Topical Issue Debate

Budget 2015

Deputy Áine Collins

I wish to discuss with the Minister for Social Protection the possibility of addressing issues in the budget that discriminate against persons. One issue that affects women in particular - even though it is not against them, that is just the way it happens - concerns those who take career breaks to look after and care for their children. When they return to work some years later, they find there is an issue regarding the PRSI contributions they have paid. This is because of the way in which the contributory pension works at present, which is that it goes from the day on which one started work and is averaged out over the number of years one has worked right up to the point at which one retires. If one takes 20 years out during the intervening period when no contribution is paid, it means one's contributory pension is affected, whereas if one only started work at 50 or 55 and worked for ten years, one would get one's full contributory pension without having worked for 30 or 40 years.

This has really affected women, especially from a historical point of view because back in the 1970s, women were forced to give up work in the public service when they got married. At that stage, women once married had to resign from their positions. As the ban ended in 1973, women in this position were able once again to make up contributions to the Social Insurance Fund, which would eventually award them a contributory pension. In such a scenario, these women were able to make up for lost contributions when they retired. However, new regulations were introduced in 2012 by the Department of Social Protection. This new system aligned pension contributions with the average number of weeks worked. This charge affected up to 50,000 people at the time, mostly women. In certain cases, this means that women who spent a substantial part of their lives working and paying contributions would have been better off had they not worked at all and simply claimed the non-contributory pension. This contradicts two basic principles to which the Government has committed, namely, removing obstacles that might prevent women returning to work and, second, the commitment not to do anything that would reduce basic social welfare payments.

This also raises another question which is dealt with under the scope section of the Department of Social Protection. The employment status group was set up under the programme for prosperity and fairness. This group was set up due to growing concern that an increasing number of individuals were categorised as self employed when the indicators were that employee status would have been more appropriate. While this area is very complex, certain outcomes have rightly and justifiably been arrived at where a partner, usually a woman, who worked all his or her life on the family farm or in a family business without a separate income has been deemed eligible to share in his or her partner's PRSI contributions, therefore allowing him or her to qualify for a full contributory pension. In this case, one must apply to the scope section and a substantial payment of up to €10,000 or €15,000 often is required, which also is a concern for people. This is because in most cases, income was assessed on the husband's income, whereas PRSI contributions are assessed individually. Therefore, if one does not have the contributions, one is not entitled to one's contributory pension. It is then difficult to understand why women or partners who stay at home to care for children, an act which allows their spouses to continue working, should not also benefit from a share of their partners' PRSI contributions during this period of their lives. This can also apply to men, as the world changes and increasing numbers of men remain at home. Were a system like this in place, the averaging system introduced in 2012 would not discriminate against women who broke their employment record merely to facilitate the family and society as a whole. If such a system cannot be universally introduced at present, the least the Minister and the Government could do is to revert to the older system where people in this position were allowed to make up for lost contributions when they retire.

This is a major issue as far as women are concerned. It is now adversely affecting older women who were banned from working because they decided to get married and a marriage ban was in place if one worked in the public service. It also affects mainly lower-paid women who now are retiring and who had worked on and off in the private sector over the years. I hope the Minister will give due consideration to this complex issue in the context of upcoming budget.

Deputy Peter Mathews

Hear, hear.

Minister of State at the Department of Social Protection (Deputy Kevin Humphreys)

I thank the Deputy for raising this matter. The priority of the Government since entering office has been to maintain fully the core weekly rates of payment for pensioners and it has done that successfully over the past three budgets. The Irish pensions system is made up of a number of schemes, based on a number of criteria such as contributions paid, income need and other factors. These ensure that people have an adequate income when they retire. The range of supports has resulted in similar outcomes for male and female pensioners in Ireland. Poverty rates for women and men over 65 have been, in statistically significant terms, the same over a number of years despite many women having lower earnings than men during their working lives. It should also be noted that the consistent poverty rate for those over 65 is approximately one third of that for those aged between 18 and 64 and roughly a quarter of the rate for those aged 17 and under.

