JOINT COMMITTEE ON HEALTH AND CHILDREN debate -
Friday, 18 Nov 2011

Child Poverty: Discussion with Social Justice Ireland and End Child Poverty Coalition

Chairman

I welcome the witnesses. I apologise for the brevity of numbers. The Dáil is sitting, a quorum is required and Members are in their constituencies today. Nonetheless, despite the small attendance of members, those present are interested and committed. From Social Justice Ireland I welcome Dr. Seán Healy, Sr. Brigid Reynolds and Ms Michelle Murphy, and from End Child Poverty Coalition, Ms June Tinsley, Ms Frances Byrne, Mr. Toby Wolfe and Ms Caroline Fahey. We look forward to the presentations.

I begin by reminding witnesses of the position in regard to privilege. Witnesses are protected by absolute privilege in respect of the evidence they give to the committee. However, if witnesses are directed by the committee to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons, or entity by name or in such a way as to make him, her or it identifiable.

I remind Members of the long-standing parliamentary practice or ruling of the Chair to the effect that they should not comment on, criticise or make charges against any person outside the House, or an official, either by name, or in such a way as to make him or her identifiable. With that preamble I invite Dr. Seán Healy to make his opening remarks.

Dr. Seán Healy

We are happy to have this opportunity to appear before the committee and thank the committee for its invitation. We will make our presentation and if there are any other issues that Members wish to raise we are happy to address those also. We have circulated the document in advance.

Social Justice Ireland is an organisation of individuals and of organisations working to build a just society. It is open to any individual or organisation to join so long as they are committed to building a society where human rights are respected, human dignity is protected, human development is facilitated and the environment is respected and protected. Those are the four basic requirements of our organisation.

I will not batter the committee with numbers but there are a few things that need to be noted. The most recent figures for the number of children at risk of poverty show that there are 218,000 such children in Ireland. That figure has increased by 35,000 in two years. We will see if that number expands further when the latest survey on income and living conditions, SILC, is published by the Central Statistics Office in the coming weeks.

The second number I wish to put on record relates to households. For example, for a household of four, two adults and two children, the social welfare payments they receive, including child benefit, amount to €80 per week below the poverty line. It is in that context that we address this issue. A number of serious issues follow from that.

When we speak about poverty, we use the Government's definition or description of poverty contained in the anti-poverty strategy. It states that people are living in poverty if they do not have the income and the resources required to live life with dignity. It is a longer definition than that but it is a very good one and we work from that definition. In the paper we presented to the committee, we indicated where the poverty line is and how much it is in 2011. The amount for two adults and two children is €515.46 per week but when the child benefit payment is added they receive €80 per week less than the poverty line.

How many have incomes below the poverty line? What percentage of the population is below the income poverty line? Given the overall population, the number at risk of poverty is 14.1%, that is, one in seven. There was an improvement from 2001 to 2009 but it has dropped a third. Seven years earlier, in 1994, there was very little change, 15.6% of the population was at risk of poverty. Some 17 years later the percentage at risk of poverty has gone down only to 14.1% from 15.6%, which is not a huge achievement. That masks something else: the number of people on the poverty line has increased because the population has been growing.

In 1994 there were 559,000 people in Ireland at risk of poverty, by 2009 the number had risen to 628,000. The percentage at risk of poverty has increased as the population grew so that the numbers are higher. Therefore, the number of people at risk of poverty in Ireland has been increasing, despite the Celtic tiger, the various developments and all the good things that have happened since 1994. Many good things are happening, despite the recent crash. It is important to state that.

When we look at children in the same base we find some 18.6% at risk of poverty. The percentage was 19% in 2006, reduced to 17.4% but has risen to 18.6%. There are serious issues here. There is a higher proportion of children at risk of poverty in terms of numbers and as a group than any other group. In 2007, there were 183,00 plus children at risk of poverty - as per page 7 of the document we sent to the committee - and the number had increased to 218,000 by 2009. That is the point we were making when we said there was an increase of 35,000 children at risk of poverty over those two years. Given that our children are our future and the country's future, it is critically important this issue is addressed.

Various things have been done in the past and Governments take initiatives of different types and put in large amounts of money. We shall look at a few of those initiatives in the next few minutes. Child benefit has always been the key variable within the various approaches that Government has used. Our position on child poverty is that one cannot take a child out of poverty without taking the household out of poverty. It is impossible to have a child within a household out of poverty but the household in poverty - that is nonsense. If children are to be taken out of poverty, the households with children must be taken out of poverty. It is important to understand that.

Various changes have been proposed to child benefit. We shall look at four and give our views on them. Should child benefit be reduced? This argument has been made and child benefit has been reduced in recent budgets. We strongly argue against any reduction in child benefit. There are many arguments that could be made. The major one, in the context of what we are saying today, is that any reduction in child benefit would have a significant impact on child poverty figures in Ireland when combined with the ongoing lack of investment in other services. We are very aware that this is not just an income issue, but that many required service issues are also involved. This is serious and we would say that under no circumstances should child benefit be reduced.

The second often mentioned option is to reduce child benefit or to leave it at the current level but combine it with the introduction of a second tier payment. We acknowledge that this could see some households maintain or slightly increase their income, depending on the levels at which the payments are set. However, we would also point out that it would create a new unemployment trap at the point where the second tier payment is withdrawn. The idea is to reduce or leave child benefit as it is and to create a second tier payment with whatever money is available. The problem is that at some point this payment must be withdrawn. Once withdrawn, it creates a serious problem in terms of an unemployment trap, because of the loss to the household.

One of our concerns in this regard is that the household would lose employment, but there are other concerns. There would, for example, be a huge incentive for a couple not to become a family because of the danger that the two incomes would be counted and they would lose the second tier payment. Also, there would be a huge temptation to break up, notionally at least, so that they would remain entitled to the payment because then only the income of one parent would come into play. Therefore, if the second tier payment is implemented there is a danger that not alone will it create a new unemployment trap, it will also lead to a situation where policy either provides a disincentive to family formation or incentivises family break up. We would have serious reservations about any policy that did this.

The third proposal on child benefit is to tax it. This is not a good approach because it creates a form of horizontal inequity. What we mean by this is demonstrated in the examples on page 11 of our presentation of two households living side by side. Both households earn €100,000 under similar circumstances and pay the same level of tax. One of the households has two children and the other none. The proposal to tax child benefit means that the payment that goes to the family with the children, which is already far from adequate in terms of supporting the children, will be reduced, but there will be no impact on the household with no children.

We believe this proposal is being made for the simple reason that there is a need to find some source of finance to ensure we can move towards balancing the budget. We strongly believe balancing the budget must be a priority and our proposals are made within that context. However, the proposal to tax child benefit would have the effect of taking money away from children. The more sensible approach is to come up with a proposal that hits all households in the same way rather than only hitting the households with children. Taxing child benefit introduces a horizontal inequity into the system.

What should be done instead? The money must be found another way, even if that involves increasing taxation on high income earners. This was the reason we took a household income of €100,000 as the base for our example. Committee members will be aware we have made other proposals as we have circulated them to Deputies and Senators. These demonstrate how the tax take of the Government can be increased without increasing income tax rates and how the Government can go far further down the road of balancing the books without touching child benefit. This is what we recommend.

The fourth approach on child benefit that has been discussed and considered from time to time by Government is one we support. This is the proposal to turn the child benefit into a refundable tax credit that would be payable for all children irrespective of the labour force status of the parent. This element is critical. It is not about ensuring the money only goes for children whose parents are employed but of ensuring that it would be a refundable tax credit payable for all children. The net cost to the Government of this is the same as paying child benefit without taxing it. There is no change in the amount, but there would be issues to be addressed in the context of the distribution of the moneys, particularly with regard to who gets access to the money and how the scheme would work. However, this is a proposal we are prepared to consider.

