Ceisteanna Eile - Other Questions

Carer's Allowance Eligibility

John Curran

Question:

45. Deputy John Curran asked the Minister for Employment Affairs and Social Protection if she will review the means test qualifying criteria for carer’s allowance to include such costs as rent, mortgage payments and childcare costs; and if she will make a statement on the matter. [43421/19]

Deputy John Curran: I also raise a similar issue relating to carers. Family Carers' Ireland made an excellent pre-budget submission. It raised an issue that rang home with many of us, namely, that one in five, some 81,000, of those caring are not in receipt of carer's allowance. The Minister suggested earlier that the means test is very favourable. In reality, many do not qualify. There is an issue regarding who qualifies and how. Will she conduct a review of the means test for carer's allowance?

The system of social assistance supports administered by my Department, with the exception of Ccildrens' allowance, provide payments based on income need. That is just how it has always been. That is not to say that should be applicable to people who are caring and that is why we need to have a proper conversation in the context of cross-party support and recognition of the valuable work done by carers. However, the premise that the Department of Employment Affairs and Social Protection is helping people who have an income deficit. The means test plays a critical role in determining whether an income need arises as a consequence of a particular contingency such as disability, unemployment or caring.  This ensures that the recipient has a verifiable income need and that resources are targeted to those who need them most.  These are increasing significantly and cannot continue to grow as they are year-on-year, which will lead to a financing problem. We must target payments to those who are most in need.

By its nature, the means test takes account of the income a person or couple has in terms of cash, property, other than the family home, and capital.  It does not take account of a person’s expenditure. In line with most social assistance payments, deductions permitted for carer's allowance include PRSI, union dues, superannuation or pension contributions and travel expenses.  Uniquely in the system, an income disregard of €332.50 per week or €665 for a couple applies to carer's allowance. That is much higher than any other means tests or disregards across the system.

Including costs such as housing and childcare would have significant budgetary implications and would give rise to inconsistencies in how means tests are applied across schemes.  We were just not in a position to do it this year.

I did not ask the Minister to make the payment. I made the point that as practising public representatives, we regularly meet people who do not qualify for carer's allowance. This is often the case with women and one reason is that the husband is out working. The Minister referred to an income disregard and an income deficit. What is missing from the equation, which is a particularly significant issue for Dublin, is the cost of accommodation, whether it is a mortgage or rent. People are not able to give up the second job and live a normal life to do the caring. It is a massive burden. I did not ask the Minister to make the payment. All I am saying is that we recognise that there is a problem for some people accessing carer's allowance. The people I meet would traditionally have worked. Perhaps they might have qualified for carers' benefit had they been in work long enough. However, that payment runs out, after which they do not go onto carer's allowance. People are living longer, and that has consequences where someone is caring for an elderly relative. I seek a radical review of this system so that the carer's allowance does not only recognise an income deficit but also takes account of the expenses people have. People cannot turn on or off their mortgage or rent.

I realise I sound like a broken record. The disregards are set based on budgetary parameters. The means test is probably one of the most generous in our social welfare system and one of the most generous in the European Union. What if I do a review and tell the House it will cost €1.6 billion to ensure carers have no means test?

There is not a person in this room who has a magic wand to enable them to do that, even over successive Governments or budgets. We need to have a collective conversation on the matter and the Citizens' Assembly, which starts at the end of next month, is the perfect opportunity for that. It will enable us to stand up collectively with carers, whom we all speak to on a daily basis. I know a particular group of parents of incapacitated children who get absolutely nothing from my Department and that is not fair. These women will never even qualify for a pension unless I make changes and that is not fair either. There is a whole load of unfairness in this system that needs to be ironed out. We need to recognise and care for carers in the future but it needs to be done collectively, as a society. Whatever recommendations come out of the Citizens' Assembly need to be implemented by whoever is in government after the next election.

I hear the Minister's reply relating to the Citizens' Assembly but given the resources of the Department, I feel the Minister should be the one to conduct the analytical review that is required. There is an anomaly because the cost of living in Dublin, particularly around housing, for people who are renting or have a mortgage, and childcare is significantly higher. I meet constituents on a regular basis who do not qualify for carer's allowance, even though their circumstances are quite difficult and challenging. The husband may have a substantial income, but the mortgage they have was based on two people working and now they are on a single income and will not be able to continue the caring they do when the benefit runs out. I suggest that, without waiting for the Citizens' Assembly, the Department and the Minister conduct a review into widening the means test to take some account of the cost of living in Dublin.

I can probably ask the Department to come up with the metrics to tell us how much it would cost if we did this or that, and we could feed this information into the work of Catherine Day and the Citizens' Assembly as it would be very valuable for them to have it. We all have an enormous appetite to change the way we care for our carers, but it will come at a cost and the costs will have to be taken into consideration.