The State contributory pension is one of a number of schemes and the pension is related to contributions made over the years into the Social Insurance Fund by the person. As such, those with a stronger attachment to the workforce and who have paid more into that fund are more likely to be paid under this scheme. The home-maker's scheme was introduced in 1994 to make qualification for the contributory State pension easier for those who take time out of the workforce for caring duties. The scheme allows up to 20 years spent looking after children under 12 years or people with a caring need, to be disregarded when a person’s social insurance record is being averaged for pension purposes. However, it is important to note that the scheme will not, of itself, qualify a person for a pension. The standard qualifying conditions must also be satisfied. For those who do not satisfy these conditions, a means-tested State pension may be available.

Costs in regard to this scheme, under the current rules, are expected to increase in the coming years due to the increase in female employment rates since 1994. The 2007 Green Paper on Pensions indicated that to backdate this scheme to 1953, the year when the unified system of social insurance was introduced, would cost the Exchequer approximately €160 million.

In regard to women and social insurance payments, it is worth noting that the Actuarial Review of the Social Insurance Fund in 2012 confirmed that the fund provides better value to female rather than male contributors. This is due to the distributive nature of the fund. The review also examined the changes in the contribution rules and the associated rates of payment which were to be introduced in September 2012. The review found that those with lower earnings and those with shorter contribution histories still obtain the best value from their contributions.

The Deputy has raised an important issue which we need to examine. I would be happy to sit down with her after the budget to scope out the details and consider a proposal that may be able to address the issue she has identified.

Deputy Áine Collins

I appreciate the Minister of State's offer and I will certainly take him up on it. This is a complex issue. It often only comes to light when people approach retirement age and it may be difficult for them to check back on their contributions during their working life. We need to deal with the issue in terms of the women who were forced to give up work when the marriage ban was in place as many of those women have reached retirement age. We need to make the process simple and to give people choices. It does not seem fair that the pension contributions of a person who began work at the age of 20, continued working until the age of 32 or 33 and then took a break of 15 or 20 years, are averaged out over the whole of their working life. I appreciate the point the Minister of State made about the scheme allowing for a provision up to 20 years in that respect. If a person only began work at the age of 55, he or she would qualify for a contributory pension on retirement at the age of 65 or 66. There is definitely inequality in the system.

I appreciate the timeline factor in that the budget will be announced next week. The issue is complicated and it needs to be examined and practically proofed, if I can put it that way. It is a little like the idea of the theory and the practice. We should have a group think-in on it and also include the contribution of some members of society who could assist in this.

Deputy Kevin Humphreys

The Deputy has made the point she raised well. There is a need to scope out exactly what the problem is and identify the blockages. When a man or a woman decides to take time out of work to mind their children at, say, 30 years of age, the last thing they think of is the effect that break in their employment service will have on their income on reaching 65 years of age. There is an important job of work to be done in this area. It could possibly be done through the finance committee. I am happy to sit down with the Deputy to scope out exactly what the problem is, ascertain if there are solutions to it and what the cost implications would be. It is an important and relevant issue. It would not be practical to say to the Deputy that we would take it into consideration for this budget when it will be literally introduced next week. We could work through the issue over a number of months and identify all the problems and the consequences or unintentional consequences of changing the pensions set-up. I thank the Deputy again for raising this issue.

Licensed Moneylenders

Deputy Terence Flanagan

I thank the Ceann Comhairle for the opportunity to raise this important issue. I also thank the Minister of State at the Department of Finance for being present to reply to this matter and I wish him well in his new role.

There is an urgent need to introduce a cap on the interest rates that can be charged by moneylenders. They are regulated by the Consumer Credit Act 1995. I have concerns that not enough is being done to ensure that moneylenders charge their customers a fair interest rate. The Central Bank renews licences for moneylenders on a yearly basis. It can refuse to grant a licence where it deems the cost of interest to be charged is too high and unfair to the customer, yet there are instances where it is renewing moneylenders' licences where some moneylenders are charging up to 188%, and even more in some cases, in interest rates.

There are 43 moneylenders licensed to operate in Ireland with the majority being small to medium enterprises. There has been an increase in the number of customers who have turned to moneylenders with the number increasing by 60,000 in recent years. Obviously that is due to the economic situation. Also, many low income earners have turned to moneylenders because they have been refused credit by the credit unions and the banks. That is an issue that the Minister needs to examine further.

