Deputy Healy was in possession. He has six minutes remaining.
Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013: Second Stage (Resumed)
Question again proposed: "That the Bill be now read a Second Time."
The Government has choices in what policies it follows. As the country has some very wealthy people in income and asset terms, there is certainly room for a wealth tax to accrue much needed income for the Exchequer. If there was ever any doubt about the high level of wealth in Ireland, it was dispelled last week when the Minister's colleague, the Minister of State, Deputy Costello, informed the House that Ireland was the seventh richest country in the world. In light of this, there is considerable scope for ensuring that the very wealthy pay their fair share and contribute properly to our recovery. It must be remembered that many of them were involved in creating the recession, not the middle and lower income families who had no hand, act or part in it.
The Central Statistics Office, CSO, has published information showing that, while 90% of the population have lost approximately 18% of their incomes in recent years, the upper 10% have increased theirs. They have also increased their assets in the teeth of this recession, yet they are not being asked to pay their fair share.
The most noticeable effect of the austerity programme, including cuts to social welfare and so on, is poverty. I am referring to consistent and relative poverty as well as to child poverty, all of which have increased substantially in recent years. The programme has also had a direct effect on the domestic economy. Low-income recipients of social welfare payments and the working poor spend all of their money in the economy, particularly their local economies. If one walks down the main street of any town or city, the significant amount of money that has been taken out of the economy through cuts is evident. Shops and long-standing businesses have closed, resulting in considerable levels of unemployment. Taking money out of the economy, be it through social welfare reductions or changes to eligibility criteria, will undoubtedly create further job losses.
Recently, the Nevin Economic Research Institute showed that the Croke Park II proposals would only save €250 million of the €1 billion cited and would lead to approximately 10,000 people becoming unemployed, half of whom would be from the private sector.
The proposal on the one-parent family payment and jobseeker's transition payment should be withdrawn from the Bill. I do not agree that the age of seven should be the cut-off point. The Minister has accepted that proper, affordable child care is not available.
The Bill should include statutory time limits for social welfare applications. Currently, decisions on most applications are taking in the region of eight months. Reviews take approximately three to six months and appeals take approximately 12 months. We need statutory maximum limits to ensure applications are dealt with in a timely fashion.
The Minister should take the opportunity to withdraw the cuts she has imposed since coming to power, in particular cuts to child benefit and those affecting the elderly such as carer’s allowance, fuel allowance and electricity allowance.
In terms of pensions, the Bill does not deal with the crucial issue of defined-benefit pension schemes and the benefits to workers where their employment has ceased or a business has gone bust. That should have been addressed long before now, as far back as 2007 when there was a similar case in Britain. The Bill's provisions do not deal either with the exorbitant fees charged on pension funds. It has been accepted in recent times that they are significant and should be reduced.
I wish to share time with Deputies Noel Harrington, Jim Daly and Seán Kyne.
Is that agreed? Agreed.
Thank you for the opportunity to speak on this Bill, a Leas-Cheann Comhairle. Following the economic crash of recent years thousands of people who never previously availed of social welfare payments found themselves forced to seek funds from the State to keep their families afloat and while this expenditure is necessary and must be maintained, it is important that every cent spent on social protection measures is given to those who most need it.
Social welfare fraud is taking money out of the pockets of the most needy in society and lining the pockets of the undeserving. The Minister, Deputy Burton, has made huge efforts to stamp out social welfare fraud and has come up with a number of innovative measures to help combat fraud. These measures have resulted in significant savings to date and thus I support her in her further efforts to eliminate fraud through the introduction of new measures to authenticate people’s identity. We have all heard stories, many of them urban myths, about people claiming multiple payments in different names. Under the current regulations people applying for a PPSN or public services card have to attend a Department of Social Protection office to have their photograph and signature recorded electronically, and a person who refuses to do so can have their payments suspended. The provisions of the Bill allow the extension of the scheme to all persons currently in receipt of social welfare and should have the effect of decreasing the opportunity for fraud even further.
I also welcome changes to jobseeker’s allowance, which will allow recipients of one-parent family payment to be exempt from certain conditions for a specified amount of time. It must be recognised that single parents with children in school, for example, are not available to take up courses which would render them unable to be present to collect or care for their children. Another very welcome and commonsense measure relates to firefighters who are currently in receipt of jobseeker’s benefit and jobseeker’s allowance. The Bill will exempt them from certain conditions and allow them greater access to jobseeker’s schemes. The changes in the Bill are in place on the ground in many cases, but incorporating the changes in legislation will provide further security to the State’s firefighters.
With money in very short supply, every opportunity to consolidate services must be examined. Accordingly, I welcome as another commonsense measure the decision to merge the office of the Pensions Ombudsman and the Financial Services Ombudsman. I note that the current Pensions Ombudsman has agreed to stay on past planned retirement to oversee the merger process. Such mergers can provide real savings in terms of office and human resources costs and opportunities for further such mergers should be identified in coming months.
I admit that I was somewhat concerned initially about plans to establish a new pensions council, fearing that it would morph into yet another State quango. However, I am pleased to learn that this will simply be a council which will advise the Minister on pension matters on request. It will not be a corporate body and will not have the power to spend money. I also welcome the fact the chairman and members of the pensions council will be unpaid. While undoubtedly new structures must be put in place to oversee governance of pensions systems, every effort must be made to ensure that we do not add to the already overweening levels of bureaucracy in the State. I commend the Minister, Deputy Burton, on her innovation in this regard. The Pensions Board will have the power to wind up a pension scheme where that scheme is underfunded. That is a necessary and long-overdue power and one that will be called upon in future as our ageing population places increased pressure on pension funds.
Further changes are necessary for the disbursement of pension scheme assets. The Minister must take cognisance of the recent decision in the European Court of Justice on the Waterford Crystal case. A comprehensive response to the findings in the case has yet to be formulated. Many of the measures contained in the Bill are commonsense measures, designed to combat fraud and improve oversight of pension schemes, while remaining ever mindful of the need to preserve the State’s scarce resources.
I also welcome the opportunity to speak on the Social Welfare and Pensions (Miscellaneous Provisions) Bill. With a budget of almost €21 billion per annum, reform of the social protection system should be an ongoing process. Given the amount of public funds involved, constant vigilance and progress are required. I welcome many of the provisions in the Bill, in particular the new social protection cards which will enhance the identification process.
In my previous existence as a postmaster I worked in an office that paid social protection to many clients. Positively identifying the correct claimant has always been an issue. The post office system has done a good job in giving the cash to those who are entitled to it but the enhanced security offered by the new card is more than welcome. Some might criticise me for saying that the new card does not go far enough. Such cards should contain much more information than a photograph, name and date of birth. Information such as whether one is an organ donor, one’s blood type, driving licence and insurance details should also be on the card. In effect, it could be a one-stop shop.
I accept the Minister has addressed the issue but work remains to be done in certain respects. I refer in particular to the type of constituency in which I live, which the Minister visited recently. She would acknowledge that the same issues do not apply in such an area. We do not have many public services, other than those provided by doctors, nurses and hospitals. We have a high ratio of self-employed people, for example, in construction. Much work has been achieved to facilitate people moving in and out of the social protection system but it could still be further refined. I come to the table with problems and I do not have the solutions but the matter requires extra attention.
Incorporating lone parents into the jobseeker’s system is a welcome initiative. Currently, the lone-parent system is a poverty trap and it has to be addressed. I welcome the Minister’s initiative to encourage lone parents to come back into the jobs market. They have a significant amount to offer. They wish to be in work and it is unfair to say that they are happy with a situation where it would not be advantageous to come back into the jobs market. The system should be incentivised. There are opportunities for lone parents and the social protection system will facilitate that, allowing people to work a couple of days a week, for example, and still maintain many of the necessary benefits and services social protection can offer.
I wish to be a little parochial again. I again refer to my interest in the post office. We had a debate in the Joint Committee on Transport and Communications, of which I am a member, and we published a report on the future of post offices.
While the gradual move towards a cashless society has many advantages, I hope the Minister is aware that a sword of Damocles hangs over the future of many post offices. In any future tendering conducted by the Department of Social Protection, the effect and impact of such moves on many rural and urban post offices should at least be considered and kept in mind by the Minister and her officials.
Finally, I wish to pay tribute to all the officials and staff in the social protection offices throughout the country, whose courtesy, dedication and work is much appreciated. I have had nothing but good experiences with them. They are at the coalface and deserve a mention for facilitating the reforms and the measures provided for in this Bill.
I welcome the opportunity to speak on the Social Welfare and Pensions (Miscellaneous Provisions) Bill. At the outset, I commend the Minister on bringing this Bill before the House. The Government received a mandate from the people in the general election of 2011 to fix a broken economy and to bring back Ireland's economic sovereignty. On assuming office, it rapidly became apparent that a tsunami of challenges and difficulties lay in store in the road ahead. However, the new Government has set about its task diligently and to date has made significant progress in re-orientating the economy back towards a more sustainable path.
One of the more challenging legacies left by the previous Administration for the present Government to tackle was the loss of more than 250,000 jobs in the economy during the preceding years. As a newly-elected Deputy after the 2011 general election, one of the toughest and most difficult positions in which I found myself was in my clinic at an office in Bandon, west Cork, while explaining to someone who had been self-employed that the person had no entitlement to supports as an automatic right. Many such self-employed people had come from the construction industry and had contributed enormous sums of money to the Exchequer during the so-called Celtic tiger era. However, Members of the newly-elected Government were faced with the task of telling them there was nothing they could do for them. They were not entitled to benefits because they had not paid the requisite PRSI contributions. What made such people particularly irate was looking around them, where they could see what appeared to them to be people who had never worked in or contributed anything to the economy but who were in a position to avail of the full suite of entitlements. As this irritant is hard to explain, I welcome the moves made by the Minister, in this Bill in particular, towards addressing the entitlements for those who are self-employed. It is long overdue, is a most welcome development and I look forward to further developments in this regard.
The overwhelming mandate given to the Government both requires it to regain Ireland's economic sovereignty and puts a huge demand on it to reform the State and how it is run. In recent months, I have had occasion to knock many doors in my constituency, in towns such as Bandon and Clonakilty in west Cork. When one converses with people, by and large most will accept there is tough medicine to be dished out. However, I have challenged myself repeatedly to try to narrow down to a single word what it is that people want of the Government. The question is what is it that one could write in a paragraph or sentence or could distil into a single word. On examination, however, the word one comes across on the doorsteps most often is fairness. People do not mind taking the medicine and do not mind contributing and helping the Government to get the country back on track but they want it to be done in fairness. If this is the case, they will put up with the sacrifice and be willing to assist the Government.
Regrettably, political opportunism arising from opposition politics, as well as cheap and crass media headlines, continually portray and project a sense of unfairness by trying to create illusory and false information to convince people that many of the measures are unfair and that fairness is not at the heart of the day-to-day running of this country. It is suggested the Government takes some form of perverse pleasure from protecting an elite group of rich people or from protecting bondholders, as though such individuals were voters who might re-elect Government Members. Through such political opportunism, people are made angry and as they hurt and take tough medicine, it is not helpful for the day-to-day living they must go through. To this end, I greatly welcome the steps taken in this Bill to prevent further fraud. Welfare fraud is a particular irritant for those who continually seek fairness. An example of this took place last week, as I knocked on doors in the Deerpark estate in Bandon, which is located in my constituency. Many of the people who live there are council tenants and were irate because they had experienced increases in the weekly rent they pay for their council houses of between €20 and €50 per week. These people had received leaflets from the local Sinn Féin party the previous weekend, advising that these rent increases were as a result of the Fine Gael-Labour Party property tax. To suggest that a €20 or €30 weekly increase, which would amount to an annual increase of between €1,000 and €1,500, was to cover the property tax clearly was disingenuous and deceitful. It was a lie. It simply compounded the anger and anxiety people feel in these difficult times.
I believe the seanfhocal, is ar scáth a chéile a mhaireann na daoine, exemplifies the approach of most Irish people to the safety net that is the social welfare system. Social welfare is viewed positively as a way of supporting those citizens who require help and this belief sets us apart from many other nations. For example, a representative of the American non-profit sector, who spoke recently in Leinster House at a briefing on that sector, unintentionally highlighted the different approach to social welfare between our two countries. The distrust and unease many Americans feel towards government was abundantly clear and was in stark contrast to the opinion of most Irish people, who view the Government as playing a paternalistic role in providing for the citizens in times of difficulty. This strong belief manifests itself in the fact that in 2013, Ireland will spend nearly €20.3 billion or 37% of State expenditure on social welfare. It is a colossal sum of money, accounting for nearly €2 out of every €5 of Government expenditure. At a time of such financial pressure on the country, when the Government is required to borrow more than €1 billion per month to cover day-to-day spending, one must out of necessity review and examine social welfare.
I will take this opportunity to commend the Minister, Deputy Burton, and her Department on the work achieved in protecting primary weekly social welfare rates and on introducing many other reforms. Examples include the increase in regular engagement with jobseekers to assist them in securing employment or further education. I note that 37,800 jobseekers received referrals in the first four months of 2013. Similarly, I note the success of the ICT skills conversion course, which has helped more than 700 jobseekers to acquire new skills to avail of employment opportunities in the ICT sector, as well as that of JobBridge, which is one of Europe's most successful internship programmes and has one of the highest placement-to-job ratios.
The Bill before Members contains further significant reforms, which will help core social welfare weekly supports, while also helping to ensure the provision of that assistance and support those citizens genuinely need. New provisions include the roll-out of the new public service card. In this context, I note and welcome the establishment of a new centre just off Eyre Square in Galway, which will enable the smooth and speedy delivery of new public service cards, which will help to guard against fraud and to ensure the right supports reach the right people at the right time. The introduction of the jobseeker's transition arrangement also is most welcome and will assist parents of one-parent families in re-entering employment. The Bill also contains provisions relating to the Civil Registration Act 2004. I have raised this Act a number of times and appeal to the Minister to introduce the necessary changes to facilitate families of Irish citizens who die abroad in obtaining an Irish death certificate or an equally valid certificate from the State. It is well over two years since I first raised this issue and I acknowledge many other Deputies also have done so, both this year and in previous years. I appreciate that changes to the general register must be carefully drawn up and well thought out although I am at a loss as to the reason there has been such an inordinate delay.