On whether Ireland can afford a universal child benefit, yes it can. Our presentation gives one example on page 14 of a change that could be introduced. If the Government eliminated only the tax expenditure relating to pensions, it would generate €2.9 billion in income. Given that 80% of the tax benefits on pensions go to the top 20% of the population, this seems the obvious approach to take. It would save the Government in one stroke the levels of money it talks about and would be a fairer approach than taxing child benefit or than any of the other proposals on the table currently.

With regard to the issue of child dependent additions, it is clear that an increase in these payments would target the people most at risk and that this would be an effective way to go. However, there is a problem, namely that when the parent takes up a job, the child dependent addition is lost. These payments were not increased over many years because they had become a serious unemployment trap. Unemployed people were unable to get out of the unemployment trap because of the scale of the payment they would need to receive from the job to make up for the loss of the child dependent addition. We would be very hesitant to support a move back in that direction, particularly when there are other ways of doing this.

Family income supplement is a very good idea in theory, but the problem is that in practice it does not work. Despite the fact that for well over a decade huge amounts of public money have been put into trying to get the take-up for FIS up to the level it should be at, this effort has failed and only a little over one third of the people entitled to FIS take it up. This is a huge loss. Therefore, FIS is not an effective means of relieving poverty and Social Justice Ireland is not in favour of expanding the scheme.

On the issue of services, there is a range of services across a range of areas to be dealt with. We do not go into these in detail but list some of those on which we have produced policy proposals which have formed part of the documentation we have already sent to Members of the Oireachtas on various occasions in the past six months. For example, we have put forward proposals on the need for integrating services for children through a whole-system approach, including services such as primary care teams, mental health and disability services, the national drugs strategy, suicide prevention, foster care, the national action plan for social inclusion, youth homelessness, youth justice and the strategic taskforce on alcohol. We do not have the time to go into detail on each of these issues now. However, in terms of child poverty, the services issue must be dealt with seriously.

Various other issues could also be added. Child care is a critical issue if parents want to take up employment. If reasonably funded child care services are not available or if people do not have the funds to access them, there is a huge problem. Ireland has a very poor record on child care services in that context. There are also all sorts of issues around education and health generally. In that context, we welcomed the early childhood care and education programme. We would certainly welcome any strengthening of that by the Government and we have certainly advocated it. It is an approach that goes very much in the right direction. It is starting at the earlier end of the education process. Within all that we would try to improve the resources for first-level education and preschool education initiatives like the ECCE scheme. We have already tabled proposals in that context.

We are talking about a whole system approach to meeting the needs of children, with a focus on better outcomes for children and families. That would ensure that these services would actually respond to the needs of the children and ensure they continue to be effective in the long run.

What is the long-term solution to child poverty? Our view has been for quite some time that the current welfare system is long past its sell-by date. It is not fit for purpose and it needs massive revision and reform. For quite some time, we have been promoting the idea that we need a much more work-friendly, person-friendly and less bureaucratic approach. The way to do that would be to introduce a basic income system. This is a system where everybody in society would receive a payment - less for children and more for older people. They would receive it on an unconditional basis without any means test or work requirement. They would get that payment throughout their lives, although it would change with age. If they took up employment, they would pay tax from the first penny. In other words, the tax credit would be devolved into this basic income, as would the welfare payment. It offers an alternative paradigm whose understanding of work recognises a wide range of work that is not paid employment, which I think is very important. Basic income also offers a simple, equitable, fair and transparent income distribution system, which would make real progress towards eliminating income poverty. By setting rates at the right level, we could eliminate all child poverty with that particular approach. We would also eliminate all poverty traps and unemployment traps.

If members are looking for a big idea for the 20th century, then the basic income guarantee is a big idea that we think would be very appropriate for the changed world in which we live.

Chairman

Thank you very much for your presentation and your very interesting points. Undoubtedly, the issue of child poverty cannot be addressed in isolation. Your presentation is very challenging. I concur with your call for a reformed social welfare approach. That needs to be explored further and not just here today.

I now call on Mr. Toby Wolfe from OPEN, on behalf of the End Child Poverty Coalition, to make his opening remarks.

Mr. Toby Wolfe

The End Child Poverty Coalition welcomes the opportunity to appear before the committee. The coalition consists of eight national non-governmental organisations that are working together to tackle child poverty. These are Barnardos, the Children's Rights Alliance, Focus Ireland, the National Youth Council of Ireland, OPEN, Pavee Point, Start Strong and the Society of St. Vincent de Paul. The aim of the coalition is to end child poverty in Ireland and our work has three specific objectives: raising public awareness of child poverty; monitoring public policy on child poverty; and developing policy solutions to end child poverty.

My name is Toby Wolfe and I work for Start Strong, which aims to advance children's early care and education. I am here with three of my colleagues, Ms Jane Tinsley of Barnardos, Ms Caroline Fahey of the Society of St. Vincent de Paul and Ms Frances Byrne of OPEN. I will make a short presentation and then my colleagues will join me in answering any questions from the committee. I will briefly run through some of the key points made in our publication, "Child Poverty: Ireland in Recession", which I believe was circulated to members of the committee. I will mention a few figures on child poverty. I will then talk about the impact the recession is having on children in poverty and I will end with some recommendations. Before I do so, I would like to comment briefly on the importance of the issue.

Living in poverty is a terrible experience for anybody, but for children its impact is especially damaging. The longer children spend in poverty, the worse their life chances become. We know that poverty has an intergenerational cycle that is very hard to break. I am sure that committee members will also agree that child poverty is deeply unjust, especially as children are being hit by a recession that is not of their making.

Page No. 3 of our publication provides the most recent figures, in 2009, from the CSO. One of every six children is at risk of poverty, using the income measure. One in 11 children is in consistent poverty, which is a measure that combines income poverty with material deprivation. That figure from 2009 was a marked increase from the year before and it means that 96,000 children are living in consistent poverty, which is a much higher proportion than the proportion of working age adults living in poverty. In total, 42% of all those in consistent poverty are children. These figures are all from 2009 and new figures will be published in the next few weeks. The recession has obviously deepened since then and the numbers in consistent poverty are almost certain to have risen, particularly those in consistent poverty.

These poverty rates are far higher than the targets set by the Government. In 2007, the Government set a target for consistent poverty of between 2% and 4% by 2012 and its elimination by 2016. The figures also show which types of family have been hardest hit, especially in the recession. Not surprisingly, there has been a big increase in the proportion of children in poverty because a parent has lost a job, but there are other types of Family who have long had high poverty rates and continue to do so, especially children in lone-parent families and Traveller children.

The figures are only part of the story. The impact of poverty is seen in children's daily lives in school, at home and with friends. Page Nos. 4 to 6 provide several examples of the impact of poverty on children's daily lives. The examples are drawn from the day-to-day work of member organisations of the End Child Poverty Coalition, which are working every day with the most vulnerable in society. We have only provided a handful of examples in this publication, but we could give many more.

A lack of disposable income is the most obvious feature of poverty. For children growing up in poverty, it means missing out on many of the things that other children take for granted. From the services being provided by our member organisations, we know that children living in poverty in Ireland are missing out on things such as birthday parties, school trips, swimming lessons, and things that almost seem to define normal childhood. The impact of the recession is seen not only in families' disposable income, but also in access to services. This access is critical in helping to off-set the effects of poverty and in helping to lift children out of poverty. An example of this is education. The recession has pushed some services out of the reach of families in poverty due to the high cost of accessing those services. In other cases, the impact of the recession has been cuts to services, with direct cuts to budgets and the non-replacement of staff both reducing access to services. They are examples of this in the publication that was circulated.

