Deputy Ó Snodaigh was in possession. Is he willing to continue in the presence of the Minister, Deputy Jan O'Sullivan?
Social Welfare Bill 2014: Second Stage (Resumed)
Question again proposed: "That the Bill be now read a Second Time."
That is no problem at all.
I will stay here until the Tánaiste and Minister for Social Protection arrives in the Chamber.
The Tánaiste was not here for the first part of my contribution to this debate. I will carry on regardless, as they say. When I spoke last week, I urged the Minister of State with responsibility for forestry, who happened to be present in the absence of the Tánaiste and Minister for Social Protection, to consider the introduction of an amendment to this short Bill. Even at this late stage, we should examine the possibility of restoring the €325 that was cut from the respite care grant. This is one of the steps that could be taken to improve this legislation. I highlighted other issues as well. I drew the Minister of State's attention to the online petition calling for the €325 to be restored and to the many comments left by those who had signed the petition. The people in question have explained much better than I could why the grant was so vital to them and their needs and why it needs to be restored in full. I hope the Tánaiste has had time to reflect on the matter since last Thursday, when the Second Stage debate on this Bill began.
I want to talk about some of the options that were available to the Government when it was drawing up last month's budget. The alternative budget presented by Sinn Féin set out a superior and better targeted way of spending the social welfare budget than that contained within the Government's budget. We recognised the plight of carers, those suffering fuel poverty, struggling working families and young people who are unequally subject to extremely low social welfare payment rates. Many young people are being driven out of this country by such rates. One of the proposals I outlined related to the change in the family income supplement payment. I said that an increase of 10% in the payment would cost €33 million. I called for the one-parent family payment income disregard to be increased to €120 rather than stalled at the current level of €90 as announced by the Tánaiste. While I welcomed the announcement - the Tánaiste had previously intended to cut the disregard to €70 - the increase I proposed would have brought the disregard back to the level where it was in the past. That would have cost €15.3 million. I also called for the restoration of equality for young jobseekers by giving them the full €188 payment over the period of two budgets. I said that this year's budget should have restored three weeks of the fuel allowance, which would have cost €23.9 million. I could list some other proposals in addition to those.
I do not believe the Government has gone far enough. I think there were alternatives within the moneys available to the Government, but it chose a different path. An alternative to the way the tax system works was also proposed. Sinn Féin outlined some of those proposals. We are not the only ones who made suggestions. A number of other groups did likewise. There is a difference between what is happening now and what has been happening. When I was first elected to this House, very few alternative budget proposals setting out how the Exchequer could be funded properly were laid before this House. At least now people are taking the time to look at alternatives. They are costing them as much as they can, and we are costing them as much as we can within the constraints of this House. Some Sinn Féin proposals that would have led to additional revenues were not included in our budget submission this year, not because we are opposed to them or because we have changed our minds on them, but because the Minister for Finance and his Department were not able, or perhaps were unwilling, to cost them. I urge the Tánaiste to ask the Minister for Finance to reconsider some of the proposals we have made and to instruct his Department to examine how much money could be raised from a wealth tax, for example. At least then this House could have a proper debate on the rights and wrongs of such a tax, by comparison with a property tax.
I am glad the Tánaiste is present now because I want to make another point before I finish up. She may recall that when we discussed the Social Welfare and Pensions (No. 2) Bill 2013, I advocated a very different priority order to govern how the restructuring of defined benefit pension schemes that are in deficit is wound up. It differed significantly from the slightly adjusted priority order that was being provided for in that legislation. I urge the Tánaiste to convert the Social Welfare Bill before the House into a social welfare and pensions Bill in order that the question of the priority order can be reconsidered. She will be aware that she has been lobbied in recent weeks by people who believe the current legislative framework continues to leave members of defined benefit schemes vulnerable to their expected pensions being almost entirely wiped out. Deferred members of schemes are particularly vulnerable in this regard, given their exclusion from the industrial relations mechanisms that generally influence the distribution of the burden of the schemes' restructuring. I am arguing, as I have done previously, that the Tánaiste should introduce amendments to the relevant legislation, for example to provide for a legal obligation that would ensure healthy employers live up to their pension promises in the first instance.
I will set out the priority order that I believe should be introduced to govern the restructuring or wind-up of defined benefit schemes that are in deficit. First, a PRSI contributions record that is sufficient to ensure eligibility for the full State pension should be purchased from the social insurance fund for every scheme member who has not attained such a record. Second, provision should be made for 100% of pensioners' benefits below €12,000, excluding post-retirement increases.
Third, active and deferred members under the age of 55 years should have dispersed to them the lower of 50% or €6,000 of their benefits or, if they are aged over 55 years, the lower of 75% or €9,000, excluding post-retirement increases. Fourth, I made a suggestion regarding 75% of pensioners' benefits exceeding the initial €12,000 up to a maximum of €30,000, excluding post-retirement increases. I also suggested that 75% of active and deferred members' benefits exceeding the initial sum up to a maximum of €30,000, excluding post-retirement increases, be the fifth round, as it were. The sixth round entailed the remaining benefits for pensioners, excluding post-retirement increases, the seventh entailed the active and deferred members' remaining benefits and the eighth related to the remaining pensioners and active and deferred members.
It is a complicated subject and, although the discussion was long, it was still truncated. Like most Social Welfare Bills, it was guillotined in the House following Committee Stage and we did not have as long a debate as we should have. We could have teased out the benefits of a scheme along the lines I suggested versus the one suggested by the Tánaiste. The Mercer report seemed to amalgamate both.
The effect of this priority would be to ensure a much fairer distribution of funds for everyone in the event of a wind-up or restructuring regardless of whether a pensioner was in payment, a deferred member or an active member. It would offer greater protection to deferred members of, for example, the Irish airlines superannuation scheme, IASS, or the Abbey Theatre. I urge the Minister to consider changing this Bill. I am not opposed to what is before us, as it is a simple proposal, but we should take this opportunity to deal with outstanding social welfare and pension issues.