I have published a Private Members' Bill on this subject but out of courtesy to the Minister and the Department, I have not entered it into the lottery system for hearing. However, I seek to have this matter progressed. People in my constituency are affected and in the words of one daughter speaking on behalf of her parents, they would like to get a death certificate for her brother, who died tragically, before they die themselves. Consequently, this matter should be progressed. I also have raised measures to strengthen genealogical services and tourism. I am encouraged by provisions in this Bill, which act as a stepping stone to achieving this overall aim. I also wish to place on record my previous suggestion that the Central Bank premises on Dame Street be acquired for use as a centre for genealogy and social history research, as such a use would sit very well with the status of that building.
While Members must defend and uphold the principles underpinning the social welfare system, they must also defend the value and importance of work. Employment must always pay and the reward for working must always outweigh the benefits of remaining in receipt of social welfare. Supporting the social welfare system and believing that a person must always be rewarded for working are not irreconcilable opposites. It is unacceptable that recent figures from the Department show that more than 43,000 people or one in seven recipients of jobseeker's payments have never contributed to PRSI.
Such statistics are deeply worrying for every taxpayer.
I welcome the news today of the largest drop in unemployment since the start of the economic collapse, which is encouraging. I am also encouraged by many other aspects of the Bill including the extension of the public services card, the new jobseeker's transition arrangement, the special qualifying provisions for retained firefighters, and the establishment of a pensions council among others. We must continue to work hard to ensure the social welfare system and its supports, as well as the efforts at reform, are focused on assisting genuine, honest citizens. Such a focus is central to the type of country we want and recognises the substantial and positive effects of social welfare budgets on all aspects of Irish life.
I welcome the opportunity to speak on the Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013. The Bill gives us an opportunity to reflect on some of the areas of social welfare that probably need to change, and some recipients who recently had major cuts imposed on them.
I always contend we have two categories of people on social welfare, namely, the old, the sick and people with disabilities who depend very much on social welfare and do not see any other way of getting an income for the future, and then the people who are able and want to work but who are unable to get a job. It is important that those people can avail of relevant courses in counties where job opportunities might be available.
In the past I argued with Ministers in my party that an analysis should be carried out in each county of the type of jobs available and match the courses to such jobs. For example, I represent a very agriculture-related county which has a large number of meat factories and produces a large number of products related to agriculture and fisheries. These are the areas courses in Wexford could specialise in but courses operated by FÁS and other agencies appear to bear no relevance to the job opportunities that might be available in the county. It is important that we would reflect on that and have an analysis carried out by the Minister's Department and the Department of the Minister, Deputy Bruton, to match jobs to courses that might be available in future.
A number of Deputies earlier reflected on the position of the self-employed. In the past three or four years a huge number of self-employed people have lost their businesses and their income. They have come to me and other Deputies asking us to make representations to the local community welfare officer or to the Department of Social Welfare. However, there is not much flexibility in terms of helping such people and by the time analysis is carried out and books and accounts are presented, families find it very difficult to survive. I have had many men and women from a self-employed background crying in my office because they are unable to get social welfare payments. That is an area that should be reflected in any pension changes in the future. I appreciate the Minister is trying to focus on that area and encourage people and I will return to that.
It is important to have a pension structure that is financially sustainable and socially adequate. We must always believe in basic pension provisions being universally available and ensure that all citizens can live in dignity, particularly in old age, and get social welfare payments when they lose their job, which in my opinion should be only on a temporary basis.
The Minister has tabled a number of amendments to the Social Welfare Consolidation Act 2005, for example, extension of PRSI and the new identification requirements where the card system will be introduced. I do not have a problem with the card system, and I hope as the Minister stated it will be done in a sensitive way because many old age pensioners and people on disability allowance may not be able to get to the local social welfare office or to the other areas to make themselves available to have their photographs taken, authorisation of their signature electronically and so on for identification purposes. Will that be done only in social welfare offices or can it be done in a post office where many people, particularly old age pensioners, claim their social welfare payments? In Wexford, for example, the only social welfare office is in Wexford town. A very large number of people would only go to their post office. The Minister might examine that to determine if it can be done in post offices to make life easier for people who will have to comply with the regulations once the Minister introduces them.
Regarding the one-parent family payment, the Minister's announcement in the budget regarding the proposed changes has caused many problems and is the subject of many representations to me and, I am sure, to other Deputies, particularly the one in 2014 regarding the child aged seven. In her budget speech the Minister said she would seriously examine that and take into account the possibilities of child care facilities not being available and whatever else that might be required but it is the one issue in the budget that has caused many problems and is the subject of many representations from people on the one-parent family payment.
I will not call it a climb down but I welcome that the Minister has made suggestions to make changes in this area. We know that approximately 36% of recipients are already in paid work of one sort or another. The aim must be to increase that percentage and ensure that lone parents can progress to full-time work, which is an aspiration for all lone parents. However, many lone parents only work on a part-time basis because of child-minding difficulties and it is important that is reflected on before the Minister makes her final decisions on that area.
I welcome the right to jobseeker's benefit for part-time firefighters. That has been an area of contention for as long as I have been a Member of this House and no Minister ever saw to make the changes. I thank the Minister for recognising the role of part-time firefighters. They do a tremendous job. Some people say they make a lot of money but I do not accept that, judging by the payments firefighters in my county receive. However, it is important they would be entitled to social welfare payments when they qualify, and I welcome that the Minister has introduced that.
Regarding the pensions council, it will comprise of a chairperson, a representative of the Minister for Social Protection, the Pensions Regulator, a representative of the Central Bank, and a representative of the Department of Public Expenditure and Reform. The Minister has the right to appoint eight members with relevant skills and specialist knowledge. She might outline those relevant skills when replying. Will an old age pensioner, a lone parent or someone from the widowers association be represented on the board? A mistake many Ministers made in the past was to appoint professional people to boards, many of whom did not have a lot of commonsense. It is important that people in receipt of social welfare, who are Department's consumers, are represented on the pensions council. The general public will be happy to see that the pensions council members will be unpaid and that it is not a case of another quango being set up with chief executives and people on high salaries.
I hope the pensions council will have a strong consumer focus. In particular it should examine the area of pension charges. One of the persistent criticisms of the private pensions industry is that it is designed to make vast sums of money for the fund managers, administrators and intermediaries. It has often been described as opaque, confusing and offering mediocre to poor value for pension holders. I hope the pensions council will seriously examine that area.
The Minister reduced rent supplement and mortgage interest supplement last year and again this year. This is causing severe problems in some parts of the country where private rents are very high. I know the Minister will reply that the more money she gives in rent supplement, the more landlords will charge, but in all counties on the east coast, rents are extremely high and the reductions in rent supplement have caused severe hardship for many people. I try to get landlords to come down on their charges but it is difficult because they will answer that the property tax and NPPR charges must be paid. In many cases, however, they are passing those charges on to the tenant. The reductions in rent supplement have caused problems for those on social welfare who are renting. They are finding it very hard to make ends meet at present.
According to the national Pensions Board, only 54% of people in the workforce have pension coverage. Within the working population there are wide disparities. Public service coverage is over 90% while in some areas of the private sector, coverage is low. The national pensions framework published by the last Government in 2011 cites the example of the hotel and restaurant sector, where pension coverage is only 23%, while the wholesale and retail trade has only 36% coverage. Independent consumer research carried out on behalf of the Pensions Board indicates that almost eight out of ten people who do not contribute to a pension say the State pension will not meet their needs in retirement. Although employers are obliged by law to offer employees access to a pension, 43% of those interviewed had not been offered access. Of those, 93% had never asked an employer about access to a pension. There are serious problems in this area.
The key issue is the improvement of coverage. This must be done through a combination of incentives, soft and hard. Mandatory pensions must be considered. People might criticise my saying that but almost all OECD countries, with the exceptions of Ireland and New Zealand, have compulsory pension savings. It is an area we must look seriously at. I do not know if the new pensions council will have the power to look at this topic but it will have the power to make recommendations to the Minister and the Minister will have to act on them. The time has come to look seriously at the whole pension situation in the country so pension schemes will be adequate financially. It is particularly important that those with a disability and the sick will continue to be looked after in a fair manner. The cuts to the free fuel allowance, the carer's allowance and the exceptional needs payments are causing severe hardship for families on social welfare. How will the Minister address that? A lot of money is being pumped into social welfare at present. The Minister is talking about pension schemes today and it is important that we have a pension scheme that will meet the needs of the people.
I hear talk about Ireland being the seventh richest country in the world but I do not know how these people define rich. I am a long time in the House and I do not see any of this wealth being made available to the Department of Social Protection. Perhaps someone will explain to me how they define this wealth if Ireland is the seventh richest country. What advantage does that offer the ordinary people of this country? The only finances I see available for ordinary people are the taxes they have paid.
It is important that we encourage as many people as possible back into the work environment. The only way we will get out of this situation is to get more people back to work. The courses that will be designed by the Department should reflect the job opportunities available.
I generally welcome this Bill and hope it passes through the House as quickly as possible. I hope the Minister will take on board those amendments that might improve the Bill. It is important we have a social welfare system that is fair and equitable and that will continue to look after those who need social welfare payments.
I too welcome the Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013. This Bill gives effect to a number of social welfare and pension reforms, some of which will bring about savings to the annual budget of the Department of Social Protection. We know that the Department has already made substantial savings this year and hopes to achieve net savings of €390 million for the year.
One of most important measures introduced in the Bill is to address the problem of benefit fraud. It is another issue this Government has inherited and must deal with. Clearly the system has been too loose for too many years. This Bill will provide comfort for the genuine public concern that exists. As a public representative, I have received representations from people who are concerned about the level of benefit fraud. The new system will require photo identification and a signature for access to the social welfare system. There was an idea of finger printing being introduced at one stage so perhaps we could clarify why that was not further considered.
The media have reported on the issue on many occasions, particularly "Prime Time". We have been approached by members of the public who have highlighted certain cases they are aware of where a person is claiming and receiving benefits he is not entitled to. I am aware the Department has undertaken a number of measures already to address this problem. Recent reports in the media have shown 100 people have been caught at Dublin Airport flying into the country to sign on for social welfare payments. Welfare tourism is a problem here and I was heartened to hear a significant number of people have been caught. I am concerned to hear 1,400 reports of fraudulent claims made by people outside Ireland last year.
Similarly I am happy to hear that more people are reporting their concerns over social welfare fraud to the Department. The number of people reporting has almost doubled between 2011 and 2012, when more than 28,000 reports were made to the Department. The figures show the Department has saved €91 million in misspent jobseeker's benefits, €173 million in one-parent family payments and €83 million in child benefit. The Department recorded control savings of €666 million in 2012.
An increased target in control savings of €710 million is proposed for 2013. The Minister has assured me and other Deputies that the Department reviews claims on a regular targeted basis, particularly where there is a higher risk of fraud.
I believe the new welfare card system will be effective and will contribute to decreasing social welfare fraud in this country. Up until now, all a welfare applicant has needed is a PPS number or a public services card to confirm his or her identity. From now on, a recipient's photograph and signature will be recorded electronically on the system to check against in the future. Obviously, this is necessary. If recipients fail to comply with this new regulation, they will put themselves at risk of not receiving further payments or of their payments being stopped.
There are citizens who must rely on welfare payments and are dependent on them. There are large numbers of unemployed genuinely trying to find work. These, quite rightly, are being supported by the Government in every way possible in their search. I very much welcome today's statement about the reduction in unemployment numbers to below 300,000 for the first time since 2010. Certainly, that is a good news story. It is a psychological lift for the country when we need a lift.
I would agree that those falsely claiming benefits under someone else's identity should be stopped from doing so. They do a disservice to the genuine recipients of welfare payments because everyone is in danger of being tarred with the same brush. They also do a disservice to taxpayers, particularly with them put to the pin of their collar. Everything that needs to be done, I am sure, will be done.
The Bill also introduces measures to allow for the transition of those on the one-parent family payment to the jobseeker's allowance scheme or another payment. Parents with a child over the age of seven will now be placed on a targeted version of jobseeker's allowance called jobseeker's transition. The transition period allows for lone parents who have been out of the job market for some time and who may have difficulties securing child care to seek work on a part-time rather than a full-time basis, and applicants will be exempt from a number of conditions for jobseeker's allowance for a transitional period until the child is 14 years of age.
The Government recognises that lone parents applying for jobseeker's allowance may find it difficult to meet the requirements of the payment, which are to be available and genuinely seeking full-time work. Therefore, lone parents of children between the ages of seven and 14 will not have to meet this requirement. Instead, they will have to take part in training and in educational opportunities which will help to get them ready for employment when their parenting obligations are less intense in the future. It is my understanding that the Department of Social Protection will hold a series of information meetings next month to inform recipients of the one-parent family payment so that they can get more details of what is being proposed, and a letter will issue in due course.
Other measures introduced in the Bill include changes to the Pensions Board which aim to increase consumer trust in and generate greater public awareness of the system in the pensions area, changes in liability for PRSI to broaden the PRSI base thus supporting the Social Insurance Fund to continue paying pensions and benefits to those who need them, and changes to the index information from the registers of births, deaths, marriages and civil partnerships allowing historical indexes to go online and making Irish genealogical research easier. The latter measure is particularly important this year with The Gathering. Given the large Irish diaspora, there is a broad level of interest among people in wanting to know who they are, where they come from and their background. Having this online will make the research much easier.
I welcome the contents of the Bill. I trust that every measure will positively impact on those it affects.
I call Deputy Fitzpatrick, who is sharing time with Deputy O'Mahony.
The Bill provides for amendments to the social welfare code arising from budget 2013 and the related policy matters. It also amends the Pensions Act 1990, providing for the restructuring of the Pensions Board.
Budget 2013 announced a number of measures to broaden the income base for PRSI in order to ensure the stability of the Social Insurance Fund so that it can continue to pay the pensions and benefits required by those who need them most. A number of these measures were provided for in the Social Welfare Act 2012, including an increase in the minimum level of annual contribution of the self-employed, from €253 to €500. This Bill extends liability for PRSI contributions to certain civil and public sector workers, who pay modified rates of PRSI - classes B, C and D - and who also have income from a trade or profession. Such income will now become liable for PRSI at the rate of 4%, but will not count towards determining entitlement to social insurance benefits. The Bill also provides that a working director with a shareholding of 50% or greater in a company is not insurable as an employed contributor in the company, and is insurable at PRSI Class S, as a self-employed person.
