JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION debate -
Wednesday, 9 May 2012

Reform of Child Benefit: Discussion with Department of Social Protection

Chairman

I welcome the officials from the Department of Social Protection who are in attendance for a discussion on child benefit reform: Ms Kathleen Stack, assistant secretary; Mr. John Bohan, principal officer; and Mr. Tony Kieran, principal officer. Members may recall that the original request to examine child benefit reform came from Deputy Róisín Shortall when she was a member of the Joint Committee on Social Protection in the last Dáil. That proposal was carried forward by this committee when we agreed to look into the matter and to discuss the principle of child benefit being paid to everyone universally regardless of income. I understand that some members strongly believe it is wrong. The Department's replies to previous questions on this principle pointed to two problems that could arise if it were decided to amend the current regime. First, the cost of means-testing child benefit would be too high. Second, any attempt to tax child benefit would encounter problems with regard to cohabiting parents, who are treated differently from married couples within the tax system. It is possible that court cases would result from any such decision.

When representatives of the Irish Business and Employers Confederation attended a meeting of this committee some months ago, they suggested that the child benefit regime could be reformed by introducing a voucher system. Most of the presentations we have received - for example, from Social Justice Ireland and Mr. Fergus Finlay of Barnardos - touched on this area as well. It is a matter of some importance. As a committee, we are keen to form a view on it. It is hoped that the thoughts of the departmental officials we will hear during today's proceedings will help us to form our view. I am conscious that we are straying into the policy area. It might not be possible for the officials to answer policy questions. Members will understand if policy-related questions are not answered. The officials are here primarily to speak about the administration of the scheme. I understand that Deputy Brendan Griffin, who was one of those who asked us to put this on the agenda, intends to be present for part of the meeting. We will compile a report after today's meeting. A study group comprising members of the committee will be formed if necessary.

Before we hear the officials' presentations, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If witnesses are directed by the committee to cease giving evidence on a particular matter and they 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. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable. I invite Ms Stack to begin. She is familiar with all the aforementioned rules so they will not scare her off.

Ms Kathleen Stack

I am thankful for the opportunity to meet members today to discuss the issue of child benefit reform. I will use the opportunity to outline some of the features of the payment and recent work undertaken by the Department in this area. Members have a copy of my opening statement so I will go through it fairly quickly. I am joined by my colleagues, Mr. John Bohan and Mr. Tony Kieran, principal officers in the Department.

Members of the committee will be aware that the Department provides a wide range of supports to families and their children through the social protection system. Easily the best known is the child benefit payment, which is paid on a universal basis to approximately 600,000 families in respect of some 1.1 million children. The payment and its predecessor, the children's allowance, date back to 1944. This longevity and the fact that the payment is made on a universal basis to all households - rather than on a means-tested basis or on the basis of social insurance contributions - probably account for its popularity. A read of the Oireachtas debates at the time of its introduction is instructive as it shows that the then Government gave much consideration to how best to deliver support to families with children and deliberately opted for the universal model rather than the more targeted alternatives. I say this because it echoes today's discussions on the reform of the payment.

Child benefit is a monthly payment made to families with children in respect of all qualifying children. The payment continues to be paid in respect of children up to their 18th birthday who are in full-time education, or who have a physical or mental disability. However, it is important to note the Department also provides child income support through additions to the main social welfare payments by way of qualified child increases, the family income supplement and the back-to-school clothing and footwear allowance.

Both demographic and policy changes in the previous decade have meant a big increase in expenditure on the child benefit payment. Between 2000 and 2009, there were significant increases in child benefit expenditure, which grew from just €638 million a year to approximately €2.5 billion a year. While the increase in expenditure was largely due to the increase in child benefit payment rates, an increase in the total annual number of births, from about 54,000 in 2000 to 75,000 in 2010, in addition to considerable inward migration, also played a part.

With the onset of the economic and fiscal crisis and as a result of the need to reduce the level of structural Government spending and the urgent need to restore order to the public finances, child benefit rates were reduced in both budgets 2010 and 2011. Budget 2011 reduced the lower and higher rates of child benefit to €140 and €177, respectively, and also introduced a third child benefit rate of €167 per month.