I have concerns that people are not aware of the loan amounts, interest amounts and profits that have been accrued in some of the deals entered into. More transparency and accountability need to be introduced. With his banking background, Deputy Mathews will appreciate that schedules need to be introduced that would set out the capital amount, the amount of interest and projected payments once payments of a fixed amount are being made on loans. The imposition of a high interest rate limit could impact on the moneylending sector and make it unviable for some operators and people may turn to illegal moneylenders whose operations are unregulated which would be even worse. Nobody would want that to happen.

In that regard, a cap on interest rates is what is needed. The Minister would have to be careful as to the ceiling he would set for the highest level of interest moneylenders could charge. For example, a person who takes out a loan of €100 and pays €58 in interest on top of the loan of €100 is paying a considerable level of interest. The Central Bank is allowing that to happen at present.

I ask that an interest rate ceiling of 50% be set which would be greatly beneficial to many customers who use moneylenders. I ask the Minister to consider that proposal. Some 13 members of the European Union have already introduced legal caps on licensed moneylenders with Spain enforcing a 10% APR cap, Belgium a 19.5% cap and France a 21.6% cap. Also the UK is considering introducing legislation in this area with a maximum interest rate of 100% APR for short-term lending. Will the Minister look to what is happening in the rest of Europe and introduce some level of a higher limit of interest rate that can be charged in these instances?

Minister of State at the Department of Finance (Deputy Simon Harris)

I thank the Deputy for raising this important issue and for giving me an opportunity to outline the Government's thinking on it. I will deal with some of his requests which were quite constructive at the end of my response.

The Government has some concerns about the introduction of a cap. Those concerns include that the introduction of a cap on the interest rates that can be charged by moneylenders would not necessarily be in the interests of consumers or the wider financial system. The Central Bank is the competent authority, as the Deputy outlined, with regard to licensed moneylending and is responsible for overseeing and regulating their activity. Legislative provisions relating to moneylending are contained in the Consumer Credit Act 1995, as amended. It is an offence under that Act to engage in the business of moneylending without a licence granted by the Central Bank. I understand that there are 39 licensed moneylenders operating in Ireland at present.

The legislation does not provide for an interest rate cap for moneylenders. The introduction of an interest rate ceiling may not achieve the objective of lowering the total cost of credit, for example, if the licensed moneylender chose instead to extend the duration of the loan. I understand what the Deputy is trying to achieve but I pose the concerns that we have that it may not have the desirable effect.

Lower interest rate ceilings could also result in excluding low income households from access to credit that have repayment capacity, even at the high rates charged by licensed moneylenders.

The Government would have some concerns, therefore, about the imposition of an industry-wide interest rate cap without a detailed assessment of its impact on consumers. Often the loans are for small amounts, are needed immediately by the customers and are made available and repaid at the home of the customer. The shorter the duration of the loan, for example, two weeks, the higher the annual percentage rate of charge, APRC, as the APRC is an annualised measure of the interest charged. This service may impose extra costs on the moneylenders. Under section 47 of the Consumer Credit Act, a customer may apply to the Circuit Court for a declaration that the total cost of the credit provided is excessive.

Moneylenders have to apply to the Central Bank on an annual basis to have their licences granted or renewed. Part VIII of the Consumer Credit Act 1995, as amended, sets out the Central Bank's powers, duties and responsibilities regarding the granting or refusal of a moneylender's licence and in the regulation when granted. In addition to the licensing system, the Central Bank has in place a consumer protection code for licensed moneylenders. The Central Bank has power to impose sanctions on licensed moneylenders for a contravention of the code. Since 1 December 2011, licensed moneylenders have been subject to a new fitness and probity regime by the Central Bank. The Central Bank has advised me that there is a rigorous process involved in the granting or renewal of a licence.

Under section 93(10)(g) of the Consumer Credit Act 1995, the Central Bank can refuse to grant a moneylender's licence on a number of grounds. One of these grounds is where, in the Central Bank's opinion, the cost of credit to be charged is excessive or any of the terms and conditions attaching thereto are unfair. This point is particularly relevant to this Topical Issue debate. Although there is no specific cap on the interest rate which a moneylender may charge, the licence granted to the moneylender will indicate what the APRC is and all advertisements must include the following words in font larger than the rest of the advertisement: "WARNING: This is a high cost loan."