The Bill also introduces measures to allow for the transition of lone parents to the jobseeker's allowance scheme when they no longer qualify for one-parent family payment due to their youngest child reaching the specified age threshold. Former recipients of the one-parent family payment will be exempt from a number of the conditions for jobseeker's allowance for a transitional period up until their youngest child reaches the 14 years of age. Lone parents who qualify for jobseeker's allowance during the transitional period will be required to engage proactively with normal activation process in order to retain their payment. In effect, the lone parents in question will be placed on a targeted version of the jobseeker's allowance to be known as jobseeker's transition.
In recognition of the nature of their conditions of employment, the Bill also provides that the retained fire-fighters will be exempt from certain conditions applying to the jobseeker's benefit and allowance schemes. These changes will reflect the administrative arrangements that are already in place.
A measure to strengthen control of social welfare expenditure will require an existing social welfare client to provide certain information and to have his or her photograph and signature electronically captured for the purpose of identification on a periodic basis. A person who refuses without good reason to comply with these requirements will be disqualified from continuing to receive a social welfare payment.
The Bill extends the list of bodies that are authorised to use the personal public service number, PPSN, for the purposes of carrying out transactions with members of the public and for the sharing of personal data and information for the purpose of carrying out such transaction. The additional bodies being included are the Insolvency Service of Ireland, Quality and Qualifications Ireland, and payment service providers who have been authorised by the Revenue Commissioners to collect the local property tax. The Bill amends the Civil Registration Act 2004 to facilitate online access to the index information from the registers of births, deaths, marriages and civil partnerships.
The Pensions Board is being renamed as the pensions authority. The authority will consist of an independent chairperson appointed by the Minister for Social Protection and two ordinary members, reduced from 16 ordinary members. The two ordinary members will consist of a representative of the Minister for Social Protection and a representative of the Minister for Finance.
Another change included in the Bill is the establishment of a new unincorporated body called the pensions council. The function of the council will be to advise the Minister for Social Protection and the pensions authority on pension matters on requests or on its own initiative. The pensions council will not be a corporate body and will not have the power to spend money. The chairperson of the pensions council will be unpaid and will be appointed by the Minister.
The Pensions Board will be provided with the power to wind-up a pension scheme in circumstances where a scheme is under funded and the trustees and employer are not in a position to adopt a funding proposal, and where the trustee of the scheme fails to comply with a section 50 direction to restructure scheme benefits.
I also welcome the opportunity to contribute to the debate and I welcome the number of provisions in the Bill which adjust anomalies which have been there for a very long time that discriminated against certain categories of people and individuals. The self-employed and retained part-time firefighters come to mind in that respect. Firefighters perform a very important role in local communities on a part-time basis and they often put their lives at risk while providing service in addition to full-time employment if they are lucky to have it. A discrepancy existed in that if firefighters became unemployed, they could be denied jobseeker's allowance or have to get it on appeal. It was an unfair process and I compliment the Minister on adjusting it. This process was first implemented in 1972, when it was decided that the days for firefighting or training would be disregarded in determining an entitlement to jobseeker's benefit. It took a long time but I compliment the Minister on making the change.
Another change means that all social welfare recipients will get a photo identification card. People may argue that this could be intrusive but it will allow payments to be made to people who are entitled to them, which is what everybody should want. People who fall on difficult times should receive payments but people should not succeed in making fraudulent claims. I know the Minister has made much progress in recent years on the issue but this Bill will make further and better progress easier, allowing money to go to where it is deserved.
There are many areas where I would like the Minister to be able to use funding, such as the farm assist scheme. Adjustments were made in the last budget and perhaps with some of the provisions going through in this Bill, we will be able to look at the matter again. There are 1,800 recipients of farm assist funding in my county and many have had it cut. If these people are not in the farm assist scheme, they are not entitled to be in the rural social scheme, and that has major implications that may not be evident for people in receipt of family income supplement. If there is a more targeted approach to cutting fraud, we may be able to consider that issue again in the near future.
With regard to the use of photo identification and signatures, one can see in the free travel scheme how measures can be abused. I know many elderly people and disabled people who are fearful that the free travel scheme will be readjusted because of its inherent costs. People who use the scheme fraudulently are putting at risk those for whom the scheme is meant. It is a wonderful measure for senior citizens and disabled people, and it contributes to the economy because many such people in the winter may use free travel to stay overnight in hotels and guest houses. It provides a cushion against social isolation and any change caused by abuse of the system would be terrible. The move to the use of photo identification is positive as it is a way of targeting payments and giving help where it is deserved rather than catching out people.
As other speakers have indicated, the Bill also introduces measures to allow for the transition from lone parent to jobseeker's allowance when a person no longer qualifies for a single parent family payment due to a child reaching specified age thresholds. This part of the Bill allows for flexibility and deals with a scenario in which many lone parents find themselves. It is consumer-friendly, which is good.
The Bill is also addressing the plight of the self-employed, broadening the PRSI base to allow them to pay into a scheme that will give them extra entitlements. It is a terrible pity that was not done ten years ago by the previous Fianna Fáil Government during the construction boom as all of us were in halls in our constituencies filled with people who had employed other people, paid taxes and boosted their local economy only for their businesses to crash, many of them in the construction area. They were not entitled to anything as a result and the Bill will address that concern. It is a pity this has not been in place for the past four or five years in particular, but I compliment the Minister on facing up to the issue.
I welcome the provisions I mentioned, although I do not have time to get into some others. I am very supportive of the Bill.
I wish to share time with Deputy Tom Fleming.
Is that agreed? Agreed.
I welcome the Minister and I am generally supportive of this legislation. I am an admirer of the Minister and what she is trying to do with social welfare. It is not an easy job. Before Government backbenchers or others get alarmed, I should say that I appreciate the difficult job she has had because of the recession and the number of problems she has faced while looking to reform. She has a good relationship with most of us on this side of the House and all politicians.
I welcome the change to the status of retained firefighters, who have given sterling service to the State and have been unfairly hit by the pension levy as they are not full-time workers. They risk life and limb to answer a call to defend others and save people's lives, so it is good to recognise that they should be exempt from certain conditions for pension schemes and entitlements such as jobseeker's allowance.
I welcome that there will be a new board, although I forget exactly what the name will be. I know that with the eight appointees the Minister might insist there should be a voice for widows, pensioners, lone parents and those in small business. I would be glad to assist the Minister in this regard as such people would be fair and have a better understanding of the matters at hand. I know the chairman works free of charge but there are many good people in community organisations and volunteers who could make a good contribution and have some common sense.
The self-employed are not being recognised enough although I salute the Minister's efforts to allow them pay some PRSI and get something back. I have been self-employed for 30 years and I know how the sector employs people, pays taxes and has the nightmare of organising work and ensuring everything is done correctly and is above board by meeting all the regulations. That is only correct and there is a good relationship with many employees. A business may founder, as many did, because of the recession and all the employees would be looked after, which is only correct. However, the self-employed person and his or her family get no recognition. They have all the pain and no gain. They want some recognition and we need those people to create jobs and employment for the economy. We do not want them to be made into paupers.
I welcome the good news today on the employment front and any bit of good news in that respect is important. The new identification cards will be a major step forward and I do not understand why they were not put in place ten or 15 years ago. It is not rocket science to have a person's identity matched to a PPS number and picture. I hope it will stop fraud.
Fraud damages the good people.
I do not use the train much but I took it this week from Limerick Junction. I asked the man at the station how business was and he told me it was desperate. I am sure he was an employee of Irish Rail. He told me without the free travel scheme the station would be silent. I met two people from Cork in the guesthouse this morning who are in Dublin for two nights. It is important for the economy that they are allowed to travel and it gives the people themselves the freedom and initiative to get out of the house. They told me Killarney and Westport train stations would close down without the free travel scheme. The business communities in these towns take initiatives and provide offers to attract people. It is wonderful for people to be able to forget about the economy and economic issues for a day or two and go away and see how other people live and enjoy themselves and relax. Irish Rail supports trips taken by the Carers Association, day care centres and active retirement groups and it is very important to encourage people such as these to get out. The free travel scheme must remain in place and Iarnród Éireann should not be sold off as rich pickings for companies who want to take the lucrative routes and forget about the subsidies for the people who built up the country and worked hard.
We can all demonise lone parents but most of them are genuine. There will be a gap when children are between the ages of seven and 14. Parents can take part in training and be upskilled to meet the needs of the jobs market. I cannot imagine how difficult it is to be a lone parent. Lone parents are isolated and trying to look after the family, and they may not be able to keep abreast of the changes in society and the different skill sets required to obtain employment again and be of assistance and play a meaningful part in the workforce.
The farm assist scheme needs to be examined even more thoroughly. I praise the benefits of the rural social scheme because farmers have time on their hands. A bit of off-farm income is wonderful and the schemes in which they have been involved have been wide and varied, including graveyards, research, genealogy, tidy towns and caring associations such as community alert and visiting family members or the elderly, and no better people to do so because the farmer's instinct is to work hard. This scheme needs to be broadened and farmers need to be given a bit more leeway because anomalies exist between the farm assist scheme and jobseeker's allowance and this is unfair.
I hate to be critical but I am aware of a case involving a person from my area and I have spoken to the Minister about it. It is with regard to an application made in May 2011. While the person has received payment, he has been waiting for back payments since January 2012. I telephoned the Department and was told it would be another week. On various occasions I have been told it would be days or weeks. I know the staff are under pressure and busy, but it is very frustrating to be told indicative dates in good faith and then it does not happen. From May 2011 to now is too long to have to wait. The gentleman still has not received his due rewards. He was originally refused but appealed and passed all the medicals and was awarded in January 2013 but is still waiting for the arrears. If he is receiving payments he is in the system so it would not be rocket science for somebody to calculate the amount of arrears and pay it out, whether weekly or in another way. At least he should be informed of his entitlements and how long it might take to pay. He should be given certainty because it is unfair. People must go through rigorous tests and many hoops and loops. He has a genuine disability. Iarraim ar an Aire é sin a dhéanamh. I know social welfare officers do their best but they are understaffed. I know significant changes have occurred in social welfare and it is a pity.
I thank the Minister for her stewardship of the Department. She does not have an easy role and her partners in government do not have the same values as she does. She is a member of the old Labour Party I knew and she is trying to live up to those ideals. She is serving the Department and the country with a modicum of respect and dignity and she is fighting her corner in Cabinet to ensure moneys are voted for this very difficult area in these very difficult times.
I agree with previous speakers that these reforms should have been made years ago but various Ministers did not do so, including some from the party of which I was a member. I accept this. Photographic identification should have been introduced yonks ago because it will stop the myths and rumours about people flying out of the country and collecting social welfare and rudaí mar sin. It is only right that those who deserve social welfare and those who have paid their way, paid stamps and are entitled to it received full support. If there are fraudsters and chancers, of which there are a minority in every walk of life, they must be dealt with stringently particularly with regard to free travel. Why should they defraud this wonderful service and deny others the privilege of travelling? Mar focal scoir, just again gabhaim mo bhuíochas don Aire as an sár obair atá á déanamh aici gach lá.
The Bill allows us to address many anomalies whereby the long-term unemployed find it extremely difficult or impossible in many cases to return to the workforce. Graduates are also finding it difficult to get on the jobs ladder. The stark reality is that 25% of our third level graduates are unemployed. This cannot be allowed to continue. Thousands of well-skilled and educated people, including those with qualifications in construction, engineering, information technology and science, and highly qualified nurses have left our shores in droves in recent years. This is a huge drain of our best resources. We have wonderful talented people but in many cases they had no option but to pack up and leave and try their hand in far-off shores. We must get back to basics and shows some light at the end of the tunnel for this sector of society. Addressing this matter is paramount to the requirements of lifting the country out of the doldrums. In the short term we must address this neglect which is demoralising for our citizens who see no hope on the horizon.
A recent survey and audit was carried out by Brightwater on the deficiencies in our IT sector with regard to suitably qualified computer programmers. It stated a large factor in the shortfall was that the focus in our colleges was too much on theory and not enough on practice. Another major deficiency according to the survey was that the universities teach old computer languages which are outdated. We are languishing far behind the modern world and this is pitiful. The rest of the developed world is leaps and bounds ahead of us and we are failing to keep up with the growing demands of this vital sector which is the real growth area in the world economy.
The stark reality is that the foreign direct investment companies which have invested in the IT sector are reasonably satisfied because it gives their management and other staff a higher quality of life. It is a good environment in which to do business and interact socially. We have a lot going in our favour but we need to work on this matter and bring it up to speed to meet the demands.
Such companies are starting off with a number of qualified staff and gradually train new recruits. It has now reached the stage where, before they come into this country, companies want suitably qualified people in place and available to work. Unfortunately, as the Minister knows, there is a shortfall of approximately 5,000 staff who are needed for the IT sector. This problem has been staring us in the face for the last four or five years. A further 10,000 such people will need to come on stream in the near future. It is pitiful and shameful that there are 430,000 on the live register, while we are falling down dramatically in this area.
While we will not solve the problems overnight, a number of factors need to be brought together in this regard. IT is such a growth industry so this shortfall of trained staff will not be accepted in future. These companies are now demanding the availability of fully trained staff as a priority even before they relocate here. Anything up to 15,000 staff will be needed in the near future. It is a poor reflection on our educational enterprise policy which does not appear to have any joined-up thinking. There is potential to treble the projected figure by perhaps going up to 45,000 or 50,000 over the next five years. That would certainly put a big dent in our unemployment figures.
Recently a small Dublin firm, which was started from nothing by an entrepreneur, was employing five computer programmers. The boss of the company needed to build that number up to at least 25, but he had to move abroad due to the lack of qualified staff here. People with the necessary experience were not available so he relocated to Poland where there is widespread availability of suitably qualified staff. The entrepreneur immediately recruited 20 extra staff and now has a small enterprise going there with 25 full-time viable jobs. That is typical of what is happening here at the moment. That company's owner upped sticks and is now flourishing elsewhere with a view to further expansion. The good thing is that his headquarters are still in Dublin, which at least leaves room for some optimism that he may come back in the future, bringing that experience with him. We will have to provide the right environment here, however, to ensure that such people will be welcome in this country. We must be receptive to such firms and ensure that all the necessary facilities are in place to encourage entrepreneurship of that nature.