JobPath Data

Bríd Smith

Question:

46. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection the number of jobseekers who have entered the JobPath programme since its commencement; the number who faced sanctions from her Department in each year on foot of this interaction; and if she will make a statement on the matter. [43634/19]

My question is on the number of jobseekers who have entered the JobPath programme since its commencement, the number who faced sanctions from the Department in each year on foot of this interaction and if the Minister will make a statement on the matter.

Legislation provides that sanctions or penalties in the form of reduced payments may be imposed by a deciding officer of the Department where clients fail, without good cause, to co-operate with the Department's activation processes. A reduced payment rate can only be applied in specific circumstances and following multiple warnings. All jobseekers are required to engage with my Department’s activation service and this obligation applies irrespective of whether the service is provided by my Department’s own case officers, those contracted through the local employment services or by the JobPath providers.  Contracted providers cannot and do not apply penalty rates but are obliged to report the facts and circumstances of a case to a deciding officer of my Department who, on careful consideration, may apply a penalty rate, where appropriate. There has been no change in policy or the implementation of penalty rate provisions in this respect over many years.  Penalty rates are only applied as a last resort.  If dissatisfied with that decision, it is open to the jobseeker to appeal to the social welfare appeals office.

The introduction of the JobPath service in mid-2015 has complemented my Department’s existing activation services and has facilitated a very significant increase in the numbers of jobseekers to whom activation services can be provided.  Between July 2015 and September 2019, some 244,000 jobseekers have engaged with the JobPath programme. It is not possible to disaggregate easily, on a retrospective basis, the number of people who at any time were both engaged in JobPath and on a reduced rate of payment.  However, by way of indication, there are currently 66,000 jobseekers engaged with the service of which 432, or 0.6%, are currently on a reduced, or penalty rate, of payment. By comparison, there are 183,700 people on the live register with a further approximately 43,000 engaged in training and employment programmes, giving a total of about 227,000 people who are subject to activation. Of these a total of 1,103, or 0.5%, are currently on a reduced rate of payment.

In February, a motion was passed in this Chamber calling for the Minister not to renew the contract for JobPath. In response to a parliamentary question last month, the Department told me there was an option to renew it for two years. Is this also for new referrals? There has been a 36% increase in the figures for people receiving penalties between 2017 and 2018. It is highly ironic that people's very basic living money, the amount they get on social welfare, can be penalised, in the context of the penalties that apply in this House to Deputies who misuse the voting system. It is extremely unfair to apply this sanction to people. The two companies engaged by the State, namely, Turas Nua and Seetec, have received €75.7 million and €73.3 million from the State so far. Is the Minister renewing the contracts and will the penalties apply to new or existing people on the scheme?

Given the uncertainty surrounding Brexit and the potential - God forbid - for losing 40,000 or 50,000 jobs, the Department triggered an extension to the provisions of the existing contract and agreement was reached with the JobPath providers to extend the existing contracts by one year, with referrals on that JobPath programme up until 2020. It is not a renewal of the JobPath contracts but an execution of the extension clause that was already in the contract. The extension is important, given that we face an uncertain year next year and the need for scalable activation, which I hope we do not need.

Penalties only come at the very last resort of deciding officers in the Department and there is only a marginal difference between 0.6% on the JobPath programme and 0.5% on the live register. There is no difference in the application of deciding officers.

The Minister is saying there will be no new referrals to JobPath but that the contract will be extended for a year. Will the extreme circumstances of Brexit be used as an excuse to bring penalties on those who are suffering job losses, such as those announced in Shannon and Cork in the past day or so? One figure suggests that only 9% of participants have secured long-term employment but research has shown that, as we saw in the committee, the scheme is often used in a patronising, cajoling, threatening and manipulative way and that many people identify the service as deliberately attempting to lower their expectations of work, wages and the way it interferes with family and caring responsibilities. It is time we put an end to this unnecessarily cruel system and we may save €150 million for the public coffers by doing so and by ceasing to penalise people who are unfortunate enough to be long-term unemployed and in receipt of job benefits. I know many people who have felt the threat, the cajoling and the bullying that take place through these so-called "activation of labour" organisations.

Back to Work Allowance Data

Martin Heydon

Question:

47. Deputy Martin Heydon asked the Minister for Employment Affairs and Social Protection the uptake of the back to work enterprise allowance in County Kildare in 2017, 2018 and to date in 2019; the supports available to those persons; and if she will make a statement on the matter. [43630/19]

Question No. 47, in the name of Deputy Martin Heydon, will be taken by Deputy Bernard Durkan.