Budget 2012 maintained the child benefit rate for the first and second child at €140 per month and also provided for the standardisation of the rate at €140 per month for the third and subsequent children from 2013. In 2012, the monthly rate for the third child will be €148 and for the fourth and each subsequent child it will be €160. Expenditure by the Department on supports for children and their families in 2012 is estimated to be around €3 billion, two thirds of which will be devoted to child benefit. This will account for 14.5% of the Department's expenditure of over €20 billion.

As part of the implementation of the programme for Government, the Minister for Social Protection established an advisory group on tax and social welfare in June 2011. As part of its remit, the group is considering the question of reform of the child benefit and child income supports more generally. The rationale for the establishment of the group is as follows: to harness expert opinion and experience to address a number of issues associated with the operation and interaction of the tax and social protection systems; to recommend cost-effective solutions as to how employment disincentives can be eliminated and better poverty outcomes, particularly child poverty outcomes, can be achieved; and to identify the specific practical institutional and administrative improvements to their operation. The issue of family and child income supports has been prioritised by the advisory group and its report on this issue is currently being considered by the Minister.

The work of the group was assisted by earlier work by the Department in its policy and value-for-money review of child income supports completed in November 2010. The review identified the issues associated with different approaches to reform to provide more consistent support to low-income families and encourage parental employment. Some details of this have been provided in the briefing material to the committee and my colleagues and I would be happy to elaborate or answer any questions raised in so far as we can.

I hope I have given members a good sense of this area and the work that is under way in the Department. I welcome their comments and views.

Chairman

I thank Ms Stack. I appreciate her contribution.

Deputy Aengus Ó Snodaigh

I apologise for being late; I was detained doing something else.

I welcome the presentation. I have but a quick question because I am one of those people who do not believe child benefit should be means tested. Access to wealth should be dealt with through the income tax system. That is a policy issue. Ms Stack said the debate at the time of the introduction of the children's allowance concentrated on what has become the existing system because it was universal. Is it true that the scheme is one of the cheapest to administer for the Department and that the absence of a means test is one of its benefits?

Ms Stack mentioned the advisory committee. Had the Department work done on alternative models to deliver a child benefit or payment? If so, was the work published and could we have access to it?

Ms Kathleen Stack

On the Deputy's question on the cost of the administration of the scheme, that the scheme is not means tested certainly makes it easier to administer in that fewer investigative resources must be devoted to it. I am told the total number of staff is 139, and they are based in our office in Letterkenny. There is a quite streamlined process for the making of child benefit payments and members will be familiar with them.

Some work was done in the Department before that of the advisory group. I will ask my colleague, Mr. Bohan, to comment on it because he is a member of the advisory group and is more familiar with it. Some work was done in the Department following the value-for-money review carried out in November 2010.

Mr. John Bohan

The value-for-money and policy review in November 2010 allowed us to consider the full range of options that existed, including the taxation of child benefit. We also considered various proposals that the NESC put forward regarding a second-tier child income support payment. Very often, when one talks of reform in this area, the conversation focuses on one of the two approaches - taxing child benefit or means testing child benefit - or introducing a second-tier child income support payment.

At a high level, we considered the pros and cons. The ultimate conclusion of the review is that we felt we probably could get better value for money from child benefit in terms of achieving better child poverty outcomes. This was the ultimate goal. It was stipulated that the benefit should not act as a barrier to parents taking up work, which would be counter-productive.

We always maintain the ability to engage in more detailed analysis. Since we published the report, we tried to focus on the more detailed arrangements associated with how one would administer a two-tier payment. In this regard, we examined the cost and the parameters that would ultimately drive what the Deputy is talking about. That complements work we had done earlier on the practical operations as to how a payment such as the child benefit would be means tested or, more likely, taxed. That work has fed into the work of the advisory group and has been useful. When the group's report is finalised, I would imagine the work will be reflected in it. The group has finished a draft and it is with the Minister for consideration. When the report is issued, the more detailed work we have done on the second-tier child income support payment or integrated child payment will be more readily available. The report is largely a technical report. If the committee does not have the VFM review, we will send copies. It is a major piece of work and quite detailed but even the executive summary would be useful to the committee.

Chairman

The report is currently with the Minister so what is the timeframe?

Mr. John Bohan

The Minister wants to give this some consideration and she will then decide what the next step will be. I cannot say much more than that.

Chairman

There is no fixed date for it?

Mr. John Bohan

No.