One can imagine what little confidence direct foreign investors have when a native entrepreneur is forced to leave due to our deficiencies. The Minister for Social Protection should liaise with her fellow Ministers, including Deputy Bruton and Deputy Quinn, on this matter. She should rein in all the stakeholders, including the new education and training boards, and second and third-level institutions, to deal with this void in our economy. This must be done if we are to have any chance of reviving the situation over the next five years and making progress in reducing our huge unemployment figures. We need to get a better skills match between industry's needs and third-level graduates. That matter needs to be addressed by any proposed initiatives.
The transition from social protection schemes to training and upskilling for jobs should be seamless. Entitlements should be provided automatically. Databases should match up so that more immediate interaction can be achieved within existing computer systems. It is annoying for people who may be finishing a training scheme but who do not have full-time work, not to receive payments automatically. I know that efforts have been made in that respect but I have seen a few cases where payments did not come straight through for welfare recipients, so their families had to support them in the meantime.
There have been big reductions in the farm assist scheme, as was mentioned earlier. If a person's €160 payment is reduced to €100 over two years it can mean the loss of some quality of life, particularly with children to support. The Minister should re-examine the farm assist scheme, given the dramatic reductions and the extreme weather conditions which, as we are all well aware, have hit the farming community. The Minister should also examine other schemes such as those for the disabled and carers. In addition, the self-employed are finding it very difficult to access social welfare payments even after paying stamps for years. I hope that matter will be rectified. I know the Minister has established a board to deal with it.
I wish to share time with Deputies Arthur Spring, Ann Phelan and Seán Kenny.
Is that agreed? Agreed. The Deputies will have five minutes each.
I am glad of the opportunity publicly to welcome this Bill. It contains many measures which are long overdue and which were, unfortunately, overlooked or ignored for many years by previous Administrations. One area of the Bill deals specifically with jobseeker's payments to retained firefighters. This is a subject of particular interest to me. It has been raised with me on many occasions and with other colleagues in the House. County Louth, including places like Carlingford, was one of the areas where many retained firefighters did not receive payments to which, I believe, they were justly entitled. It is an indictment of the state of our social protection system under previous administrations that this situation was allowed to develop in the first place. In one part of the country, retained firefighters received their payments without any fuss, while elsewhere they were effectively blocked as the regime was interpreted differently depending on what rules were applied by deciding officers.
Nobody in this House needs to be reminded of the important role carried out by retained firefighters across the country. Their function is essential, particularly in rural areas, and as back-up to full-time staff in urban stations such as those in Drogheda and Dundalk in my constituency. We should not be putting obstacles in the way of them fulfilling their duties.
When I first raised this issue with the Minister for Social Protection, following my election to the Dáil, she was very sympathetic to the plight of retained firefighters. She grasped straight away the importance of correcting this particular anomaly. I am glad that we now have what could be described as a sensible and fair solution, whereby retained firefighters can receive jobseeker's payment subject of course to the normal requirements. They will no longer be disadvantaged as a result of the fact that they are required to reside in close proximity to their stations, which would limit alternative employment opportunities.
There is no doubting their desire and availability for full-time employment but if this situation had not been resolved in the context of this legislation, we could have ended up with the ludicrous situation of telling dedicated firefighters that they should sit at home rather than serve their communities because they would not be adequately and justly rewarded for doing so. To continue to operate such an unclear system at the mercy of deciding officers was unjust, unfair and very frustrating. This measure allows the State to support the retained firefighters who are as well trained and committed to the fire service as the full-time colleagues beside whom they serve. There is no doubting that. In the absence of such a measure contained in this Bill, we could have feasibly ended up with a situation where retained firefighters denied access to appropriate social welfare supports could have exited the service entirely having had thousands of euro of taxpayers' money spent on their training. This would have been a complete waste of their time and taxpayers' money.
I pay tribute to the Minister and the determined way she has addressed this issue and the departmental staff who have dedicated significant time to assisting the Minister to resolve this issue. This provision of the Bill is a very positive development and I congratulate the Minister, Department and this House, which I hope will see fit to support this aspect of the Bill in supporting rural communities in particular which very much depend on the retained firefighters and the dedicated service they provide.
I thank the Ceann Comhairle for allowing me to participate in this debate. There is no doubt this Bill will give effect to a number of social welfare and pension reforms, with changes in liability for PRSI contributions, broadening the PRSI base, changes to the jobseeker’s payment scheme, enhanced identity authentication requirements for claiming social welfare and the changes in the Government structure of the Pensions Board. First I compliment the Minister on working towards what I believe she hopes to achieve, a modern social welfare system that is trying to build in flexibility. While our social welfare system is huge and turns very slowly, and it takes a very long time to make changes to it, the Minister is trying to make the social welfare system fit for purpose and I hope to be able to help her in those endeavours.
Like my colleague, I congratulate the Minister on solving the situation for the retained firefighters. A number of them are in my constituency and I felt very sorry for most of them. I have made representations on behalf of a number of retained firefighters and some have had to endure financial hardships. As a result, many have accumulated severe debt through mortgage arrears, credit card debt, household expenses and, in some cases, very severe medical expenses. All of this is because they were classed by the Department as “not being openly available for full-time work.”
I was recently approached by a retained fire officer who informed me that he was due to undergo a review by the Department regarding his entitlement to jobseeker's benefit. Because of the arduous nature of the process over nine months ago, he became extremely negative towards the State. He claimed that at this stage, the process had become so complicated, time consuming and stressful, he was seriously considering resigning his post in the fire service to go on jobseeker's allowance altogether. It was no longer worth the hassle for him or for his family who were really struggling with their expenses. In light of this case and others I represent in similar circumstances, I am pleased the Minister has taken all of our representations on board and has seen fit to incorporate a provision within this Bill to ensure all retained firefighters are exempt from having to satisfy the sub-loss rule, and that any days of employment when they are firefighting will not reduce their jobseeker’s claim. Regarding availability for work, I am delighted the proximity clause in itself does not render a claimant unavailable for full-time employment provided they are genuinely seeking work. On this basis, retained firefighters will be able to re-qualify continually for jobseeker's benefit as they will not have to suffer a sub-loss, even in situations where firefighting is their main employment.
The new jobseeker’s allowance transition announced by the Minister is another welcome addition. The Department recognises that it would be very difficult for some lone parents to meet the conditionality attached to the jobseeker’s allowance which requires recipients to be available for, and genuinely seeking, full-time work. Under the new arrangement, unemployed lone parents with a youngest child aged between seven and 14 years will not have to fulfil this requirement. I have long thought that education is the great equaliser and am delighted the Minister sees it this way too. This Bill allows for lone parents to engage with education, training and employment supports to help them upskill and make them more job-ready for when they can dedicate more time to the labour force. This Bill will exempt former one-parent family recipients from having to be genuinely seeking employment, available for employment and proving unemployment, but who satisfy the jobseeker’s allowance means test. These reforms will allow parents to access and avail of part-time work, which is more suitable to a particular moment in their lives. That is what is required. I am delighted with this flexibility and I compliment the Minister on introducing it because I have always believed we needed this in our social welfare system.
We must introduce a scheme that self-employed people can pay into. We must learn the lessons from the Celtic tiger. There are any number of people who have suffered very badly. They have to pay into it but we must devise a scheme where they will be able to avail of that.
I compliment the Minister on doing an excellent job in her portfolio in unprecedentedly difficult times for our economy. The element of fairness is upheld in this Bill. Comparison with EU countries suggests Ireland's system of social transfers is the most effective in reducing poverty. When we look at social welfare we often think of the fact that 2.2 million people in Ireland are in receipt of some form of social welfare out of a population of 4.5 million, yet we often forget we have to protect those with the very least in society. There are many good parts to this Bill and a lot of sense is being spoken on it on all sides of the House. My two party colleagues who spoke before me spoke about the firefighters and the fact that we are addressing an anomaly that has stood in this House and the country for years without being addressed. Particular praise needs to go to Deputy Stagg because he has pursued this for years before many of us became politicians.
There is also an element of truth about this because fraud is an element in all societies. Unfortunately, we are trying to address a situation where €700 million can be saved. I welcome that and the Department is doing a good job. The fact that 250,000 identity cards have gone out is very welcome and will mean that people will feel under scrutiny when they attend a social welfare office. It will not be overly burdensome but appropriately so. I encourage the Minister to pursue the concept of the pensioners in line with what is being done with the Passport Office. Rather than bringing every pensioner in and trying to provide them with an identity card, she should work with the Passport Office to see if she can produce a card for the pensioners and give them a level of access to the identity system too.
I would like to see these ever so slightly improved. The issue of pharmacists is one that affects my area in particular. They do great work in small communities, often in large areas that can be uncared for by local authorities due to the current strains on the system.
The self-employed still need more care. Any self-employed person who comes to my office seeking help has not been getting fair treatment at the level society would wish for them. Those who have had their fingers burnt as a result of being self-employed are not inclined to start another enterprise, which is not a productive measure of society. The Pathways to Work scheme is welcome and so is the stabilising of social insurance, jobseeker's transition and pension payments. As Deputy Ann Phelan noted, the lone parent's access to education and the capacity for flexibility within the system are excellent.
If I may, I will bring the attention of the Minister to the Social Welfare and Pensions Act 2011 because it is my belief we need to address part of that Act. At present people retire from private employment at 65 years of age, as per contract, but because the State pension will now not kick in until they are 66 there will be a gap of a year during which the transitionary pension will not be in place. I have been contacted by a number of people, in particular some who have been working on the factory floor in the Kerry Group, who have approached the management, seeking to have either an extension of their work or an option to retire later, a provision they do not have. We cannot ask a person who has been working for 45 or, in some cases, 47 years, to retire and go on jobseeker's benefit. There needs to be an incremental process whereby people are allowed to retire in this way. Otherwise we must bring in the Congress of Trade Unions and employers' agencies such as IBEC, with the Government standing by, and work out a way whereby people can work longer or else be given the option to have a State pension without having to go on jobseeker's benefit. Much of the work that is spoken of is physically intense and the capacity to do a similar job to the one previously held is limited for people aged 65 or 66 years of age. This must be addressed rather quickly. I believe there is an appetite within congress and some employers realise such people have passive knowledge built up through work experience that cannot be brought in by younger people. I ask the Minister to address that. I realise it is not pertinent to the current Bill but it is pertinent and the deadline is upon us.
This Bill provides for the implementation of a number of changes to social welfare schemes announced in budget 2012, including the welcome changes to the one parent family payment. In addition, the Bill provides for a number of amendments to the Social Welfare Consolidation Act 2005 and amendments to the Pensions Act 1990 in respect of the funding standard which applies to defined benefit pension schemes. The changes require defined benefits pension schemes to hold a risk reserve to meet the scheme funding requirements.
Section 6 amends and extends the list of bodies that are specified in Schedule 5 of the Social Welfare Consolidation Act 2005 as being authorised to use the personal public service number, or PPSN, for the purposes of carrying out transactions with members of the public, for sharing personal data and information for the purposes of carrying out transactions, and for exchanging data. I welcome this initiative, which is long overdue.
Section 7 extends the list of weekly social welfare payments that are excluded from the general disqualification for receiving a weekly social welfare payment, where a person is also participating on a community employment scheme. At present, participation on a CE scheme does not affect a person’s entitlement to rent supplement payable under the supplementary welfare allowance scheme. Section 7 provides that participation on a CE scheme will not affect a person’s entitlement to mortgage interest supplement or to the diet supplement, payable under the supplementary welfare allowance scheme.
Part 3 provides for the necessary amendments to the Pensions Act 1990 to give effect to the Government's decision to introduce a risk reserve into the funding standard. The funding standard needs to be met by defined benefit pension schemes to ensure that the pension scheme can live up to its pension promise. This is intended to improve the sustainability of pension schemes and the security of members’ benefits and provide a buffer against the volatility of financial markets. The measure will allow pension schemes a long lead-in time to develop the required level of risk reserve. The level of risk reserve will be linked to the level of risk the pension scheme is carrying in terms of its investment strategy.
The existing funding standard provisions in Part 4 of the Act, which require pension schemes to maintain sufficient assets to meet the liabilities of a scheme, will be extended to require pension schemes to hold a risk reserve. The trustees of pension schemes are currently required to submit an actuarial funding certificate to the Pensions Board to indicate whether the scheme satisfies the funding standard. If it does not do so, the trustees are required to submit a funding proposal to the board to restore scheme funding. The amendments to the Pensions Act will now, in addition to the submission of an actuarial funding certificate, require the trustees of a pension scheme to submit an actuarial funding reserve certificate. Section 12 also provides that a working director with a shareholding of 50% or more in a company will not be regarded as being insurable as an employed contributor in the company. Company directors holding 50% or more of the shareholding of a company are not normally regarded as falling within a normal employer-employee relationship and are therefore, deemed not to be employed under a contract of service and liable for PRSI class A contributions, namely, as an employee. Instead, such company directors are deemed to be employed under a contract for services and to be liable for PRSI class S contributions, something I very much welcome. There are a number of measures to broaden the income base for PRSI in order to ensure the stability of the social insurance fund so that it can continue to pay the pensions and benefits required by those who need them. A number of these measures were provided for in the Social Welfare Act 2012, including an increase in the minimum level of annual contribution from the self-employed, from €253 to €500.
I join my colleagues in welcoming the eligibility for social welfare payments of part-time fire-fighters. Believe it or not, people have been struggling to get this for more than 40 years and it is welcome it has now been achieved. This is a very good Bill and I commend it to the House.
I call Deputy Dara Calleary who is listed as having 12 minutes, which is unusual.
It might not even be that.
The time will be worth it.
I welcome the chance to speak on the Bill. "Miscellaneous provisions" in the title of a Bill is generally the parliamentary term for the kitchen sink, with everything thrown in on top. At the beginning of any social welfare Bill, however, it is appropriate to pay tribute to the staff of the Department of Social Protection who work throughout the country and deal every day with people who are under huge pressure. They deal with us, too, and the telephone inquiry lines of the Department are a model for other organisations of Government as to how to facilitate us. As I always do, I appeal to the Minister to try to deal with the backlog of social welfare appeals - to provide the extra staff required in that area. None of us are happy with a situation where social welfare appeals are running behind, in some areas, by 14 or 15 months. I know the Minister has put extra people in place and that a particular cadre is what is required, but we must address that issue.