I understand Deputy Halligan is sharing time with Deputies Joan Collins, Boyd Barrett, Coppinger and Tom Fleming, with six minutes each.
I will briefly refer to the ongoing discussions with representatives, particularly Unite, of the 1,200 glass factory workers regarding their pensions. The Tánaiste is often criticised, but I want to congratulate her on that front.
Fingers crossed for the workers.
We hope the situation will come to a good end for the many workers. This is one of the greatest injustices ever perpetrated against workers. I am not accusing the Tánaiste of being responsible, as this started way back. Having worked for 20, 30 or 40 years, many people are still without their pensions and 30 or 40 have died. On behalf of Unite and the workers, I hope the negotiations come to fruition shortly.
I will concentrate on child benefit and the high cost of child care. Child benefit has shrunk from €160 per child in 2008 to its current level of approximately €130. The Government has added €5, returning €70 million to parents, but this does not make up for the €400 million that has been cut since 2009. The €5 will make no discernible difference to parents who, on average, are forking out €167 per week per child for child care. I cannot comprehend why the Government did not use the budget as an opportunity to promote high-quality, affordable child care.
According to the latest statistics, we have one of the lowest rates of investment in child care in Europe. This is astounding for a country that was once one of Europe's richest. Fees paid by Irish parents for early years services are among the highest in the EU. According to a staggering OECD figure this year, Ireland is one of the two most expensive countries in the world for child care, with the average family of two spending 40% of its wages on child care costs. This is an extraordinary, shameful and damning statistic. A developed country in the Western world, yet here we are. It is incomprehensible. It is estimated that a family with two children and with both parents working pays an average of 35% of net income on child care. For a lone parent on an average wage, child care costs can amount to 40% of his or her income, yet the average rate in the EU is 10% to 13% of family income. This is unacceptable in a modern country where we all talk about putting the issues and rights of women first. If the Government was serious about helping families and returning parents to work, we would address prohibitive child costs.
I met a group of 60 or 70 women, many of whom are teachers, during the week regarding this issue in particular. They suggested the introduction of a second free preschool year, which is already the case in many countries, particularly the Nordic ones. We need to step up to the plate. The lack of high-quality, affordable child care will continue to affect many families living in poverty and, as the Tánaiste knows, prevent many women from providing a valuable and integral contribution to the workforce. I do not understand it.
During the week, I spoke with two teachers who had three children. They made the point that, having qualified, one of them would have to make a decision on whether to stay at home to mind their three young kids because they could not afford child care for three children. We are educating people at a colossal cost to the Exchequer to become teachers, yet we are taking them out of the system because we will not help them with affordable child care. It does not make sense.
I have been involved in politics for 20 or 30 years and, for as long as I can remember, successive Governments have discussed all sorts of proposals to bring affordable and quality child care to women in particular and their children, yet we are no closer to achieving that in 2014. Not only is it incomprehensible, it would be shameful if we were to sit here and glance around the world at countries that, despite being poorer than us, had affordable child care because they concentrated on trying to get as many qualified people into the workforce as possible while ensuring children received care.
I do not know where the Government can go from here. Maybe it does not realise how great an issue this is. From speaking with many women in the workforce, however, I know this to be a major one for them. It is driving down their wages indirectly, in the sense that they must pay for child care, driving down spending power in communities and taking qualified people, for whose skills we have paid to some degree, out of the workforce in order that they can mind their children. It is reprehensible.
The Minister's changes under the Bill give rise to four, five or six issues relating to, for example, child benefit, the household package, the living alone allowance and the change to the amount invested in JobBridge, etc. People, particularly those affected by cuts in recent years, have given their judgment on the budget.
Sean Moynihan, the chief executive officer of ALONE, commented:
After seven successive years of harsh budgets disproportionately affecting the most vulnerable, we now are in a situation whereby 1 in 5 older people are at risk of poverty or suffering deprivation, despite the National Positive Ageing Strategy. We are questioning whether this budget will do anything to bridge the gap between the rich and poor. Not all older people are the same; those surviving on the state pension alone (which is just above the poverty line) will see a small increase of just €124.60 this year, and that’s before the water [taxes] are taken into account.
The ALONE chief executive officer went on to state:
For the first time since 1996, the Living Alone Allowance has been increased. Nevertheless the increase of €1.30, from €7.70 to €9.00 is not in line with inflation over the past 18 years and will make very little difference to the 20% of older people who are at risk of deprivation or living in poverty.
That was ALONE's judgment on the Social Welfare Bill. A similar response came from the One Family organisation, which stated:
While the child benefit increase of €5 and the partial re-instatement of the Christmas Bonus may be welcomed by some parents, these are not cost-effective measures that will impact on poverty levels in any tangible manner without being tailored to respond to need. 53% of lone parents are in the labour force yet one-parent families remain those statistically most at risk of poverty.
The National Women's Council of Ireland, NWCI, commented in a similar vein by stating it:
... welcomes the €5 increase in child benefit as a partial recognition of the cost of living increases for families, one which NWCI called for in the lead up to Budget 2015. However it is important that we recognise that this measure, worth approximately €70 million, does not offset cuts to the payment which amount to over €400 million since 2009 or the impact of increased property and water taxes on many families and does not address childcare costs, which average €800 - €1000 a month.
That was the judgment of some of those organisations that deal directly with people in society and with those areas and people who have been most affected by the austerity of the past eight years in Ireland.
