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Joint Committee on Employment Affairs and Social Protection debate -
Thursday, 26 Oct 2017

Engagement with Committee for Labour and Social Protection, Chamber of Deputies, Parliament of Romania

Chairman

I welcome from the Committee for Labour and Social Protection of the Chamber of Deputies of the Parliament of Romania Mr. Adrian Solomon, Chairman, Mr. Silviu Vexler, Vice Chairman, Ms Violeta Rãdu, secretary, and Ms Mara-Daniela Calista, member. I also welcome the ambassador of Romania, Ms Manuela Breazu. I hope I have pronounced our guests' names correctly. I also hope they are enjoying their time in Ireland and finding their visit informative.

I will introduce the members of the joint committee who are in attendance. We have Deputies John Brady and Gino Kenny and Senator Alice-Mary Higgins from the Upper House. On the Government side we have Deputy Joe Carey, which is the reason he is sitting on his own. I say that jokingly, as the Deputy can sit where he likes.

I would like the meeting to be as informal as possible in order that members of both committees can ask or answer questions and have an opportunity to participate. I ask Mr. Solomon to make his opening address.

Mr. Adrian Solomon

I will speak in Romanian. I thank members for being available to meet us. About one year ago my colleagues and I in the Romanian Parliament with responsibility for the labour function commenced a tour of the northern countries of Europe. As has been recognised at European level, northern countries such as Denmark, Sweden and Ireland have very good and solid systems of social protection and social insurance.

For the last 30 years, since the political system changed, we have been trying to find a way - we still have some work to do on the public pensions system - to establish a social insurance system along the lines of that in a European-style welfare state. We have learned a great deal and are still in the process of getting further information. We got lots of answers from the members' colleagues in the Government and learned that Ireland's pensions system was established in 1961 and is still in place. We would like to know how it is possible that it lasted and is still working today. My immediate feeling is that maybe it is not one of the best contributory systems but is rather redistributive. It is a system which is accepted by Irish citizens and the Government and one which we can see is accepted by the majority and brings peace within the social Department. Since 1989 we have had three pension laws or reforms and are now in the process of establishing a new one. The general sense is that no matter how much one tries to respect and abide by each person's contributions during their working life, there are still some people who are not content or are unhappy with what they receive, especially in the public system.

We would also like know what the relationship is between industrial management and the trade unions, between employees and employers. Does the Government interfere? Does it engage in mediation? Is it biparty or triparty?

My colleagues have their own areas of interest and questions. My colleague Ms Mara-Daniela Calista who will follow me has been working in the government area and is interested in the area of disability. I am also joined by my colleagues Ms Violeta Rãdu and Mr. Silviu Vexler who is the representative for the Jewish minority federation in Romania. With the committee's permission, I will ask each of them to contribute as they wish. We hope we will find the meeting beneficial.

Ms Mara-Daniela Calista

I am very pleased to meet the members and thank the committee for taking the time to see us. As Mr. Solomon said, I have been working in the government area for a year; therefore, I know the other side, outside parliament. My own area of interest includes gender equality. I see the committee is well represented in that regard. I am also very interested in natality, which is a problem in Ireland and Romania. There are many people in the pensions system and fewer younger people in the active workforce. What is Ireland's plan to increase overall contributions?

As Mr. Solomon said, I am interested in the area of disability. I see that Government buildings and the Parliament are fully accessible. What are the public policies on inclusion in the workforce of people with disabilities? Is there legislation in place or are there policies which oblige the private or public sector to have employment quotas for people with disabilities?

Chairman

Does anyone else wish to contribute?

Ms Violeta Rdu

I am mostly interested in anything related to child protection and the ways in which children receive State assistance, whether by Government or social measures.

Mr. Silviu Vexler

As a representative of the Jewish minority in the Romanian Parliament, my area of interest is somewhat more specialised. Two topics interest me particularly. The first is the social protection and labour laws concerning the cultural system in Ireland and the second is the elements that fall in the committee's area governing the protection of national identity and the Irish language, which I think is great.

Chairman

I thank the delegates. I will allow members to speak on any or all of the issues which have been raised. Some of them have especially strong interests. I should point out that the matter of child protection is not within the remit of this committee. There is a Department and a Minister with responsibility for children, but that does not preclude colleagues who have an interest in the area from commenting on it, but it is not particular to this committee. I will begin and colleagues who wish to contribute may then do so.