There are some welcome elements of the Bill. I welcome in particular the extension of PRSI. In this country we have a difficulty with entrepreneurship and business. We still do not give appropriate - or enough - support to entrepreneurs and do not give them enough encouragement as they go about creating their business. In particular we do not support them when it does not work out. This is not political, it is cultural. We love to celebrate failure in this country and love to throw at a person that his or her business did not work out. If we are to move on as a country we have to support people. The current situation is that many people who were employers during the so-called boom times are now in a worse situation than those they used to employ because the system is not designed to help them. Deputy Spring referred to this. It is not good enough. The people who contributed substantial money in taxes and PRSI are now left out and cannot access a payment because, in many cases, they are not entitled to one. Even if they are so entitled, because of properties they have that are worthless at this stage, they cannot get the payment because there is a perceived income arising from the property. We need to look at that situation and encourage people. Schemes such as the back to work one are excellent and need more support and publicity.
I welcome the granting of the principle in this legislation that PRSI will be extended to those with an income for a trade or profession. It does not go far enough but at least it is we have opened the door.
I welcome the provision for part-time firefighters to receive jobseeker's allowance. Particularly during the spring emergency season for gorse fires, part-time firefighters play an important role. They are not especially well paid for the risks to which they expose themselves and I pay tribute to all who campaigned on this issue. The notion of them not being available for work because they are protecting public safety reminded me of Sir Humphrey and I am glad the matter has finally been addressed.
Although the Bill makes provisions for pension reform, we still are not facing up to the pensions time bomb. The Minister and her predecessor have commissioned a series of reports and conferences on the subject and every so often there is a splash on the six o'clock news but then we move on to the next story. We are facing a serious problem down the line as our population structure changes and the proportion of those in need of pensions begins to exceed those at work. Perhaps because we are so busy trying to get through our current difficulties we are not focusing our governmental, societal or personal attention on the pension challenge. The Bill goes some of the way to resolving this issue but in 15 or 20 years time people will retire in the expectation of a pension pot that is no longer available. They will then try to access the social protection system but at that stage it will be too late. The number of retirees will be so great that our system, which is already under pressure, will collapse unless we begin preparing now. It is no bad thing that the age of eligibility has been increased given that people are working longer but the question of how Ireland Inc. pays for pensions remains to be addressed. There is no sense in planning for our economic recovery if we ignore the elephant in the room because adequate pensions provisions are essential to ensuring our recovery is sustainable.
In the spirit of miscellaneous provisions, I would like to raise a number of issues relating to social protection. It was wrong to cut farm assist in December. The Minister of State, Deputy White, will not be familiar with farm assist.
I usually think people are referring to pharmacists.
The payment is aimed at those on the lowest farm incomes and with the smallest family farms, who did not gain from the upturn in agriculture. Their situation has deteriorated even further because they have experienced the worst six months of weather and an unprecedented fodder crisis. We speak about these issues frequently in this Chamber but the national conversation does not appear to take account of the seriousness of the crisis facing farm families. While there has been growth in some parts of the country, farm families have maxed out their credit with co-ops and banks and are no longer in a position to buy supplies. The decision to cut the only protection for those on low farm incomes needs to be reviewed ahead of the budget in October.
In her first Social Welfare Bill, the Minister increased the number of contributions required for pensions. This had a particular impact on women who were returning to the workplace after raising their families and many find themselves short of the full pension to which they are entitled. All of us have encountered this issue through our constituency offices and will have attempted to track contributions over a period of 40 or 50 years to make up for gaps in employment. This was an incorrect decision on the part of the Minister and we are seeing what it has done for the sake of saving a few euro per week. It tells the people concerned that their work is not as important as those who managed to get out before the change. In fairness to these women who have done the balancing act in terms of raising their families and working to put their children through college, the number of required contributions needs to be reviewed.
I am concerned about the impact of the move to cashless payments on those who are most dependent on social welfare, namely, older people. Many of them are still uncomfortable with cashless payments and prefer to receive the cash in their hands. At times I do not blame them for this. The change will also have an impact on our post office network. The Minister explained the ongoing tendering process in response to a parliamentary question I tabled two weeks ago, but she did not reassure me in this regard and I will also be raising the subject as a Topical Issue with the Minister for Communications, Energy and Natural Resources. Has the Government given any thought to what will happen to our post office network if it loses the social protection contract for cash payments? These payments are what keep most post offices open and they comprise 60% to 70% of the business of many rural post offices. If that business is given to some other operation at the end of this year or we move to the era of cashless payments, we will lose our post office network. I refer not only to small post offices, but also ones in relatively large towns because the traditional postal business has changed so much that they depend on these contracts to remain open. I am aware that reports have been commissioned and that Deputy Tom Hayes's committee has produced a report on the matter, but I do not get the sense that the Government realises the imminence of this threat.
There is much to support in this Bill but we need to open the door further in terms of extending PRSI to those earning incomes from trade. Even if it means forcing individuals to pay contributions, at least the current generation of entrepreneurs will be in a position to get a payment to carry them through the down times. We need to encourage the spirit of getting back on the horse after a fall. However, the elephant in the room for our country is the pension time bomb. The Bill suggests a plan but it does not go far enough in terms of raising the alarm.
I welcome the opportunity to speak on the Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013. I agree with the comments by Deputies Calleary and Spring in regard to the self-employed and welcome the first step the Bill takes to rectifying the anomaly whereby those who take a chance and try to establish a business are left without a safety net if they fall on difficult times. I look forward to a prompt report from the expert group established by the Minister so that the Government can act at the earliest opportunity.
I also welcome the provisions in the Bill on retained firefighters. In many areas of the country, including my own county of Wicklow, people generously give of their time for small or nominal sums of money in order to protect communities in times of emergency. It was a bugbear for many people that such individuals were deemed ineligible for the jobseeker's payment.
The changes made by the Bill to lone parent supports are particularly welcome. The introduction of a new jobseeker's transition arrangement will allow those who were formerly in receipt of the lone parent family payment to seek part-time work. This has been welcomed as a progressive initiative by organisations like One Family which work with lone parents on a daily basis. One Family has described the new measures as a helpful stepping stone. We do not want a social welfare system with built in poverty traps and in the absence of these reforms we would have run the risk of the lone parent family payment becoming a poverty trap. The proposed transition mechanism will be extremely helpful in enabling single parents to balance their desire or need to work with their caring responsibilities for their children. I commend the measure.
I also welcome the measures to tackle fraud, an issue of concern for every taxpayer in this country and one which regularly arises in the Committee of Public Accounts.
Measures that require people, where necessary, to visit their local social welfare office to have their photograph taken and provide a signature to be scanned electronically and recorded on their file will go a long way towards cracking down on social welfare fraud. They will also help to ensure that the allocations to social welfare of more than €20 billion passed annually by this House will reach those who need them most and prevent people from engaging in fraud.
We need to bring stakeholders with us when introducing social welfare reforms. The Minister provided an excellent template for doing so when dealing with reform of the domiciliary care allowance. Rather than establishing an in-house expert group, she asked representatives of all the stakeholders, including the Carer's Association and groups representing children with autism and the parents of children with special needs, to outline their proposals for changing the domiciliary care allowance system. This process produced excellent proposals for change. We need a similar process to be applied in many other areas of the social welfare system in need of reform. Unfortunately in politics, one tends to hear announcements of rash changes to one or other payment structure at which point we scramble to engage in consultations only to find it is too late. I commend the Minister's efforts to change the domiciliary care allowance and ask her to explore the possibility of extending the model of bringing together all relevant stakeholders when reforming the systems and supports in place for carers.
I support many of the contributions of previous speakers, especially comments on the fairness of this social welfare legislation. Many families depend solely on social welfare to provide for all their needs. For this reason, the Government has protected core social welfare rates in successive budgets. As the Minister noted, in a time of unprecedented crisis we are standing by those who are most vulnerable. In difficult times, when tough decisions must be made, we must salute the Government for standing by the most vulnerable, namely, the unemployed and those who depend on social welfare payments. I am pleased to note that Ireland's social welfare system ranks highly when compared with other European Union countries.
I ask the Minister to clarify how many of the 400,000 people who are registered as unemployed are engaged in some form of work. Is the figure 50,000, 60,000 or perhaps 100,000? This matter needs to be clarified.
It is vital that the Government ensures everything possible is done to enable people who wish to return to work to retrain. Blocklayers, plasterers and other skilled building workers need to be retrained because the construction industry accounts for only a small percentage of gross output. I could cite many projects in my constituency which are unable to find people to engage in training. Only last week, I attended a function in my home town of Cashel at which I met people who could not fill training positions. Something is wrong with the system and the Department should address it.
I concur with Deputy Calleary's comments on the post office network. The Joint Committee on Transport and Communications, which I chair, produced a detailed report on the future of the network. We found that the social welfare contract is one of the key factors keeping post offices open. While I accept the Minister is bound by certain rules and regulations and the need for transparency, given the vital importance of post offices to rural areas, I ask her to ensure social welfare contracts remain with An Post.
I welcome the Bill and thank the Minister for attending the debate. This legislation should be placed in the context of employment statistics published by the Central Statistics Office today. The figures are important and deserve comment because they show employment grew for the third quarter in a row and unemployment dipped below 14% for the first time since the crisis began. While we would all like unemployment to be much lower, it is noteworthy that the rate has fallen below 14%. Apart from the top-line figures, another statistic is worthy of comment. It is encouraging that employment levels among people aged 35 years and older are now returning to the levels that existed when the economy was enjoying high growth rates. However, the flipside of this is the position of those aged below 35 years. A recent report by the Economic and Social Research Institute noted that the youngest have borne the brunt of the crisis from which we are emerging. In that context, I welcome the Bill and urge the Minister to continue to focus on certain areas.
Some of the recent figures from the Department on the periods people spend on jobseeker's allowance and jobseeker's benefit show that we must redouble our efforts in the area of activation, in other words, helping people return to the employment market by ensuring appropriate incentives are in place. Deputies will be familiar, from their clinics and constituency work, with the despair felt by people who cannot find a job. This feeling is even greater among our constituents who find a job but cannot afford to take it because of the negative impact it would have on their benefits. Typically, the jobs available are either part-time or on the lower end of the wage spectrum. This is particularly relevant given that much of the employment being generated is in the area of part-time work, as is the case in the early stages of recovery in most labour markets.
I urge the Minister to focus on three areas, the first of which is the activation measures to which I referred. Through the Pathways to Work scheme, the Minister is seeking to ensure that everyone in receipt of a jobseeker's payment will be contacted regularly by someone providing assistance in finding a job. The purpose of this approach is not to harass people but to help them by ensuring they receive appropriate training and are given good advice. The second area on which I urge the Minister to continue her work is rent allowance. In some cases, people find they lose more in rent allowance than they gain from taking up employment. The third issue I ask the Minister to address is to ascertain the impact of taking up employment on the social welfare benefits of the household as opposed to the individual entering the workforce. We want to ensure that taking a job pays and that, as the recovery accelerates, it delivers jobs for those who need them most.
I too welcome the Bill. Given that speaking time is short, I will focus on a couple of specific points. Section 15 amends the Civil Registration Act 2004. The Minister has promised on a number of occasions to introduce legislation to deal with an issue that is not covered in the section.
I understand that the heads of the Bill may already have been prepared.
We are in the midst of the holiday season and people die while overseas. I and my colleague, Deputy Tom Hayes, have raised this matter on a number of occasions and Deputy Kyne has drafted a Private Members' Bill in respect of it. I am of the view that we have missed an opportunity in the context of dealing with this matter in the legislation before the House. We could have amended the Civil Registration Act to allow for details of the deaths of Irish citizens which occur overseas as a result of accidents, etc. to be recorded in this country.
I agree with Deputy Donohoe that the figures which have been produced are excellent. This is an issue about which we should be talking much more, particularly in the context of the positive aspects relating to it. The matter I want to refer to and which is not dealt with in the Bill relates to those who are self-employed. The statistics released earlier today show a 4.3% increase in the number of people who are self-employed. We all support the concept of entrepreneurs starting up their own businesses. However, there is no safety net for these people if their businesses fail. In America, people whose business fail are encouraged to start again, but in this country there is no safety net. Therefore, young entrepreneurs whose businesses fail cannot rely on the social welfare system for support. A number of countries throughout Europe have opt-in systems whereby people can make additional PRSI contributions so that if their businesses fail, they can obtain some form of social welfare payment. There is a need for such a system or safety net in this country. I am aware the Minister is awaiting a report on this matter. I hope that when she receives it, she will be in a position to act as quickly as possible in order that there will be a safety net for self-employed people. In the coming five to ten years, it is these individuals who will be creating jobs for the next generation of school leavers.
I hope the Minister will consider the points I have raised. I welcome the Bill and I also welcome the figures that were published this morning. Those figures prove that the various job innovation schemes that have been put in place are guiding people back towards work. The latter will definitely put our economy on the right track in the years ahead.
I welcome the opportunity to contribute to the debate on the Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013. I wish to address three main aspects of the Bill, namely, the fact that it will provide part-time firefighters with equal rights in respect of jobseeker's benefit, the support it provides in the context of assisting single parents to return to work, and the issue of PPS numbers.
In the past two years I have received many representations from retained firefighters in Monaghan and Cavan outlining their frustration at being turned down for jobseeker's benefit on the grounds that they were not available for and seeking work. The Bill provides that a retained firefighter who is on call will be deemed to satisfy the available for work condition. It also provides that any days of employment as a firefighter will not lead to an individual's weekly jobseeker's benefit payment being reduced. If a person works five days as a firefighter, he or she will also receive five days' worth of jobseeker's benefit. I commend the Minister on taking action and addressing this long-standing anomaly. As everyone is aware, retained firefighters play a vital role within their communities. The legislation will ensure their jobseeker's payments will not be reduced in any way.
