attitude of the Government to the most vulnerable and least well off in our society. Reports have recognised, time after time, that lone parents are the most disadvantaged in our society. It is a disgrace that the Government continues to target them.
Likewise, we are resolutely opposed to the cut to jobseeker's benefit contained in the Bill. The affected jobseekers have had their hours reduced as a consequence of the recession but the Minister is blaming them for their predicament. She claims they are nervous about entering the world of full-time work, despite economists of all colours unanimously agreeing that any growth in full-time job opportunities is a long way off.
It is not good enough for the Minister to say she will not proceed with this provision if she does not get a credible and bankable commitment from the Government on the delivery of such a service. I see no sunset clause in the Bill, because there is none. There is nothing to suggest the Minister will not proceed with these changes. Unless the Minister can guarantee that such supports are in place she should not proceed with the relevant provisions in any shape or form.
I am disappointed by some of the inflammatory language used on both sides of the House. Anyone who would suggest that those on social welfare benefit are in receipt of a suite of allowances should check his or her language. Anyone who recommends the introduction of biometric scanning should have that costed. We have 450,000 people on the live register and I would like to see how much biometric scanning of that number of people would cost and where we would find the finance for it. This is a particularly insulting suggestion for those who are going through the turmoil of unemployment. To suggest that there are not enough activation measures is to assume the Pathways to Work document was never launched and is not in existence.
Some of the challenges in the social welfare budget are stark. While 450,000 people now depend on social welfare, the Minister was required to take more than €300 million out of the social welfare budget. She has achieved a minor miracle in taking that amount of money out of the social welfare budget while keeping the basic rate of social welfare untouched.
Further reforms will be needed. We will shortly be looking at next year's budget and at how we can target child benefit in order to focus on lower income families. We must tackle the issues of employer's sick pay, social welfare for the self-employed and other initiatives.
I congratulate the groups that have campaigned on the lone parents issue in the last number of months. I met some of them yesterday. It is encouraging that a group of people who were once so derided and were the recipients of politicians' scorn are now so articulate and empowered to fight their corner. Whenever I raised this issue with the Minister in the last number of months, as Labour Deputies such as Deputy Ciara Conway and others have also done, I have felt nothing but a sense of compassion and respect from the Minister.
My colleague, Councillor Jane Horgan-Jones, proposed a motion on this issue on behalf of the Dublin North-Central constituency council at the Labour Party Conference last weekend. The motion pointed out that 18% of all families are now lone parent families, that lone parents are more likely than any other social group to be living in consistent poverty and that children living in lone parent families are experiencing deprivation and poverty more than any other demographic. The motion asked the conference to recognise that when the impact of taxes, benefits and child care costs are combined the financial incentive for lone parents with young children to take up employment is lower in Ireland than in any other OECD country. The motion also asked the conference to note that lone parent families are headed predominantly, although not exclusively, by women, and that this issue is therefore intrinsically linked to the struggle for gender equality in society. The motion asked the conference to recognise that the single biggest barrier to the labour market for lone parents is the availability and affordability of child care, as mentioned in the 2009 ESRI report on female participation in the Irish labour market. The motion asked the conference to recognise that lone parents of both genders often experience difficulty in accessing work, education and training opportunities because of a lack of good quality affordable child care and after-school care. The Dublin North-Central constituency council was asking the Minister to refrain from imposing any further cuts to benefits for lone parent families and to address the issue of child care. I am glad to say that is exactly what she has done.
Many of those who have campaigned against this measure have said seven years is too young. The Minister agrees with that. She has said she will proceed with the measure to reduce the upper age limit to seven years only in the event that a credible pathway to the delivery of such a system of child care is in place by the end of this year. If that is not forthcoming the measure will not proceed. This is a Minister who listens and who understands the social welfare system and the nature of unemployment and child poverty.
All sides of this Parliament must launch a war on child poverty. The one issue we have consistently failed to tackle effectively in recent years is creeping child poverty, which is deepening and getting worse. It is something on which we must launch a war. The Minister understands the position, which is why I commend her for her clarification on payments to lone parents. I caution all sides of the House to avoid the inflammatory language being used in the debate. Those in receipt of social welfare payments desperately need the payment and deserve greater leadership from Deputies in the Chamber.