When one considers how the Government responded to this by giving more into the pockets of those earning more than €70,000 while giving less into the pockets of those earning lower incomes, one can see why this budget has been worked out this way. While the Tánaiste has stated the Government has not cut core payments, it has. It has cut the jobseeker's allowance for those under 25 and under 21. The Government has cut the pension for women who have worked all their lives and because it changed the way in which the allocation of contributions are worked out over the years, it has actually cut their income by substantial amounts of money. The figures I have read state that next year, one could envisage almost 54,000 women being affected by these cuts in the old age pension contribution. The point is that for women who have worked since 1974 but who took time out to rear their families or to care for their mothers or fathers, the contribution now is levelled over the number of years, which means they will have less of an old age pension when they turn 66 years of age. People are outraged about this and the Irish Congress of Trade Unions has come out to absolutely lambaste the Government on this change, as have SIPTU and the National Women's Council of Ireland. However, the Tánaiste has had the audacity to state there have been no core cuts in payments. This constitutes a deep core cut in payments for women who need it and who are most vulnerable in the later years of their lives. Moreover, this issue has not gone away. Although there was supposed to be a home tax credit to offset this cut to these women's pensions, it has not happened. It is sitting with the Department of Finance at present, as the issue was transferred from the Department of Social Protection to the Department of Finance to be dealt with. Consequently, it is a damned lie in respect of no cuts in core payments.
The Social Welfare Bill does not go anywhere towards trying to address the inequalities that existed in our society before the crash and which have only become embedded since then. As for the impact of these cuts, I met a group of people from the Canal Communities Partnership last week and these across-the-board cuts in the partnerships and the networks, in the HSE and in the Garda have had a really bad impact on certain parts of society whereby it now is extremely difficult or practically impossible to get Tusla to work with families who are most vulnerable in the child protection area. Whether there have been cuts there as well and it cannot deal with the pressures, this is what is happening now. There have been a number of attempts to meet families to try to deal with child protection but that has not happened since last April. This is the impact it is having in communities right across the board.
The unprecedented popular rebellion seen on the streets in recent weeks was focused on the issue of water but in fact was an accumulation of all the anger and bitterness against six years of injustice and unfairness. Much of this was centred around some of the most vulnerable sections of society being absolutely savaged with brutal cuts. I refer to lone parents, people dependent on rent allowance, cuts to child benefit, back-to-education allowances and telephone allowances and the entire raft of cuts that have been imposed on some of the least well-off people. This has left Ireland in the shameful position in which it has one of the highest levels of child poverty anywhere in the OECD. An incredible 28.6% of our children are living in poverty, which is a shameful situation. The minor concessions, which are a drop in the ocean compared with what has been taken from people over recent years, will go nowhere to addressing this absolutely unacceptable and shameful situation of poverty for huge numbers of people and in particular for children. It does not get any worse than that and a state that cannot protect children and other vulnerable groups against poverty is a state that deserves nothing but contempt.
Any minor give-backs, which go nowhere near reversing the unfairness and cruelties of the past six years, in any event will be wiped out by the introduction of water charges. If for no other reason, I oppose this Bill on the grounds that it is premised on the idea that water charges are coming in when the people have told the Government in absolutely unequivocal terms that they cannot take any more and do not accept water charges. Water charges are regressive by nature and it does not matter at what level one sets them. It does not matter if one sets them at 50 cent as they are regressive, because they hit the least well-off disproportionately compared with the wealthy. Moreover, once one gets them in, that regressive tax will continue to escalate, thereby increasing the unfairness and inequality, as well as the tax injustice in the way in which the tax system works. One message I wish to give to the Minister of State, Deputy McHugh, as he and the Government ponder what they will do in the face of the revolt against water charges, is that nothing will stop this revolt other than the Government scrapping these charges and accepting that Ireland's taxation system and how public services are funded must be done in a progressive way. User charges are inherently regressive. One does not need to be a rocket scientist or a socialist to work that one out. This is what people are saying and beyond that, they seek some fairness in how wealth is distributed, as well as a taxation system that ensures a fairer distribution of that wealth.
Members of the Government often state that Deputies on these benches imagine there is some sort of pot of gold somewhere or that there is something else that could be taxed rather than these measures the Government imposes. However, there is and the Minister of State should read the quarterly reports produced by the Central Bank. I have just read the latest one, which shows there is €508 billion in household and financial wealth here, which constitutes an incredible 13.7% increase since 2012. A new international wealth report has just been published by Credit Suisse showing that in Ireland, the top 1% have 20% of that wealth, that is, of the aforementioned €500 billion.
The richest 5% own over 40% of that wealth. If the Government imposed a 2% tax on the incomes of these individuals, it would raise billions. They would not even feel the imposition of such a tax because their money probably generates more than 2% in returns from that in which it is invested. However, the Government has chosen not to examine the enormous position with regard to wealth listed in the Central Bank's report or to tax a small part of same. Instead, it continues to hit the least well-off. The result of this is that children are living in poverty.
The other result is homelessness. There is a glaring omission in this respect in the Bill before us. Each week I am visited by three or four people who are being made homeless. Just yesterday, I met a woman who had just been made homeless and who is now on the street with her two daughters. They are homeless as a result of the rent allowance caps which have been cut by the Government in recent years. In the context of those caps, there is simply nowhere for families on low incomes to go. The Tánaiste and Minister for Social Protection, Deputy Burton, stated that community welfare officers would show flexibility. When one goes in search of that flexibility, on many occasions one cannot find it. People are being told they must find properties to rent for €1,100. There is nowhere in south Dublin which can be rented for €1,100. As a result, families such as the woman I referred to and her two daughters are on the streets. Where are the measures in the Bill to provide increases in the rent allowance caps or extra funding for community welfare officers in order that they might demonstrate real flexibility and help people avoid becoming homeless?
It is unfortunate that the Tánaiste and Minister for Social Protection is not present to hear what we have to say in respect of this very important matter.