I welcome the establishment of the jobseeker's transition scheme, the aim of which is to support lone parents and assist them in returning to the labour market. This scheme will allow former recipients of the one-parent family payment whose youngest child is under the age of 14 to receive the full support of the Department's activation services in returning to work, education or training. It is critical that we should provide this support to lone parents because they must traverse many difficult hurdles when trying to return to work. Many lone parents will have been out of work for a considerable period and any attempt to return to training or further education must be weighed against the prospect of high child care costs. In some instances, people may not be able to pursue training courses or schemes as a result of such costs. Essentially, therefore, they are trapped. The Bill will afford lone parents the flexibility they require. Under the transition scheme, lone parents will draw up personal development plans in conjunction with their case officers. These plans will identify suitable education, training and employment programmes that will enhance their skill sets and better equip them to return to the workplace. The scheme will also allow lone parents to seek part-time work if this better suits their family circumstances rather than being obliged to be available for and seeking full-time employment. This is a common-sense and practical approach on the part of the Minister because seeking full-time employment is simply not a possible for some lone parents.
I welcome the fact that the Bill extends the list of bodies authorised to use PPS numbers to include the Insolvency Service of Ireland, Quality and Qualifications Ireland and payment service providers authorised by the Revenue Commissioners to collect the local property tax. Will the Minister consider extending the list further to allow PPS numbers to be used in the compilation of the electoral register? Such a move would greatly improve the accuracy of that register. As Deputies are aware, the register is currently full of inaccuracies. I would welcome it if the Minister would allow for the use of PPS numbers in this way because it would be of major assistance in the context of the electoral register.
I welcome the Bill and I commend the Minister on the proactive approach she has taken in addressing the matters with which it deals.
Almost 500,000 people in this country are unemployed. I do not know who is responsible for it but there is an impression in the media that these individuals do not really want to work.
The Deputy should deal with the facts.
The 500,000 people to whom I refer want to work. There is an impression that they are on the dole because they do not want to do anything else. It might have been possible to make statements to that effect in the 1980s without people being in a position to contradict it definitively. However, we can contradict them definitively now because the majority of those who are unemployed were working when there was work available. They are not unemployed because they are lazy, it is because they cannot obtain employment.
The Minister referred to getting people back to work, which is essential. However, one of the most important aspects in that regard is to create the environment whereby employment opportunities will be available for them. If such opportunities are created, there will be no need to push people out the door to get them to work. They will do so under their own steam, regardless of whether it is because they are sick of looking at repeats of "Dr. Phil" on television or as a result of the fact that they do not have a red cent in their pockets. These people want to work. It is as simple as that. I meet them in my office all the time. A couple of weeks ago I met a man - a big individual - who had tears running down his face and who informed me that he was going insane at home. He had spent six years on a FÁS scheme, which is the maximum period allowable. The man in question is a machine driver and he was wiling to remain on the scheme for no pay but it was not possible to obtain any work for him. This is also a mental health issue. People are suffering because, on top of everything else, they are bored. I know the Minister is aware of that fact. In light of the mental health aspect, there is a need for action.
It has been stated that the level of unemployment is decreasing. One of the major reasons for this is because people are leaving the country in their droves. This cannot be denied. If those who emigrated had not done so, the unemployment figures would not have fallen. If the country was hit by a tsunami tomorrow and if half the population was wiped out as a result, the Government would come along in a couple of weeks and inform us that the unemployment figures had decreased. This would, of course, be due to the fact that half the population had been killed, which is not really how one would want to reduce unemployment. Why not try to keep people in the country while reducing the level of unemployment? People would like to remain in this country because they like it here. It is not for reasons of leisure that they are going abroad.
The 19 out of 20 people in my and my wife's households who emigrated did so because they had no choice.
However, it appears that, by tinkering with the system, the Government is taking positive strides towards making it more likely that entrepreneurs will create work, in that they will not be denied social welfare. As everyone agrees, people who are of an entrepreneurial spirit should be encouraged. When they visit my office, their story is that, even though the people next door to them did not even work during the boom, those people are getting something while the entrepreneurs are getting nothing. The Minister needs to change this situation quickly. It is not on and does not encourage people to create work when I am sure that she would only be delighted to encourage them.
When trying to return to work, many of the entrepreneurs in question - I am sure that they visit other Deputies - apply for contracts to build something or other, but are told that they cannot because they do not have turnovers of hundreds of thousands of euro. It is a catch-22 situation - even though they are well qualified to do the work, they are knocked out on the basis that they have not been working and do not have the turnover. If anything can be done to change this unfair situation, please do it.
Harmac Medical Products - I am unsure as to whether I can mention its name - employs hundreds of people in my town of Castlerea. Its HR section asked me to highlight the fact that it has been trying unsuccessfully to fill 12 part-time positions for the past six months. It is easy to criticise and get PR from running down the Government, but if it is doing something good, it deserves praise. I hope that its plan for single parents will help. Harmac Medical Products is offering five hours per day, three days per week during the hours when kids are at school and parents have some spare time. They would be paid €187 for their 15 hours and would still be able to mind their kids. Perhaps it would be useful for someone else in the social welfare system. I am unsure as to how this approach fits with what the Government plans for single parents, but I hope that it would rectify the situation. There is a problem with the social welfare system in general, namely, it is so rigid that one is not even allowed to get one hour of work per day without losing one's payments. This situation needs to change.
The company is offering other positions. These involve working two 12-hour shifts at the weekend at €12.50 per hour, which is not the minimum wage. This work is worth €300 per week, but the company cannot find people to take these positions because working more than 19 hours per week removes one's entitlement to a social welfare payment. This is the company's understanding of the situation. The social welfare system needs to be changed to cater for such situations. If a few hours of gainful work were available without impacting on social welfare payments, no social welfare recipient would turn them down.
Perhaps we should consider a suggestion made by the Jesuits' Milltown Institute and Fr. Seán Healy years ago. I presume they are still pushing the same idea of a guaranteed basic income. Some people will trash this and question how every adult could be guaranteed a minimum payment. If someone had earnings from additional work, the guaranteed income would be taxed to the point that he or she would not actually get it. If an unemployed person - someone in receipt of a social welfare payment - had a guaranteed basic income, one could take up a job because one would be gaining all of the time. There would be implications for the tax system, leading to higher taxes in certain respects, but no one would be disincentivised from working. If someone had a money-making idea, one would not need to worry about losing more money than one would make. The system would be less rigid. I do not have anything close to all of the answers, but this idea needs to be discussed.
As the Minister is well aware, places like Castlerea have dire unemployment levels. At the same time, there is work that people cannot accept. The Minister must address this issue. Not only would she increase people's incomes, she would improve their self-esteem by allowing them to add to their communities. They would also pay tax. I do not agree with people who claim that we must consider taxpayers as if they are separate from the unemployed. It is as though the latter do not give anything to society. We should be looking out for citizens in general. Something needs to be done to make it possible for people to accept casual work without losing their social welfare payments.
A Deputy mentioned the cut to farm assist payments. Negotiations on the Common Agricultural Policy, CAP, are well advanced. If proposals by organisations such as the United Farmers Association, UFA, were listened to and payments under the policy were capped at €35,000 per farmer, close to €92 million would be returned to the less well-off farmers. By providing them with this income, the State would save money in terms of farm assist. These savings could be put towards smaller farmers under pillar 2, as I am dubious that the Government can find the matching funds otherwise. Overall, there would be a better package for everyone.
A major mistake was made when the Government cut the fuel allowance. Genuinely, I have no problem with the Government cutting its own costs in this regard, but it did not seem to be open to other ideas. For example, if it provided the money to people in single lump sums, they could get better value and there would be no additional cost to the State. Someone could purchase a few trailer loads of turf or, with a big lump of money in hand, get a better deal from a co-op on cheaper briquettes. I know this for a fact. While saving money, the State would not increase the person's hardship. I would love to see the Government pursue this idea next time.
A number of people have attended my office about the idea of front-loading social welfare payments so that they could start businesses instead of staying on social welfare indefinitely.
People's reluctance to take up courses has been mentioned. Who knows why they might be reluctant, but one can surmise that they do not view training as relevant or believe that they will get anything out of it at the end. Training for training's sake is demoralising. We need to get away from that approach.
It has been stated that we need to train people who used to be in the building industry to do other jobs. That is 100% correct. In the past week, I heard in the news that the Government was considering investing €1 billion in shovel-ready projects. Many of the projects in question might be important, but is it not time to stop viewing projects that involve concrete as the only work that is shovel ready?
There are many shovel-ready projects that do not involve building or using a shovel. There are shovel-ready projects involving work with young people and the provision of youth services. Several youth organisations have come to me and said their funding has been cut. We cut their funding, reduce the amount of people working with them and then we use the money for more building. Have we not done enough building in this country for a while? Could we not start thinking about shovel-ready projects that will help people in more ways than just getting them mixing concrete? The Minister must examine that as well. That is what I have to say on the Bill. I hope my tuppence worth is worth something to the Minister.
I welcome the opportunity to speak on this Bill in the House today. There are many provisions in the Bill on which I could comment but I will concentrate on just a few. Like others, I welcome the change in the Bill which ensures that part-time or retained firefighters will no longer miss out on jobseeker's payments because of a requirement that they reside near their stations. The practical solution put forward in the Bill will ensure that the proximity clause in itself does not render a claimant unavailable for full-time employment under the welfare code, provided they meet the other welfare requirements. This is a practical solution to a problem successive Governments since 1972 have failed to address. I urge the Minister to issue an immediate memo to the effect that any cases in the system involving retained firefighters that fall foul of existing legislation would be immediately resolved.
I wish to see further reforms this year in social protection. We must ensure that unemployed people who perhaps are not entitled to a payment due to their spouse's income, are eligible for further training and internship programmes. I have dealt with a number of cases, usually concerning middle-aged men, who are work-ready but find it difficult to compete with younger and perhaps more mobile jobseekers. We must create a mechanism whereby such jobseekers can apply for training places or for programmes such as JobBridge or Momentum.
Activation measures are only useful if they activate all jobseekers, regardless of whether they qualify for a means-tested payment. There is also a cohort of people who expected to be in receipt of a transition pension at the age of 65 but will now have to wait for another year to claim their old age pension. I refer to people aged perhaps between 60 and 65 who are now considered as jobseekers. There should be a formal acknowledgement by the Department of the extra challenges faced by this pre-retirement group when rolling out the Pathways to Work activation measures. I am interested to hear the Minister's plans in this area.
Common sense has been applied to one-parent family recipients in the Bill with the roll-out of the new jobseeker's transition scheme. The scheme is an offshoot of jobseeker's allowance and will exempt lone parents from the full rigour of the requirement for those receiving jobseeker's allowance to be available for full-time work. Availability for part-time work will provide full eligibility. The initiative is to be welcomed. In parallel, we must continue to pursue the provision of cost-effective, quality child care arrangements to further support the movement of lone parents back into the workforce. That is something on which I will continue to work and will continue to raise with the Minister and her Cabinet colleagues. The Minister is on record on this matter herself. I welcome her reiteration of the position today.
I refer to the enhanced identity authentication requirements for claiming social welfare. It is vital that we strengthen the control of our finite and reducing social welfare expenditure. The issuing of identity cards with biometric photographs and electronic signatures will act as a defence against false claims. However, I urge the Minister to provide assurances that there will be human oversight of the system. We must ensure that should any mistake be made with the new system that results in recipients losing a payment in error, those unfortunate recipients are not bogged down in an appeals process for a payment they should never have lost. Fraudulent claims must be tackled, although not with a heavy-handed approach towards all social welfare recipients. Recent experience leads me to believe that people are guilty until proven innocent when it comes to social welfare investigations. That manifests itself when a person has his or her payment immediately cut off before an investigation or inspection even begins. Such a response can automatically send families into desperate financial situations. I accept that some claims are fraudulent, but in many cases people are cut off in error.
I call on the Minister to review the practice of immediate cut-offs and to replace it with a risk-based approach. I propose a flagging system, whereby, following a risk assessment, an individual may be advised that from a certain date he or she will be under investigation and should the investigation prove an instance of fraud or false claim then the payment will be taken away from the time the investigation began. An innocent until proven guilty system is required. It applies in the courts and we should also apply it in the social welfare system.
I wish to refer also to some other matters, some of which are contained in the Bill. A scheme to cater for the self-employed must be brought forward as a matter of urgency. Other speakers have referred to the issue. I welcome the change in the appeal system for the partial capacity payment. The changes to FIS assessments are welcome for lone parents. I hope such changes will in future apply to all FIS recipients. I look forward to the Minister's response on the issue. I congratulate the Minister on her determined efforts and success in resisting efforts to scapegoat social welfare recipients, on protecting the most vulnerable in society and promoting the value of welfare in a Keynesian context.
I might not use all the time available to me. Like previous speakers I welcome the changes announced by the Minister, especially to the jobseeker's allowance for parents who no longer qualify for a one-parent family payment due to their youngest child reaching the upper age limit. The unemployment transition is a significant and progressive development in a long series of welfare initiatives intended to support families at risk of poverty. In the past 30 years, income support payments were reformed in response to gender equality legislation and to reflect the significant shifts in female labour market participation and social attitudes to the role of women. Measures to encourage lone parents and women married to welfare recipients to take up employment were also introduced in a renewed effort to combat and prevent poverty. Members have different views on the issue but findings, both national and international, are almost unequivocal in stating that employment offers the best protection against poverty. That is very important, most especially to those of us who are part of the labour movement. The jobseeker's transition recognises the challenges in combining full-time paid work and caring when parenting alone and the inadequacies in the current supply of child and after-school care places while at the same time maintaining the goal to lift lone parent families out of poverty through employment.
Many views were expressed following last year's budget and especially on the social welfare Bill. I acknowledge the Minister's response to those who were in favour of reforming the system. I commend the Minister in that regard. Nobody can take that from her. Some Members were critical of proceeding with the reduction of the upper age limit when there are so few jobs available. We all recognise that. However, I take a different view because such a mindset belongs to our less enlightened past. Lone parents should have the same rights and responsibilities to compete for jobs and to secure a better quality of life for themselves and their children.
I welcome the Bill and the improvements it provides to certain sectors in respect of social protection. In the course of the debate, many Members have spoken on the subject of entitlements for the self-employed. I have been waiting for the forthcoming report from the departmental working group on the future status of self-employed people and social protection. If this country is to move forward and to create new jobs, the issue of self-employed people and social protection must be considered. In fairness to the Minister, she has been championing the cause. Most self-employed people pay an S-class stamp, which amounts to 4% of their annual earnings and essentially, this entitles them to a contributory pension and nothing else. However, there have been some leaks from the forthcoming report to the effect that were a further 1.5% to be paid, bringing the contribution to 5.5%, it would enable the provision to those concerned of some other entitlements such as illness and disability benefits. This is to be welcomed, as small and medium-sized enterprises, SMEs, are finding it hard at present and their takings are down. Given the recession, this is natural but one must recall that in such cases, if they are making a profit, they will pay income tax on it. If not, they are taking drawings and if such drawings also are taxed, as a self-employed person I would rather look after myself and put something on a stamp than have nothing available, were something to go wrong. Consequently, I welcome the picture that is emerging.