In her statement to the House last night the Minister for Social Protection, Deputy Joan Burton, highlighted the fact that despite improvements to the one-parent family payment in recent years, a large proportion of lone parents and their children still experienced poverty. I can vouch for that statement, as every week I meet many lone parents struggling to meet basic household expenses such as the cost of food and heat. That has always been the case for lone parents who have been given just enough financial support to get by. However, they need more than this. They need structural supports and engagement in order to provide a better quality of life for themselves and their children.
In Galway last Saturday I spoke about how the social protection system, as constructed by successive Governments, was passive and allowed many people to drift into long-term unemployment. Previous Governments did not seem to care how they felt, having been cut adrift, disenfranchised and stripped of self-esteem and self-worth. The system had let them down. The system, as inherited by the Government, has also let down lone parents by failing to provide a mechanism whereby they can engage in training opportunities and re-enter the workforce. Many lone parents whom I have met, including many whose children are fully grown, regret the lack of opportunities afforded to them as they were raising their children.
The changes in the Bill to the one-parent family payment which will ensure that from 2014 new recipients of the one-parent family payment will receive it until their youngest child reaches seven years of age have caused concern. I accept that seven years is too young an age for a child to be left without adequate child care facilities if his or her parent has to return to work. That is why we need safe, affordable and accessible child care arrangements to be made before lowering the age requirement. I was heartened to hear the Minister speak about a multi-departmental approach involving the Minister for Children and Youth Affairs and the Minister for Education and Skills, aimed at providing affordable and accessible child care services for lone parents. I fully support the adoption of this approach, as I strongly believe that if accessible and affordable child care services are not in place by 2014, the proposed change from ten years to seven should be deferred until such time as appropriate child care facilities are available. That will not be easy and it will require cross-departmental co-ordination, political will and creative thinking. Perhaps the use of rooms in primary schools as potential locations for child care facilities could be an option to be explored with the Minister for Education and Skills. There would be advantages to accommodating child care services in the same premises in which the children in question are schooled in the morning and early afternoon. Parents would not have to worry about transporting children from school to another location which would cut down on costs, worry and hassle. I accept this would require further engagement with and flexibility on the part of the Department of Education and Skills, but I hope all Cabinet Ministers will do their utmost to support the Minister, Deputy Joan Burton, as she moves the social protection system in a more progressive direction.
The Bill could be one of the most influential pieces of social welfare legislation in the history of the State if it results in better outcomes for single-parent families. That is the objective of the Minister in making changes to one-parent family supports. It is not easy to change the ethos of an entire system, one which was handed over to the Government in such a state of disrepair and neglect. The Opposition, in its quest for populist headline grabbing, is intent on muddying the waters and focusing on the aspect of cost alone. It does not see an opportunity to introduce reform in anything. It seems to believe that blindly increasing all thresholds is the answer to all the problems in the social protection system. As usual, it is wrong and misguided; it is misrepresenting the complexity of the issue for the public. What the country needs is structural change in the social protection system. People need to be helped up, not a hand-out. The best way out of poverty is through a return to paid employment.
I am encouraged by how the Minister has consistently linked her vision for the Department of Social Protection with making social welfare recipients job-ready when opportunities arise. Lone parents will not be left behind. I accept that the provision of adequate child care is critical. I call on relevant Departments and Ministers, in particular the Minister for Children and Youth Affairs, Deputy Frances Fitzgerald, to support the Minister in assuring people that there is a child care plan which will be in put in place and that the Government will be remembered for how it supported lone parents in a way they had never been supported previously and delivered the outcomes required by all, including lone parents.