We now have the free preschool year, which was a great step forward and something we support, but it only helps children for one year, which is the immediate year before school at the age of three or four. The recession has meant that many families have been forced to withdraw their children from early care and education services, even though we know there are major benefits in participating in quality early care and education. The cost of early care and education remains among the highest in Europe. Community services can be more affordable, but many families have no access to them and there are still costs associated with attending them.

The recession means that more families are struggling with the costs of school, especially clothing and school books. We know from our member organisations that some children are going to school hungry. We know there are children who need additional supports or assessments and are going on waiting lists that are so long that by the time they get to the top of the list, the best opportunity for those children to receive support has gone.

There is a close link between poverty and poor health. It is compounded by cuts to health services. From our member organisations' services, we know that many children are experiencing delays in receiving developmental checks and in accessing mental health services. We know that parents are cutting back on medical costs for their own children in the recession.

In regard to housing, the recession means more children are growing up in homes in need of repair as a consequence of cuts to social housing budgets. Likewise, more children are also living in households in which heating is being rationed. In addition, one in seven of those using homeless services is a child.

Our recommendations which appear on page 7 of our document are at a strategic level. There is certainly a need to consider specific items and every member of the End Child Poverty Coalition has made a pre-budget submission. However, as a coalition, we chose in this document to make several broad, strategic recommendations. We did so for two reasons: first, child poverty is a multifaceted problem which requires joined-up solutions and our recommendations reflect this; and, second, the current economic and budgetary situation creates the need and opportunity for new approaches.

In this regard, our first recommendation is that prevention and early intervention be an overarching approach in Government policy. The Minister for Children and Youth Affairs has stated prevention and early intervention will be a core principle of her Department, which is good news. However, that commitment must be translated into practice. Research shows that supporting children early in their lives is far more effective, particularly cost-effective, than seeking to remedy problems at a later stage, whether those problems are educational, to do with health or behavioural difficulties. In the long run, a prevention and early intervention approach is good not only for children but can also save the State money.

Second, reducing child poverty requires a mixed strategy, with a balance of income supports and services. If we are to reduce child poverty, both aspects matter. Comparisons of Ireland with countries which have successfully achieved a low child poverty rate show we have a particularly low level of public expenditure on service provision for children. While there is little scope for expanding services in the short term, we must, at the very least, avoid cuts to services that matter to children living in poverty. In the medium term the Government must rethink its strategic priorities in order to ensure a greater focus on public service provision. Income supports are also critical in protecting children against child poverty. There is a great danger that any reduction in income supports at this time would push more children into poverty.

Third, we must have targets for the reduction of the level of child poverty and improving children's access to services. Above all, ending child poverty must be a priority for the Government. There are several aspects to this. First, any decisions made in the upcoming budget must be poverty proofed, particularly in respect of their impact on children. Second, the current review of the national poverty targets must set an ambitious target for the reduction of the level of child poverty. Third, the national children's strategy which is expected next year must include a focus on child poverty and explicitly aim to improve children's access to services. There are more examples and detail in the publication we circulated. My colleagues and I will be pleased to answer any questions members may have.

Chairman

I thank Mr. Wolfe for his presentation. I agree that there is a need for joined-up policy as opposed to piecemeal change. That is vital if we are to achieve our objectives in regard to child poverty.

Deputy Caoimhghín Ó Caoláin

I welcome the representatives of Social Justice Ireland and the End Child Poverty Coalition. We are conscious of the small number of members in attendance. It is not often that a visiting delegation would outnumber the members of a committee. We are a little disappointed with this, but, as the monitors show, there is other business taking place within the Oireachtas today.

In addition to the delegates' respective contributions, I also thank them for the submissions they have shared with us not only in preparation for this meeting but also going back over a long period. There was a time when we spoke realistically about targets to reduce and eliminate child poverty. There was a time, prior to the recession, when elimination was a realistic objective. Today, however, the big task lies in seeking to address the hope and aspiration of elimination. It may be beyond our reach in these recessionary times, but the responsibility is even greater now than it was in better-off days. There is no question that the recession has set back the project of seeking to eliminate poverty in society. Without getting any of my colleagues' hackles up, regrettably, the economic strategy being pursued by a succession of Governments is further depressing the economy and imposing even more hardship on those least able to contend with it. One of the consequence is increasing child poverty.

The figures bear out that reality. I have been a Deputy for 15 years and a councillor for as many years prior to that. In the 1980s and into the 1990s the profile of cases was generally of a particular type. However, the issues people would raise changed as we moved into the new millennium. As traction was created, one could see that the issues had altered. Unfortunately, the most unhappy of unhappy days are back with gusto. These days the profile of cases is not only reflective of my earlier years in elected life but also indicates that the people involved are new to that reality. I expect that Deputies and others who have been involved in elected life for some years would all concur with this. It is happening throughout the State, in all constituencies. People are hurting anew and others are hurting for the first time. In this context, the onus is on us, as never before, to seek to address the issue of child poverty.

I absolutely agree with Dr. Healy that we cannot address the issue of child poverty in isolation of the broader context of the households in which children reside. Children are at particular risk of poverty where their parents are contending with unemployment or, where parents are employed, they are struggling under the succession of new and additional demands which gives them an ever decreasing return for their labour. The universal social charge and rising fuel prices are causing particular hardship. It is incredible, for example, when one considers the price of a bag of coal. There was a time when the way to evaluate whether a Deputy's feet were firmly on the ground was to ask him or her the price of a loaf of bread, a bottle of milk or a bag of coal. I will not test my colleagues, but I can say the price of a bag of coal is absolutely shocking. In addition, people with medical cards are now subject to prescription charges and many families are contending with severe mortgage debt. This is leading to great hardship, with parents often having to make the choice between meeting the needs of their children or seeking to avoid the worst the mortgage lending bodies and financial institutions can visit upon them.

How do we go about addressing the issue of child poverty? Supporting working families must be absolutely central to our approach, and it must be a multifaceted approach. The failure to raise the threshold of qualification for a medical card has been a particular source of concern for many. The question of children's access to GP referral and other health-related services, never mind that of the adult members of the household, is confronting families on a weekly basis. This is an awful vista and a real situation. Many such cases have presented to me in this regard. It is outrageous and it must be addressed.

I wish to make a further point specifically about children and relevant to the remarks of our colleagues who joined us this morning. Mr. Wolfe spoke about children being denied access to normal activities. A terrible gulf is being created within the schoolroom and among peer groups and young people in the playgrounds of schools between those who have been able to maintain access to after-school activities, such as the local swimming pool, music lessons and other activities that cost money, and the young people no longer able to access these activities. We must try to address children on an equal basis in some way.

I propose a couple of ideas to which I am keen to hear the delegation's reaction. The cost of providing for children at school is considerable and it is a major demand on families. The funding of a central school book provision scheme is an obvious area for consideration. The school book needs of children through primary and second level education should be taken on by Government. The estimated cost is of the order of €60 million. This is not an inordinate sum of money but it would make a great difference to struggling families for whom school book access is a problem. Perhaps if there were a centralised Government provision scheme there might be a more realistic assessment of the changes in text books and the requirement of same as time goes on.

Another issue related to child poverty is hunger and Mr. Wolfe made the point about children going hungry. This is absolutely true. Where does one address this? It should be within the primary school system. It is arguable and deliverable to have free hot lunch meal provision for every child attending primary school. The lack of nourishment and the hunger and all that this entails for young people is a great problem. The estimated costs would be of the order of €250 million but we would be doing a great service to young people across the board in helping to eliminate real problems presenting in households throughout the country were we to undertake to do some of these things.

The return of 100 special needs assistants is vital. Only €6 million has been allegedly saved with their removal. While it is not always the case that those who benefit come from poorer families, in my observation there is a tendency that this is and can be the case.