I also thank the Minister for lowering the bar for self-employed people and getting some entitlements for them. Since she assumed office, she has been excellent in looking after the self-employed and I urge her to keep it up. Some infrastructure must be put in place for social protection for this group in the future and I look forward to working with the Minister on this matter as a member of the Joint Committee on Education and Social Protection. The issue of self-employed people and social protection must be recognised because while they will get us out of the mess in which we find ourselves, a safety net is required for them in the future.
Deputies Broughan and Shortall are sharing 20 minutes. Deputy Broughan has ten minutes.
Yes. The Acting Chairman might tell me when nine minutes have elapsed.
The Minister, Deputy Burton, may be in attendance in a few weeks' time when Neil Young and Crazy House will entertain us at the RDS. Given the deplorable impact of cutbacks and the great tightening of qualification criteria for social assistance, benefits and pensions since March 2011, I hope the Minister will be able to happily sing along if Neil Young breaks into "Are You Ready for the Country (because it’s time to go)", because the impact of the three budgets since early 2011 has been severe on different and significant cohorts of our most vulnerable citizens, many of whom of course are counting down the days until they have an opportunity to vote in a general election. The conservative media rant on about the €20 billion social welfare spending and always conveniently omit any reference to the Social Insurance Fund and the huge extent to which people directly fund their own benefits and pensions. I note the Minister recently has been talking hopefully about the need to end austerity, following the fine lead given by President Higgins. I hope she is sincere and determined in that belief and will not countenance another series of mean cutbacks in the social welfare budget for 2014, which I understand must be finalised by late July or early August in this first year of the European Union's two pack rules. I believe the Minister should have resigned last year, rather than present the social welfare budget of 2013 and she could have then joined Deputy Shortall and me on these benches. I hope that some of the positive aspects of the Bill indicate the Minister really is determined this time to end austerity for our most vulnerable citizens.
As the Minister is aware, the need to ensure we have a solid and reliable social welfare system is the key to supporting individuals and families through this difficult and still recessionary period. Like all Deputies, I frequently meet vulnerable people who really struggle financially. Their experiences with the Department of Social Protection are variable and unfortunately, many of the constituents I meet on a weekly basis - in the same manner as the Acting Chairman and other colleagues who are present - are encountering serious delays in respect of appeals and reviews, which they find to be particularly difficult. For example, I have come across individuals who have been waiting for more than a year for applications for invalidity benefit to be finally decided. Earlier today, I was addressing an invalidity pension application that had not been decided after a period of two and a half years since the first application. While I understand the Department is under strain with the continued baleful influence of austerity on demand and growth in Ireland and with increased numbers of citizens relying on welfare payments, it cannot be acceptable that individuals are waiting for six months and more for an invalidity pension appeal decision, for example. I note from figures the Minister recently supplied to me that there is no backlog in invalidity claims at present. She reported that almost 60% of her Department’s current claims in this regard are awaiting a decision for two months or less. However, the overall rate of processing invalidity appeals must be improved drastically. I also recently asked the Minister about claims for disability allowance and she reported that her Department has completed a major service delivery modernisation programme and that a plan is in place to reduce the backlog of disability claims. I hope this will become evident as Members and the Department deal with people in the coming weeks and months.
I had tabled an oral question for the Minister yesterday in respect of one key area, namely, the cuts to rent supplement but unfortunately it was not reached. As the Minister is aware, I asked her about current expenditure and the ultimate impact the cuts in rent supplement rates are having on rent levels. I reiterate that unfortunately, I did not get the opportunity to speak on it but I appreciate the reply the Minister supplied to me. I note she indicated that her Department’s expenditure on rent supplement in 2012 was €423 million but that it has been reduced to €403 million for 2013. Can the Minister confirm that these revised rent limits with which Members are wrestling will be realistic? Yesterday, I was detailing to the Minister of State with responsibility for housing, Deputy Jan O'Sullivan, and to the Minister for Public Expenditure and Reform, Deputy Howlin, the huge problem of homelessness in this city of which the Minister is also aware. I refer, for example, to the 20,000 people on Dublin City Council's waiting list, many of whom have moved into homelessness because of decreases in rent supplement payments and no decreases in rents. I raised this issue with the aforementioned Ministers yesterday and appealed to them to campaign for a major public housing investment programme in 2013. I hope this is a proposal that the Minister would also support and that it will come to pass because there is a crisis in this regard.
Section 9 amends section 2(1) of the Social Welfare Consolidation Act 2005. It provides that retained fire fighters will be entitled to social welfare payments and I welcome this provision as a support to valued members of the fire services, who consistently deliver a high-quality service. It is welcome that the uncertainty that part-time fire fighters experienced in their entitlement to certain social welfare payments finally has been eliminated.
I also welcome the Minister's rethink in producing the measures she has introduced to assist lone parents who are moving from the one-parent family payment to jobseeker’s allowance in section 10. The changes to one-parent family payment, which formed part of the Department's reductions in budget 2013 are profoundly worrying for lone parents who are among the most vulnerable of social welfare recipients and are most at risk of poverty. I agree Members must support those citizens to help themselves to move out of the poverty trap and note the comments of the One Family organisation in that regard. However, it is essential to have in place a system in which employment opportunities are encouraged for lone parents. I have spoken many times to the Minister on the activation programmes in which the Department has been engaged. I acknowledge the Minister spent many years trying to promote such measures at local level. Again, a much more proactive and imaginative approach is required in 2014. However, I recognise the Minister is working to redress the present situation, in which lone parents traditionally have been disincentivised from seeking employment because of the effect this would have on their social welfare payments. Hopefully, all Members recognise the creation of a transitional arrangement for lone parents whose youngest children have reached 14 years is vitally important. Moreover, the Minister must ensure the Department fully supports those parents, who are very stressed and anxious about changes to the one-parent family payment scheme.
Lone parents also need support in the form of the provision of child care places. I note from the Minister's speech to the House that she does not believe the child care services have yet been comprehensively reformed to a satisfactory level. The debate Members have had in recent days on this vitally important matter on foot of the "Prime Time" programme might inform Government decisions in a positive way in the latter part of 2013. As the Minister is aware, lone parents are disproportionately affected by cuts to child benefit and the Minister should give a commitment to the House that there will be no further cuts in child benefit in budget 2014.
I have always believed that all citizens should have national identity cards, in the form of photo ID, for all interactions with the State, including with gardaí.
I remember discussing that matter as transport spokesperson for the Labour Party when the PULSE system was being developed. My preference was a national identity card rather than the date of birth mantra. I welcome section 11 and the role it will play in reducing the level of fraud.
I note, however, the recent experience of some of my constituents who are part of the cohort of 230,000 individuals who have already been issued with the new cards. Some of those did not positively engage with the Minister's Department and had their weekly payments stopped until they complied. It needs to ensure compliance but there is concern that citizens are being punished before we pass this legislation.
I welcome some of the reforms the Minister is introducing in Part 4 regarding the establishment of the new pensions authority and consequent amendments. However, as the Minister has recognised, there is a need for further major reform, particularly in the fallout from the Waterford Crystal case. This Bill fails to tackle the inequity regarding the division of pension assets among members of pension schemes when defined benefit schemes have been left with a deficit after a company has gone into liquidation.
On the subject of pensions we cannot forget our hard-working citizens, particularly women, who are adversely affected by changes in budget 2013 to reckonable contributions to qualify for State pensions. I am aware of senior women who have worked for more than 30 years who discovered that they do not have an entitlement to a full or near full State contributory pension, and they are very upset by that.
I broadly welcome some of the provisions contained in the Bill but there are various issues the Minister must address more seriously. I hope that in budget 2014 we will not be faced with another remorseless attack on the most vulnerable people in our society.
The Hogan judgment, which was delivered on 25 April last, has major implications for the operation of defined benefit pension schemes. It is a matter of extreme regret that this Bill does not address the precarious position that so many Irish people find themselves in as a result of being in defined benefit pension schemes, with little or no protection. Legislation was promised to provide such protection as is required but, unfortunately, for some reason that legislation is not contained in this Bill. That is a missed opportunity. Not only does it continue the insecurity for defined benefit pensioners but it also exposes the State to potential significant claims as a result of the failure of successive Governments, including this Government, to provide that necessary legislation.
Members of defined benefit schemes currently have no protection whatsoever in legislation and, as a result, they are dependent entirely on the continuing support of their employers to deliver on the pension commitments made in the past but there is no legal obligation on employers to honour those commitments that have been given.
I very much welcome the ruling of the European Court of Justice, ECJ. It is a very good ruling for the Waterford Crystal pensioners in particular and it is promising for members of defined benefit, DB, schemes generally as it will provide a greater level of clarity for people in those schemes in the event of a company going into liquidation where the pension scheme is also insolvent. It is the first time I can remember during the current economic crisis when a European institution has found in favour of the people, and in that regard it is to be welcomed. Since the ECJ delivered its judgment in favour of the Waterford Crystal workers there has been little or no constructive engagement by the Government with those workers. In light of that fact the legal team acting for the workers is now in the process of preparing to return to the High Court to see this case out. It is important to point out that the Waterford Crystal workers got positive rulings on all the significant points of law before the ECJ. There is a good deal of optimism among the workers, their legal advisers and their pension advisers regarding the likely outcome of the case when it returns to the High Court, but it is very important that the Government would now decide to address this matter. We know that after the ECJ ruling on the precedent case, the Robins case, the United Kingdom moved swiftly to introduce legislation to provide the kind of protection required and has provided protection to the level of 90% of people's pension entitlements. That addressed the issues that had been raised by the ECJ.
It is incumbent on the Government now to move to deal with this matter. We expected some provision would be made in this Bill to address the precarious position DB pensioners are in but for some reason Government spokespersons, including the Minister for Social Protection, seem to be using this judgment as an excuse for not legislating when the onus is on Government to do the reverse. Given the positive findings of the ECJ on the Waterford Crystal workers case there is an urgent need now for Government to move to legislate to provide the necessary protection, which the UK Government has already done and on which the ECJ has found the Government to be remiss in its responsibility to members of DB schemes.
I do not know the strategy the Government is pursuing. The sensible thing to do would be to take account of the fact that all of the ruling has been positive to date, take account of what happened in the Robins case and move to engage at a senior level with representatives of the Waterford Crystal workers to reach an arrangement with those workers to assist them in ensuring that they have an entitlement to a significant percentage of their original pension promises.
If, as is expected by most people, the case is won in the High Court the likelihood is that there will be a very significant capital compensation payment demanded of the Government that will result in a very significant expenditure exposure by the Government, estimated to be in the region of €250 million to €300 million. That is likely to be an up-front payment with other associated costs and for that reason the most sensible thing for the Government to do would be to engage with workers to see if a plan can be put in place to meet the likely liabilities in terms of the pensions of the former Waterford Crystal workers. The actuarial advisers to those workers have calculated that the immediate exposure, if such an arrangement was to be reached on the basis of staged payments over the lifetime of those workers, would be in the region of €2.5 million rising to a maximum of approximately €18 million in about 2030. From everybody's point of view - the taxpayer and the Waterford Crystal workers - that would be the most satisfactory outcome if agreement could be reached to secure the pension provisions of the Waterford Crystal workers over their lifetime and also, in the process, reduce the liability of the State and provide the necessary security.
If an up-front compensation payment is demanded of the State by the High Court we are then talking about having to buy annuities to secure the future pensions of the Waterford Crystal workers. That would work out far more expensive and, in addition, there would be legal fees associated with further hearings in the High Court. For all those reasons the sensible thing for the Government to do would be to engage with the Waterford Crystal workers and reach an agreement on the way their pension provision can be secured into the future while at the same time limiting the financial exposure of the taxpayer. I again urge the Minister to take action in that regard and engage at this point before the matter returns to the court.
Leaving aside the particular case of the Waterford Crystal workers, there is a need to act now to ensure that security is provided for members of DB schemes generally.
Companies that are solvent should be prevented from walking away from their pension scheme responsibilities where there is a question of insolvency in the scheme itself because as things stand a company can do that. There is an urgent need to introduce an insurance scheme to provide a safety net for those workers who find themselves in a double insolvency, as happened in Waterford Crystal. It is a matter of serious regret that action has not been taken to date.
Overall, it is disappointing that no action has been taken on a thorough review of pension provision in the State generally. More than €2 billion goes to tax relief on pension schemes, the vast majority of members of which are higher earners who have benefited from the unfairly generous pension tax relief scheme that has operated in the country in recent years. That must be brought to an end. The Government signalled last year that it would do that in this year's budget and there is no reason why a limit could not have been put on the total tax relief any one person could claim in last year's budget. The Government moved against everyone else: public sector workers, child benefit recipients and other people are on low and middle incomes. The better off, however, always get away with it for as long as possible. There was no excuse for the Government not acting in the budget last year.
I would like to hear an assurance when the Minister is concluding the debate that promised reforms and the cap that was talked about last year will now be applied to pension tax reliefs for the current year, where relief will not be given to anyone that would allow a pension in excess of €60,000 per annum.
Finally, I raise with the Minister again the issue that I have raised on several occasions, the opportunity for the State to make savings of €21 million by ending the welfare subsidy that currently goes to insurance companies because of the failure of the Government and the Minister's Department to introduce a system where it is possible to claim back welfare payments paid out to a person who has had an accident and who made a successful insurance claim. It makes no sense that no arrangement is in place to recoup those social welfare payments. This represents a welfare subsidy to the insurance industry at the cost of the taxpayer. It is an opportunity for the Minister to make savings of €21 million that would not impact on social welfare recipients.
The processing times for social welfare claims leave a lot to be desired. It is intolerable that people are waiting for up to 60 weeks for an invalidity pension claim to be processed. People are in horrendous circumstances while waiting between 30 and 60 weeks for claims to be dealt with by the Department. That would not be tolerated in any other walk of life and I urge the Minister to take the necessary action and transfer staff from other areas to bring those claim times down to an acceptable level.