In his opening remarks Mr. Solomon raised the matter of pensions. Ireland is no different from many other countries. While we have a system that operates, it is not without its challenges.

In fact, the State pension operates in two parts, namely, contributory and non-contributory. People pay into a Social Insurance Fund that funds the contributory State pension, while the non-contributory State pension is means-tested. We are an aging population and people are living longer. Without an increase in the annual pension and just to accommodate new pensioners, the additional funding required on a year-by-year basis is €200 million per annum.

In relation to the contributory pension, for which workers pay during their working lives, the system at present is under scrutiny, with a view to introducing a new type of system. The reason is that it is based on an average contribution over a person's working life rather than the person's total contributions. The averaging system has some anomalies in it, and particular groups of people have been dealt with unfairly because their annual average is not high enough. For a pension system to work effectively for those who contribute to it, it is important we have a system of credits that acknowledges periods of time when people cannot work for whatever reason, whether to rear a family or care for somebody.

Our national Budget Statement was made a couple of weeks ago, and the issue of the contributory pension and annual averaging has received considerable debate. The Government is committed to changing it over the course of a number of years. This committee will scrutinise and evaluate its proposals as they become available. I do not want to take up the whole meeting and I have colleagues here. Deputy Carey is a member of the Government party and I will afford him the opportunity to speak first.

The witnesses are very welcome to Ireland and I hope they enjoy their stay here. I share the views expressed by the Chairman. We are from different political parties but we come together as one committee. There are challenges in the pensions system in Ireland, which was established in 1961. The Chairman has outlined those challenges, which have come to a head recently. The Government is committed to trying to change that. We might not be able to do it overnight but it is important that we make some efforts to do so. As the Chairman has pointed out, the social welfare Bill will come before this committee and we will scrutinise changes put forward in terms of the pensions issue.

The remit of the committee has changed recently in that we now have a labour element to it. The name of the Department changed and it is a new Department. At the second last meeting, officials from the labour side came before the committee. It works well and I note it is the same approach as is taken in Romania. It is a proper fit. I note Romania's unemployment rate is 4.75%. We are at approximately 6% now. I am interested to hear how Romania deals with social welfare. What weekly payments are made? Does Romania have labour activation measures in place to get people back into the workforce? The witnesses are very welcome and I look forward to the engagement.

Chairman

I will remind my colleagues of some of the key issues. There is the issue of industrial relations. Senator Higgins will jump at the issues of gender equality, disability and labour law.

The witnesses are very welcome to Ireland. I hope they are finding their trip enjoyable and informative. I hope their engagement with the committee this morning can be of some use. Many areas have been touched on and time will be precious here. I am interested in a couple of areas, including the issue of pensions, which has been touched on. It has been dealt with fairly comprehensively by the previous speakers. Many changes have been made to the pension system in Ireland in recent years, including the pensionable age. I am interested to hear what the situation is in Romania. The pension age moved from 65 to 66 in Ireland. In 2021 it will move to 67 and up to 68 in 2028. In Romania, I believe the retirement ages are different for men and women. I believe it is 63 for women and 65 for men. I would like some feedback on how the system in Romania works and whether there are any planned changes to increase the pension age.

In Ireland in 2012, serious changes were made to the contributory pension in terms of contribution, and this ties in with gender-proofing because the changes that were made in 2012 were not gender-proofed and had a direct impact on women in particular. Subsequent to the changes, almost 70% of women are on lower contributory pensions. The changes did not take into account the time that women take out of work to raise families or to look after loved ones. There is much focus on this now, and the Government has said it is moving to a new total contribution system, but this will not come into place until 2020 or 2021. There are a lot of pressures and focus on this.

My colleague touched on the unemployment rate in Romania. To come at it from a slightly different angle, youth unemployment in Ireland is double the national figure of 6% or 6.5%. Youth unemployment is probably 12% or 13%. Are there similarities in Romania in terms of youth unemployment? We have specific job activation schemes in Ireland targeting the long-term unemployed. I have difficulties with lot of them but there are some positive schemes. Are there specific job activation schemes in Romania? How do they work? Are they useful?