The continual boast of the Government in recent years has been that there have been no cuts to social welfare rates. I wish to provide three examples of how this boast can be completely turned on its head. The first example relates to child benefit which, over a six-year period, has been cut by €400 million. Only €70 million of that was given back in the recent budget. The Tánaiste boasted that she is giving back €5 per month per child. That is the equivalent of 2 litres of milk and a sliced pan for a child for a month. It is this that the Government is boasting about as representing the end of austerity. By any standards, those opposite will be obliged to admit that the overall cut to child benefit still stands at €330 million.
The second example of an area which, quite unbelievably, the Government claims to have left untouched is rent supplement. On average, this was cut by 28% in the period from 2009 to 2012. This means that people are now obliged to find a whopping amount of money to pay their share of their rent. Those in government should not forget the number of people who are in the private rented sector. That number is already huge and it continues to grow as a result of the housing crisis. Over 30% of all families are obliged to rent. This is despite the existence of the fabled Irish gene which makes us all want to own our homes. The cuts to rent supplement have obliged the poorest in society to pay increasingly large top-ups to their landlords. As a result, families are more likely to be evicted because they simply cannot meet rising rents. The Tánaiste, Deputy Burton, is on record as stating: "There will be no incidence of homelessness due to these changes." It is clear that hundreds of people have been made homeless as a result of the changes in question. Mr. Mike Allen, one of the leading people in Focus Ireland, a former general secretary of the Labour Party and hardly likely, therefore, to be having a go at that party for no reason, has stated that "Government policy on rent supplement is one of the immediate causes of the sharp rise of family homelessness". This is a direct contradiction of the propaganda put out by the Government.
Like the Tánaiste, I represent the constituency of Dublin West. I have many cases on my books but there are three, in particular, which I wish to cite. The first relates to a young woman who gave birth by Caesarean section and who was discharged into a Travelodge hotel with her other four children. Do those in government who are bragging about the end of austerity believe this represents decent treatment of young women and others in society? The young woman in question is in a highly dangerous situation, particularly as she is obliged to sterilise bottles for her baby, etc. She has found herself homeless on many weekends and has been moved around on four or five occasions. The second case relates to a man in his 60s with diabetes and arthritis who visited me at my constituency office and informed me that he travels to Dublin Airport several nights each week in order to find somewhere warm to sleep where he will not be harassed. The third case relates to a large family on the edge of being made homeless from whom I have just received a text. They have been battling with their landlord for a long period and the text indicates that the latter has just erected a "For Sale" sign outside their front door.
Nothing has been done to help all of those families and individuals who are on rent allowance and who are prey to private landlords. Instead, the Government threw another few hundred million in the direction of landowners and landlords. Obviously, however, the biggest attack it has made on those in receipt of social welfare is water charges. The greatest austerity measure facing the entire population, regardless of whether one is working, is water charges. Incredibly, people on social welfare are going to be obliged to pay the same amount as millionaires. That is the reality. The household package of €100 equates to what has now been announced for those who register. In other words, everyone who registers to pay water charges will receive a discount of €100. I am of the view that no one should pay water charges and that the Government is going to be faced with a mass campaign of non-payment. If this Administration does not relent, then this issue has the potential to bring it to its knees. It is incredible that those opposite have seen fit to decide that people on social welfare, whom they claim to have been protecting for many years and who were the justification for Labour's participation in this Government, will be obliged to pay the same amount in water charges as the rich. The current position is that a family in receipt of an income of €20,000 per year will pay the same as someone in receipt of €2 million. Is it any wonder that people are stating they will not pay? They cannot pay and they certainly will not pay. At a time when the Government claims that the economy is in recovery, why should people pay such inordinate amounts in water charges?
As has been stated on previous occasions, the Government could have considered other avenues to raise the money it requires. A wealth or millionaire's tax of even 0.5%, introduced as an emergency measure, could have paid for the water charges. Obviously, such a tax should be imposed at a much higher rate. These people have increased their wealth by more than 12% during the recession and they have huge incomes. One in eight of such people are tax exiles. It is no wonder the people took to the streets last week, particularly when the Taoiseach saw fit to visit Mr. Denis O'Brien. This character is a tax exile who owns half the media in this country, who has a huge vested interest in Irish Water and who obtained an audience with our Taoiseach. Did those in government expect the people just to roll over in respect of that matter? Is this man, who seems to have obtained a number of sweetheart deals from Fine Gael over the years, a member of the Cabinet?
The Deputy should not make allegations about people outside the House. In any event, her time is exhausted.
I was just about to conclude. I outlined the position regarding Mr. O'Brien to explain why the Taoiseach got the reception he did on the northside of Dublin last week.
The rate of youth unemployment in this country is rampant at 26% and is double the average rate of 13%. Once more, young unemployed people were overlooked in the recent budget. There was a great opportunity to redress the position regarding the drastic reduction in their social protection income supports introduced in budget 2014. I am of the view that this matter should have been given priority in the context of budget 2015 and the Bill before the House. Those in the 18 to 21 age group who are unemployed are obliged to live on a jobseeker's payment of €100 per week. That is a pittance. Those aged between 22 to 24 receive a payment of €144 per week. These reduced rates of payment were introduced in last year's budget to incentivise young people to seek appropriate and suitable employment or to return to education or training. The kernel of the problem in this regard is the absolute lack of jobs. Motivation is not the central issue for young people who are seeking work. Reducing the level of support available to these individuals is providing them with a further reason for joining their friends who left the country in droves in recent years to seek employment.
We are all well aware that every parish organisation is feeling the pinch, including sports teams. GAA, rugby and soccer clubs and all community groups are feeling the effect. If anything, it has accelerated the exodus of the youngest and more vibrant from their homeland. Those concerned cannot subsist on the pittance they receive given the rising cost of living. Many of them are caught in a poverty trap because, if they opt to leave the country, they do not have the necessary finance. In many cases, they cannot even choose to move abroad with their friends. Travel costs are beyond them in many cases and they do not have the money to survive for a couple of weeks when seeking work abroad.