This question seeks to ascertain the participation rates in the back to work enterprise allowance scheme in County Kildare in 2017, 2018 and to date in 2019, in order to establish a trend.

The back to work enterprise allowance scheme provides an incentive and support for people who are in receipt of certain social welfare payments, such as jobseekers and one parent families, to develop a business, while allowing them to retain a reducing proportion of their welfare payment over two years.  Participants maintain 100% of their payment in year one and 75% in year two. This financial support allows a person the opportunity to grow their business with the security of maintaining their welfare payment. This acknowledges the vital role entrepreneurs and new businesses play in economic development and job growth.  This is something of which I am very supportive and I am introducing jobseekers benefit for the self-employed next month.

Local development companies and local enterprise offices also play a key role in supporting local communities and entrepreneurs to develop their new business ideas where they also provide a range of complementary supports.

Through these services working together, the viability of a supported enterprise is enhanced by the scheme. Currently, 4,800 people receive the back-to-work enterprise supports. The numbers supported in County Kildare at the end of 2017 and 2018 were 337 and 212, respectively. There are currently 139 participants in Kildare. The numbers have reduced in recent years, which is in line with the overall trend on the scheme and reflects the improved economy and available job opportunities.

Individuals in receipt of the back-to-work enterprise allowance may also receive the enterprise support grant. This grant offers up to €2,500 over the first two years of a new business and assists with the early business start-up costs. Approximately 6,300 businesses were supported with this sizeable grant in 2018.

How many people in County Kildare drew down the support grant in the period in question? What has been the drop-out rate, if any, from inception to date in each year?

The Deputy might have me on both questions. I will come back to him later, if that is acceptable.

I am sure I can conjure up another question. Has any research been carried out on the satisfaction rate among participants? Has it been possible to ascertain the degree to which those participating have found the scheme to be an excellent one allowing them to progress and obtain a new lease on life with time they would not otherwise have had in a productive situation? Has the scheme been hugely therapeutic in moving people from unemployment to employment situations?

We undertook a review in 2016 that focused on assessing the extent to which the allowance was meeting its objectives and on the identification of best practice for future change. The review found that the scheme offered effective supports for long-term unemployed people with a genuine interest in self-employment as a route to entering or re-entering the labour market. The review suggested the project should continue. The review outcomes were encouraging. The review compared those who remained on the scheme for the full two years with those who did not participate. It found that those who completed the scheme were twice as likely to be off the live register six months later than those who did not take part. The trend was also evident after more than 18 months. As such, there is consistency. The review found that follow-up engagement with participants who commenced on the scheme in the first few months of their new business ventures was important to the ongoing support and morale those people needed. The follow-up is critical to identify where referrals to future supports and mentoring may be required from other State agencies and to establish progress with our new enterprises.

Social Insurance

Brendan Smith

Question:

48. Deputy Brendan Smith asked the Minister for Employment Affairs and Social Protection if insurance contributions will be credited to farmers for pension purposes for the time they were in receipt of farm assist; and if she will make a statement on the matter. [43631/19]

I am handling the question put down by my colleague, Deputy Brendan Smith, and hope it will not be equated to voting on his behalf.

We would never do that.

Jobseeker's benefit and invalidity pension are now available to self-employed persons and, of course, there are contribution conditions. Is it intended that periods on farm assist payment will count as contribution years for the purposes of jobseeker's benefit and invalidity pension for the self-employed?

PRSI credited contributions, or credits, are only awarded to former employees to cover gaps in social insurance where they were not in a position to pay PRSI contributions. This would be, for example, during periods of unemployment or illness. Self-employed workers do not qualify for credits. The farm assist scheme was introduced in 1999 to provide income support for low-income farmers. It replaced the former smallholder's unemployment assistance payment. In line with the then-existing arrangements for unemployment assistance, including smallholder's unemployment assistance, and pre-retirement allowance, the non-welfare income of farm assist recipients was exempt from the payment of class S PRSI for self-employed workers. Recipients of farm assist who had previously paid class S social insurance contributions had the option of paying voluntary contributions to maintain their social insurance record, provided they satisfied the qualifying conditions to do so.

Since 1 January 2007, the exemption from class S PRSI has been removed and those self-employed persons receiving jobseeker’s allowance or farm assist are subject to class S PRSI as self-employed contributors on their self-employed income, provided they have an annual income is €5,000 or more. Any self-employed person, including farmers, with an annual income less than €5,000 can pay voluntary contributions to maintain their social insurance record for pensions purposes once he or she qualifies to do so. A person aged 66 or over with insufficient PRSI contributions to qualify for a full rate contributory State pension may claim a non-contributory State pension if they have an income need. The maximum weekly personal rate is €237, which is over 95% of the maximum contributory State pension rate. While it is means tested, there are significant disregards which benefit claimants and a significant majority of such pensioners are paid at the full rate.

