I thank the Chairman and members for the points they have made and for raising various issues. I will try to answer specific questions, but more importantly widen the debate to a policy context to which some members have alluded.
Deputy Ring's first question related to negative equity. When a property is being assessed it is done under normal capital rules, in other words the first €20,000 does not count and it is calculated on the basis of €10 per €1,000 after that and then it is €20 per €1,000. However, that is net of a mortgage on the property. Where the problem arises is that in some cases people mortgage their home to buy a second property and that mortgage cannot be taken into account for a property in Spain if the mortgage is secured on the primary residence. In that case under the present rules one cannot take the mortgage into account as an offset against a property in Spain, for example, or a property that one might own in this country. Where the mortgage is against the second property it is taken into account. Perhaps that is worthy of further debate but the problem is that if the mortgage is not on the property in question how does one establish that it was taken out for that property. I hope that explains at least the policy issue in that regard.
The next issue raised by Deputy Ring is the nub issue, namely, what one pays in and what one gets out. The biggest potential benefit we all get from PRSI is a widow's pension or a State pension. They are by far the most expensive schemes we pay for. Jobseeker's benefit is time limited and the numbers on illness and invalidity pension is small compared to the number benefitting and the length of time people spend on average on the State pension or widow's pension. The self employed pay 3% and the employer and employee pay 14.75%. One group is paying four times more than the other but it is not getting four times the benefit. It might appear at times because employees have jobseeker's benefit and illness benefit that they can have four times the benefit but actuarial studies have established that self-employed people enjoy greater gains for their contribution from the system in the long term than those who are employed. Therefore, if one were to level the playing pitch in terms of entitlements one would also have to level it in terms of contributions and not only look at the employee contribution but also the employer contribution. That issue is worthy of further consideration and debate.
The next issue, which was alluded to by Deputy Durkan, is one that is near to my heart and I am willing to examine it. Under a self-employed system it is nearly impossible to establish short-term entitlements. How do we know a self-employed person is totally unemployed? In any case, what many self-employed people want to do is keep some self employment but they cannot live off it. Therefore, jobseeker's benefit does pose challenges if one introduced it universally. I have in mind a way that might be worth considering in dealing with that issue. Illness benefit in the short term is a challenge. I have enormous sympathy for the argument that invalidity pension should be available, again taking into account the fact that contributions need to be looked at. However, there is an argument to be made on a self-employed person who is permanently invalided. There are big risks involved all the time for the self-employed and it is worthy, at least, of serious consideration.
An issue was raised about the average time. I have visited local social welfare officers, Department offices and met front line staff. I make it my business to discuss the operation of the scheme with front line staff. We know that in some offices the jobseeker's benefit is down to six days turnaround, because it is fairly black and white. There is a number of contributions; one looks up the computer record and pays it. The average time for the self-employed is 10.71 weeks. That is partly due to delays with the investigations and the operation of my Department. From years of experience, however, no more than Deputy Ring there, I dealt with self-employed people even in the best of days, and farmers. It can, at times, involve considerable work to assist someone who has a very small operation to get all the bits of papers together, and to get all the information required to make a decision. Some cases have been brought to my attention, recently, and because of what went on in banks and so on there is some hairy information on file that warrants investigation. I know someone who was genuinely unemployed for years who managed to get a loan on a property, and the loan document stated that the person was earning a fantastic salary. Obviously, my Department had to check whether that was true and whether the previous payments made by this person were correct. One can be surprised what one discovers when one sees all the paperwork, and those cases are tricky. They take time and I wish there was some magic way of dealing with them.
On the issue of where we should go, we must take the whole thing in the round. I always believe one must hear two sides of an argument to get a solution to a problem. We have 8,883 people in receipt of the self-employed job seeker's allowance and 256 decisions pending. We have 172 on self-employed jobseeker's benefit - in other words, they had previously been employed as employees - and there are two decisions pending. There are 10,430 on farm assist, and 500 decisions pending. I shall return to that again.
On a wider issue, the problem with the Department as regards self-employed people with means is that if I say that we can assess a tradesman's income of €150, for instance, it is very hard for us to monitor that. If we question the individual doing some work, he or she can say "You told me that I could earn up to €150 per week". It is very hard to know whether he or she is earning €500 a week or €100 a week. We should recognise that there is an issue there that needs to be looked at.
It is particularly a problem with the farmer if he or she has no income deriving self-employment outside of farming. Certainly, in the west of Ireland 80% of the income comes from State payments. It is very easy to establish that all the other income from trading is probably taken up with expenses. Deputy Ring would agree with that. At least we have a good idea of what is going on from year to year.
I have often thought that self employed people should register for something like the rural social scheme, do the 19.5 hours and then be free to legitimately earn money for the year. It would facilitate best departmental control and satisfactory early decision making. At the end of the year he or she would make a tax return when we could see whether the individual was still entitled to self-employment income. If things picked up significantly, he or she would come off the scheme. If the position remained the same, he or she would stay on it. I know from my years of working with this problem that the advantage from the viewpoint of the self-employed person is that he or she has a guarantee for a year. Once the individual has done his or her time working, he or she is free to go off and do his or her thing in the evening, on a day off or whatever. This limits the black economy, and from society's viewpoint the advantage is that one can get the services of really highly skilled and motivated people.