There is a need to prioritise this cohort of unemployed youth and give them meaningful access to decent employment. This requires a number of steps. First, the focus must be on the creation and maintenance of decent jobs. It is not in the interest of the unemployed or country as a whole to have low salaries for very precarious work, which is happening at present. Second, every effort must be made to liaise with unemployed people in order that they can secure access to proper employment, including through the provision of good information and advice services. The work with employers undertaken by the Department of Social Protection and through the labour market council must be built on to create real access points, especially for the long-term unemployed. Third, a greater effort must be made to maximise the potential of employment programmes. Many are concerned about the effectiveness and appropriateness of many of the schemes. Many unemployed people have raised concerns with me that JobBridge is basically displacing those in paid employment and reducing people's chances of finding a meaningful job. Others are concerned about the low progression rate from schemes such as community employment schemes. We are well aware, however, that such schemes are very valuable and are underpinning many of the social services in communities. That said, there needs to be progression to more permanent employment when one is finished on a social employment scheme.
Child poverty is on the rise. Research has demonstrated that addressing this issue requires better income supports for families and also public services, including affordable and high-quality early child care and education services. The child benefit increase and the introduction of the back-to-work family dividend are welcome, certainly after a continual stream of austerity measures. The reality, however, is that the €5 increase will only offset in a minor way the series of cuts encountered over recent budgets. For instance, child benefit has been cut in recent years from a peak of €166 or €203 per month per child to the current rate of just €130.
The back-to-work family dividend will help families moving off social welfare into employment and will go some way towards making work pay. It will address the loss of benefit, but one must consider that the average weekly cost of a child care day place in a crèche is €167. Only €29 is provided under the back-to-work dividend scheme and it is making only a small contribution to those concerned. We should try to address this in the Finance Bill.
I am sharing my time with Deputies Paul Connaughton, John Paul Phelan and Tom Barry.
I welcome this Bill, which displays our progress as a society and country since the warranted departure of the last Fianna Fáil Government. This progress would not have been possible without the continued patience and co-operation of the people, who should be acknowledged and rewarded for enduring the effects of the severe measures introduced in recent years, which measures were necessary for recovery. Recover we will. The new schemes and support structures introduced, and in some cases reintroduced, in this Bill will provide monetary increases that will be felt in families’ pockets every single week. The Bill will provide confidence and hope in the road that lies ahead.
The introduction of the back-to-work family dividend, JobPath and JobsPlus, the increases pertaining to child benefit, funding for school meals, living alone allowances and household support packages, and the reintroduction of the Christmas bonuses signal a move in the right direction for parents, children and members of vulnerable groups in society. This progress is underpinned by the commitment and promise made by the Government to deliver better living and working standards.
It is clear to see there is a welcome shift in how this Government approaches issues of unemployment and poverty that Irish people face day to day. This contrasts with the approach of Fianna Fail in the past.
We have heard of circumstances where a mother or father is financially better off on the dole than in employment. This Bill fosters a route back into the workplace. In this regard, a family will be financially better off in employment. The structured incentive to go back to employment comes in many forms, including in the shape of the back-to-work family dividend, which allows families to retain 100% of their qualified child increase of €29.80 per week for the first year after their return to work, and 50% in the second year. The back-to-work family dividend will financially support families in that the continued payment of qualifying child allowance will supplement any child care expenditure required to allow the mother or father to re-enter the workplace. With approximately 612,000 families and a whopping 1.17 million children benefitting from this scheme in 2015 alone, it is indisputable that this Bill sees families better off in work than on the dole. It is all well and good to incentivise unemployed people to return to work but there is an onus on us to facilitate job creation to meet the employment needs of these jobseekers.
This Bill allows for the expansion of JobsPlus, which provides subsidies to those employers taking on long-term unemployed jobseekers. This is a vital facet in getting families back to work. As with the back-to-work family dividend, this measure is in tow with the commitments made by the Government in its statement of priorities in the summer of this year.
There exist vulnerable and marginalised social groups, including the elderly, who are at risk of poverty. This Bill introduces measures to ease the financial burden on those living alone, with an increase of €1.30 per week in the living alone allowance. While that might seem small, it is an increase of 17%. I welcome the increase as it provides an additional cushion of protection from poverty in the form of extra income to those over 66 living alone or those who are in receipt of disability, invalidity or incapacity supplements and allowances. It is these marginalised groups, who are living alone and do not have the option to pool resources to make ends meet, that we must help. This Bill does just that.
I have addressed a number of qualities and attributes of the Social Welfare Bill. The media have acknowledged in reporting on budget 2015 that we are progressing and recovering. We cannot just say there is recovery and expect families and the unemployed to believe us; we must prove it, and we are doing so. The Bill certainly demonstrates to unemployed families, who will see themselves back in employment and with more disposable cash, that we are well on the way to recovery.
I am grateful for the opportunity to speak on this Bill. There are many elements of it that I welcome, particularly the increase in child benefit and the living alone allowance. Other changes provided for in the Bill that do not require legislative change include the new water subsidy, the increase in JobsPlus places, extra funding for JobPath and additional funding for the school meals programme.
Job creation is a core objective of the Government, and creating the correct conditions for both employers and employees is at the heart of this.
Helping jobseekers get a foothold on the employment ladder is an important element in addressing unemployment, but so too, where necessary, is upskilling and reskilling. Providing jobseekers with a structured path back to work has proved successful to date in many instances, and the newly created Intreo centres are key to this success, providing a one-stop-shop for jobseekers looking to re-enter the workforce.
