Social Welfare Bill 2019 [Seanad]: Second Stage

I move: "That the Bill be now read a Second Time."

I am genuinely really pleased to have an opportunity to introduce this Bill to the Dáil today. I express my sincere appreciation to everybody, not just those on all sides of this House but in the Seanad too, for agreeing to deal with All Stages of the Bill today, as was the case in the Seanad last week. The purpose of this Bill is to introduce a new social insurance scheme of jobseekers benefit for self-employed people with effect from 1 November. It is a great achievement by of all of us.

The introduction of the new scheme was part of the 2019 budget announced last October and is designed provide self-employed contributors who lose their businesses with the income support and breathing space they need as they assess their next steps. The development of this scheme reflects the Government's aim of creating a supportive environment for entrepreneurship. As the House will know, we have sought to introduce a new deal for the self-employed when it comes to their access to benefits and, having already extended entitlement to treatment benefits and invalidity pension to the self-employed in recent years, the introduction of the new JBSE scheme marks a further important step in this process of equalising social insurance benefits across employees and the self-employed.

The new scheme will provide an income safety net to thousands of small and medium businesses throughout the country. It will mean that the self-employed will have access to the safety net of income supports if they lose their self-employment, without having to go through a means test. In most respects, the key features of the existing jobseeker's benefit scheme, which provides support to employees who have lost their job, will apply to this new scheme. The personal weekly rate of payment will be the same for both schemes. The duration of payment - six months or nine months, depending on the claimant's social insurance record - will be the same. The scheme has been designed to take into account the fact that PRSI contributions by the self-employed are paid by way of an annual lump sum. Claimants of the new payment will also have access to the full range of activation supports currently available to other jobseekers, including, for instance, referral to group information sessions, one-to-one interviews and subsequent caseworker support if the claimant so desires.

It is important to note that self-employed people who are operating businesses at low levels of income can continue to access the means-tested jobseeker's allowance scheme. There are almost 7,000 self-employed in receipt of this payment. I wish to assure Members that scheme will continue to operate.

I will briefly outline the content of the Bill, which has passed through the Seanad and contains 11 sections. Sections 1 and 2 provide for the standard provisions setting out the Short Title of the Bill, its construction and citations, commencement provisions and a definition of the principal Act referred to in Part 2 of the Bill.

In light of the introduction of the new jobseeker's benefit for the self-employed scheme, we are amending some of the legislative provisions governing the existing jobseeker's benefit scheme. The more significant of these changes is in section 3, which extends the qualifying conditions for the existing jobseeker's benefit scheme by providing that the first condition to determine eligibility for payment can now be met by having 104 employment or optional contributions, such as PRSI class A contributions, as has always been the case, or by having have 156 self-employment contributions, denoted by PRSI class S. This is a positive change which recognises that some people will have engaged in both employment and self-employment in the course of their working lives. By recognising that both forms of employment give rise to entitlements within the social insurance system, the change will help to ensure that an individual will not be at a disadvantage as a result of a move from employment to self-employment or vice versa.

Section 4 is a standard provision to ensure that a claimant does not secure a double benefit. Put simply, it states that where a claimant who is in receipt of jobseeker's benefit for the self-employed also satisfies the qualifying conditions for jobseeker's benefit for the employed, periods spent in receipt of jobseeker's benefit for the self-employed will be treated as though jobseeker's benefit were being paid.

Section 5 is a key part of the Bill and provides for the introduction of a new chapter 12A to the principal Act which sets out all the provisions governing the new jobseeker's benefit for the self-employed scheme. The new chapter 12A provides for the general qualifying conditions for receipt of jobseeker's benefit for the self-employed; the social insurance contribution conditions; the rate of benefit payable, including reduced rate benefits payable where the average reckonable weekly earnings of the claimant fall below certain thresholds; the increases payable where there is a qualified adult or qualified children; the duration of payment; the requirement to engage with activation services; and disqualifications. These provisions mirror, to the greatest extent possible, the existing provisions governing entitlement to jobseeker's benefit.

Section 6 provides for a range of amendments to general provisions of the Act which cover all social insurance schemes and which are required to reflect the introduction of the new jobseeker's benefit for the self-employed scheme. The amendments are set out in the form of a Schedule to the Bill.

Section 7 of the Bill concerns an issue which is separate from the main body of the Bill and the new jobseeker's benefit for the self-employed scheme, namely, the procedures governing appeals in respect of social welfare payments which follow from decisions of deciding officers appointed as bureau officers under the Criminal Assets Bureau Act 1996. In practical terms, the section provides that such appeals will always have to be submitted to the Circuit Court.