Deputy Seán Kyne

Legal challenges in certain areas were mentioned. There was talk in the past that there could not be a means test or taxation of child benefit because it was linked to the child, not to the parents. Has any definitive advice been given to the Department on that by experts?

Mr. John Bohan

Without having a court case, I cannot say anything is definitive. There have been cases in the last ten years that have pointed in different directions. I should preface anything I say about taxation with it being a matter for the Minister for Finance. One would want definitive advice from the Attorney General as to whether the legislation would need to be changed on the ownership of the payment and the follow-on implications that would have for the award of tax credits. That would have to be addressed in the overall package. We do not have definitive advice on how exactly that would work. It would need to be sorted out by the Department of Finance and the Attorney General.

Deputy Joan Collins

I agree with the universality of the children's allowance, mainly because it protects the child. It is a straightforward payment that seems to be becoming more complicated and costly in its implementation. The administration costs outweigh direct payment costs. Who is on the advisory group? Is it a collective of social groups or is it mainly departmental staff?

Ms Kathleen Stack

There is a mixture. A number of Departments are represented but there are others as well. The Revenue Commissioners, the Department of Public Expenditure and Reform, the Department of Children and Youth Affairs, a representative from PricewaterhouseCoopers and Brian Nolan from the UCD school of applied social studies are among the members. We can provide the committee with a list of group members. SIPTU and the National Economic and Social Council are represented as well. It is a good mix of people.

Mr. John Bohan

This is just one area the group has been asked to report on. It is a priority but there are other areas arising from the programme for Government, such as social insurance for the self-employed, some budget measures and broader reform of working age payments. This is a part of the advisory group's remit.

Ms Kathleen Stack

We will send on a list of the membership; that is not a problem.

Chairman

So the same advisory group is covering a range of issues?

Ms Kathleen Stack

Yes.

Deputy Anthony Lawlor

The objective is to support low-income families in particular. Which model has been proven to be most cost effective with the objective of supporting low-income families in particular?

Some parents may have addiction problems and the benefit does not go directly to the child. Are there ways to ensure the child gets the benefit rather than the parent? We talk about kids going to school hungry and there may be an underlying problem with the family background.

I researched the number of overseas families who are benefiting from a fairly generous welfare system in this country in comparison to other states. Within the EU they are supposed to be paid the benefit in the country where they were born, even though they may reside elsewhere. I am not talking about Irish nationals who are overseas; I am talking about people who were here but who have since moved back to their own states while still claiming benefit here. What is the situation with that?

Mr. Tony Kieran

The first question was about payment to children in their own right. The benefit is payable in general to the mother of the child. Where it is shown the mother is not supporting the child, it can be paid to someone else. We have a limited number of cases where we have paid the benefit to a child under 16 years of age but in such a case the child must be shown to be supporting himself or herself and would probably be gone from the family. It is a very small number of cases. Paying directly to the child is a problematic area if the child is still living with the family. It has happened but only in a very limited number of cases.

There are around 4,900 families with children who are paid benefit while living abroad, a total of 7,700 non-resident children. They are in a range of countries. We do not differentiate the nationalities of the children, so included in that number are Irish children who live abroad, perhaps even Irish or non-Irish children living in Northern Ireland, where people work on one side of the Border while living on the other side. The amount of money in payment has reduced. In 2008, €21 million was being paid abroad but by last year it had decreased to €13 million. That is significantly less than 1% of the total child benefit pay out.

Ms Kathleen Stack

We are governed by EU regulations on that so we have no choice but to do this in accordance with EU regulations that govern family benefit payments.

Chairman

Does that number include a child who is living abroad for the treatment of a medical condition that cannot be treated in this country?

Mr. Tony Kieran

Child benefit continues to be paid because we do not count such children as living abroad.

Deputy Anthony Lawlor

If children have left the family home but are still younger than 18, is the payment made to the child or is it made to the family?

Mr. Tony Kieran

I cannot say I am aware of any particular case but if a child under 18 was still at school and he or she has left the family home, he or she would fall into the same bracket. We could in an exceptional case pay if we can show that the child is out of the family home, still at school and supporting himself or herself. One of the conditions of receiving child benefit between the ages of 16 and 18 is that the child needs to be enrolled in school.

Deputy Anthony Lawlor

I acknowledge that but a number are falling outside that.