I understand Deputy O'Dea is giving way to Deputy Aindrias Moynihan.

I thank the Minister for outlining the position. Farm assist replaces the former small farmer's dole. In the past, a limited number of people claimed the small farmer's dole who were at the same time, quite reasonably, caring for an elderly relative or minding children at home. Following the 2012 improvement, however, these people now find themselves excluded from claiming the carer's credit for pensionable purposes. Is there a way to modify this to allow such persons to claim the carer's credit? It is reasonable that a person farming on a small scale would also care for an elderly relative. Someone might have been milking the cows in the morning, taking the children to school, doing a few jobs and coming back again in the evening. Such persons should be able to claim the carer's credit while they had the equivalent social welfare payment. If they had been on jobseeker's allowance, that would be credited.

I do not know and will have to look into it. When they were receiving a payment on top of the small income they had, they would have made class S contributions and have the ability to fill the gaps that may now exist in their records by buying voluntary contributions. When the changes were made to attribute their credits to them, we fixed that anomaly. What the Deputies are requesting now is to go back and allow people who were working and receiving an income from the State to also claim caring credits.

In much the same way as carers.

I am not saying "No", but I will have to have a look at it. Carers are not mostly working. I do not know the answer and will come back to the Deputies.

For clarification, the Minister said people who were previously in receipt of the small farmer's dole because their income was not sufficient to live on would not be able to claim credits for the period in which they were receiving that dole when they applied for jobseeker's benefit, invalidity pension or a contributory old-age pension. Is that the position?

I am saying the position is that if one is working, one is working. One cannot be working and not working at the same time. We need to look at it as it is a nuanced matter. The significant changes made over the past number of years impact on these people while other changes have made positive contributions to other people who were caring.

As there is a still a little bit of time left for the question, I will allow Deputy O'Dea to come back in.

If they are working three days per week and in receipt of social welfare benefits, that will be a credit.

We are talking about retrospectively changing what was the practice. I know well that the Deputy knows this. Self-employed people do not work three days on and two days off. They might work two hours on a Monday and four hours on a Friday, but it still means they are making the contribution for that week, month or year. Self-employed people make their contributions in 52-week blocks. They do not make contributions for ten weeks and then not work for 42 weeks. It is not as clear-cut as saying "Yes" or "No". We should have a look at it. I will have a look at it and come back to have a conversation with the Deputies again.

Social Welfare Benefits Waiting Times

Bernard Durkan

Question:

49. Deputy Bernard J. Durkan asked the Minister for Employment Affairs and Social Protection the efforts being made to speed up the processing of applications for carer's allowance and benefit, disability allowance and invalidity pension; and if she will make a statement on the matter. [43574/19]

To what extent can the processing of various claims be expedited to reduce in so far as possible the hardship caused to claimants for the benefits listed in Question No. 49, in particular, as well as for rent support and so on?

My Department is committed to providing a quality service for all of the people receiving payments from us, ensuring applications are processed and that decisions on entitlement are made as quickly as possible. Processing times vary across schemes, depending on the qualification criteria. Payments under schemes that require a high level of documentary evidence from the customer, particularly in the case of illness-related schemes, can take longer to process. Similarly, means-tested payments also require more detailed investigation and interaction with the applicant, thereby lengthening the decision-making process in some cases. Delays can also arise if information is required from social security organisations in other jurisdictions and where additional information has been requested from the applicant but remains outstanding.

In 2019 the average time to process new applications for carer's allowance and disability allowance is 14 weeks, while for invalidity pension applications the average time is nine weeks. Processing time for carer's benefit applications, as of September 2019, is ten weeks. I reassure the Deputy that claim processing and the length of time it takes are kept under active review, with additional and targeted attention focused on carer's allowance and disability allowance applications. It includes, since September, the assignment of a number of temporary staff to assist in processing new applications for carer's allowance and disability allowance, coupled with the implementation of a new business process for the front office/back office programme. This change is working well and initial outcomes are very positive. It is hoped to have the processing of applications under these schemes back within targets by the end of the year.

A similar focus on carer's benefit claim processing times in the past few months reduced processing times from 14 weeks in July to ten weeks in September. We can certainly see that when we put extra resources into areas, we get significant results. I assure the Deputy of my Department's continued attention in providing the best service we can in the most timely manner possible for the people we serve.

I welcome the improvements made. As time passes, we will glean more information in that regard. My only concern is the reference to average times, as averages have the potential to mislead because of vast differences between processing times for applications that are dealt with in the most expeditious and least expeditious way. Are the changes effected since September likely to bring about an improvement in processing times for cases that are outstanding the longest which previously have proved to be problematic?