In its July 2010 study, Social Justice Ireland made a recommendation that tax credits should be refundable. The Social Justice Ireland figures estimate that there would be something of the order of 248,000 beneficiaries at a cost of €140 million. Let us imagine the difference this would make to struggling families today. These are some of the reasonable measures which, I believe, would impact on the cohort of families that I know personally who fit the descriptions the delegation have shared with us this morning. These are real people and I could fill the room with them from within a short distance of my home. This is the truth this morning.

The elephant in the room is how we deal with the bigger picture and how we separate the sovereign debt from the now adopted non-sovereign debt of the major financial institutions and we must deal with it. The IMF-EU-ECB deal is no way forward in terms of the issues we are trying to address today. This is the elephant in the room. The other measures are within the gift of Government. I hope and pray that our exercise this morning and whatever we can do in the interim might lead to some of these measures presenting on 6 December.

Senator Jillian van Turnhout

My thanks to Social Justice Ireland and the End Child Poverty Coalition. I found the discussion interesting. I wish to make one or two brief comments and then I will put some specific and general questions. Our visitors may wish to note that the session will go out on the UPC channel and during the weekend someone may see this session. First, the Dáil goes out live and then at the end of the Dáil sitting today the Seanad sittings will go out and then all the committee sittings will be broadcast. Perhaps we may enlighten some people in the early hours of some morning during the weekend.

The issue of child poverty is relevant. The committee has a wide brief covering health and children but the fact that we have dedicated time to child poverty demonstrates the importance placed on the issue. When one examines the poverty figures, whatever way one parses or slices it, children are disproportionately affected. We are all convinced that more needs to be done and that child benefit is a significant issue. I am convinced that the universality of child benefit should be maintained on many levels while having targeted supports where appropriate. I could talk at length about this but when one drills down into the argument and when one is trying to get at why people wish to cut child benefit, the reason is that the rich people are getting it. However, for me the issue is to examine the income tax system. Child benefit is a horizontal payment and it is about those without children supporting those with children because later in life those of us without children will be looking for pensions and the children in question will be paying contributions towards our pension. This emerges when one boils down the issue but I will not go on too much.

I was surprised by one point in the Social Justice Ireland presentation. It is not linked to the child poverty issue so much but to the proposal to cut tax incentives for pensions in the private sector. As a former employer, I had many middle and low income workers. In trying to encourage them to take out a pension one of the issues was the tax incentive. We see those in the public sector having a defined pension at the end of the day. I am uneasy with this proposal which I believe is short term. Later in life people will need pensions and we should try to encourage people, where possible, to have pensions. This is simply a personal experience of mine.

My questions relate directly to the upcoming budget. We held a good debate yesterday in the Seanad with the Minister for Social Protection. She specifically mentioned the back-to-school clothing and footwear allowance and whether there might be a way of moving this payment towards schools or parents' groups who could administer it at a local level and perhaps increase purchasing power for buying uniforms. What is the view of the delegation? The Society of St. Vincent de Paul and Barnardos have spearheaded the campaign on the school book scheme. I am keen to hear more about how this would operate. Should it be universal or targeted? The habitual residence condition has not been mentioned. Something should be said on this and I hold certain views on the matter. The proposal by IBEC in respect of vouchers appears to be getting more air time than it should get. According to a recent document provided by the Money Advice and Budgeting Service, saving should not be considered negative. We should encourage families, even those in poverty, to save for unanticipated events. I am not aware of any research which shows that people who are well off would feel stigmatised by using vouchers. I am not convinced by that argument although I am convinced a voucher system would create a new layer of administration. I am interested in the views of the delegation on this matter.

On the mid to long-term outlook, what combination of policy measures is required to make inroads into addressing child poverty levels in a manner that will have a long-term sustainable impact? What steps need to be taken? Mr. Wolfe referred to the need to set targets. While we all agree that targets are necessary, which Departments need to be focused on child poverty as an action issue if it is to be genuinely addressed? Assuming the answer is that more than one Department must be involved, which Department should take the lead and drive action? How do we ensure action is taken?

What investment in services is required to address child poverty? How can one show a link between the impact of such investment and any reduction in child poverty given that such investment will not directly affect income? I refer, for example, to early intervention and prevention measures.

Deputy Peter Fitzpatrick

I thank the delegation for coming before the joint committee. As a newly elected Deputy for the Louth constituency, these types of meetings are new to me. I remember visiting housing estates while canvassing during the general election campaign in February. At the time, I did not realise how much poverty existed in my locality. One does not appreciate what one has until one sees the problems of others. My wife and children gave a hand canvassing and, believe it or not, my family has since become much closer because we now appreciate what we have. I saw many parents sacrificing their lives for their children by putting their lives on hold to ensure their kids are looked after. It brings tears to one's eyes to see this.

I will not pretend I fully understand the issues. I became a candidate in the general election to learn from organisations such as those before us and to try to help them in any way I could. Everyone is entitled to human rights and dignity. It was an awful shock to realise that 218,000 children are living in poverty. I cannot understand this and I am particularly concerned about the increase of 35,000 in the number of children in poverty in the past two years. This annual increase of more than 17,000 must stop. As public servants, we must help.

Dr. Healy left me slightly confused about one issue on which I ask him to elaborate. He stated a household of two adults and two children which is in receipt of State benefits, including child benefit, is €80 per week below the poverty line. I cannot understand this. He also stated one in every seven people is at risk of poverty. I come from a relatively normal background. My mother used to be among the first in the queue outside the post office every Tuesday to get her children's allowance, which she used to pay for children's clothes and so forth. It would be an awful shame if child benefit were touched.

People talk about means testing and taxing child benefit. While canvassing I called to many homes where I thought the householders had plenty of money only to find that many people were putting up a big show. The recession has caused poverty, negative equity and other problems. People should not be embarrassed. We are all human beings. They should not be afraid to say they need a little help.

Dr. Healy referred to an income mechanism which could solve poverty. Will he elaborate on the system? The three Members who made an effort to come to the meeting are willing to give the delegation more time to discuss these issues.

It is fantastic that eight organisations have come together in the Child Poverty Coalition. Eight heads are better than one head. Mr. Wolfe referred to development solutions. Will he outline the top three priorities of the coalition? We heard that 93,000 children are in persistent poverty? Will he define persistent poverty? The reason I ask these questions is that this issue is new to me. I want to work with my constituency people to try to help in this matter.

Supporting children in their early lives is very important. I maintain that everyone is entitled to an education and those who are sick are entitled to see a doctor. Will the delegation elaborate on the need to provide support at an early age? There is a strong emphasis on social housing.

The Government is trying its best and the more information we receive from the delegation, the easier it will be for us to raise issues at parliamentary party meetings and in our constituencies. We need to work together.

I put my hands up. The voluntary organisations are doing a fantastic job. Our role as public representatives is to help them. Our guests should not be afraid to ask if they believe there is anything we can do.

Dr. Seán Healy

Members have posed some serious questions and challenges, which is terrific because we relish the opportunity to respond. I will first address Deputy Ó Caoláin's contribution. It is critical that the policy process sets itself a target to eliminate poverty - full stop. This should be one of public policy's primary targets. We have had an opportunity to do this for some time but, as a country, we have blown it. Is it possible in these recessionary times to reduce poverty? The answer is unquestionably "Yes" but it depends on the choices one makes. I place on record for the umpteenth time our view that the strategy being adopted to address the recession will not succeed and will damage many people in the process unnecessarily. People who are poor are bearing a disproportionate share of the burden.