It is a disappointment that the Government has not acted to put in place a fairer regime where we no longer spend €2 billion on pension tax relief for the better off. We currently have a situation where people on low incomes who cannot afford a pension subsidise the pensions of the better off. That is intolerable and must be brought to an end. People who are paying into defined benefit schemes must be given the security they require.
I thank all Deputies from both Government and Opposition who contributed so thoughtfully to the debate. I want to start by mentioning today's latest employment figures from the CSO, which Deputies on all sides referred to. The figures show employment grew by 20,500 in the first quarter of the year. It is important to remind people that in the three years after the bank guarantee, and the disaster that brought on the country, 250,000 jobs were lost so although people might say that 20,500 figure should multiplied by a factor of ten, which is my ambition, nevertheless, this initial growth in employment is extremely important. Also according to the CSO, unemployment has fallen below 300,000 for the first time since 2010, from 14.1% to 13.7%. That figure of 300,000 is a lot of men and women and the figure is still unacceptably high. Every one of those has a personal story about not being able to find work, to contribute and to be financially independent. The numbers, however, are going in the right direction and it is a significant improvement that will be seen internationally as statistically significant as well.
The Government is making firm progress in its goals of fixing the economy and getting people back to work. The Department is now spending more than €1 billion per year on employment support. Today's figures show the Pathways to Work strategy is making a strong contribution to people returning to work, education, training and work experience. There are some 85,000 people involved in those areas.
The reforms I am introducing in the one parent family payment are a vital element of the strategy. Deputy Ó Snodaigh asked why I am proceeding with those reforms. Despite significant levels of State spending over the years on one parent families - Deputy Broughan and Deputy O'Dea both know about this from their constituencies - those families continue to experience significantly higher rates of consistent poverty. in comparison to the population generally. Why do children from such families have worse outcomes in educational achievement? Other countries that have the sort of system we are moving to have much better outcomes for the life chances for parents and children. The best route out of poverty is through paid employment. This is why I am proceeding with these reforms. The Government believes that supporting lone parents to participate in education, training and the workforce, once their children have reached an appropriate age, will help them on the pathway back to work.
Work, however, especially full-time work, may not be an option for parents of young children. For that reason, it is crucial that lone parents are helped in a compassionate, supportive and effective way to move into the labour market. The changes to the jobseeker's scheme contained in this Bill achieve this by recognising the difficulty of parenting alone and will ease the transition of former one parent family payment recipients with children of primary school age on to a jobseeker's payment while fully recognising and balancing their caring responsibilities for young children.
In other words, lone parents will get the full support of the Department's activation services to help them on the pathway back to work, but in a manner that recognises the reality of their circumstances. This progressive pathway back to work would not be available to lone parents if the Government had followed the advice of some on the Opposition benches who at times in the debate over the past two years backed themselves into a corner in wanting no reform of the lone parent system or social welfare in general. Members' sentiments may be admirable, but it does not help recipients to keep them locked out of having successful working lives.
I remain convinced that we need the best possible child care and early education system in this country to help all families. In the context of the debates of recent days, the Department has, through community employment, roughly 1,700 people supported in child care situations. As Members will be aware, the experience in the community-based crèches for children is of a high quality, and since I came into the Department, I have worked intensively to develop and expand the education and training path for those involved, through community employment. It is important that staff are trained. In that regard, for instance, we will be looking at FETAC level 5 as the standard outcome of those during their period with a community employment scheme. In fact, as time passes, we will be progressing that to higher levels. I am aware that Deputy Ryan, among others, has a number of community child care facilities in his constituency. I am also aware how important these are as a community resource as well as an opportunity for people to get involved in work in an important area of caring for children and to get serious and progressive qualifications that enable them to get well-paid employment and to look after children properly.
On the issue of pensions, I was glad to hear the welcoming comments for the Pensions Council and the reform of the governance structure of the Pensions Board. As Deputy Ó Snodaigh acknowledged, this will strengthen consumer protection and give consumers increased confidence in the system. The work I commissioned on pension charges shows that many small schemes charge high fees and often consumers are not as knowledgeable as they ought to be about what pension charges are being incurred on their account. This can mean vastly reduced pensions on retirement, and it is important to engage consumers.
Pension coverage is a critical issue and it is essential that citizens have sufficient income on which to live in retirement. This is the primary concern expressed by the OECD, specifically in its recommendations on a national supplementary pension scheme, in a recent review of the Irish pension system, which I published in April. Increasing numbers of employers and employees are relying simply on the State pension, and Deputy O'Dea referred to that. We must expand coverage. Other countries have done that successfully. In that regard, I will be bringing proposals to Government in due course.
On Deputy O'Dea's comments on defined benefit, I am well aware of the persistent funding problems of such schemes. Deputy O'Dea also has direct experience of this, given that the problems date back to 2000-2001 when he was in Government. I say that, not to make a political football of the issue because it is important to hundreds of thousands of people-----
Two and a half years.
-----but merely to point out the obvious, that this is a complex problem which requires time to address properly. I am bringing proposals to Government to address the range of issues facing defined benefit schemes and the pension sector generally.
The funding standard was suspended by the previous Government when the economic crisis struck in order to allow employers and trustees assess and restructure their schemes. That is what the Government of which Deputy O'Dea was a member stated was the reason. Numerous measures have been introduced since then to assist schemes improve their funding position. Ultimately, it must be remembered that the regulatory structure is there to ensure members' benefits are protected and it is also important to note that the OECD report to which I referred described our minimum funding standard as "undemanding".
They are still in trouble. That is the point.
They are in trouble because of the worldwide collapse of the stock market and the way in which the stock market and bond prices have been affected. That is the core problem for the schemes, dating back to the time of the dotcom bubble and the catastrophe from 2008 onwards.
On the approaching deadline of 30 June for funding proposals, more than 300 schemes are due to send in funding proposals to the Pensions Board. The board will then decide what steps to take scheme by scheme on a measured basis and taking account of the individual scheme circumstances. However, it must be emphasised that trustees must meet their legal obligations, and ultimately the Pensions Board will use its regulatory powers where benefit underfunding is not properly addressed. This is to protect scheme members, not to punish employers. After 30 June, I will be in a position to assess the extent of the funding difficulties and the effectiveness of the measures that have been taken or are being proposed.
On the priority order, Deputy O'Dea will be aware from his own experience that this is a highly sensitive area. He did not refer to the fact that the priority order involves reducing the pensions of existing pensioners - that is what he was proposing - and using those funds to provide additional moneys for current employees and former or deferred members of the scheme. As he will be aware, this not a straightforward matter. Defined benefit pensions are not the significant amounts for many individuals that people suppose. For example, 40% of defined benefit pensions pay out less than €6,000 a year and 70% pay out less than €24,000, which are not large pensions. The proposal to reduce those kinds of pensions in general proposals made by some - I am not suggesting Deputy O'Dea advocated that - relates to relatively small pensions. We must look at this with considerable care and sensitivity towards all those involved. In any priority order, the large six-figure defined benefit pensions to which Deputy O'Dea referred would have to bear a significant part of the rearrangement, but they are a small fraction of the total number of such pensions in payment. That is what I want Members to reflect on. Considerable work has been done on this issue and I will bring proposals to Government, in the light of the outcome from the funding standard and the consultations under way with the Attorney General on the appropriate policy response to the Waterford Crystal situation. As I stated earlier, my Department and I have been in detailed consultation with the Attorney General and her staff on the Waterford Crystal case, which was referred by the Irish courts to the European Court of Justice and which must return there on certain matters.
During the course of the debate, Deputies referred to the position of self-employed people in relation to social welfare entitlements.
Self-employed persons are liable for PRSI at the rate of 4%, which entitles them to long-term benefits such as the contributory State pension and widow's pension. Ordinary employees who have access to the full range of social insurance benefits pay PRSI at the rate of 4% but as people know, employers also make a PRSI contribution of 10.75%, leaving the total contribution at just under 15%. In 2011, I established the advisory group on tax and social welfare and the issue of self-employed people has been referred to it in order to establish whether wider cover is technically feasible and financially sustainable.
In this context, I also mention the findings of the recent actuarial review of the Social Insurance Fund, which I published late last year. The review found that the required contribution as a percentage of salary needed to provide the core full-rate State pension contributory - which is the benefit currently available to self-employed contributors - is approximately 15%. This compares favourably with the 4% rate currently paid by the self-employed. Therefore, in terms of the pension entitlements, the report concluded that the self-employed achieve very good value for money in terms of the PRSI contributions paid. Any proposals to revise the social insurance system for self-employed persons by extending social insurance entitlements will have to be considered in a budgetary context, taking account of the findings of the actuarial review.
Self-employed workers may access social welfare payments supports by establishing entitlement to assistance-based payments such as jobseeker's allowance and disability allowance. In the case of jobseeker's allowance, they can apply for the means-tested jobseeker's allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services. In general, their means will take account of the level of earnings in the past 12 months in determining the expected income for the following year and, in the current climate, account is taken of the downward trend in the economy.
I recently met a large delegation from the Irish Farmers Association as many Members mentioned farm assist and the rural social scheme. Traditionally, means are assessed for farm assist on the previous year's earnings and looking back. However, I made it very clear to the IFA that if, for example, a farmer's means have changed very rapidly, I have advised that the farmers in question should go back to local social welfare management with more current evidence.
Retained firefighters who have previously applied for a jobseeker's payment and have not had their claim approved will have to reapply in order to benefit from the legislative proposals I am introducing. There is no retrospective provision contained in the Bill. All retained firefighters will still be assessed based on their individual circumstances and they must continue to be genuinely seeking work to be awarded a jobseeker's allowance claim. However, special dispensations are being created so that retained firefighters will no longer be disallowed on the basis that they will not be available for work, given their requirements to be near their respective fire station when on call. As Deputy Broughan noted, this has been sought for a very long period.
I will deal with Deputy Ó Snodaigh's comments concerning recent budgets. I have protected core welfare rates in successive budgets and ESRI research has shown the importance of that, as Ireland's system of social transfers remain more effective in preventing poverty than that of any other EU member state. The poverty reduction effect in Ireland is enormous when compared to most other EU member states. Since coming to office, this Government has sought to protect the most vulnerable in society while taking the necessary decisions and introducing the necessary reforms to stabilise the economy and get people back to work. This Bill will continue those reforms.
Today's figures indicate an increase in the number of employed people, and I am aware that many of the improvements relate to people working on a part-time basis. It is very satisfying to see the first serious increase in employment since 2010 and it is an important factor for many people and their families. I continue to encourage employers. I also encourage Members who mentioned that people found it difficult to take up offers of work to give such information to local social welfare officers. We have an employment relations division in the Department for the first time and we are knocking on employers' doors and meeting them. I have completed approximately eight road shows around the country in which I met employers and people involved in human resources. So far, between 2,000 and 2,500 people have come to those events and in July we will launch the Jobs First initiative which will provide incentives for employers to take people from the live register and give them a cash payment.
Deputy Shortall commented on the reform of tax relief and the budget. As the Deputy knows from the Minister's Budget Statement, the reform has been committed to by the Minister for Finance and it does not fall within my remit to carry out that reform. The taxation side of pensions is dealt with by the Minister for Finance but there is a commitment in the budget to concentrate tax reliefs for pensions on people of low and middle incomes, as well as people in atypical work and women who may have had work interrupted from time to time because of involvement in caring and family commitments to children or older people. That remains the most important element.
There are a number of examples from countries with compatible systems where additional pension provision is being built up. These include processes in New Zealand and the recent example in the United Kingdom of the commencement of auto-enrolment in building additional pension entitlements. The officials in my Department have done a great deal of work in examining those systems but as we are still in much economic difficulty, some have indicated that funding them would probably be difficult for many people. I am confident we can move to that kind of system in the not too distant future. It will provide enhanced coverage as it has in countries like Australia.
Question put:
The Dáil divided: Tá, 65; Níl, 21.
Tá
- Barry, Tom.
- Breen, Pat.
- Burton, Joan.
- Butler, Ray.
- Byrne, Eric.
- Carey, Joe.
- Coffey, Paudie.
- Conway, Ciara.
- Costello, Joe.
- Daly, Jim.
- Deenihan, Jimmy.
- Deering, Pat.
- Doherty, Pearse.
- Doherty, Regina.
- Donohoe, Paschal.
- Dowds, Robert.
- Durkan, Bernard J.
- Farrell, Alan.
- Ferris, Anne.
- Fitzgerald, Frances.
- Fitzpatrick, Peter.
- Flanagan, Terence.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Tom.
- Humphreys, Heather.
- Keating, Derek.
- Kehoe, Paul.
- Kenny, Seán.
- Kyne, Seán.
- Lawlor, Anthony.
- Lyons, John.
- McGinley, Dinny.
- McHugh, Joe.
- McLellan, Sandra.
- McLoughlin, Tony.
- McNamara, Michael.
- Maloney, Eamonn.
- Mitchell O'Connor, Mary.
- Murphy, Dara.
- Murphy, Eoghan.
- Nash, Gerald.
- Neville, Dan.
- Nolan, Derek.
- Ó Ríordáin, Aodhán.
- O'Brien, Jonathan.
- O'Donnell, Kieran.
- O'Donovan, Patrick.
- O'Mahony, John.
- O'Sullivan, Jan.
- Phelan, Ann.
- Ryan, Brendan.
- Spring, Arthur.
- Stagg, Emmet.
- Stanley, Brian.
- Stanton, David.
- Timmins, Billy.
- Tóibín, Peadar.
- Tuffy, Joanna.
- Twomey, Liam.
- Wall, Jack.
- Walsh, Brian.
- White, Alex.
Níl
- Broughan, Thomas P.
- Calleary, Dara.
- Collins, Joan.
- Cowen, Barry.
- Dooley, Timmy.
- Flanagan, Luke 'Ming'.
- Higgins, Joe.
- Keaveney, Colm.
- Kelleher, Billy.
- Kitt, Michael P.
- McGrath, Michael.
- McGuinness, John.
- Moynihan, Michael.
- Ó Fearghaíl, Seán.
- O'Dea, Willie.
- O'Sullivan, Maureen.
- Ross, Shane.
- Shortall, Róisín.
- Smith, Brendan.
- Troy, Robert.
- Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Luke 'Ming' Flanagan and Seán Ó Fearghaíl.
Question declared carried.