I did a little bit of research and found an interesting point.

Although I am not certain whether this is the case, my understanding is that in Romania, a bereavement grant is available to everybody when a family member passes away. A bereavement grant was available in Ireland some years ago but it has been abolished. Perhaps the witnesses would comment on those issues.

I welcome all of the witnesses. Other speakers have touched on the pension system in terms of the historical context. The main concerns regarding the pension system were flagged in a Government Green Paper in 2007, which I would recommend. It deals with the first tier, second tier and third tier question. It was, of course, followed by the crash and so many of the issues highlighted and discussed therein were put aside. I understand some of the problems identified have become further embedded.

As stated, we do have some good redistributive elements within our pension system but we also have problems within our contributory system. The averaging system we had effectively served to penalise people who had the required number of years' contributions but not in a row. For example, in the case of people who had worked in their teens or 20s and who were then out of the workplace for ten or 15 years before taking up employment again, their pensions were lowered because of the averaging system. This particularly affected women because many of them had lower levels of contributions. This became more impactful in 2012, when we moved to lower the payments and we introduced new band systems, which in some cases severely reduced the pensions of people who had lower levels of contributions. This happened even though it had been acknowledged since 2007 that the system was not fair.

Another important issue is how care is recognised in our system. There is one small measure which addresses a tiny part of the problem in averaging, namely, the homemaker's disregard which was introduced in the mid-1990s. While this allows for a certain number of years in respect of homemaking or care to be discounted for the averaging process, the problem is that many of the women affected were out of the workforce between 1973 and the 1990s. Many women's organisation believe it is not sufficient to only have a disregard for care and that we should have a recognition for care through the introduction of a care credit or care contribution. This will be a challenge if we move to a second tier. For example, in introducing a universal supplementary retirement savings scheme, how do we ensure that care and other forms of contributions outside of employment are recognised in the system? Another concern on the universal supplementary retirement savings scheme is the increase in precarious work, which results in people having many more gaps in their work lifetime than was previously the case. If we move to a total contribution approach for the first year, or if we introduce a second-tier system, it will be important to find a way to ensure that care and other contributions are recognised. This is one challenge we will face, as well as the immediate challenge of how to rectify the unfair 2012 changes, which disproportionately impacted women who already were being treated unfairly by the system.

We have a non-contributory pension which is means tested. While it is positive that we have a non-contributory pension, because it is means tested it is not always a solution for women, as their partners may have means of some kind or may have a pension. There is a concern around financial independence for women and their being able to access money in their own right. Many of them may not qualify for the non-contributory pension, which means that in some cases women have no access to finance in their later years. These are some of the issues we are teasing out in Ireland. I am very interested in this area and I would be very interested to hear about some of the many measures that have been tried in Romania.

In regard to employer contributions, we do not yet have a formal system of employment contribution directly to pensions, as is proposed in regard to the universal supplementary retirement savings scheme. We are currently experiencing a problem with pay-related social insurance, PRSI, which I think is increasingly becoming an issue across Europe. In Ireland, employers pay a set portion of PRSI and employees pay another portion and this money goes into the Social Insurance Fund. We are experiencing a rise in bogus self employment, however, whereby people are categorising themselves as self-employed when in fact they are working with one employer who employs everybody on individual contracts and thereby can bypass the requirement to pay social insurance contributions on behalf of employees. We recently dealt with Opposition legislation, which was supported by the Government, to address the issue of bogus self-employment which is a drain on our system.

On the point made by Ms Calista, gender equality is a key concern. I previously worked with the National Women's Council of Ireland. During that time, the council was constantly pushing Government to introduce gender and equality proofing of the budget, a measure it has since agreed to but is not yet in practice. It is important now to ensure that is done. Another key concern is lone parents. I would be interested in hearing what supports are in place in Romania for those who are parenting alone. This cohort of people experience high levels of deprivation and consistent poverty. There have been some changes to our system in this regard. As a committee, we produced a report, which I am sure can be shared with the witnesses, recommending changes in this area. I am sure that report would be of interest to the witnesses.