Mr. Tony Kieran

I am not aware of any particular cases.

Ms Kathleen Stack

Has the Deputy a particular case in mind?

Deputy Anthony Lawlor

I will talk to the officials following the meeting.

Mr. Tony Kieran

If there are particular cases, we can investigate them.

Mr. John Bohan

The Deputy's first question related to the relative cost of administration. It is hard to be definitive. When we did the expenditure review, it would have been nice to get almost a unit cost but it was not possible to do that. We touched earlier on the child benefit payment being quite efficient in terms of the number of payments and the relatively small number of staff who administer it because it is universal. One would expect as one moves away from universality into selective payments that the unit cost would become more expensive but that is not always the case. While family income supplement is time consuming in terms of the number of staff who have to administer it relative to the number of payments made, the qualified child increase we make as an addition to the main adult payments is classed as a child income support payment. The marginal cost of that is minimal because clearly it is an addition to a main adult payment. It is not always the case, therefore, that moving to selectivity is more expensive because of that. The proposal we came with in our VFM review was to try to make the most advantage of the fact that we make selective payments to quite a lot of children and rationalise the payments to low-income families who are not in receipt of them on top of the child benefit payment. When we send the committee details of that report, the Deputy will probably have more information about that.

Deputy Brendan Ryan

I support previous speakers who said the universal payment should be retained. No vouchers should be associated with it and I encourage IBEC, which favours such a scheme, to carry out an experiment for us by paying its staff in vouchers for a year and then coming back to the committee to demonstrate the merits or demerits or the scheme. I would be interested in that.

I agree with those who say wealthy individuals should be dealt with through the tax system. However, people such as Michael O'Leary have stated publicly that they do not want child benefit. Will Mr. Kieran outline the process by which someone gets child benefit and whether there ought to be an application process to deal with Mr. O'Leary's dilemma of getting a payment he does not want?

Senator Jillian van Turnhout

It is not an automatic payment; one must apply for it.

Mr. Tony Kieran

There is a streamlined application process. When the first baby is born in a hospital, the birth is registered and a PPSN is issued by the Department, which triggers the sending of an application form to the parents that they must sign and return. They, therefore, make an application, but it is a streamlined process.

In the case of second or subsequent children, if one has claimed for the first child, that process happens again but the payment issues automatically. It is assumed the parent will apply for the second child. In the case of second or subsequent children, we pay once the child is born and resident in the State.

Deputy Brendan Ryan

Therefore, one only has to apply for the first child and it is automatic thereafter.

Mr. Tony Kieran

Yes.

Deputy Brendan Ryan

It might be worthwhile taking a look to change that.

Mr. Tony Kieran

People can stop claiming child benefit. We have the option where people do.

Chairman

Has anybody stopped claiming it?

Mr. Tony Kieran

We do not keep records but we have a control programme through which we issue certificates to people regularly. We issue them to Irish and non-Irish mothers and if they do not return them, we suspend payments. There are cases where people stop claiming. We do not know whether they have moved away or have decided that they do not want to claim.

Senator Jillian van Turnhout

I thank the Chairman for the opportunity to ask a question. I support the universality of child benefit but I also recognise the need for targeted payments and striking a balance in this regard. Child benefit is the only reliable, regular and easy to access payment and it is a safety net for families. Regularly, when I discuss child benefit, people mention Michael O'Leary but they forget that people must apply for the payment. It is not that the State lodged the money in Michael O'Leary's bank account; he or his wife applied for it. I do not accept his argument, which is erroneous.

If we are examining a second tier or an integrated child payment to address child poverty, I agree with Deputy Ryan regarding vouchers. Has the Department considered the provision of direct services to children? Instead of putting money into households, the Department could ensure services are available for children. The child care supplement was short lived and was replaced by the free preschool year. The State saved money but children benefited directly. Has consideration been given to, for example, providing school books, health services, school meals, after-school activities or transport? This would ensure money is targeted for the purpose intended while supporting children across the board. The success of the free preschool year is no top-up payments are allowed and every child is treated equally. We now have child care settings that are a reflection of their community rather than having separate disadvantaged or middle class settings. They are fully integrated and, therefore, universality is important. They are children first and foremost. Has the provision of services been examined?