While the idea of having a case worker for every jobseeker is laudable, the current practice means that case workers are simply overwhelmed with the number of jobseekers they are dealing with, and the experience in many cases is not a positive one for the jobseeker or the case worker. A ratio of case worker to jobseeker of 500:1 is unworkable. The plan to decrease the ratio to 200:1 is more workable, but it still leaves case workers in a difficult position, given the volume of people leaving and joining the live register each month. I hope the positive trend of decreasing numbers on the live register in recent months will continue. It should result in a reduced workload for case workers and a more positive experience for jobseekers.
Studies have been conducted in recent months on the financial impediments for those returning to work. The new back-to-work family dividend is a common-sense approach to addressing this, providing €29.80 per week per child for 12 months after the person's return to work, reducing to 50% in the second year. JobsPlus is designed to help those who are long-term unemployed return to work through providing incentives to employers, and 3,000 unemployed people have benefited from this to date.
Young people seeking to access employment have experienced great difficulty in recent years, because while they have had the necessary skills for the task, the required experience was not available. To this end, the Youth Guarantee initiatives are an important step in helping young people to access either further training or employment at a crucial time in their lives.
Many young school leavers are willing and anxious to work and often the lack of some crucial skills, be it health and safety permits such as Safe Pass, ECDL qualifications or food hygiene certification, prohibits them from entering the workplace. It makes sense to provide them with the skill set needed for the jobs they are most interested in. Often their parents are willing, but financially unable, to help them access the additional courses or qualifications needed.
Helping families with young children through this most difficult time is a core objective of the Government and that is why the Bill contains measures increasing child benefit and the provision for school meals. More than 600,000 families will benefit from the increase in child benefit, while the increased allocation of €2 million for school meals will see approximately 6,000 children benefit. I note that 10% of DEIS schools have not yet signed up to the scheme of free school meals and I would urge them to consult further with parents on this issue as I have seen to date a positive reaction from parents whose children are benefiting from this initiative.
In recent weeks I have spoken to many who live alone and find it difficult to cope financially. I refer to the elderly living alone struggling to heat their homes and also younger persons on allowances, such as disability allowance, who may have decreased mobility and a greater need for heat in their homes. I welcome the increase in the living alone allowance. While it is a small amount weekly, it is a step in the right direction and an acknowledgement of the difficulties faced in single person households, where costs cannot be pooled and home maintenance and other bills must be borne by one person.
Overall, the measures in this Social Welfare Bill build on the Government's work to date, continuing our commitment to help those of all ages access the world of work, while at the same time seeking to reduce child poverty and the poverty prevalent in single income households. The numbers on the live register continue to be much too high, but each week now we hear increased job announcements and, thankfully, an increasing number of those are in areas outside the main cities. We must ensure that as the country emerges from recession the benefits are felt nationwide, and I believe that the measures in this Social Welfare Bill seek to do just that.
I echo the sentiments of the immediately previous speakers on the measures contained in the Social Welfare Bill. The Bill is an annual event to give effect to the changes in social welfare announced on budget day. This year is the first time in five or six years that we have seen not alone significant increases in existing schemes and payments but also the introduction of a couple of new changes. That is reflective of the fact that the country is in a better place economically than it has been for the past five or six years, especially now that the pressures on the social welfare budget have eased with a quicker than expected reduction in the number on the live register. I do not like taking exception with Deputy Tom Fleming, but he spoke about the unemployment rate being 13%. It was announced last week that the unemployment rate is now down to 11%, from a height of 15.4% at its highest point, which is a significant reduction. Obviously, there are still far too many out of work but the unemployment rate has moved significantly in the right direction continuously for more than two years. In fact, each month, for as many months as I can remember, there has been a reduction of 0.1% in the number on the live register. That is reflected partly in the social welfare measures announced in the budget in that there was some more freedom for the Minister for Social Protection to make some changes.
In that regard, I also welcome the increases in the living alone allowance, the partial reintroduction of the Christmas bonus of one quarter and the changes, mentioned previously, to JobsPlus and the school meals programme. I also welcome that the Minister, on budget day, was in a position to announce a €100 subsidy for those in receipt of the household benefits package and who would be in most difficulty upon the introduction of water charges.
The Minister's announcement in this budget with regard to the new back-to-work family dividend highlights a problem that many of us would have come across, in particular in recent years, namely, that the unemployed are often disincentivised to go back to work because in doing so, they lose some of the ancillary benefits that the unemployed enjoy. This new measure is to be greatly welcomed as well.
I find myself in the unusual position of agreeing with some of the previous Opposition speakers on the housing issue. I welcome very much that the budget contained a €2 billion announcement in relation to the construction of local authority housing throughout the country over the next number of years. The fact is local authorities have not been in the business of building houses for many years. Needless to say, the housing lists in most parts of the country are lengthy and the number in receipt of rent allowance is astronomical. In my part of the world in Kilkenny, there are more than 2,500 applicants on the housing list, and many of them have been on it for quite a considerable period. Despite the announcement in the budget, the position remains that many local authorities, not least the one in my area, do not own much, if any, suitable land for housing development, and any increase in housing output by local authorities will be delayed by the fact that they must acquire land on which to build. The housing area, along with the child care area, which was mentioned in the debate, are probably two areas on which the Government needs to focus in the next 12 months in the lead-up to the next budget. It is highly unsatisfactory at this juncture that those waiting for housing live in unsatisfactory conditions and often do not receive enough in rent supplement to allow them continue to live where they are. The Government needs to address the issue urgently.
I welcome the opportunity to speak on the Social Welfare Bill. I welcome the balance that has been struck here. As has been mentioned, there is the increase in the living alone allowance, the Christmas bonus, the €5 increase in children's allowance at a cost of €72 million - a lot of money - and the topical one, the €100 subsidy towards the water charge for those on the household benefits package.