In regard to disability, my colleague in the Seanad, Senator John Dolan, is head of the Disability Federation. I can provide the witnesses with his contact details if they so wish. The issue of child protection was mentioned. A very positive development in this area was our referendum on the rights of the child. It applies across all areas in that in any issue that affects children, the child's individual rights rather than the rights of his or parents or family must be considered. That referendum was a major change in Ireland in recent years.

In regard to the point made by Mr. Vexler on minority groupings, we are just pushing towards legislation on sign language recognition. We are starting that journey in Ireland. There are issues facing particular groups. The Traveller and Roma communities in Ireland face issues related to social protection and so on. I would be interested in hearing Mr. Vexler's views on Ireland's habitual residency condition, which requires people to have been two years in Ireland and contributing thereto before they are able to access social protection, which affects everybody and not only minority groups. Perhaps we might hear from the embassy on the impact of this condition on the Romanian community here, which, I think, is approximately 35,000. On the cultural issues, I would be very happy to discuss them later over lunch.

Chairman

It is going to be an interesting lunch.

Just before I allow Deputy Gino Kenny in, I would like to say that in Ireland we have 40 multi-seat constituencies. Deputy Gino Kenny and I share the same constituency and that is why I left him until last.

The delegation is very welcome to Ireland. I was in Romania three years ago and had a fantastic time. People are extremely friendly and it is an amazing country. I have a question for Ms Calista, who touched on the issue of disability. I presume Romania has ratified the UN Convention on the Rights of Persons with Disabilities. Amazingly, Ireland has not ratified it. This is astonishing as over 200 countries across the world have done so. I presume Romania is one of them. What is the average rate of social welfare in Romania for a single person and for a family? I know it is all relative to the standard of living there and so forth.

I remember when the revolution took place in Romania in 1989. It has come on a lot since then and has seen a lot of dramatic societal changes, as has Ireland. We share a lot of issues. The revolution in December 1989 always stuck with me. It may be out of the witnesses' remit, but post-Ceauescu, how have the new generations managed to deal with the general issues of contemporary Romania?

Chairman

A number of issues have been raised. I am not asking Mr. Solomon to address them all personally but perhaps some of the members of his delegation would like to add something.

Ms Mari Preda

I will act as interpreter for Mr. Solomon's response.

Deputy Joe Carey took the Chair.

Mr. Adrian Solomon

I will answer Deputy Carey's questions first. It is true that in Romania the official unemployment rate is 4.5%. This is just for registered unemployed people who are actually getting a payment. Two years afterwards, they stop getting a payment and enter into another category, which is people unemployed but socially assisted. We have almost 4 million Romanian people scattered all over Europe, active, and there are almost 60,000 Romanians here in Ireland. In Italy we have about 1 million Romanians and the same in Spain. If all these people were back in Romania, they might not have a job. The rate or percentage the Deputy mentioned would then be much higher. Most of those who are in Romania are either young or over 45 years old. These are the two main categories in the unemployment rate. There are Government programmes which fund jobs for two years after unemployment. The employer is obligated to keep the person for one more year once the two years are finished. The occupational office agency administers specific jobs and training for all of the unemployed people. On a monthly basis, they can participate in training, courses and grants. It is called the grant for jobs. We have training programmes and apprenticeships for those who finish college or school and want to go straight into the workforce. Many of them are funded by the European Union. One is the youth grant. Unfortunately the biggest problem for us is not the unemployment rate but people who are too highly qualified for the jobs that are on the market. We feel this issue is getting worse in all areas.

Deputy Brady asked about the pension age. Before 2035, we need to implement the same pension age for women and men. It is an obligation under a directive from the European Union. The new Bill was published yesterday by the Ministry of employment. They consider the possibility for mothers who have had more than three children to have the pension age lowered by between one and three years. Those who wish to still work after the pension age, depending of course on the individual circumstances, could stay in the workforce until the age of 70. The bereavement grant that was mentioned is paid from social insurance at the level of the national net average salary. Those who are not insured can receive only half of the grant.

Deputy Gino Kenny asked about the social welfare rate. There are supplementary benefits for families with more children and one-parent families. There are also back-to-school supplements, for high school in our case.

