I will reply as quickly as possible. I thank members for their straightforward comments, to which a great deal of consideration will be given. We need to determine how we can take on board as best we can the concerns that have been expressed. We have listened carefully to what has been said and we will try to respond to it.
I was asked whether lone parents will be included in the employment action plans. The intention that lone parents will be included in such plans is at the core of these proposals. The implementation group to which I referred is working on that. We are heading in the direction of involving lone parents in the employment action plans.
I was also asked about a second tier. Dr. Sweeney and his colleagues in the National Economic and Social Council have been working on that for some time. I have been told that they are finding it very complicated and difficult. They are not getting anywhere with it very quickly. I have asked them to continue their work. I have also asked officials in the Department of Social and Family Affairs to prepare some proposals to try to pull together the child dependant allowances and the family income supplement, without being in conflict with whatever the National Economic and Social Council might eventually come up. They should ascertain whether I could introduce an initiative, either immediately or in next year's budget, along similar lines to those being worked on. I am in favour of a second tier which would focus child income support at the lower level of the scale.
Members asked about these proposals in the context of Article 41.2 of the Constitution. The Attorney General's view is that the working group's recommendations, as outlined in the Government discussion document, do not run counter to it.
Members asked about consultations with the relevant organisations. I have enormous admiration for such excellent organisations as One Family, One Parent Exchange and Network, OPEN, and others. They attended our forum and I am available to meet them at any time, as are my officials, to work through their concerns as this process is worked through.
I have asked my officials to hold an early meeting with FÁS, in particular to discuss the issue raised by many members, namely, flexible working and course times. As part of the strategy, it will be asked to move to more family-friendly hours for courses targeted at lone parents. I agree with this proposal and hope progress can be made in that regard.
The issue of maintenance was raised. I have said publicly many times that I am unhappy with the numbers of fathers who make payments. Slightly more than 2,000 absent parents have been making payments directly through the maintenance recovery unit. As I have been concerned about these numbers for some time, I recently instructed my Department to prepare a special report for me on the issue. Anecdotal evidence suggests substantial numbers make direct payments to spouses or partners with whom they do not reside. These numbers could be significant. I hope to receive the report within the next two weeks and will certainly place it in the public arena. I want a more accurate assessment of the precise number of fathers who make payments. It is clear that many thousands who are in employment do not. I have asked for the figures to be checked and reviewed. Although the Department does not necessarily have easy access to information on the numbers who make direct payments, it is trying to assemble it.
The issue of legislation was raised by members. I have stated publicly that my target is to bring legislation before the Houses in the course of this year. The draft legislation is under preparation and will be along the lines of the report. Obviously, I have allowed myself scope to take on board the outcome of consultations and make amendments, either before publication of the Bill or during its passage through the Houses. I understand Deputy Stanton particularly asked whether the provisions would be introduced as part of the Social Welfare Bill or in separate legislation. I would like to introduce them separately. These reforms will be so far-reaching and of such a scale that, depending on whichever title is settled on, a separate lone parents or parental allowance Bill should be introduced.
The Chairman rightly put in play the idea that the average length of claims for one parent family allowance is approximately seven and a half years. That is correct and formed the basis of the proposed eight year period. I want to make a point on the notion of compulsion, whereby people will be forced out to work. That is not what is involved. Last year one in three children born was born to an unmarried mother. In one city within the State the figure rises to one in two. It is unthinkable and unfair to contemplate a scenario in which one would not seek support and activation, as well as a return to education and employment and training for such a significant number in the State. One cannot simply park such persons. In a particular city in the State one in two children is born to an unmarried mother. While this does not mean they are all lone parents, it serves as an indication that many of them are. Hence, it is not a matter of forcing them out to work but of trying to help and encourage them, to give them opportunities and to interact with them. In that regard, I restate that this measure is not designed to save money. According to the report, the State will not save one penny as a result of this measure until 2011. Regardless of whether limitation rules or different types of qualified adult allowance are implemented, these proposals amount to medium to long-term reforms. The concept of lone parents will be replaced by that of children in low income families.
We will put our money into low income families and help them to get back to work. I have a lot of research findings to hand. Members are welcome to have a copy at any stage. These proposals pertain to 80,000 people or more in their late 20s and the numbers are growing strongly. It is unfair to expect such persons not to aspire to participate in training, education and employment. The way to lock them into poverty is not to activate them. Moreover, the timescale involved will allow them time to adjust. We envisage a five year phasing-in period before the proposals will become fully operational. When a child reaches the age of five years, the Department will seek facilitation. It will seek to work with the parent to advise him or her on training and educational opportunities for a further three years. Hence, such parents will receive advice, help and support for three years before their children reach the age of eight.
This morning I asked my departmental officials to draw up examples showing scenarios before and after implementation of the proposals, which members will find useful. The examples consider the amounts lone parents receive at present in unemployment assistance, qualified allowances, child dependant allowance, CDA, child benefit, rent supplement and so on. They compare these amounts with those that will be payable after the changeover to parental allowance. The figures make it clear that we are not in the business of saving money. In fact, the families in question will have substantially greater income. To take one example, a couple, neither of whom is in employment, are in receipt of approximately €18,000 per annum, between unemployment assistance, qualified allowances, CDA and so on. Under the new parental allowance system, without any change in circumstance, they will be in receipt of €21,000. Hence, we have front-loaded the money to get them moving. However, this amount will fall and be down to €17,000 after five years. Hence, the slope is gentle.
When my work on these examples has been completed, I will share them with members in order that they will see how the proposals will operate. I am extremely anxious that the reforms will be seen as social and that in time they will benefit the individual and the State, rather than as an attempt to save money. In the long term they will save money for a good reason — not because of any cuts made but because many more will be in employment, having availed of extra education, training and so on. That will be the payback from this measure to the State and the taxpayer in due course.