I am pleased to have an opportunity to speak to the Bill. I was amused by Deputy Éamon Ó Cuív's expression of horror, shock and surprise at the things the Minister was allegedly setting out to do to decimate the entire welfare system, leaving people high and dry, suffering and in poverty. Creating confusion for the people in looking for Dingle is one thing; adding a "v" to the Irish alphabet is another, but pretending not to know about how we arrived at our current position is stretching the imagination, even for some of those on the far side of the House. We should always remember that those in receipt of social welfare payments do not become eligible for such payments deliberately. There is a popular myth that people deliberately wish to be unemployed and apply for a social welfare payment. That is not so. I am amazed at the experiences in other parts of the country because – I speak as a former incumbent of the Department – I have not seen the evidence of the ready availability of payments that others have seen and it is not because I do not engage with my constituents, because I do. There is great folklore, as well as a great many urban and rural myths, most of which are grossly inaccurate.
One of the issues that has created a serious problem in terms of the burden placed on the social welfare system is the lack of housing. The previous Administration decided to dismantle the housing system over a period of many years. There was a time when people on low to middle incomes could rely on the availability of local authority houses as starter homes. They paid differential rent which gave them security. It was a simple system which worked very well and small and large families were accommodated. Then a change was introduced. The powers-that-be decided that there would be no more local authority houses built, or if there were, they would be difficult to obtain. As a result we have reached a point where there are approximately 100,000 families on local authority housing lists. A further 10,000 families have not been allowed onto the lists because of the intricate application forms that have been filled in. As a result, those who find themselves in such a predicament are vulnerable. When they receive their social welfare payments and having paid their rent, there is very little left. I have dealt with as many such cases as anyone else in the House.
The Minister is in a difficult position and I have the utmost sympathy for her. There was a splurge of spending that continued uninterrupted for 15 years, during which time elections were bought on a regular basis by the amount of money that could be forked out beforehand. I recall one election where cheques appeared to every parent in the country in respect of child benefit in order to sweeten the electorate for the election. Such nonsense has eventually come home to roost and has created awful problems. It has created problems for those who now must take responsibility to ensure there is some payment available to those who find themselves in that position.
In all the cases I have dealt with over the years, single parents themselves want to go to work. They do not need any encouragement. They wish to have independence and the independence of a job is all they require. They want to go back to education and try to do so, and in most cases they do. However, the position is getting tighter now and it is more difficult to do that. I have the utmost sympathy for those who find themselves in that particularly difficult position.
In times of significant financial stringency and stress, the tendency is for everybody to look around and say everybody else must suffer. He or she must cut, the person to whom they are speaking must cut, and everybody else must suffer a little more. That is fine, and I understand it. That is a human reaction. However, there are those who are extremely vulnerable in society at present who must watch every cent. No doubt there are those who are not in receipt of a social welfare payment who are in the same position and we must accept that, but the financial situation and the situation in respect of resources that must be spread wider and thinner is the problem. There will be such a situation until such time as there is some kind of economic recovery in terms of growth and a return to better times. All we can do in the meantime is hold out the hand of friendship and the sympathetic ear and be there to recognise and examine the cases for those who find themselves in a difficult position. There is no sense whatever in giving the impression we do not hear their voices, which is a dangerous place to go.
Those of us who were here in past stringent times learned a great deal during that period. What we learned most was the need to keep society on board. We need, in particular, to keep the vulnerable in society on board and to indicate clearly that we understand their position and do not enjoy a situation whereby persons receive reductions in their payments. By and large, I can understand the kind of measures the Minister has to take and I accept them. A short simple answer is, there is no money. That is a sad situation. That did not come about over one year's negligence. It came about over several years' continuation in the same direction with the result the economy has imploded and now, unfortunately, everybody must pay.
Incidentally, somebody mentioned earlier the self-employed do not qualify for any payment. That is not true. In fact, Deputy Ó Cuív spoke about it. He should know. I recall, when I had some responsibility in that Department, changing the position so that the self-employed, instead of having to show a P45 or income details for the previous 12 months, merely had to show it for the past three, four or five weeks because it was clear the income the person received the previous year was gone and there was no sense in assessing as means against the individual what he or she had earned in the previous year, and that was done. Lo and behold, despite the good times, those who came after decided to change that back again. The innocence expressed on the Opposition side of the House a few minutes ago about some of what is now happening is well feigned because some of those changes took place in the not so distant past when individuals on the Opposition side of the House had particular responsibility.