There is a danger that if a cap on interest rates were introduced, some licensed moneylenders might exit the market with the ensuing risk that illegal operators might take their place. We are all aware of the operation of illegal operators and the negative impact they can have on families and communities. Since persons operating as illegal moneylenders are in breach of the law, it is a matter for the Garda Síochána to investigate their activities. Under section 98 of the Consumer Credit Act 1995, as amended, the Garda Síochána has sole responsibility for the investigation and prosecution of such offences.

I would encourage consumers to consider all the different sources of loans that are available to them. Deputy Terence Flanagan highlighted the problem of moneylenders becoming so prevalent as a consequence of the economic crisis the country has come through. I encourage people to avail of the personal finance information available from the National Consumer Agency. This information can be found on the website www.itsyourmoney.ie. In addition to the information provided on this website, people who are in debt or in danger of getting into debt may avail of the services of the Money Advice & Budgeting Service, MABS. As the Deputy knows, MABS works with people in order to assist them with financial planning and budgeting for the future. It is a national, free, confidential and independent service. The Deputy's point about the need to examine what happens in other European countries and best practice in Europe is something I am happy to take back to the Minister for Finance and I will ensure he receives it directly.

Deputy Terence Flanagan

I appreciate the Minister's last comment in particular. He has a can-do attitude and, hopefully, he will re-examine the fact that 13 EU countries, including Spain, Belgium and France, are adopting a legal cap on licensed moneylenders. Even the UK is considering it. We are talking about low-income families who are being refused credit by banks and credit unions and have nobody else to turn to. Perhaps the Minister of State could consider allowing credit unions to apply a risk-based price structure to their loans and charge a higher rate for higher-risk loans. Credit unions could have more of a role to play in these particular instances and provide help for families in extreme difficulty and in poverty. Perhaps this could be considered as part of the ongoing debate about credit unions and what they could and should do in the future.

The Society of St. Vincent de Paul has highlighted the issue of illegal moneylenders and warned the Government that urgent action must be taken to stop vulnerable families being targeted. Some of them are being charged 400% per quarter for short-term loans, which the Minister will agree is horrendous. Families are turning to these illegal moneylenders particularly when they are preparing their children for going back to school and at Christmas time. Hopefully, something can be done about this as we approach the end of the year. I support the Society of St. Vincent de Paul in highlighting the issue and, hopefully, the Minister of State will target these people.

Deputy Simon Harris

The Deputy is correct. The issue that has been raised by the Society of St. Vincent de Paul and others about illegal moneylenders is a major cause of concern for people on all sides of the House. We need to examine it. Since persons operating as illegal moneylenders are in breach of the law, it is a matter for the Garda Síochána to investigate their activities. Under section 98 of the Consumer Credit Act, the Garda Síochána has sole responsibility for the investigation and prosecution of such offences. While the Central Bank has no power in this regard, if it has reason to believe a person is operating as an illegal moneylender it refers the matter to the Garda Síochána. I strongly encourage every Member to ask that anybody who has information about the operation of unlicensed moneylenders to make the information available to the Garda Síochána, which will take all measures open to it to enforce the law in this area. Perhaps the Deputy can raise the matter with my colleague, the Minister for Justice and Equality. I will also refer to it when I next meet her. We need to examine what other countries are doing and I will ask the Minister for Finance to examine what is happening with his European counterparts. As I said in my opening statement, the legislation already in place on the issuing of a moneylender's licence allows the Central Bank to refuse a licence on grounds which include where the Central Bank is of the opinion that the cost of credit to be charged is excessive or that any of the terms and conditions attaching thereto are unfair.

Deputy Terence Flanagan

Can the Minister give one example of a moneylender being refused a licence?

Deputy Simon Harris

I do not have that, because it is a matter for the Central Bank. It is a fair point. We have provisions in the Consumer Credit Act 1995. If the question the Deputy is posing is whether they are adequate or if more could be done, I am willing to explore it with my colleague, the Minister for Finance. I thank the Deputy for raising it.