I take on board the Deputy's comments. We report average times, but some cases take considerably longer to process. There are always reasons they take considerably longer. To his credit, the Deputy is one of the people who help with the most number of carer's allowance and disability allowance applications, but he will appreciate that in some cases where information is not readily available to us, processing of the applications can be delayed. I am genuinely heartened that our new front office/back office programme has provided for real efficiencies in how to turn around and utilise staff in every county and make t he best use our resources. When we added extra resources in the past few weeks because of the more efficient use of our staff, average waiting times reduced from 14 weeks to ten, which is really significant. We must ensure we get the processing time for carer's allowance applications to under 12 weeks, which is the stated objective. I would love to see us go even further as there are greater efficiencies from doing business online in order that we can bring down waiting times.

Should we look at cases with a view to determining whether hardship might ensue? I fully accept the need for means tests or medical tests, etc., but in some cases there is extreme hardship and a necessity to invoke some clause to ensure the people who might be in that category will be not left waiting the longest time.

I know exactly what the Deputy is saying, but I am not sure how we could fix it, as we do not categorise claims as they come in on the basis of people's means. They are classified according to the date they come in and dealt with sequentially. I acknowledge that there are people who are financially pressed when they are waiting for an application to be approved. The community welfare office system genuinely reaches out and, I hope, helps or looks after people in such a period, whether it is eight, ten or 14 weeks. It might be very difficult to classify recipients according to this status of means from an information technology perspective. It might not be fair if people could skip the queue in that way. I know that the Deputy has helped many people and that where there is a genuine need, it must be met by community welfare services.

I thank the Minister.

Carer's Allowance Eligibility

Willie O'Dea

Question:

50. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection if the impact on the income disregard for carer's allowance was given consideration in view of the increase in the hours permissible to work as announced as part of budget 2020; if the income disregard for carers will be revised in view of the increase in the hours they can work; and if she will make a statement on the matter. [43603/19]

This question is, more or less, along the same lines as the questions raised by Deputies John Brady and Willie Penrose. There are just a few more aspects to it into which I would like to inquire.

In budget 2020 I announced that recipients of carers' payments would be allowed to increase the number of hours they could work, study or attend a training course outside the home from 15 hours to 18.5 per week. Over 1,200 additional family carers are expected to qualify for payment as a result of this change, at an estimated cost of €11.6 million. Also, any carer currently working less than 18.5 hours per week can avail of the additional hours.

There have been calls to increase the disregard for carer's allowance from carer groups and organisations. In deliberating on measures for inclusion in budget 2020 I included an examination of the disregard for carer's allowance. In its pre-budget submission Family Carers Ireland looked for an increase in the disregard for carer's allowance of €117.50 for a single person and €235 for a couple per week. My Department costed this proposal using the ESRI simulating welfare and income tax changes, SWITCH, model. Allowing for income tax and working family payment offsets, net expenditure, if these changes were made, is estimated to be around €55 million per year. Gross expenditure would be €73 million.

Changes to schemes are considered in an overall budgetary and policy context and from an evidence-based perspective. Some 92% of current recipients of carer's allowance have no means or means of less than €7.60 per week and would not benefit in increasing the disregard. The existing income disregard and means test for carer’s allowance is the most generous within the social welfare system and across the European Union. The weekly earnings disregarded are currently €332.50 for a single person and €665 for a couple. At 18.5 hours per week, this is equivalent to an income of €36 per hour worked in a two-person household and €18 per hour worked in a single-person household.

The Minister is right, of course, when she states this was one of the requests made by the Carers' Association. It was to increase the number of hours carers could work without their carer's allowance being affected. Nevertheless, that proposal was not brought forward in isolation. There were a number of other proposals which we must consider in their totality. It is fair to say that when the Carers' Association requested an increase in the number of hours someone could work, it envisaged a proportionate increase in the earnings disregard as people would obviously earn more. Whatever about the figures produced by the Minister, there is little doubt that a number of people at the margins - perhaps it is a small number - will be adversely affected by what is supposed to be a proposal that should result in an improvement in their position. The Minister is also aware that of the hundreds of thousands providing care, fewer than one in four qualifies for carer's allowance. I do not see why a proposal that is supposed to improve their position should result in some of them being adversely affected.

I thank the Deputy who is absolutely right. All of the carer organisations attended the pre-budget forum, which we hold in Dublin Castle every summer, and did not ask for this change in isolation. They asked for five actions, four of which were delivered by the Government in the budget.