There is a minimum amount for people who, for various reasons, cannot be in the workforce. They would have to work a certain number of hours for the community to receive this. There are supplementary benefits for people with disabilities. The entire budget for social protection would also include the protection of the child at a national level. It is somewhere in the region of €7 billion to €8 billion per year. This does not include pensions and local community contributions. They represent between 20% and 30% of the total payments.

Deputy John Curran resumed the Chair.

Ms Mara-Daniela Calista

I will answer two questions for Deputy Gino Kenny. Romania has ratified the UN convention. We have ratified it but we do not have the same level of accessibility as Ireland, although I understand that Ireland has not yet ratified the convention. Another problem we now face in Romania, hence my earlier question regarding people with disabilities, is how we can make them feel important. encourage them want to work in some field, whether public or private, and allow them to do so rather than paying them to stay at home. For example, one might not have a hand or a leg or such and be given money by the state to stay at home. That is not a solution. The solution is to bring them with us and make them feel like real citizens, actually doing something for the community because they can. There are people who can think and write, who might not be able to hear but can see or who might have other combinations of disabilities. One of our main focuses in Romania is how to get these people into employment. To do so, one needs to have a ramp for them to get into institutions, for example, to enable people to get from the first floor to the second floor or to have a bathroom adapted for them. These are the minimum accessibility priorities we must facilitate in the context of these people in order to allow them to come to us - the public institutions - and to the private sector. At the same time, however, we should be there for them. In Romania, we are now focusing on how to increase the number of people with disabilities in the public and private sectors.

Chairman

I can see that Senator Higgins is anxious to speak. The points Ms Calista raises are interesting. She talks about physical infrastructure for people with disabilities. We have ramps and accessible public transport but there are other issues to enable those people to have an opportunity to engage in the workforce in real activity beyond just physical infrastructure, though the physical infrastructure is important.

I have one word of caution. Those of us from the Lower House will be obliged to go there to vote in the coming minutes so I will need to formally conclude the meeting. I understand that the delegation is having lunch with Senator Higgins. For any unresolved or unanswered issues, the Senator has never been short of a few words to contribute. I do not want the delegation to feel I am rushing this but there will be a vote and all Members of the Lower House will be obliged to attend. The voting block will last for possibly an hour.

Mr. Adrian Solomon

We also do this in Romania.

Chairman

We have to look after our Government colleague.

I can come back because I will have an opportunity later but I realise that the delegation has specific questions. It was asked if we had quotas. There were quotas in certain public sector areas but we had a long-term freeze on recruitment to the public sector, so that had a disproportionate impact on persons with disabilities because it was one of the few areas in which there was an active recruitment programme. We can discuss that in more detail. There is a very delicate balance. I think the delegation is right to focus on institutions, points of access and the question of giving supports. In some jurisdictions in Europe, we have seen an approach that seems to be based entirely on sanctioning individuals when, in our experience, many persons with disabilities are very keen to work but want supports rather than simply sanctions.

Chairman

Senator Higgins can elaborate on that over lunch. We are coming very close to the end of the meeting. Would Mr. Solomon like to make any concluding remarks?

Mr. Adrian Solomon

We wish to thank the committee for its time. We deal with such votes in Romania as well so we know exactly what committee members have to go through. That is not a problem. My personal request to the Chairman and the committee is to please come to Romania, perhaps even before 2019, when a Romanian will be President of the Council of the European Union. I would like to make the Chairman wish to come to Bucharest by handing this small present to him.

Chairman

We have a small token for the delegation on behalf of our committee. I thank Mr. Solomon and his committee for attending and for an interesting and open discussion on some of the differences and similarities in our systems. In particular, on behalf of the committee, I thank him for the invitation to visit Romania prior to it holding the EU Presidency. While the formal engagement is over, I hope that Mr. Solomon has an informative and interesting lunch with Senator Higgins. As I said earlier, the Senator will have plenty to say on a range of social protection issues.

Mr. Adrian Solomon

My final answer is in respect of whether, after 1989, people succeeded in having a better life or country. The fact that 4 million Romanians are scattered across Europe makes it clear that we did not succeed in having a better Romania but we are doing our best. Is it possible to have a photograph taken?

Chairman

One moment. I will officially conclude the meeting. Senator Higgins can look after the lunch arrangements.

The joint committee adjourned at 1 p.m. until 10.45 a.m. on Thursday, 9 November 2017.
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