Nuclear Plants

Deputy Joe Costello

I welcome the Minister for Health, Deputy Leo Varadkar and congratulate him on his new portfolio. I am glad to have the opportunity to speak on the decision by the European Commission to give approval to the proposed £24.5 billion or €31.2 billion nuclear power station at Hinkley Point in Somerset. There has been no nuclear power plant construction in the UK in the past 20 years and there has been a very substantial emphasis on renewable energy for a considerable period of time, with Ireland hoping to become a net provider of energy to the UK in the not too distant future and Germany turning its back on nuclear energy. Therefore, the announcement by the European Commission that the UK, in its proposal for a very expensive power station in Somerset, 240 km from Ireland, should be allowed to receive state subsidy for its construction and operation came as a surprise to everybody.

Given that it is very difficult to see how this could be other than contrary to the anti-competition laws, I call on the Government to join Austria in the legal action it proposes against the proposed nuclear power station. There are major environmental concerns regarding the impact of the power plant in relation to state aid. The Austrian Government's legal action in the European Court of Justice is very specifically on the state subsidy element. The problem is that if the European Commission does not regard a state subsidy as anti-competitive, we could have a new generation of heavily subsidised nuclear power plants across Europe. This plant will provide approximately 7% of the UK's energy requirements and could spark a very large number of similar nuclear power projects and shift the dynamic from renewable energy to nuclear energy.

The power plant will use the unproven EPR technology, which is not operational anywhere in the world, even though France and China are beginning to look at construction there. Nevertheless, it is unproven at this point in time. After all these decades, there is still no satisfactory method for dealing with the considerable quantities of radioactive waste the plant will generate over its lifetime of 60 years.

Under the plan, the British Government would be allowed offer EDF Energy, the company behind the project, a guaranteed power price of £92.50 per megawatt hour for 35 years - more than 50% of the lifespan of the plant. This is more than twice the current market rate. Clearly, this represents subsidisation of an operational plant.

EDF Energy will also benefit from a state guarantee covering any debt which the operator will seek to obtain on financial markets to fund the construction of the plant. The new Hinkley Point nuclear power station will require debt financing of £17 billion and will eventually have a capital outlay of approximately £34 billion. These are massive sums.

Rather than these significant subsidies for nuclear energy, it would seem far more appropriate to support alternative renewable energy sources, which are still grossly underfunded throughout Europe. The scale of the subsidy being given to EDF Energy is significant and it is difficult to understand how such extensive support cannot be considered an illegal state subsidy.

Minister for Health (Deputy Leo Varadkar)

I thank Deputy Costello for raising this important issue. I am taking this debate on behalf of my colleague, the Minister for Foreign Affairs and Trade, Deputy Charles Flanagan, who is on Government business.

The European Commission announced yesterday that is has found revised United Kingdom plans to subsidise the construction and operation of a new nuclear power plant at Hinkley Point in Somerset to be in line with EU state aid rules. During the investigation, the United Kingdom agreed to modify the terms of the project financing significantly. As a result, the Commission indicates that it has decided that the state aid provided will remain proportionate to the objective pursued, avoiding any undue distortions of competition in the Single Market.

The United Kingdom Government published its draft energy national policy statement in November 2009, which signalled its intention to construct ten new nuclear power stations at sites judged by it as potentially suitable. This was subsequently revised in October 2010 when the number of planned stations was reduced to eight. The first of these plants is planned for construction at Hinkley Point in Somerset, on the south-west coast of England.

It is Ireland's position that, where another state chooses either to develop a nuclear power industry or expand its existing nuclear power industry, this must always be done in accordance with the highest international standards on safety and environmental protection. Ireland's priority is the safety of the Irish people and the protection of our environment, including the shared marine environment of the Irish Sea.

Ireland has been recognised by the United Kingdom as a stakeholder in any consultation involving a nuclear development proposal. When the United Kingdom decided to embark on plans to build a new fleet of nuclear power stations, Ireland was one of the stakeholders involved as part of the national policy statement consultation.