In mentioning the household benefits package, we need to review it and ensure it has proper oversight because it has come to my attention that while the State pays significant ESB bills for those on household benefits, it has no oversight.
There are cases where people are receiving cheques for their electricity allowance which make it clear that they are not living in the house. If they are not living there then it is the case that a social house is empty that someone else could use. Given that we are investing €2 billion in social housing, we must examine the current stock and ensure that claims are properly made. I do not take issue with the requirement by Irish Water for people to provide PPS numbers given the situation with the household benefits package. Previously, people who got an allocation of electricity units used them up and started again the next month, but now if one does not use them, one gets a cheque for the relevant amount. That is absolutely bonkers.
I welcome the increase, from 3,000 to 6,000, in the number of employees on the JobsPlus scheme. If the scheme is tied in with the JobBridge programme then a person could be employed for nine months, following which they would qualify for the JobsPlus scheme and they would be trained up for a small business that is trying to get some help to employ people. The change is valuable. The measure must be welcomed, as working for two years with a wage subsidy provides a chance for rural employment. That is evident in the increase in the number of people employed, which is approaching 2 million, yet criticism is coming from all angles of the Opposition. That is negligent. At some stage such Members will have to recognise the facts.
There are anomalies in the system. We must examine more closely the requirement for progression in terms of education courses in order to qualify for the back to education allowance. People should get a chance and there should be more flexibility in the system. I refer, for example, to a person who wants to do a level 5 course in a different area because he or she is aware that a job is available in the area. I accept that more flexibility has been introduced into the system but a little more would go a long way. People have come to my clinic who must become unemployed for nine months in order to qualify, and they would prefer to do a course rather than to collect unemployment benefit. We must tweak the system in one or two areas.
An article was published in The Irish Times today about the European Court of Justice ruling to the effect that economically inactive EU citizens who go to another member state solely to obtain social assistance may be excluded from certain social benefits. That is an extraordinary ruling. A member state must therefore have the possibility of refusing to grant social benefits to economically inactive Union citizens who exercise their right to freedom of movement solely to obtain social assistance in other member states. That is something middle Ireland feels very strongly about. We have no problem helping people who need our help but people who exploit the system are a different matter. One spokesman from the European Commission stated that it has consistently stressed that free movement is the right to free circulation. It is not the right to access freely a member state’s social assistance system. That will be an interesting topic of discussion in the House in future. We are good European citizens.
The budget is a very good one in terms of social welfare. I accept the following issue relates to finance rather than social welfare but I would have liked to see an extension of capital gains tax relief, even for another three months, because given the situation with rent, that would have allowed a lot of people to buy property and put it on the rental market which would make additional houses available to rent. It slipped by a lot of people who only have more money now and might not have realised what was happening. I will ask the Minister for Finance, Deputy Noonan, to reconsider the matter if at all possible.
I welcome the opportunity to speak on the Social Welfare Bill 2014. The Bill, as presented is a particularly short one. It essentially contains one section, which runs to little more than a page. One must ask what it is all about. It gives statutory effect to the recent budgetary announcement by the Ministers for Finance and Public Expenditure and Reform. Two items of legislation are required on foot of the announcement, namely, the Finance Bill, Second Stage of which was discussed last week, and the Social Welfare Bill we are discussing today. The Bills are related as they cover different aspects of the same budget day announcement.
One could ask whether the budget was good or bad. The answer is very simple. The budget can be summarised in one simple sentence. On budget day and on the following day people asked me to explain the budget to them. I gave a straight answer to the question put to me. If one earns an income of more than €70,000 per annum then one is better off. If one earns an income of less than €40,000 a year, that is €800 a week, one is worse off.
In the context of the Finance Bill and the Social Welfare Bill, we are talking about legislation to copperfasten a budget that gave tax increases to the wealthy and caused severe difficulty for every household in the country with an income of less than €800 a week. The latter group is worse off following the budget. Anybody who thinks for a minute that the Opposition will support any legislative enactment to bring the budget into effect is badly mistaken. The budget was wrong. It was regressive. It looked after the wealthy - certain supporters of certain parties in government - and the other party in government was ignored. In case people do not understand, the budget is simple. If one’s household income is more than €70,000 a year, one is better off and if one has a household income of less than €800 a week, one is worse off.
Níl an ceart ag an Teachta.
I include in those figures the water rates bills that are due next year. They must be taken into account. On budget day the Minister made it very clear that water rates are separate from budgetary measures, but one person gave the lie to that statement by the Minister for Finance, namely, the Taoiseach. At an annual Fine Gael event he inextricably linked tax rates and water rates. He made it very clear that if water rates are not introduced, there will be a 4% increase in the tax rate. He made the situation abundantly clear, more so than any commentator in this House or elsewhere could have done. The point we made on budget day is that one cannot look separately at the budget and other Government charges. The Taoiseach confirmed that in his own statement. He said it on the national airwaves. He inextricably linked water rates and income tax rates. The water rates bill is part of the legislation. There is a reference to the issue in the explanatory memorandum of the Social Welfare Bill even though it does not appear in the legislation.
The answer to the question of whether this is good or bad legislation is very simple. It is legislation to look after the wealthy. All the budgets produced by the Government since 2012 were regressive. All objective analysts have confirmed that. Someone cajoled the ESRI recently into producing a report showing that the combined effects of budgets from 2008 to 2012 were progressive overall. The reason for that is very simple. Difficult and all as the budgets were in 2008, 2009 and 2010, when the most difficult cuts were being made, those on the lowest income levels were looked after the best and the budgets were progressive. Ever since the Government came to power the budgets have been regressive. If one adds the budgets introduced by the Fianna Fáil-led Governments to the first two budgets introduced by the Government, the overall effect was positive because of the carry-over of the progressive budgets.