I do not have time to go into the area of mortgage and rent support. It is a significant problem at present. It is a considerable administrative problem as well. It is most repetitive and difficult to administer. It is difficult to qualify for. Rent support is brought about simply because another Department over a long number of years failed to fulfil its obligations by providing housing for those who could not provide houses for themselves out of their own resources.
I will finish on a matter that has caused many of us problems, that is, the difficulty now arising which some of us flagged several years ago when we saw the downturn coming in the economy and we pointed out to the then Minister that it was time to transfer more staff from other Departments into the Department of Social Protection to ensure applications were processed. One must remember the time involved in processing applications is lengthened considerably by having to go back over the same process repeatedly, which often is what happens in almost everything those in that income bracket now must face. That is sad, but that it is the way it is.
The next speaking right is shared between Deputies Wallace and Catherine Murphy.
I realise full well the Minister has a difficult job and if she is told to cut a certain amount to try to make it work, it will not be easy. Obviously, I do not agree with the fact she is told to cut so much in the first place. I would have rather seen the money raised through a higher increase in the tax bands for the better off. It is unfortunate the Government has decided to cut this Department's funding so much but since it is doing so, it is a fairly impossible task not to hurt many people.
There is little doubt one-parent families seem to have taken the severe brunt. I was glad to hear the Minister is thinking of rowing back a little on it. That is positive. I am not one to criticise a person for changing his or her mind. Those who cannot change their mind cannot change anything. I hope the measures will alleviate problems for many vulnerable persons.
Recently, I met two women in Wexford who asked to see me - a girl called Deirdre who had been working continuously for 14 years and a girl called Ruth who had been working continuously for ten years. They had lost their jobs and become single mothers in a short space of time. They told me their stories, even about accessing social welfare benefits. It took Ruth eight months before she could get anything and she found it difficult to make progress in getting the money she thought would naturally be there for her if she ever lost her job, given she had paid tax for so long. Deirdre is still trying to get help. She admitted the father of the child was paying her a small sum of money and as a result, she has not been able to access the benefit. She was told they did not believe her figures because she could not possibly be living on the small amount of money the father of the child was giving her, and that problem is still not solved. There are so many in a difficult place today, and these are only two problems.
A big problem as a result of the austerity measures implemented has been that not only have people become poorer, which is a natural result in a recession and we have come a long way down from the 2006 and 2007 levels of living standard, but also our society has grown much more unequal in that time. It is interesting to look at comparative figures for Ireland and Europe in regard to the numbers at risk of poverty or social exclusion, which is determined as having to live on less than 60% of the average income. I studied certain graphs which demonstrated that in 2007 the percentage of the population in Ireland that was considered at risk of poverty or social exclusion was 23% whereas the European average was 20%. In 2010 the European figure had risen by just 0.2% whereas Ireland's had risen to 29.9%, which is frightening. Households with dependent children are even more at risk of poverty or social exclusion. In 2007 the European average in this regard was 19.6% and the figure for Ireland was 24%, but while the European figure has remained pretty stable since then, the figure for Ireland has increased from 24% to 34%, which is also frightening.
Single adult households are taking the brunt of the recession in Ireland. The percentage of such households at risk of poverty or social exclusion in 2007 was 56.4% and it is now 62.7%. In other words, 62.7% of people who live in single parent households are at risk of poverty or social exclusion, which is an incredible figure for a developed country.
Many of the less well off have been hit by the austerity measures but, sadly, it has developed in a very uneven way. We have seen the wealth of the top 10% grow in the past four years. I cannot help thinking that many of the measures introduced are something of a paper exercise. We sometimes do things that amount to false economy. We all accept the statistics that €1 spent on a child in a developed country saves the State close to €7 before the child becomes an adult. Therefore, it is not planning for the future to fail to take care of the young people who most need our help.
In addition, the spending habits of those on lower incomes and on social benefits are beneficial to the domestic economy. People on lower incomes are inclined to spend all their money - they have to - so the domestic economy suffers when they do not have the money to spend. I would suggest 80% of the people in this country, perhaps 90%, have less money to spend now. However, the fact people from the lower strata have been hit the most by the measures in recent budgets has exacerbated the problem for the domestic economy.