Since the original announcement in 2009 of plans to build a new fleet of nuclear power stations, Ireland has written at ministerial level to the United Kingdom Secretary of State for Energy and Climate Change, Mr. Edward Davey MP, outlining concerns about the potential environmental impacts in Ireland and in the Irish Sea. The key issues of concern include the assessments by the United Kingdom of effects on the environment, the management of radioactive waste and the rationale underpinning the proposed justification decision for new nuclear facilities. This engagement has been supported by a continuing dialogue at official level where Irish officials engage with relevant United Kingdom officials on a wide range of nuclear related matters.

It is the United Kingdom's position that Hinkley Point will have no transboundary effects during routine operations. Under the EURATOM treaty, the United Kingdom was required to satisfy the European Commission that the development at Hinkley Point would not result in the radioactive contamination of the water, soil or airspace of another member state. In that context, a Commission opinion, issued in February 2012, considered that in normal operating conditions, discharges of liquid and gaseous radioactive effluents were not likely to result in exposure of the population of another member state, which is significant from the point of view of health.

The Radiological Protection Institute of Ireland, RPII, which is now incorporated into the Environmental Protection Agency, was asked by Government to prepare a report on the potential radiological implications for Ireland from the proposed new nuclear power plants in the United Kingdom, including Hinkley Point. This report, published on 20 May 2013, concluded that the threat to human health from this new building programme is very low. The report shows that any radioactive contamination in the air, either from day-to-day operation of the proposed nuclear power plants or accidental releases, would be transported away from Ireland most of the time. This conclusion arises from an analysis of weather conditions prevailing in Ireland and the United Kingdom over the past 21 years. The RPII report also shows that the routine operation of the proposed nuclear power plants will have no measurable radiological impact on Ireland or on the Irish marine environment. In the highly unlikely event of a severe accident occurring at one of the plants, combined with unfavourable atypical weather conditions prevailing at the time, the report finds that some food controls and agricultural protective actions would be necessary in Ireland for a period.

The Department of the Environment, Community and Local Government will continue to utilise fully existing channels of communication with the United Kingdom authorities to ensure they are fully aware of any concerns that Ireland has in relation to their proposed nuclear new-build programme.

While the Commission announced its state aid decision yesterday, the decision itself has not yet been published. We will be reviewing it carefully as soon as it is available.

Deputy Joe Costello

I thank the Minister for the reply. He did not indicate whether or not Ireland will consider joining Austria in the legal action in which it has decided to engage, even though there has not been full publication of the decision.

There are the obvious environmental dangers that I mentioned. We have had difficulties in recent times with Chernobyl and Fukushima that arose from man-made and natural disasters. Apart from that, if state subsidisation is allowed for a particular form of energy production, where does that leave the other energy production modes? In renewable energy, on which we have European Union targets to meet, anti-competition laws seem to apply fully, but because this is such a major project, it is allowed to get subsidies, both in terms of the capital funding for its structure and in terms of the cost ratio for its current operations. Both of those seem questionable in terms of EU policy and I understand that is the basis on which Austria is taking the case. From the point of view of best practice and statutory provisions, even though the Commission has made its decision, would it not be appropriate that we should also have recourse to the European Court of Justice to determine whether anti-competition mechanisms are in operation in this case?

We have considerable agricultural capacity here in Ireland. We are building that for the future and expanding to a significant degree. As well as the threat to the people of Ireland, and there is always the danger of a serious threat despite what is said about the prevailing winds likely to be going in the opposite direction, we were affected to a considerable degree when Chernobyl exploded and we could not sell Irish lamb from various areas for a period. Chernobyl is a long distance from Ireland.

All the issues would indicate that it would be well in our interests to ensure we are involved at the highest level in this decision-making process in the European Union.

Deputy Leo Varadkar

I reiterate that while the decision has been announced, it has not yet been published. I imagine the Department of Foreign Affairs and Trade will want to see the detail of it before making a decision on how to act.

On the specific question of joining Austria in its legal action, I am advised by the Department of Foreign Affairs and Trade that it is not necessarily the case that we can simply join Austria. Ireland would need to consider its own legal strategy. Once the Commission's decision is published, the Government will consider its implications carefully.