I am not trying to discount or disregard the enormous contributions of carers, both those in receipt of carer's allowance and the thousands who are not. We sometimes put numbers on these things and say they are saving us billions of euro and so on, but we cannot put a number on the value and investment carers contribute to the common good of society. That is why we should not tinker around the edges when it comes to these decisions. Increasing the disregard would have cost €70 million, but would only have impacted 0.1% of the people currently in receipt of payments. Our ambition in this budget was to look after the people who are most financially vulnerable. In that context, it would not have been wise of me to increase the disregard. We need to have a collective conversation, both as parliamentarians and as a society, about caring for our carers in future. We must decide how society will acknowledge and appreciate the enormous contribution they make to the common good of Ireland.

I agree with the Minister about the need for a conversation because the number of carers will increase significantly over the next ten, 15 or 20 years. However, her reply is a little disingenuous. She has agreed to increase the number of hours from 15 to 18.5 per week, but she says that increasing the disregard would cost €117 for a single person and double that for a couple, at a net cost of €55 million. It is not necessary to increase the disregard by that much to compensate people for working an additional three and a half hours a week. The people who would earn €117 in three and a half hours are earning more than €80,000 a year or even double that. Compensating for the additional hours would cost far less than that.

Fuel Allowance Data

Bríd Smith

Question:

51. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection if a review of the levels of energy poverty in the general population will be commenced; the number of applicants for the fuel allowance that were unsuccessful and refused in 2017, 2018 and to date in 2019; the reason for the refusals; and if she will make a statement on the matter. [43637/19]

My question has two parts. First, I ask the Minister if it is intended to conduct a review on the levels of energy poverty in the general population, and whether that will be commenced. Second, I ask her the number of unsuccessful applicants who were refused fuel allowance in 2017, 2018, and to date in 2019, the reasons for the refusals, and if she will make a statement on the matter.

In 2016, the Department of Communications, Climate Action and Environment commissioned a review of the level of fuel poverty in Ireland. That study estimated that 28% of households were living in fuel poverty because they spent more than 10% of their income on fuel costs. A study by the Economic and Social Research Institute, ESRI, which utilised the same methodology, was published in June of this year and it estimated that the rate currently stands at 17.4%. The Department of Communications, Climate Action and Environment is also currently participating in a project led by the Central Statistics Office, CSO, to establish indicators for energy poverty, which should allow for a more reliable analysis of households with low incomes and a low BER rating. This will facilitate better targeting of supports and better measurement of the impacts of those supports in addressing energy poverty. It is expected that the CSO will begin to publish reports from this project in early 2020.

Budget 2020 also included an allocation of €52.8 million for the warmer homes scheme, which funds retrofits for those living in energy poverty. This represents the biggest ever allocation for this scheme and is more than double the initial allocation for 2019. My Department increased the fuel allowance payment by €2 to €24.50 per week. This will increase the annual amount from €630 to €686, which is a €56 yearly increase with a total cost to the Exchequer of €21 million. This will be funded by a ring-fenced allocation from the circa €90 million that is expected to be raised from the carbon tax increase. This is the largest allocation in the budget and is directly aimed at protecting our most vulnerable citizens. In 2017, the number of fuel allowance claims disallowed was 21,182. In 2018, it was 22,023. So far to date in 2019, it is 15,014.

I ask the Minister to come back to me regarding the reasons for the refusals. A number of issues jump out in her reply. Measuring fuel poverty is difficult and how it is done is not satisfactory. I met pensioners yesterday who were former semi-State workers with RTÉ and the ESB. They cannot afford to keep their houses warm due to the pension levy applied to their pensions and because there has been absolutely no increase in those pensions since 2008. This is a separate subject but it is an indicator that the rate of fuel poverty goes beyond the measurements used by the State or the ESRI. The money spent on retrofitting is paltry to say the least. Given that we have a climate emergency, €52.8 million is paltry and the increase of €2 will barely cover the increase in carbon taxes these people will face in travel and other expenses in heating their homes. It is like someone splitting their head and being given a plaster. I ask the Minister to comment on that and tell me exactly how she is going to proceed.

I will finish my earlier reply. The scheme conditions include only one fuel allowance per household; satisfying a means test; and satisfying the household composition test. We do not have a breakdown of exactly why people are refused, but it is for one of those three reasons. Someone will not receive the payment if he or she does not satisfy the means test or if there is a fuel allowance payment already going to the household. The composition of the household used to be a reason for refusal as well. However, we have changed the household benefits package for single adult pensioners who have another adult living with them. That will be changed in this budget.