I could read out the list but Members have heard it all before. The list of areas where the less well off have been hit includes one-parent families, old people on fuel allowance, those on back-to-school and clothing allowances. It amounts to too much unfairness. I find it regressive. We need to start working towards tackling the level of inequality in our society, which has to be a primary aim if we want to make this country a better place.
I thank the officials from the Department for the briefing on Tuesday. That briefing is useful in helping us to understand some of the sections of what is proposed, although, clearly, the political decisions and consequences are an entirely different matter.
I want to deal with the obvious issue, which is where the focus of attention has been, namely, the provisions in regard to the age where the lone parent payment will not be paid, which could apply to children as young as seven. The Minister told us this is intended as a reforming measure. It is essential we see the totality of the package proposed because if we do not, it is very difficult to see how it is a reforming measure. I will not dispute the Minister's good intentions in this regard. However, it is completely unwise to proceed with this in legislation until there is a guarantee of child care.
It is illegal to leave children as young as seven on their own. In many situations where the household is headed by a lone parent, there are older children, but, even at that, it would depend on the age whether it is appropriate. I have put down an amendment seeking the removal of this section until child care is put in place.
If a person is put on a jobseeker's payment he or she must be available for work. Not only that, the person must be available for a Tús scheme, for example, or a course or any other job activation measure that has been more or less presented. Therefore, child care needs to be provided not only for those who go to work but also to cover those who are caring for children who are below the legal age at which children can be left on their own.
The child care issue is hugely important and I know the Minister believes that too. However, with respect, and maybe it is with a lot of respect, the Minister could be reshuffled into a different portfolio-----
Then I might be able to solve the money problem.
It would need a crystal ball to say the Minister will argue this. It is dangerous. The Minister should delete this section of the Bill until child care provisions are in place.
I listened the other night to Mr. Jim Power, the expert and chief economist who told us we were going to be in for a soft landing and who haggled with Professor Morgan Kelly about this four or five years ago. Essentially, Mr. Power talked about lone parenthood being a lifestyle choice. I hope we do not get back to that kind of nonsense. One would want to have masochistic tendencies to select a lifestyle that is leading in the poverty stakes. The one group that consistently comes out as the most at risk of poverty is households that are headed by a lone parent. It is part of the reason I believe the Minister wants to change that. However, let us see the total package if we are going to proceed along those lines.
The Government said it wants to protect the headline rates. However, many other things are affected by the fact the headline rates are protected and, given the social welfare budget has been cut, some of them are causing serious pain.
I want to ask the Minister about an issue that is not in the Bill, namely, community employment schemes, in particular the training allowance and the materials allowance. I confess I have a vested interest since I am on the board of the County Kildare Centre for the Unemployed. It is somewhat ironic that this is a service for the unemployed. I do not believe these centres can continue to operate if the current situation prevails. What is in the Bill in this regard? Will there be any change? Will the Minister make a note of it and come back to me? Perhaps I will discuss the matter with her again. I am concerned that since it is not in the Bill, there will not be an opportunity for a review.
It is not a legislative matter, it is an administrative matter.
That is fine.
It does not require legislation.
The area of domiciliary care payments is probably an administrative matter as well. It appears a review is carried out somewhat frequently, perhaps every few years, in the case of those who qualified under the Department of Social Protection rather than under the old system administered by the health boards. It is costing people a good deal to get the required evidence for the review. One individual informed me that it would cost approximately €1,000 to get an expert to give her a psychological report. It may be that €1,000 is on the high end in this case but the fact that the process costs people money raises questions. Is a review necessary in all cases given that it depends on whether a child has a profound, mild or moderate disability? Clearly the position will not change in certain situations. I raise the matter because it is causing much angst and concern.
I echo the point made by Deputy Wallace on the unequal society we are creating. The Nobel prize winning economist, Joseph Stiglitz, has identified that this is the scenario that prevails prior to a large crash. If we are to reform our society and economy, at the least we should keep the imbalance and try not to make our society more unequal.