On the issue of state subsidisation, it is worth pointing out that state subsidies are allowed for renewable energy. We have the renewable energy feed-in tariff, REFIT, scheme in Ireland which guarantees a price for renewable energy. They use the renewable obligation certificate, ROC, system in the United Kingdom. To the best of my knowledge, all renewable energy in Ireland is subsidised through a guaranteed REFIT price.

Deputy Joe Costello

Not for 35 years.

Deputy Leo Varadkar

The same goes for peat. Gas, coal and oil are not. I will make the Minister, Deputy Charles Flanagan, aware of Deputy Costello's comments on this. I am sure the Minister will want to talk to him about it again.

Nursing Homes Support Scheme Administration

Deputy Barry Cowen

This year there has been an alarming escalation in the number of people waiting for long-term care under the fair deal scheme, in addition to an increase in the length of time people must wait. Last month, 2,000 people were on the waiting list. Since July the time spent on the waiting list has increased from three months to four months. The waiting list in July increased from 1,465 to 2,007 people.

The situation has resulted in a dire situation for older people and their families. The delays caused by the HSE while waiting for approval are costing people thousands of euro. The cost is up to €1,000 a week in some cases. People are entitled to access care under the fair deal scheme but they find themselves trapped on the waiting list and forced to remain in hospital. That has an obvious impact on hospitals in general, especially acute hospital beds, and there are associated costs to the State. The other impact is on nursing homes and their ability to trade and provide a service.

Once the scheme was provided to people, negotiation with nursing home owners was possible which allowed the scheme to be backdated, but that is no longer the case. The cost associated with the delays are to the detriment of the applicants and their families. Many of them simply cannot afford the situation. Families cannot take advantage of an offer of a place within a nursing home close to them which might suit their needs and requirements as they cannot afford it. If and when approval becomes available, three to four months later, there is no guarantee that the service within the facility to which they applied will still be available.

It would be cheaper and more cost-effective for the State to address the deficiency of administrative staff. I was told that €23 million was diverted from the scheme to the community care package. The situation of many of the people who made representations to me on the matter has deteriorated to such an extent that the time provided to them has been cut. When they apply for home help for an hour a day, they are provided with only half an hour a day. I do not see where the extra money that was taken away from the fair deal scheme is being provided.

I urge the Minister to speak to his counterpart in the Department of the Environment, Community and Local Government, Deputy Kelly, about the schemes to assist the elderly and the disabled, for example, the home adaptation scheme which carries out necessary repairs to meet the needs of people within their homes to avoid them being a burden on the State. Funding has dried up to such an extent in County Offaly that I am acting for 70 people who have been told by the local authority that, due to the lack of availability of funding, it cannot address the needs of those applicants. In many cases people were told that it would be a further three to five years before the applications could be processed. The average cost per applicant is approximately €20,000. The cost to the State of not providing the funding amounts to approximately €18 million. The figure is based on €1,000 a week for five years to provide care in a nursing home setting, which the Government is forced to do in the absence of being able to maintain people in their own home by virtue of the lack of funding which might have adapted their home to their needs. The provision of €1.4 million could alleviate the problem which would allow an overall saving of approximately €16.5 million.

I urge the Minister to make an effort to converse with his ministerial counterpart with a view to addressing the deficiency with a once-off payment which might meet the demand and reduce the burden on the fair deal scheme. I corresponded with the Department and those responsible for improving the situation, but to date, unfortunately, that has been to no avail. Has the Minister made any inroads in terms of his forthcoming budget or on impressing on the sector the need to be more efficient and to address the deficiencies? The scheme was devised to assist people. People should be allowed to be accountable in some shape or form for the service they receive. That is not the case to any great extent currently.

Deputy Leo Varadkar

I thank Deputy Cowen for raising this important issue. The nursing homes support scheme, a fair deal, is a system of financial support for individuals who require long-term nursing home care. Anyone who is ordinarily resident in the State and who may need nursing home care, regardless of age, can apply for the scheme.

The total budget for long-term residential care in 2014 is €939 million. It should be pointed out that a number of people covered by funding arrangements which preceded the scheme are also funded from this provision. The HSE releases funding weekly to balance activity across the full course of each year. The HSE operates a national placement list to match the funding available at any given time to demand. All applicants who are approved for funding are put on the placement list in order of their approval date. Funding issues to applicants in a strict order to ensure equity nationally. The current waiting time on the placement list is 15 weeks, with 2,114 people on the list awaiting release of funding.