With regard to payments to families abroad, we often forget the other side of the equation, which is Irish families living in other member states benefitting from the EU ruling. Sometimes we only think of what the State is paying out but in comparison to the services for children in other member states, Irish families abroad do much better than they would do here.

Mr. John Bohan

With regard to the second issue, that particularly reflects the situation in Ireland in the 1960s and 1970s when many Irish people were working in the UK and would have benefited from its child benefit rates. We are part of the EU and we are bound by the social security co-ordination rules. They are there to ensure social security does not act as a barrier to people moving.

As the Senator pointed out in asking her first question, the social protection system runs the school meals programme and, therefore, we are in that space but only in a limited way. Our core mission is to provide income support to groups and households with children. That is the main lens we bring to this. I do not say that in our VFM review we took a blinkered view on this. We looked at evidence across Europe as to where they were getting the best poverty outcomes. It seemed like a paradox but countries that spent more on child income support payments did not get necessarily get the best poverty outcomes. Countries that provided a good level of child income support plus services tended to do better. The conclusion we made in the review was that a balancing act was needed in the levels of service provision and income support. We concluded tentatively that some shift from income support to services might produce better incomes. We were not prescriptive about what those services might be but, clearly, they should help parental employment and child care, as the Senator mentioned, but there are other areas. There is a broader issue between universality and selectivity not only in the income support system but also in the type of services that are operated. The answer to the Deputy's question is not directly but we are not blind to the arguments that are there.

Chairman

Are there any other questions? Ms Stack or Mr. Kieran referred to the control measures. This involves writing to people. Some clients have taken great offence but I understand it is normal practice. Is that the case?

Ms Kathleen Stack

At the moment we do two fraud and error surveys each year. We pick different social welfare schemes. This year we are doing the child benefit scheme. We started relatively recently in March. We will do the jobseeker's allowance later in the year. We select 1,000 cases at random. It is part of the control measures in the Department and a part of our fraud initiative. We have savings targets for each scheme.

Chairman

What does it involve? What are the practices? Does it involve commenting on the 1,000 cases as well? I have no problem with it but I am simply asking the question.

Ms Kathleen Stack

Yes it does. Basically it involves checking eligibility criteria from the get-go in terms of what they are doing.

Chairman

Is it a standard practice carried out across different sections?

Ms Kathleen Stack

Under the fraud initiative we are committed to doing two schemes per year.

Mr. Tony Kieran

There have been several inquiries on the matter. People find it strange to get a call at home about child benefit because it is not means tested or taxed. However, as Ms Stack noted, we must carry out the fraud and error scheme in accordance with the rules the Department has agreed with the Comptroller and Auditor General. Whenever we do a fraud and error scheme or a survey on any of our schemes they must be done in the same way. It involves a home visit. Some years ago we did the same with old age pensioners. We had to call to a representative sample including some very old people. We may not especially wish to do so but it must be done to keep the sample right. That is what is happening. We have had several inquiries and people have wondered whether it is a new departure. The main control function involves the issue of continual eligibility certificates. This is rather cost effective because when they come back we scan them into our systems and they update them. People are more familiar with these.

Deputy Seán Kyne

The back-to-school clothing and footwear allowance is means tested and applies to almost 196,000 families, one third of the total number of families receiving child benefit. What is the cost of means testing for the back-to-school clothing and footwear allowance? The Department is considering the cost of means testing but it is already doing so it for one third of the families.

Mr. Tony Kieran

The back-to-school clothing and footwear allowance is means tested. One of the eligibility criteria is that if one is in receipt of a payment under another means tested scheme, then we re-issue it automatically, more or less. We did this last year and it was a new departure. We automatically matched 127,000 of the families paid with our other databases and automatically paid them based on eligibility because they were already in receipt of jobseeker's allowance, the one-parent family payment or other means-tested payments. It is not true to say that we means test all 200,000 families again. We conducted a desk assessment means test on 96,000 cases last year, of which 67,000 were paid. That was done from a central processing unit in our Letterkenny office and the child benefit staff were involved in that.

Ms Kathleen Stack

I wish to clarify that there are 196,000 families and 380,000 children. Those were the figures for last year.

Chairman

I presume we are in a better position this year to deal with the applicants compared with last year with regard to paying out the money and so on. When representatives from IBEC were here they discussed the voucher system but they did not get much backing from members at the time. However, for other allowances, including the clothing and footwear allowance, is work ongoing to examine options to provide a service and to provide the actual clothes and shoes or is the same belief held that it is best to pay? I realise it is a policy issue but I am only asking whether it is being considered.