I will provide a micro analysis followed by a macro analysis. On budget 2011, let us take a household of two adults and two children who are not in receipt of social welfare but are members of the working poor. In other words, the household is headed by a person with a job but its income is below the poverty line. A substantial proportion of households are in that space. About four in every ten households at risk of poverty are headed by a person with a job. What happened to the family to which I refer in budget 2011? Their income was hit in six different ways, although one of them has been withdrawn by the current Government. Nevertheless, the other five hits remain in place. First, the working poor were put into the tax net. Second, the imposition of the universal social charge cost them money. Third, charges that they pay for services were increased which also cost them money. Fourth, services for which they did not pay charges had charges imposed on them, for example, rural transport for primary school children. Fifth, child benefit was reduced. These five changes remain in place, while a sixth, the reduction in the minimum wage, has been reversed.

These measures amount to a classic example of lack of integration in policy. Various things are done in the belief that they stand alone. In this case, we have the income of the working poor household being hit from five different directions. This group is already in poverty, yet the budget introduced five ways to take money from those within it. The purpose of the measures is to pay back financial institutions in Germany and France and elsewhere which gambled their money recklessly, lost their gamble and have been given a guarantee that Irish taxpayers, including the poor, will wind up repaying the debt. We need to separate sovereign debt from the debts of financial institutions.All Deputies and Senators should insist that the Government separate the two components in its presentation of budget numbers on 6 December and beyond and on stability and growth updates and so on.

We are rapidly moving towards a situation where we will be able to pay our way on the budget side for ordinary day-to-day spending but have a huge overhang of debt. We are also paying interest on that debt and are paying everything from unsecured bondholders to a variety of other things. We need to have clarity. Social Justice Ireland has sought that from the Department of Finance and has failed to get any real breakdown. It told us it does not compile those numbers. The National Treasury Management Agency is responsible for managing the debt. We have tried to establish a connection with it but have not gotten very far.

Chairman

Has the delegation met it?

Dr. Seán Healy

No, it has not responded at all. We went through the Department of Finance and requested a meeting but it has not come back to us. We raise the issue once a week.

Chairman

Has it met other groups?

Dr. Seán Healy

Not that I am aware of. I have a concern that it not doing those calculations at all. It is putting all the debt together. Debt was accumulated by the State which it has to pay off. We accumulated debt because we suddenly found ourselves borrowing money to pay for day-to-day expenses. We are also paying off interest on the debt that has been accumulated as a result of the sovereign debt being mixed up with our financial institutions. The catch in all of that is it is very difficult for an outsider to work out how much of the debt repayment was incurred by the banks and financial institutions and how much was run up by the State over a few years. When the crisis started Ireland's debt to GDP ratio was very low, at approximately 25%.

Sr. Brigid Reynolds

We were in surplus in 2007

Dr. Seán Healy

The whole budget was in surplus-----

Chairman

It was false money.

Dr. Seán Healy

That is true, but we had the money. The problem is there was gambling behind it.

The bottom line is that we need a different approach on both fronts. We need a different macroeconomic approach which recognises that we need another approach to economic development to deal with the recession. The approach currently being used will not get us out at the trough we are in. We are facing declining domestic demand. We are totally dependent on exports to generate growth next year. The Government forecast is that domestic demand will fall again next year. It will fall further if VAT is increased and other changes are made, which the German Parliament but not Ireland is being told about. If we are going to get out of the situation a different approach is urgently required.

The elimination of poverty should be the primary concern of all policy-making. Ending poverty and child poverty should be an issue which is progressed budget by budget. We can do this in budget 2012, depending on the choices we make. The decision of the Government to have €2 in cuts for every €1 increase in taxation seems to fly in the face of common sense. Ireland's total tax take, including social insurance payments and local charges, is one of the lowest in the western world and there is plenty of scope for growth in that area which could be used to tackle poverty and so on.

Cutting the incentives for pensions is only part of our proposals. I will deal with the issue in some detail. We have a study on this that is almost ready to go. We have done the costings for the next 50 years. It will show the country would benefit enormously from the total scrapping of tax incentives for pensions. The money could then be used to create a basic income for all people over 65 years of age. It would mean everybody would receive a payment quite a bit higher than the current pension payment.

There would no longer be 46,000 missing women who are not eligible for a pension, a figure that has been consistently ignored in pension strategy documents and so on, which the Senator is well aware of and has campaigned on. It could be done without any additional cost to the Exchequer. It would put a fairly decent floor underneath people who are older without necessarily going down the pensions route. If people want to invest in their future, of course they can do so.

We propose the programme should be run by an agency like the NTMA and not the pensions industry which I consider to be nothing more than a rip-off on ordinary people who put their money into pension funds, the main beneficiaries of which are the funds themselves.

Sr. Brigid Reynolds

As well as the people who run the pension funds.

Dr. Seán Healy

The people who run the pension funds are the main beneficiaries. There is extraordinary scope for eliminating or reducing substantially an industry we would be better off without, while at the same time securing a decent pension for every adult in the country aged over 65.

Deputy Fitzpatrick asked about basic income. A basic income system has been discussed in Ireland on a stop-start basis from the 1970s. There have been studies of various types. There are two different approaches. One would give a basic income on top of everything else that is in place. There is general agreement that very high tax rates are needed to pay for that and we do not think it is a sensible approach.

Another approach, which we have supported for nearly two decades, would see the current welfare system and income tax credit system eliminated completely. A basic income system would be introduced in their place. There would be a payment for every adult which would be gender neutral. Children up to the age of 18 or 21 years would receive a lower payment and people aged over 65 would receive a higher payment. The payment would be permanent and paid automatically. It would not be lost if a person took up a job or became a millionaire because people would pay tax on every penny they earn. There would be no tax breaks or incentives to have a pension in such a system.

It is clear this could be funded within current Government expenditure without any additional cost. A study we have almost completed examined the implications of putting a system of that nature into place for pensions. We have compiled regulations for the next 50 years based on Government numbers and have shown what will happen.

In 2002 the Government published a Green Paper on basic income. It is one of those Green Papers that was published before people in the Dáil decided to have silly rows about it, rather than discuss it. I do not want to be misunderstood on this. Rather than having a discussion about it, Members began slagging each other, whether they were serious or not about the idea. If anybody paid any attention to the Green Paper, the interesting thing about it was that it showed that a basic income could have been introduced in Ireland in 2002 at no additional cost. This would have taken the route we are talking about and would have had quite a substantial impact on poverty, including child poverty. We are here nearly ten years later and the idea is still a good one.

Chairman

In your opinion, is it workable?

Dr. Seán Healy

Absolutely. We constantly produce updates on costings for this, as do others. At a recent conference in Cork, a member of the Government's taxation commission, Dr. Micheál Collins, produced such a study showing the costings for a basic income. It is quite clear from the costings he produced at the conference that basic income is fundable in Ireland in 2012. There are pathways to doing this. Sr. Reynolds and I have written two chapters for two different books in the last few months that are coming out in the US. One chapter tells the story of basic income in Ireland, while the other outlines alternative pathways to the introduction of a basic income system in Ireland. Studies were also carried out by Professor Charles Clarke from St. John's University in New York, who is a world authority on basic income, and he has produced a book on how we can introduce a basic income system in Ireland.

Chairman

How many countries around the world have a basic income policy?

Dr. Seán Healy

There is no country with a full basic income policy. Brazil has a law moving towards basic income, and Brazil now has 18 million households with a basic income and only one condition is attached. They started with the poorest. It was introduced by President Lula da Silva in his first term of office, and now 18 million households have it. The only condition attached to the receipt of the basic income in the household is that the children in the household must go to school. It works exactly as a basic income.