In fairness, the Government is doing much do deal with energy poverty. We are committed to protecting vulnerable households from the impact of energy costs. I do not agree with the Deputy's statement regarding carbon taxes. The increase of €56 in the fuel allowance this year will more than compensate for the €45 increase in costs to households on the three lowest deciles. We will address people experiencing fuel poverty in a variety of ways over the next number of years, both collectively as a society and as part of Government policy.

I completely disagree with the Minister that the increase in fuel allowance will compensate people for the increases in carbon taxes. That is another story, about which we argue in the climate committee all the time. However, it is clear that the way in which the fuel allowance is allocated works against some people who are stuck for cash. Elderly or unwell couples come to me, as I am sure they come to other Deputies, who are €2 or €3 per week over the threshold for fuel allowance. That allowance would allow them to apply for schemes to retrofit their homes, get their attics lagged, or get their windows changed, but not having it compounds fuel poverty and drives it even deeper. We need to look at a wider cohort of the population that falls a little bit above the bracket determined by the Department, the ESRI, and others who do not understand what it is like to live with fuel poverty.

Last year, a number of people made applications for fuel allowance who were only a few euro above the threshold. I find it difficult that we stop such people from getting €22.50 a week because they are €2 or €5 a week over the scheme limit. I looked into perhaps knocking that €5 off and giving them €17.50, or finding some other way to address what I felt was an anomaly. Unfortunately, when one gets down to brass tacks, there has to be a cut-off point somewhere. Moving that cut-off point will only create a new cut-off point, which will not fix the problem because there will always be people outside of it. I appreciate that something needs to be done, such as perhaps introducing a sliding scale. It would be valuable if we did something along those lines this year.

State Pension (Contributory)

Éamon Ó Cuív

Question:

52. Deputy Éamon Ó Cuív asked the Minister for Employment Affairs and Social Protection when the new total contribution system will come into force for new applicants for the State pension (contributory); the date when eligibility for a State pension will increase from the present 66 to 67 years of age; and if she will make a statement on the matter. [43628/19]

John Curran

Question:

78. Deputy John Curran asked the Minister for Employment Affairs and Social Protection the progress being made to introduce a new total contribution pensions scheme; the next steps and the associated timeframe; and if she will make a statement on the matter. [43420/19]

Currently, there is both a total contribution system and an averaging system in place for calculating pensions. The averaging system was to be abolished. Is the Minister going ahead with abolishing the averaging system, which in many cases is more favourable than the new system she introduced? On what date will that happen and when will the contributory pension age increase from 66 to 67? People deserve to know.

I propose to take Questions Nos. 52 and 78 together. The introduction of the total contributions approach, TCA, for establishing the level of entitlement for all new State pension contributory claims was signalled by the then Government in the national pensions framework in 2010.

At the time it set a target date of 2020 for implementation of the new TCA approach. More recently, the roadmap for pension reform for the period 2018 to 2023, inclusive, which was launched on a very snowy day last year targeted implementation of the TCA approach from quarter three of 2020. This is subject to the necessary legislation being enacted and supporting structures and the IT system being in place.

Consultation is a very important part of the development and design of the new pension for the next generation. With this in mind, I launched a public consultation process on the design of the TCA on 28 May 2018, in which a wide variety of stakeholder groups were invited to participate. A number of workshops were also held on the day to elicit views and feedback. Shortly afterwards Members of the Oireachtas were invited to a very detailed briefing by my officials in Leinster House. The consultation process was open for over three months and the Department received almost 300 responses from individuals and organisations. The submissions outlined the views of respondents on the issues of most interest to them. Having carefully examined the outputs of the consultation process, my Department is designing the scheme and I intend to bring a proposal to the Government setting out the design in the near future. When the Government has agreed to the approach to be taken, I will initiate the work required to introduce this reform.

With reference to the State pension age, the purpose of reform in this area is to make the pension system more sustainable in the context of increasing life expectancy. If there is no change in State pension age, the proportion of a person's life spent in retirement will increase to levels where current workers will no longer be able to support current pensioners. The Social Welfare and Pensions Act 2011 provided that State pension would age be increased gradually to 68 years. The process began in January 2014 with the abolition of the State transition pension. This measure standardised State pension age for all at 66 years. It will increase to 67 years on 1 January 2021 and 68 in 2028.

The proposals brought forward by the previous Fianna Fáil-led Government spoke about a total contributions record over a period of 30 years. Following the introduction by the Minister of the 40-year requirement, many people will be worse off than they are under the current averaging system. Will the Minister confirm whether she has calculated the difference between a 30-year total contributions record and the 40-year requirement? It has changed the goal posts significantly in transferring from an averaging to a total contributions record system.