In the first seven months of 2014, a total of 3,553 new clients were funded under the scheme. The length of time an applicant remains on the placement list depends on the number of approved applicants awaiting funding for the scheme at any given time and the number of applicants receiving payment under the scheme. This means the duration of time on the placement list can fluctuate.

While I would prefer if we had no need for waiting lists of this kind, significant funding pressures exist in the health service generally, and the nursing homes support scheme must operate within the funding available to it and manage that in the most effective way possible. I must emphasise that while residential care is an important part of the supports in place for older people, Government policy is to enable as many older people as possible to remain in their homes and communities for as long as possible. Towards that end, funding for community services has been augmented by transferring €23 million from the provision for residential care to enhance new and more intensive home supports for those with higher or more complex needs, as Deputy Cowen acknowledged.

The review of the nursing homes support scheme, which is under way, will consider the sustainability of the scheme itself, and will also consider the way in which we balance residential and community supports. The needs of older people are, and will remain, a very high priority for the Government. The resources that are available will continue to be applied to provide the best possible mix of supports and services in a way that most effectively matches the needs and preferences of older people themselves, with a particular focus on enabling people to live as independently as possible for as long as possible.

Deputy Barry Cowen

I thank the Minister for his response but he has merely restated what I said about the current situation. It is another example of what the Minister might agree was a flawed health budget this year. The question is how the Minister will address the issue I outlined, among others.

It is easy to acknowledge the current deficiency and inefficiency that exists. The Minister said it is the Government’s prerogative to allow people to remain in their home for as long as possible. That is most laudable and I support it wholeheartedly. If the Minister meant what he said and if he wants it to carry any weight and show he can be different from the Ministers who have preceded him, he will acknowledge what I said. For example, 70 people are waiting to have their homes adapted in order for them to stay at home and live longer in their homes. The cost of that is approximately €1.5 million. The Minister is standing idly by while the Department of the Environment, Community and Local Government allows a local authority to inform such people they will have to wait three years to five years before their applications can even be fully assessed. The Minister must then carry the can. If they were to apply for the fair deal scheme, the Minister would be obliged to pay €18.5 million to provide care. We all know the majority of the applicants would be in the cemetery before the five years is up. Those are the facts of the matter. That is the bottom line. No amount of glossing over figures and saying the sum of €23 million was diverted here, there or elsewhere will cover up what is happening. The change has not made an impact because the money has not followed the patient, as per the mantra of the Minister’s predecessor.

Will the Minister address this in a real and meaningful way, looking at basic, obvious, black and white issues? If so, we can work together to alleviate difficulties in this and other areas.

Deputy Leo Varadkar

The situation is far from satisfactory and I will not pretend otherwise. There are roughly 700 delayed discharges in acute hospitals at the moment. Most of these are elderly patients who have been discharged by a consultant and are ready either to go home or to go to a nursing home but cannot do so. More than half the 700 delayed discharges are in Dublin city.

There will always be delayed discharges for various reasons, but if we could lower the number from 700 to 350, it would have a significant impact. It would free beds to lower the number of people on trolleys and reduce surgical waiting lists. This issue is one of the ten priorities I have outlined for my Ministry. It is under discussion at the moment in the context of putting together a budget for 2015 and a service plan thereafter. We need additional resources for social care, because it is very underdeveloped in this country relative to Northern Ireland and England, and we need them for the nursing home support scheme.

I have not had specific engagement with the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, on the issue of housing adaptation but I will speak to him and ask my officials to examine Deputy Cowen's figures to see if they stack up. The Deputy will be aware from his constituency work that not everyone who seeks housing adaptation would otherwise be in a hospital or nursing home. Many live in the house in any case. To do what the Deputy suggests would require a distinction between those who can live in a house without adaptation and those who would otherwise be in a hospital or nursing home. There may be common sense in what the Deputy says so my officials will examine the figures.

The Dáil adjourned at 3.55 p.m. until 2.20 p.m. on Tuesday, 14 October 2014.

Dáil Éireann debate - Thursday, 9 Oct 2014