There is a basic income system in the state of Alaska, which is very interesting. In the late 1960s and 1970s when Alaska was being opened up to oil exploration, the state put down a condition that it would take a portion of the revenue earned from all oil discovered there. The state has built up a huge fund, known as the Alaska Fund, and every year the state pays a dividend - a basic income - to every man, woman and child in Alaska. It is calculated on the basis of whatever it is worth in that particular year and it comes to several thousand dollars. Citizens get the full value of the basic income if they are 25 years in Alaska. If a citizen is one year in Alaska, he or she gets one 25th, if he or she is two years in Alaska, he or she gets two 25ths and so on. Therefore, it builds up over time for children.

The IMF and the World Bank have recommended in some countries that a basic income be introduced. For example, they have proposed this in Iraq and Nigeria, two countries whose people have not benefited from oil revenues. There is a world organisation called Basic Income Earth Network, or BIEN, and about 20 countries have affiliates, including Ireland. BIEN Ireland meets regularly and often runs public events, briefing people about these issues. If the committee is interested in taking it further, we can write up a briefing.

Making tax credits refundable could be done in the forthcoming budget. The value of this would be that the working poor would benefit dramatically. Some 113,000 households and 240,000 individuals would benefit from a very small investment by the Government. It would also lead to a much fairer system because at the moment, the working poor are losing out from budget changes.

Senator van Turnhout asked about the targets required to eliminate child poverty. An interesting starting point would be targets currently being set by the Government for the Europe 2020 strategy. The Government has already sent in its first year's targets. The European Union has set targets on the reduction of poverty by 2020. Ireland should set an overall target to reduce poverty by half - from 14% to 7% - over ten years. The Government should also set sub-targets, one of which should be on child poverty. It should be about more than halving child poverty within ten years. The other areas in which it would need targets include people in social housing, people who are unemployed and one or two other high-risk categories. The Government needs to take those targets seriously. I have to say to the committee that so far, I do not find Government taking these Europe 2020 strategy targets seriously. The Government would have to submit a new national reform programme report in April, and this should outline what it proposes to do on poverty. A good suggestion from this committee might be that the Government should have a specific child poverty target within the overall target, and that it should be ambitious. The actual target set by the Government is pathetic. That is a charitable way of putting it.

Sr. Brigid Reynolds

I would like to take up the point on vouchers. I am horrified that anybody would make such a suggestion. To think that rich people will not cash vouchers is stupid. People are rich because they are very good at maximising their income and they will certainly cash them. It is also a way of increasing the marginalisation of poor people and is very inequitable. I hope that this committee does not support that strategy at all.

Ms Michelle Murphy

I want to take up the point made by Deputy Ó Caoláin about the gulf between children in classrooms now. This is being exacerbated by the cuts to community and voluntary groups, which previously provided after-school clubs, breakfast or lunch clubs, and took children swimming or on group trips. The money to these groups has been cut consistently over the past few years and this is eroding our basic social infrastructure and is resulting in a huge gulf between the quality of life of different children in Ireland.

Mr. Wolfe made a point that the earlier the intervention in a child's life, the better the outcomes and the lower the cost to the Exchequer. In our budget proposal, we have proposed an income contingent loan system for third level. I am making this point here because a report went to the Minister for Education and Skills in 2009 about this. The report states that the main barrier to entry for higher education to students from lower socio-economic groups is their lower levels of school completion and attainment in the leaving certificate. Those who have completed third level education have earnings that are 84% higher on average than those who have just completed upper secondary education. Most income contingent loan systems contain a built-in mechanism to support those from lower socio-economic backgrounds. It is key that this money we are proposing should be invested in children in the 0-3 age bracket, before they even begin the primary school system. That would be a long-term policy gain for Ireland, because we could measure our targets and the growth of these children.

Dr. Seán Healy

Deputy Fitzpatrick asked how we had calculated the figure of €80 per week below the poverty line. Two adults receive €11,265.60 in social welfare payments annually. Child benefit payments for two children work out at €3,360 annually. If a family is receiving social welfare payments, the child dependant additions come to €3,099.20. If we add these figures together, for a household of four we get a total income of €22,724.80. The poverty line is at €26,877 per annum, as calculated by the CSO. When we subtract from this the total income, the difference is €4,152.20 which, when divided by the number of weeks in a year, 52, work out at €79.80 per week. The figures have been carefully worked out and the members will find, when we put numbers on the table, they do stand up.

Mr. Toby Wolfe

I welcome the Chairman's view that the system is in need of reform. Each of my colleagues might answer some of the specific questions put in turn and I will make some general comments on overall approaches and priorities. Before I ask my colleague to contribute, I will comment on the question of having targets, which is very important. I agree that we need ambitious child poverty reduction targets. Members referred to the difficulty in reaching targets, with child poverty figures rising, but the fact that it is getting harder to reach targets does not make them less important. If anything, there is even greater urgency attached to prioritising a reduction of child poverty.

Ms Tinsley from Barnardos will comment on the back-to-school clothing and footwear allowance and the level of consistent poverty.

Ms June Tinsley

I thank Deputies and Senators for their comments. School book rental schemes and the back-to-school clothing and footwear allowance were mentioned. Barnardos carries out an annual back-to-school cost survey which time and again has highlighted the pressure parents are under. This year it was found that the cost of preparing a four year old child for junior infants - that is, by providing school books, uniforms, footwear, the voluntary contribution, extra photocopying costs and so on - was about €350, while for a child going into first year in secondary school the cost was €805. Parents must incur these costs if they do not qualify for the back-to-school clothing and footwear allowance. From the parents who completed the survey, the most frequent comments were about the exorbitant cost of school books and the frustration felt that school books could not be reused by siblings because of the frequent publication of new editions, even when the curriculum remained unchanged. The Society of St. Vincent de Paul conducted a campaign earlier this year on the need for a school book rental scheme.

There have been some positive developments in this regard, which we welcome. For example, there is now a publishers' code, with a commitment that they will not publish new editions more frequently than once every four years, which is good as it means books can be reused by siblings. However, the most cost-effective way to deal with this issue is to have a universal national school book rental scheme. Ireland is almost unique in not having such a scheme. Currently, all principals receive a pot of money towards the cost of school books which they may distribute at their discretion, although they are encouraged to set up school book rental schemes. It should be mandatory for such a scheme to be operational in all schools, which would mean a level playing field for all children. No child would feel different and no parent would be put under extreme financial pressure in getting his or her child ready for school.

With regard to switching the back-to-school clothing and footwear allowance to the Department of Education and Skills, this is an area in which there is the possibility of reform. It could increase the feasibility of setting up a national school book rental scheme. Our concern is with regard to uniforms. Again, parents expressed exasperation at the fact that a school jumper cost €45 because it had a crest on it, while a similar V-neck navy jumper in Dunnes Stores cost €12. A practical solution would be for the board of management of each school to choose a colour for clothes that parents could buy in generic Dunnes Stores or Tesco-type stores and then have a crest sewn or ironed on. That would be a cost-effective solution.

Chairman

Would Ms Tinsley advocate having no school uniform?

Ms June Tinsley

It is up to each school to decide that matter. The benefit in having school uniforms is that there is less pressure on parents because of brand issues and so on.

Chairman

American schools have no uniform.

Ms June Tinsley

That is true, but what we are hearing from parents is that having a school uniform is helpful because it removes the pressure of children needing to wear a Benetton jumper. "Every little helps", to quote Tesco. If the back-to-school clothing and footwear allowance were to transfer to the Department of Education and Skills, with the possibility of introducing a national school book rental scheme, it would need to have a caveat that schools would have to choose a generic uniform colour, and there would even have to be the possibility of having a top-up payment for low-income families or recipients of qualified child allowance in August to give parents some relief in enduring costs at back-to-school time which is a very expensive time of year.