The Minister has indicated that she intends to bring the redesigned TCA to the Cabinet in the near future. I ask that as soon as that happens that it be published in order that Members of this House can have a real debate on it because there is very real and significant concern about the arrangement whereby the total number of contributions will be recorded over a working life of 40 years instead of 30. Most Members are very conscious of the anomalies that arose the last time a significant change was made in 2012 and we do not want to go down that road again. The Minister will tell us about the different credit arrangements for caring and so forth, but that is the detail we need to see and discuss. The real concern is that if we use a 40-year cycle, a significant number of people will be worse off than if the were to remain in the averaging system.

I can certainly confirm that the proposal issued in the very early days of 2010 by the Fianna Fáil-led Government was a for period of 30 years. What I cannot confirm is Deputy Curran's assumption of what the design will look like because it has not yet been approved by the Cabinet. Therefore, it has not been announced and certainly not sanctioned. Therefore, I respectfully ask the Deputies to wait until I obtain Government approval for the design. I will be hotfooted on the day to make sure I will publish it. I will very much value Deputy Curran's input thereafter.

Will the Minister confirm, regarding the reviews of those who were disadvantaged by the change made in 2012, that she is working on a 40-year instead of a 30-year cycle? Will the persons in question be entitled to a further review if she introduces a 40-year cycle? Will she also confirm that the percentage of people who benefited from a change following a review was about 30% and that most of them have not benefited by an equal amount when compared to what they lost following the change introduced by the previous Minister?

The Minister has rightly said that in 2010 the expectation was in respect of a working life of 30 years. The reason there is concern is that in the interim arrangement for the TCA as it applies to those affected by the anomaly resulting from the change made in 2012 she is using a 40-year period. I acknowledge that she has not published the document and not brought it to the Cabinet, but, equally, she can see why there is concern in that regard. It is because of what she has done. In advance of addressing the anomalies arising from the change made in 2012 the expectation would have been that more people would benefit. Have lessons been learned that are now influencing how the new TCA will be formulated?

The TCA in 2012 and 2020 will bear no resemblance to each other. I again ask for the Deputies' patience and indulgence. When I bring the design to the Cabinet and as soon as that meeting is over, the Deputies will know as much as I know today. They should not fall into the trap of making the assumption that it will be exactly the same. The TCA in 2020 will bear no resemblance to the caring credits approached introduced by the previous Government. I am quite pleased with the results of the review of the cases of 92,000 people because 54% of women who were potentially maligned by the caring credits approach or the lack thereof received an increase in their payments to the full pension. All of the other women stayed on exactly the same money, while 21% of gentlemen folk received an increase. Obviously, the remaining number of men could not access caring credits. I am quite happy with the lessons learned in the review. They have certainly fed into the design of the new 2020 proposals which I hope to bring to the Cabinet in the very near future.

National Minimum Wage

Bríd Smith

Question:

53. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection if the suggested 30 cent increase in the national minimum wage will be implemented following a deal on Brexit, her plans to examine proposals for a living wage; and if she will make a statement on the matter. [43636/19]

Given that Brexit has held back a 30 cent increase in the national minimum wage, does the Minister intend to implement it if a Brexit deal is done? Does she have plans to examine a proposal for a living wage as distinct from a minimum wage?

In developing its recommendation on the national minimum wage the Low Pay Commission assesses various economic indicators such as changes in earnings, exchange rates, employment, unemployment, productivity, international minimum wage comparisons, the need for job creation and the likely impact of the national minimum wage changes on levels of employment, the cost of living and national competitiveness.

Numerous economic commentators, both in Ireland and overseas, have highlighted that any form of Brexit has the potential to impact negatively on the Irish economy. Accordingly, although the Low Pay Commission recommended an increase in the national minimum wage of 30 cent to €10.10, it did so on the assumption of an orderly Brexit and acknowledged that the Government might wish to reserve its position in the event that there was a disorderly Brexit.

Although we are all optimistic about a deal being ratified, the possibility of a disorderly Brexit is still present; therefore, the economic circumstances that will apply in 2020 continue to be very uncertain. Nevertheless, the Government accepted the recommendation of the commission but decided to defer a decision on when its recommendation would commence until the nature of Brexit became clearer. I intend, therefore, to make provision in the Social Welfare Bill to declare the national minimum wage in 2020 in line with the commission's proposals once the situation in respect of Brexit is clarified. If a Brexit deal is agreed before the end of the year, I expect the national minimum wage to be changed on 1 January 2020 as it was in previous years.

It is important that Ireland’s statutory national minimum wage and the living wage concept not be conflated. The living wage is a voluntary societal initiative centred on the social, business and economic case to ensure that, wherever it can be afforded, employers will pay a rate of pay that provides an income sufficient to meet an individual’s basic needs such as housing, food, clothing, transport and healthcare.