Ms Kathleen Stack

There are no changes this year. It will operate broadly similar to the way it operated last year. Changes were announced in the budget to the amounts being paid and the age profile but the payment itself has not changed.

Chairman

Is it on the list of work for the advisory group?

Mr. John Bohan

It has not been on it. If the advisory group examined the possibility of an integrated or second tier payment and if there was a logic to setting up a second tier payment, the issue of whether the back-to-school clothing and footwear allowance would be rolled into that would be a second level decision. It is indirectly addressed but not specifically.

Deputy Michael Conaghan

I welcome the delegation. Tackling child poverty is a critical issue. The delegation remarked that the countries which pay more directly do not necessarily have the best way to tackle child poverty. Does the Department have more detail on this? To which countries and options is the Department referring? What information does the Department have? Does it relate to the Nordic countries or middle European countries?

Mr. John Bohan

I can produce and send the committee an up-to-date list of child poverty outcomes. This would probably be the best approach because the analysis we carried out was based on data from several years back. Deputy Conaghan referred to the Nordic countries. They are associated with low child poverty outcomes. This is often related to high levels of parental employment or engagement with the labour market as much as anything else. This is another point which I did not make clear. It is not simply a matter of the level of child support or child related services. Generally, this is related to the level of support and the degree of activation one might have in respect of the social protection system. In a way, this gives added impetus to the area of activation within our system and the focus on getting not only better poverty outcomes but employment outcomes and delivering them. I can send the list of countries. The Nordic countries were included. Ireland tends to be middle-ranking in some of the outcomes. This is somewhat surprising given the level of resources we put into child support but it maybe explained by the other point I made.

Chairman

Before we conclude, will the Department clarify the issue of people who live outside the country and who get child benefit? There is a good deal of ill-informed comment about this issue. Negative commentary often attaches for the wrong reason. It would be no harm to put on the record who can qualify and why it is paid out.

Mr. Tony Kieran

For those living outside the country to qualify for child benefit, one of the parents must be working in the country, in Ireland. The other parent must not be working in the country where the children are living. That is it, plainly and simply. Under EU regulations, Ireland becomes the competent state to pay the child benefit. This is the reason, for the 4,900 families we have referred to, one of the parents must be in employment in Ireland while the children continue to reside in other countries. Typically, the media refer to children living in Poland or eastern Europe and they continue to have rights. As Mr. Bohan pointed out earlier, we have been beneficiaries over the years when child benefit rates in the United Kingdom were higher than here and when Irish people had to go to work in the UK. That conferred a right on people living in this country to claim child benefit from the UK. A similar arrangement applies. At the moment we ask those people to recertify every four months that they continue to have employment in the country which, in turn, confers the rights to get child benefit paid abroad.

Ms Kathleen Stack

As Mr. Kieran stated earlier, the numbers and amounts involved are going down. We can certainly provide the committee with details of recent years. In 2008 there were approximately 10,000 non-resident children at that stage for whom we were paying. This has gone down to approximately 7,700 now. The cost relative to the overall cost of child benefit is relatively small, as Mr. Kieran stated earlier, at less than 0.1%. It amounts to €13 million out of €2 billion. It is made out to be a bigger problem than it is.

Chairman

That is why I am asking. I presume, like every other scheme, control measures are in place. People need to know this and some of the commentary is unfair. It is important to use this chance to clarify the situation.

Ms Kathleen Stack

Strong control measures are in place.

Mr. John Bohan

At the heart of EU co-ordination regulations, which date back to the early 1950s and 1960s before we joined the European Union, the rights to social protection are based on employment rather than residence. That made sense in a Europe where somebody might have been working in Belgium but living in France or Luxembourg. We have a social insurance system which is based on employment but we tend to base it more on residence, and that might be at the heart of the misunderstanding about some of those areas.

Chairman

Our discussion might be a little premature because the report is not yet finalised with the Minister but it will be an ongoing issue for this committee on which we might revert to the witnesses in a few months. I appreciate them attending today.

The joint committee adjourned at 10.45 a.m. until 9.30 a.m. on Wednesday, 16 May 2012.