One of the Deputies mentioned experiencing while canvassing householders' fear and apprehension about what was coming down the tracks. We are seeing this on a daily basis. People are afraid, as has been highlighted in the media. Even today, we heard that more than 100,000 households were in mortgage arrears. Families are already living, as Dr. Healy said, below the poverty line, and we know that some things will probably happen in the budget such as the introduction of a property tax which will cripple families. What we are seeing on a daily basis is that parents are struggling with everyday costs and unexpected bills, for example, where a dishwasher breaks down or the electricity supply is cut off. These are practical items that need to be sorted out, but parents do not have the money even to do this. They must make choices such as bringing their child to the pharmacist because they cannot incur doctor's fees, which obviously has the consequence of affecting the child's health.

Barnardos has run breakfast clubs for a number of years, but in the recent past we have had to increase their number owing to the number of children arriving hungry and asking whether they can take some toast to school with them because they do not have a school lunch. The after-school projects we run are having to offer more and more food, as children want to take food home with them because there is not enough to eat on the table at dinner time. That is the reality for the many children living in consistent poverty.

In terms of how consistent poverty is measured, the calculation is made by the CSO. Consistent poverty means that a household has an income below 60% of median income, plus the household must be deprived based on two or more of the indicators the CSO has devised, which include the ability to afford food, appropriate clothing for the season, furniture in the house and social activities. It captures these dimensions of the household. One of the studies Barnardos made recently with the Society of St. Vincent de Paul cncerned the possibility of making these indicators more child-centred. Currently, the information captured is on household poverty and we were examining the feasibility of capturing information purely through the lens of a child. What came from that study was the possibility of determining whether a child was unable to participate in life by doing things such as going on school trips, inviting his or her friends over for play dates or other child-like activities, as well as having a bed of his or her own or books to read for fun. These are child-centred indicators which would capture the level of child poverty more starkly. Currently, however, consistent poverty is measured through the CSO criteria of an income below 60% of median income, plus at least two deprivation indicators on the index.

Ms Frances Byrne

It is good to be here and I welcome the debate taking place. I want to address the habitual residency condition, which is an interesting one. A few years ago OPEN was inundated because we had we done a particular piece of work in a direct provision centre and some of the families were given the right to remain, while others were not. We were at the coalface and ended up having to develop a system of referral to the Free Legal Advice Centres. As a result, we have kept an eye on this issue ever since and even though FLAC does not divulge names when talking about cases, we often wonder whether they refer to any of the families with whom we dealt. There are several issues to do with the implementation of the condition and, anecdotally, people will tell different stories about their experiences. One thing is clear: there is a significant waiting list for appeals and appeals are taking a long time not only in this area, but in respect of social welfare as well. The larger issue for those of us examining poverty at a strategic level, and this is especially relevant in the context of targets, is that these are the very families, along with children in homeless services and Traveller children, who are not counted. It is very difficult to get at these figures. The way we have handled the immigration issue in Ireland has left children behind. However, it is a complex area and it goes beyond the remit of this committee.

As the Senator is aware, many children come to Ireland unaccompanied and a significant portion go missing, even though they are technically in the care of the State. The rule represents a very difficult issue but one that the End Child Poverty Coalition has highlighted as one in need of examination. Sometimes it may appear to be a transparent habitual residency condition rule but the Department of Social Protection may sometimes interpret it as a centre of interest issue, which is the way we believe it should be interpreted. If a child is living here then regardless of their circumstances, whether the child of an asylum seeker etc., they are living here and, therefore, as long as they are living here, they should receive the services and support of the State. That is our view.

Deputy Ó Caoláin made a point about the gulf between children and this applies to the point made by Deputy Fitzpatrick as well. Even during the boom we heard from lone parents who spoke of how they dreaded a party invitation in the school bag and the way it made them feel. While they were delighted that their child had been included, and there is nothing worse than knowing that a party is going on and one's child is not included, a horrible feeling which has caused some schools to have banned such invitations because of the way they make children feel, that feeling of initial elation was followed by the realisation that the party might be on a Wednesday and the one-parent family payment would not be made until Thursday.

Earlier, I was discussing with my colleagues a sad situation involving a person who expressed relief that her father's funeral was on a Thursday because it meant that she could go to the post office early and get down from Dublin to Ennis to attend the funeral. Can the committee imagine this being a factor?

I highly recommend to the committee the Vincentian Partnership for Social Justice, which has links to the Society of St. Vincent de Paul, especially to Deputy Fitzpatrick, who expressed a most welcome interest in this area and who referred to coming across the issue on the doorsteps. On that, I know of friends and colleagues who canvassed for all parties and none during the general election and all of them have spoken exactly as Deputy Fitzpatrick did about walking into a so-called middle class area and being hit with the poverty once the door is opened. I commend to Deputy Fitzpatrick the organisation's excellent studies about various household types and the actual cost of having a decent, basic low-income life. I have never heard of anyone in the Department of Social Protection or the Department of Finance challenge their figures. For a lone parent with two children there is a cost of €53.39 for social inclusion and participation. In other words, this is the cost for trips out and to facilitate one's children going to parties and swimming, etc. When one examines this in cold, stark terms it seems to be a high figure for two children but the breakdown is on the website. Clearly, this is beyond the scope of the families that OPEN and our colleagues in the End Child Poverty Coalition deal with each day of the week. The gulf to which Deputy Ó Caoláin referred and which Deputy Fitzpatrick witnessed when he was canvassing is real. It is bad for Irish society that children are in schools now where such divisions are visible in the classroom. As my colleague from Barnardos stated, more of these families will emerge as a result of the housing crisis, etc. I will leave it at that.

Ms Caroline Fahey

I thank the committee for the opportunity to speak here today. I wish to address two issues. I wish to discuss the proposals relating to child benefit being paid as a voucher and I wish to discuss the targets. Let us consider what child benefit is spent on by the families we are helping. By the way, it is all spent and none of it is saved. How would one use a voucher or smart card to pay for the voluntary contribution that schools demand at the start of the year? How would one use them to pay for the art classes or swimming lessons which are part of the activities of which children should be a part and which some, unfortunately, are going without? There is a case study in our presentation detailing school mock examination fees of €120 to have the papers marked. How would a smart card be used for this? In addition, one must pay for the doctor or a visit to an accident and emergency unit. These are the areas where child benefit is spent. Unless we equip schools with the appropriate machinery to use such cards, it simply will not work. We know from the work of the Vincentian Partnership for Social Justice that households in rural areas have fewer options as it stands when it comes to where to do the shopping without further restricting this by deciding on where child benefit should be spent and to which outlets it should go.

The money advice and budgeting service, MABS, recommends putting aside some of the child benefit money, for example, €5 or €10 per month, because Christmas is coming or the washing machine might break down or to pay for the first communion because no one wants to go to moneylenders. This is what child benefit is about and it makes no sense to try to suggest that it should be paid by voucher or restricted so that it cannot be spend on these things.

The question was raised of how we capture the impact of this on poverty levels given that there is such a focus on measuring income poverty. We will be able to capture it eventually but in the meantime we will see fewer children not making the move between primary and secondary school, we will see more of them completing their leaving certificate examination and managing to stay in school until then and we will see better literacy and numeracy rates. This will happen because we will have invested in the early years and this is where the difference will be seen. We can measure these numbers and set policy targets in these areas as well as setting a number for the poverty targets.

The Society of St. Vincent de Paul is keen to see the inter-generational cycle broken. Families come to our members whose parents and grandparents would have been helped by the same people. The same families come to us repeatedly and only when this changes will we know that the right investment has been made in services. In addition there are health inequality issues. It is possible to link poverty and health inequalities and improving access to health services will tackle this.