Sections 8 to 10, inclusive, provide for the necessary amendments to the Taxes Consolidation Act 1997 as a result of the introduction of the new scheme. Section 11 is an amendment which added to the Bill on Report Stage in the Seanad last week - regrettably, in my view - and commits to the preparation of a report on policy options to strengthen social protection supports for one-parent families with a youngest child between the ages of 14 and 18.

To return to the main purpose of the Bill, jobseeker's benefit for the self-employed will provide an insurance-based safety net which has not previously been available to people who have set up and run their own businesses. Such enterprises can be particularly vulnerable in times of economic difficulty and it is right that they should enjoy the same levels of support as employees currently do.

I thank Deputies on all sides for agreeing to the swift passage of this important legislation and enabling the early introduction of a key support that will be valued by all our entrepreneurs.

I wish to share time with Deputy Scanlon. Fianna Fáil will support the Bill, the purpose of which is to provide for the introduction of a new social insurance scheme to provide jobseeker's benefit for the self-employed. It will be payable to individuals who lose their self-employment and have the required number of PRSI contributions to qualify for payment. Fianna Fáil has consistently supported extending a full range of social protection supports to self-employed PRSI contributors on a phased and voluntary basis as part of our commitment to foster an entrepreneurial culture as well as enhancing social solidarity. As the Minister will know, this was one of the commitments in the confidence and supply agreement. My colleague, Deputy O'Dea, should be present to deal with the Bill, but it is a great pleasure for me to speak on it. As I stated, Fianna Fáil supports the Bill and the creation of a social welfare safety net for the self-employed. The Minister indicated in her contribution that she is anxious to move the legislation along speedily. We will do nothing to disrupt or delay it. It is quite important that it is dealt with quickly.

I am interested in speaking on the Bill because I spent my entire working life as a self-employed person until I entered politics. It is a daunting and nerve-wracking place to be. There are no supports when things go wrong. It is often claimed that those in such a situation could apply for the means-tested payments. As those who have been self-employed know, if things go against a self-employed person and the business effectively folds, it is very difficult to prove eligibility in a means test. One may hold certain assets but there may be significant debts behind them. It is very challenging for the self-employed to access protection and supports. As I noted, this is one of several improvements that have been made for the self-employed. It is a very important change.

The Minister will be aware that the Joint Committee on Employment Affairs and Social Protection has been looking at the area of bogus self-employment and so on. I noted at the time that a significant number of people - more than 325,000 - are classed as self-employed. For those people, the passage of the Bill gives them a degree of support and comfort that they did not have previously. It is important that the work being done by the committee on bogus self-employment concludes and that the Government engages in that process in terms of future legislation such that there is absolute clarity on who is self-employed, what constitutes bogus self-employment and how that is determined. I do not wish to open a debate on the matter this evening, but there are concerns in that regard.

The Bill is very welcome. I do not wish to end on a sour note, but I was disappointed that full equalisation of the earned income credit with the PAYE credit was not provided for in the budget. It was expected that that would have been done by now. I acknowledge that other benefits, such as dental and optical benefits, have been extended to the self-employed. We are moving in the right direction. The Minister has the support of Fianna Fáil on the Bill, the measures in which formed part of the confidence and supply agreement. It is interesting that the Bill has been introduced at this late stage in what may be one of the final gallops of this Dáil. I will be glad to see it enacted.

I am delighted to speak on the Bill. I should declare that I was self-employed from 6 September 1974, 41 years ago, until the point at which I was fortunate enough that the people of Sligo-Leitrim elected me to this House. We do not really appreciate the amount of employment created by self-employed people or the amount of work they do.

According to the CSO, there are more than 250,000 small and medium-sized businesses in this country. They account for more than 99% of all business enterprises.

I recently attended a Brexit meeting at a company in Manorhamilton that employs approximately 80 people. We had quite a good discussion with the speakers who were present on the day. It was mentioned that just 11% of small businesses employing less than ten people have made any contact with any Department regarding supports to help them through Brexit. We can blame the Government for everything, but we cannot blame it for this. We need to transmit a better message about the opportunities that exist. Everybody is standing back and hoping there will be a deal. I genuinely hope, for the sake of everybody in this country, that there will be a deal. When we reflect on the number of people employed by these companies across the country, we must hope they will not need to the supports in question. I hope we will have a deal before too long.