I agree with a point made by Deputy Bernard Durkan on housing. I realise the Minister has discussed this issue previously and I have raised this matter with her in respect of my area. I hope the Minister will be able to make a change in this area. There are almost 100,000 individuals or families on the housing waiting list nationally but there is an unequal distribution throughout the country. The six counties at the top of the list account for 43% of those on the housing waiting list while the bottom six counties account for 3%.
In most cases rent assistance is the only option. This is a terrible poverty trap and I realise the Minister intends to do something about it. However, it is a case of the quicker, the better because it is a Hobson's choice whether one keeps a roof over one's head or goes for a job. For those who are out of work for a long time, most jobs on offer are at the lower end. There is a serious poverty trap as a result. I realise the Minister is aware of this. I hope the Minister will be in a position to do something in the case of particular parts of the country. Kildare North is a particular location with a problem in this regard. All the Deputies from Kildare North have seen, daily and weekly, people being forced to move further down the county, having to take children out of school and so on. This is a serious concern and I hope the Minister will be able to address it in the short term.
I am aware the Minister has a difficulty and that hers is one of the big spending Departments. The only way to deal with this constructively and to reduce the social welfare budget in a significant way is by getting people back to work. The issues are inter-linked. The lack of an ability to invest in initiatives that will return something to the economy and at the same time take people out of the social welfare system is a problem. I believe we will grapple with the social welfare system year after year until we get to the heart of the problem, that is, the need for work. I know of almost no one who receives the jobseeker's benefit or allowance who has no wish to work. Most of these people were gainfully employed up to two or three years ago. This demonstrates the desire of these people to work if nothing else does.
There is a great deal in the Bill, much of which relates to pensions. There are some welcome measures to ensure a more secure pension environment. I am somewhat concerned about the transition arrangements especially in respect of pension funds that will not survive. What will happen to the people associated with those pension funds? This is a serious concern which may come to the fore in the coming year. I do not approve of some other measures in the Bill. I hope the Minister will withdraw section 4. Unless one has a certain imbalance, one cannot argue it represents a reforming measure.
The Department of Social Protection is one of the most expensive Departments in terms of spending. The costs for 2012 will amount to €20.5 billion. Spending on social welfare has more than doubled in the past decade while the number of weekly welfare payment recipients has increased by the order of one and a half. In 2000, social welfare cost €8 for every €100 generated by the country. By 2010, this had rocketed by 100% to €16.70 for every €100 generated. During the same period, the number of people in receipt of weekly welfare payments, who account for the bulk of the social welfare budget, increased from somewhat more than 900,000 to almost 1.38 million, a rise of 52%. The number of one-parent family payment recipients has risen by 25% during the past decade. The figure stood at 90,307 on 31 December 2011. The cost of the scheme is estimated to be €1.06 billion for 2012.
Considering these sobering facts about the costs of social welfare, any related Bill before the House must deal with reform. The Minister has set out such measures within the Bill and this is paramount. For certain applicants from 3 May 2012, the maximum age limit for the youngest child for receipt of the one-parent family payment will reduce to 12 years of age. The limit will reduce further to ten years in 2013 and to seven years in 2014. There will be no changes for existing customers in 2013, after which revised phase-out arrangements will come into effect. The Bill continues the special provision for recently bereaved lone parents to receive the payment for a period of up to two years. Where domiciliary care allowance is being paid in respect of a child with a disability, the one-parent family payment will remain until the youngest child reaches 16 years of age.
Until 2011, the one-parent family payment provided long-term family support until children were 18 years of age, or 22 years in the case of those in full-time education to lone parents, without any requirement for them to engage in employment, education or training. Legislation came into effect in April 2011 to reduce the maximum age limit of the youngest child for receipt of the one-parent family payment. The changes announced in the 2012 Budget Statement and contained in the Bill continue the reforms of the one-parent family payment.
I understand the Minister stated last night that she would consider the area of child care in respect of these measures and I welcome this. Consultation between Departments can ensure the relevant child care measures are in place to ensure lone parents can be supported if they are required to attend college, training or work. Section 3 provides for an increase in the minimum number of paid PRSI contributions required to be eligible from 260 paid contributions to 520 paid contributions.
Debate adjourned.
The Dáil adjourned at 10 p.m. until 10.30 a.m. on Friday, 20 April 2012.