The issue of child care was raised frequently. While I will not deal with every detail, we have increased child benefit substantially. This helps considerably and applies across the board. We hope to start paying the new child care supplement in August. I refer to the supplement of €1,000 per annum announced by the Minister for Finance, Deputy Cowen, in his Budget Statement. It will be paid in respect of 350,000 children. Interestingly, one third of those who will receive the new child care allowance are lone parents. That is a direct additional support for lone parents.
The equal opportunities childcare programme has seen investment of €500 million, with 41,000 new child care places and overall 91,000 child care places to be created by 2011. However, I take the point that child care is at the heart of this issue and without making real progress on these child care issues it is not possible to untangle the lone-parent issue. There is a five-year phasing in period after which increasing numbers of those child care places should be in place.
Some 13,000 one-parent recipients are in receipt of rent supplement. Lone parents account for 27% of the 30,000 in the target group for the rental assistance scheme. Instead of us paying rent allowances, we transfer the money to the Department of the Environment, Heritage and Local Government to supply accommodation, which is the correct solution in this regard. By the end of February 2006, some 777 people had been accommodated under the rental accommodation scheme and it is hoped this number will increase dramatically. I hope to transfer more of my funds from rental to the Department of the Environment, Heritage and Local Government to provide permanent housing for people.
The point about flexible working was rightly raised and we will try to take it on board. Lone parents, in particular, need flexible working hours. In all our definitions of full-time employment, including the references to 19 hours, etc., we will seek to ensure that flexible working hours are at the heart of the matter. We are not talking about 9 a.m. to 5 p.m. work, rather whatever suits the individual.
From all the research it is clear that long-term welfare dependency in respect of a person of working age is not in the best interests of the lone parent. We might think we are being nice to them by allowing them that dependency until the child is 18 or 22. However, all the independent research has shown that it is not in their best interest if they are of working age. Further research shows that is not in the best interest of their children and it is certainly not in the best interest of society to accept long-term welfare dependency by people of working age.
The Chairman mentioned the word "compulsion" on a few occasions. I understand what he is saying and we will consider what is possible. The existing employment action plan is compulsory. Apart from the increase in employment, one of the reasons for having reduced unemployment to such a low level from such a high level was the excellent work undertaken under the employment action plan which helped and supported people. The result of that help and support was that thousands of people, who otherwise might not have got work, found employment and were delighted to do so. Without that support they would not have got it. A very significant number of the 80,000 lone parents would like to get help, support, encouragement, advice, training and education to allow them make the same leap.
If the present employment action plan were to be totally voluntary, in other words, it was no longer necessary to come for discussion with FÁS, would the plan work? It would not work to suggest to these people that until their child reached 18 they should drop in and talk to us on a voluntary basis and we would continue to pay them if they did not turn up. The people who would turn up would be those well able to get themselves work anyway. Those who would not turn up would be the ones really needing help, which would be a pity.
The State is spending more than €1 billion on employment supports for particular FÁS programmes for women returning to the labour market. I understand the Chairman's point about the limitation rule. We will certainly take on board his thoughts in this regard and see how we could be of assistance. I again stress that we have tried to ensure that the new regime of parental allowance would ensure at least the same income into the household as the present lone-parent allowance. In this regard the figures have been tweaked regarding limitations, qualified adult allowances and disregards to try to achieve that situation. This is why they were tweaked. It is not a question of saving money.
Overall, activation is positive. It is about education, training and employment. It is about improving skills and obtaining better paid employment. It will not impact on present recipients as it takes a five-year phase in period before the reforms would bite.
Senator Terry spoke about poverty and referred to my press statement of yesterday. I believe the debate on the numbers in relative poverty is a distraction. I have decided not to follow that particular bus and to leave it to the academics to worry about relative poverty. I am concerned about consistent poverty. Everybody is poor relative to someone else. On the relative poverty stakes, Ireland is in the same league as Slovakia. Average annual earnings in Slovakia for 2003 were €7,000. Irish earnings in the same year were five, six or seven times that level and yet we are in the same league in terms of relative poverty. It is something for researchers to continue to work on if they wish to do so. Yesterday, I published numbers on consistent poverty which we need to tackle. I made the point that approximately 250,000 people have left consistent poverty in a decade and approximately 65,000 children are, unacceptably, still in consistent poverty, which is the number I wanted to tackle.
All we are doing on rent supplement is to introduce a system of tapering in order that a recipient does not automatically lose allowances on returning to work, like falling off a cliff in income terms. We have tried to introduce slopes in order that those coming off welfare and going back to work find their allowances gradually reduce rather than in one swoop. This is what we are trying to do with rent allowance, as it is such a big attraction for so many people. I believe Deputy Callanan mentioned raising the disregards, which we did in the budget and we will continue to do so.
Overall, the choice is simple. While these proposals may not be perfect, we have been informed by the Seanad debate, by what has been said here, by the organisations I have met and by the forum. This work has been ongoing for some time. I encourage us all to move forward firmly and steadily with the proposals. I would be happy to make amendments as we go. I would not like to water this down so much that it cannot do the job, which would be a pity. Future generations will thank us. At the moment lone parenthood can involve substantial poverty, there is no incentive to go to work and the lone parent cannot cohabit. Anything must be better than that. We want these people to be supported, encouraged and helped back to work. We pay a rental allowance to low-income families instead of lone parents and the cohabitation rule is removed. That prize is worth obtaining for the individual and the country and I would like to move in that direction.
I thank the Chairman and the committee members for the hearing they have given this document.