It is important to recognise the contribution made by small employers who employ seven, eight or nine people in shops and other businesses in small towns throughout rural Ireland. If these people had not taken a chance by setting up business, many of the local people they employ would be in England, the US or elsewhere and not in this country today. It is about time we recognised the work that is done by self-employed people who are out there taking risks. They borrow money from banks to buy or set up businesses and create jobs. Sadly and unfortunately, things can go wrong. I was close to the edge many times. There is nothing for people in such circumstances. This Bill will help to support them. It is important that such supports be available. I hope that as a result of this Bill, people will be more inclined to start a business because they know they will be looked after if something goes wrong. They have not been looked after up to now. Nothing whatsoever was in place for them.

I am delighted for the people who need help and support that the Bill is before the House. I understand that dental and optical benefits will be extended to self-employed people with PRSI contributions. All of those people will be eligible for an invalidity pension if they sadly get injured or sick. This option will give them a full contributory pension if needed. I welcome the Bill. I am delighted that my party will support it all the way. It is a welcome benefit for many thousands of small business people. It is important that they will know their backs are covered if anything goes badly wrong.

I am pleased to have an opportunity to speak on the Bill. I welcome the extension of jobseeker's benefit to the self-employed. Sinn Féin supports this Bill, which has been a long time coming. Any extension of social welfare supports to the self-employed must be welcomed. The self-employed do not have access to the full suite of social welfare supports available to other workers. A survey of class S PRSI contributors carried out by the Department of Employment Affairs and Social Protection and published in 2017 gave a useful insight into the social protection supports that self-employed people would like extended to them. Some 82.3% of those surveyed identified short-term illness benefit as such a support. KPMG has calculated that cost of extending illness benefit to the self-employed would be €72 million in 2020, which is not a significant amount. I urge the Minister to consider this. The self-employed face barriers in accessing the State pension when they retire. They must ensure they have the necessary number of contributions to qualify. The Government is continuing to examine the best model for the total contributions approach and the new auto-enrolment pension scheme for workers. The nature of the working lives of the self-employed must form part of the model that is implemented in both cases.

I refer to the section that outlines the obligation on the self-employed in receipt of jobseeker's benefit when it comes to attending activation meetings. I would be concerned if these activation meetings included JobPath, which was set up for the long-term unemployed, and I ask the Minister to clarify that.

I would be surprised if the Deputy was not concerned.

When we welcome the extension of further welfare supports for the self-employed, it must be borne in mind that many employers are engaged in bogus self-employment practices. This leaves workers who are legitimate employees high and dry when it comes to accessing social welfare supports and basic workers' rights such as annual leave, sick pay and holiday pay. While many of the self-employed will benefit from this Bill, some of them will not, through no fault of their own. This Government has not tackled the issue of bogus self-employment but it must. The result of its failure to do so is a major loss of PRSI to the State. The Government is not going after those who are engaged in this activity. Rather than recouping the money lost in PRSI, the Government is choosing to try to recoup overpayments made to social welfare recipients. Such overpayments typically result from departmental error. Coincidentally, before I became a Member, I was self-employed for 15 long years.

Who knew we all had so much in common?

Absolutely. It is a lonely place to be, particularly for sole traders in difficult times. I am not sure whether other Deputies have shared my experience of having to avail of social protection. The business I was operating was one of many businesses that went to the wall during the economic downturn, when the bottom fell out of the economy. Unfortunately, I had to pull down the shutters on the business I operated. Like many others, I have first-hand experience of the challenges experienced by people when they are seeking badly needed supports. I know from my experience in 2010 that many self-employed people come up against many challenges, brick walls and barriers as they seek to provide for their families and keep a roof over their heads. While this legislation is positive, if I have any criticism it is that it has taken a long time to get to this stage. It has to be welcomed. While I welcome all Government moves to extend social welfare supports to the self-employed, I do so with the caveat that they are unable to access all social welfare supports even though they should be able to do so. This is a positive step forward, but there is much more work to be done.

I will respond to the two questions were asked. I assure Deputy Brady that the activation offering available to jobseekers who were self-employed is exactly the same as what is on offer to those who were employed. I also assure him that the Department follows up overpayments and underpayments in the exact same vigorous manner. He would probably use different language. When the Department is owed money that it could spend on people who need our support, as he rightly mentioned, it is taken seriously.

I thank the Deputies for their contributions. I do not know why it has taken so long to reach this point. I was self-employed for many years. Everyone present has been self-employed. Like Deputy Brady, I know exactly what it feels like to see one's business go wallop. It happened to me in 2009. Unfortunately, I was unable to get help from the Department of Social Protection even though I was experiencing significant difficulty. This is an important stage in our political careers because we are able to stand here tonight and say that this milestone has been accomplished. I hope it will be effective when, God forbid, the next recession comes.

They come and they go. The next time anything happens in this country, our self-employed people will be supported in exactly the same way as employees are if misfortune comes to their door.

Question put and agreed to.