One could ask what we should have done with the available resources. This is the first time we had resources available and the Government made choices. Although key issues arise in the areas of health, homelessness and housing, the Government decided to give tax cuts to high income earners. That was the answer to everything.
I was in Naas General Hospital yesterday visiting a patient and all of the nursing staff were out on the picket line at lunchtime.
It is a shame that I was coming in here on the same day when people were suffering in accident and emergency units and the Government's answer has been to give tax cuts to the wealthy. Last Thursday I was in the same hospital. It was not possible to get in the door of the accident and emergency unit in Naas General Hospital because the beds were end to end on both sides of the corridor, causing a fire hazard as well as a health and safety hazard. How staff and patients are expected to cope in such a hospital which lacks the physical facilities to allow staff to carry out their duties is beyond comprehension. It is only right that the nurses and staff were on a picket line at lunchtime today and yesterday on that issue. For these reasons we must oppose everything to do with this budget, the main aim of which was to give tax cuts to the high earners and penalise and make worse off those with incomes of less than €800 a week.
I acknowledged that some sections of this Bill and the Finance Bill may be good and are welcome. Overall, it is a camouflage and a fig leaf for a bad budget. For that reason we must oppose the entire Bill.
The Bill provides for an increase of €5 a month in child benefit, which is welcome. However, when one considers the cuts introduced by the Minister, who is now the Tánaiste, in this area since she came into office, this is a paltry increase. I accept it is a start but it is a small start and I remind the House of the cuts she inflicted as part of the regressive budgets over which she presided in recent years.
Many of the announcements in the Budget Statement are not included in this legislation. For example, the increase in the living alone allowance will be introduced by regulation, as will the Christmas bonus. These issues should be debated on the floor of the House and not by way of reading a statutory instrument in the Oireachtas Library.
One of the issues announced on budget day which is not included in this legislation is a measure I put forward in the Fianna Fáil pre-budget submission. I am delighted the Government followed through and did precisely what we asked with regard to the back-to-work family dividend. I see every day in my constituency clinic where people on social welfare who are in receipt of €29.80 for each dependent child lose that payment if they return to work. It is wrong that a person with three dependent children who takes a job is down by €100. Fianna Fáil's submission proposed the continuation of the full child dependant allowance for at least a year or two years when a person takes up work. We now see that this measure is not included in this legislation and we are told it will come into force some time next year by means of separate legislation. The text of the Finance Bill is 124 pages and this Bill is contained on one page. It would have been possible to draft the legislation to include the back-to-work family dividend. It should be included in this Bill and it should be in force from 1 January 2015. I do not know if the Minister will even be on that side of the House next spring or next summer. Good measures which we suggested to encourage people back to work should be included in this legislation and not put on the long finger. This is a further reason I will oppose this legislation because items that should be included have been specifically omitted. The back-to-work family dividend should be included in this legislation and it should be law on 1 January 2015. The Department of Finance can do it with regard to tax changes.
I refer to other budget day announcements which are non-statutory items which may mean administrative items. The public do not understand this. The water subsidy, the fuel allowance and the household benefits package will have to be dealt with by some administrative arrangement or whatever. The Tánaiste is a member of the Economic Management Council and as such she failed to consider the people on low incomes who may not have a taxable income but may not be in receipt of social welfare benefits. I pointed out this fact during the debate on the budget and within 30 minutes of reading the Budget Statement. It was so obvious one could not miss it. How did the proposal get by the Economic Management Council to give high earners a tax cut and give a cut in the water bill to people on certain social welfare payments but to exclude low paid workers? This flies in the face of the back-to-work family dividend. We are trying to get people back to work but there is no provision for a measure to deal with water charges. The logic should be that people on the back-to-work family dividend would qualify for at least the same subsidy for water as those on social welfare payments. I suggest the Government should revisit the entire Irish Water situation. It is right to mention this now because it is referred to in the explanatory memorandum to the Bill.
In her haste to rush this measure through, the Minister forgot about people who lose their jobs. One must be long-term unemployed to receive the fuel allowance. Therefore, a person who loses a job and is out or work for 12 months will not benefit from this announcement. How did the Minister pick out two groups of people to penalise, first, those who lose their jobs and are out of work for up to a year or 15 months and who are not given an allowance and, second, those whom she says she is trying to help by way of the back-to-work family dividend - those on low incomes? All these matters need to be revisited by the Minister because there is a fundamental flaw in her approach to this issue regarding people on low incomes. We will deal separately with the Irish Water issue.
I welcome the increased funding for JobsPlus and JobPath which will be dealt with by means of other administrative arrangements. Abuse of some of these schemes is a concern and they may need to be put on a statutory footing in order that more care can be taken with regard to their implementation.
I agree with a measure in the budget which is to be dealt with by an administrative arrangement or in the Estimates, namely, the extra €2 million for the school meals programme. For the past three weeks I have submitted a Topical Issues matter on the inequality in the payments to some schools. I received information by means of parliamentary questions I tabled in July and I submitted a Topical Issues matter every day for the past four weeks but my matter has not been selected. Some schools are in receipt of ten times more funding per pupil under that scheme than other schools. It is being implemented in an unequal manner. I welcome the additional funding but it is not being delivered in a fair way to children in DEIS schools and in DEIS band 1 schools in particular.
I oppose everything to do with this budget because a person earning more than €70,000 is better off while those earning less than €800 a week are worse off. More than anyone else in Ireland, the Tánaiste is responsible for the increase in homelessness in recent years. Homelessness was not an issue three or four years ago. Her action in cutting the rent supplement in recent years has forced those who can no longer live at home to become homeless. The cut in their rent supplement has meant they cannot afford to rent and landlords are not taking them as tenants. People have ended up sleeping on the streets solely as a result of measures taken by the Minister, Deputy Burton, who is now the Tánaiste.
Debate adjourned.