Mr. Toby Wolfe

I will be brief and make some broader comments on overall approaches. One Senator asked which Department was responsible. As the Senator stated, this is a multifaceted problem and there is responsibility for all Departments. Were I to choose one with special responsibility, I would single out the Department of Children and Youth Affairs because it has an explicit cross-cutting brief, and drawing together policy from other Departments is part of what it was set up to do. It has a particular opportunity next year with the development of the national children's strategy, which will be cross-departmental, to develop policies that affect other Departments and which will bring in other Departments.

There was a question on prevention and early intervention and what sort of investment we have in mind. There are various things we could discuss but I am keen to highlight early childhood care in education. There is a good deal of research which demonstrates that high quality early childhood care in education brings great benefits to children by improving educational outcomes later in school life, improving earning capacity and reducing crime, anti-social behaviour and such issues. There are vast longer-term benefits of early care in education. I agree with the remarks from Social Justice Ireland that the age group of between birth and three years is vital and that it is not simply a matter of the free preschool year. Children develop even faster before three years of age than between three and four years of age. Quality early services and parenting supports are critical to give children a good start.

Deputy Fitzpatrick asked about the top three priorities. I could give more than three but I will limit my response to three points in respect of the current budget because, unfortunately, we are in a situation where we cannot call for the longer-term changes that we would dearly wish to see made. First, in the current climate maintaining child benefit is an absolute priority. Cuts have already been made and there is no call for further cuts. Second, it is critical to safeguard budgets for services for children in poverty. I will highlight some issues in this regard. The free preschool year was a vital step forward and we must maintain it. There must be no inroads made into that. Linked to that are early intervention services which help children who experience difficulties, whether through special needs assistants, psychological services or developmental health checks. They are critical and must be safeguarded.

There is a commitment in the programme for Government to develop area-based solutions to child poverty. We have not heard much about that. It will not solve the problem of child poverty but there is an opportunity to explore joined-up solutions if the Government were to act on the specific commitment. Those are short-term priorities for the upcoming budget but we must address the more strategic questions at some point.

The longer-term priority is improving access to services for children in poverty. The National Economic and Social Council said a couple of years ago that the radical development of services is the single most important route to improving social protection in Ireland. In the longer term that is what we have to do.

Chairman

On pensions, could it be argued if the model in the presentation was followed it would drive more people into poverty?

Dr. Seán Healy

No, absolutely not.

Chairman

I agree with Dr. Healy regarding the pension industry.

Dr. Seán Healy

The reason is quite simple. If one sets the target for a basic income at the poverty line for each of the groups, by definition every man, woman and child in Ireland would have an income that keeps them out of poverty. Therefore, the poverty rate is zero, by definition.

Chairman

Who pays for that?

Dr. Seán Healy

We have done the figures. It would be quite useful to have a discussion, but I do not want to take up the time of the committee at this stage. A series of things would change. For example, 75% of the welfare system would be closed. The only elements that would remain would be special payments for disability, illness and special cases. A huge saving would go with that. One would not have to do a lot of work on integrating systems. Supposedly work has been going on in the background for more than 20 years to integrate the tax and welfare systems in Ireland. Despite all the work that is supposed to have been done, it has not happened.

If one puts in place a basic income system of this nature, one would guarantee income in terms of funding for groups. Some groups in Ireland are already getting some of this money. An example is farmers who benefit from the Common Agricultural Policy and receive a payment every year. It is a basic income for them but the only catch is it is not secured because it changes every few years.

Supports are in place in a variety of different ways where income is given to people to support them at various points or to do various things. Those numbers come into play in this context. One would not give people the same payment twice. We have done the numbers and can do them again. We can present them to the committee any time it is interested in hearing them, and we would be delighted to do so.

We are convinced the welfare system is not fit for purpose for the 21st century. It was built in a world which was totally different. In the 30 years after the Second World War there was full employment and the world worked on the basis that a family wage was paid to one person who was in a secure job for life. All of that has gone. We are in a totally different world and we have been messing around with the welfare system ever since trying to catch up.

The current welfare system is totally inappropriate for the world of work, for example. It has failed dramatically to eliminate poverty. From 1994 to 2011 we succeeded in reducing poverty in Ireland by 1.3%, from 15.4% to 14.1%. There must be something wrong with that and we should ask if we can do something differently. There is a different way which would eliminate huge amounts of bureaucracy, recognise issues like the equality of men and women and eliminate all poverty and unemployment traps. It would ensure that poverty in practice could be eliminated if it became a policy priority.

It would recognise work that is not paid employment. The current welfare system does not. One is required to be actively seeking a job, which seems questionable as a methodology when jobs do not exist in the first place. People are being forced to look for non-existent jobs and others are paid to check they are looking for jobs that do not exist. We call it an intelligent system. That is cracked and we need a different approach. An enormous amount of work can be done but people cannot do it because it is not recognised. Therefore they have to look for jobs which do not exist. There is no recognition of all the unpaid work, an enormous amount of which is done by women in society. People are caring for older people, children and those with disabilities, but there is no recognition of any substance. A massive amounts of work is done in the areas of sport and local and personal development, but there is no recognition of it because it does not involve paid jobs. However, without unpaid work being done, society would not survive.

We need a tax and welfare system which recognises that reality in the new world that is emerging. Government members keep saying very simple things but I am not sure they recognise the truth of what they are saying. They said we are not going and cannot expect to go back to the past. I agree with that, but there is no idea of what the future is going to look like.The approaches we used in the past are not viable in the 21st century. We need an alternative and appropriate approach. We have promoted the idea of basic income for quite a long time as an approach that is appropriate to the 21st century. Other issues besides income have to be dealt with. There are issues around participation, work and access to work with which a re-envisioned society needs to engage. It should be on the agenda.

Chairman

I thank Dr. Healy.

Deputy Caoimhghín Ó Caoláin

I have to excuse myself at this point. My grandmother used to say there are good goods in small parcels. I include the Chair in that. The engagement has been very useful and I thank the delegates for their contributions. I hope some day there will be a wider and attentive audience for what they have to say.

Chairman

On behalf of the committee members here, I thank the delegates for their challenging, sobering and thought-provoking definition of poverty and, more importantly, their presentation on a human level. The humorist and cynic in me would wish Dr. Healy had been listened to in Inchydoney.

Dr. Seán Healy

I will listen to this meeting.

Chairman

I agree that we must examine how we can reform the system in order to provide for greater equality and efficacy. As somebody who is not only a politician but also a teacher and a worker in the community, I recognise the difficulties and inequalities people face. There are young people going to school hungry, whose parents are making a determined effort to secure their education but who are struggling to make ends meet. One of the catastrophic consequences of the current difficulties, as the delegates observed, is that we are seeing a breakdown of family structures and, in some cases, an unwillingness on the part of spouses or partners to have children. There is a huge question mark over the spirit of the people. We must examine this. In that regard, I hope this meeting will be a catalyst for debate and change, notwithstanding the difficult budget to come. To be fair, the Minister for Finance is acutely aware of the ways in which people are struggling. The delegates may not agree with everything he is doing, as is their prerogative, but it is important that we seek consensus with a view to achieving fairness and equality. It is all about looking after vulnerable people and the discussion today focused on the welfare of children. Under the Government, we have for the first time a Minister at the Cabinet table advocating for the welfare of children and, above all, making changes in that regard.

I, again, apologise for the lack of numbers. As Deputy Ó Caoláin said, this has been one of our best meetings. Unfortunately, Deputies are in the Dáil and the Seanad is not sitting today.

Senator Jillian van Turnhout

Some of us are here today.

Chairman

I apologise to the Senator; I keep forgetting that she is a Member of the Upper House. We look forward to inviting the delegates back in the new year to continue our discussion. I hope they found the meeting worthwhile.

The joint committee adjourned at 12.45 p.m. until 10 a.m. on Thursday, 24 November 2011.