I welcome the representatives from Older and Bolder, Ms Patricia Conboy, director, and Mr. Tom O'Higgins, chairman. From Age Action, we have Mr. Eamon Timmins, head of advocacy and communications, Ms Lorna Roe, social policy officer, and Mr. Gerard Scully, senior information officer.
Social Welfare Benefits: Discussion
Deputy Charlie O'Connor will be here at 11.30 a.m., he has been delayed in his constituency.
Thank you, Deputy. The format for the meeting will be a brief presentation by the two groups followed by a separate presentation by the Minister for Social Protection, at which point members may question the Minister.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they give to the committee. If they are directed by the committee to cease giving evidence in regard to a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the long-standing parliamentary practice to the effect that, where possible, they should not comment on, 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.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
Mr. Tom O’Higgins
I am chairman of the Older and Bolder campaign and I thank the committee for giving us the opportunity to address the committee today. After my comments I will hand over to our project director, Ms Patricia Conboy.
Some of the committee may know Older and Bolder is a national alliance of eight organisations that defends and champions the rights of older people and fights ageism in Ireland. Our member organisations are Active Retirement Ireland, Age and Opportunity, the Alzheimer's Society, the Carers Association, the Irish Hospice Foundation, Irish Senior Citizens Parliament, the Older Women's Network and the Senior Helpline. Our combined active membership and affiliates is estimated to be at least 100,000 people and our activities affect the lives of thousands of others throughout every county. Each of the alliance's members has its own unique goals and work programmes. Older and Bolder's role is to enable our members to speak with collective and united voice on issues of policy and practice that are critical to the well-being of older people.
Among our activities is the organisation of national campaigns so that whenever individuals or groups become involved, they know they are part of a mutual, shared national movement. In our current campaign these range from Kerry to Donegal, Wexford to Sligo, Wicklow to Galway and Dublin to Cork. Our shared vision is of an Ireland that affirms aging and the rights of older people, enabling everyone to live and die with confidence and dignity as equal, respected and involved members of society.
The members of the Older and Bolder alliance believe the State pension is an issue that demands a collective response. That is why we have combined in a shared campaign to defend the State pension and associated supports in the forthcoming budget. Looking beyond that budget, we want to ask all political parties to make a long-term commitment to a fair and secure State pension. A secure and adequate income is a key determinant of health and well-being at all ages. The United Nations declaration on aging promotes this concept, with a life-course approach to income adequacy and inter-generational solidarity as the fundamental basis of income adequacy in later life.
During the current debate in respect of the State pension older people have as a result of their growing numbers sometimes been portrayed as a problem. We argue that, on the contrary, this growing number of older citizens brings a demographic bounty to Irish society. Older and Bolder's view is that, far from being a drain on the Exchequer, the State pension is an investment in older people, enabling their active contribution to communities and society. It is also an investment in families and provides assurance to younger family members that older relatives have access to a basic income. We also contend that the State pension is an investment in the local and national economy. It should be remembered that the State pension, like other social welfare payments, is spent in local shops and businesses and is recycled throughout the economy.
We are continuing to campaign for the delivery of the Government's promise to develop a national positive aging strategy. This promise was made in the 2007 programme for Government. We are seeking a coherent, planned approach to policy-making and implementation. Such an approach must be grounded on equality and the rights of older people. We regard a national positive aging strategy as a holistic, comprehensive approach to a range of issues which impact on older people. I refer here to issues such as equality, health care, rural transport, retirement age, discrimination in employment and pensions. The current debate relating to the contributory State pension has again highlighted the need for a clear, long-term commitment to a fair and secure State pension system for all.
I thank members for their attention and I will ask my colleague, Ms Conboy, to make the next part of the presentation.
Ms Patricia Conboy
I refer to Barbara, a 68 year old woman who lives alone and who is solely reliant on the State contributory pension. Barbara qualifies for a medical card but maintains private health insurance. She says, "I'm a year older now and if I did need to go to hospital, the VHl would hurry it up a bit". She is unsure that she will be able to afford this private health insurance into the future. She relies on her car for shopping and for social contact, including the club where she does voluntary work every week. However, the car is now ten years old. Maintenance costs are high but so too are replacement costs.
Barbara is frugal in respect of heating, burning clippings and branches from her garden and heating just one room in her house with an open fire. She was obliged to buy a new TV set this year to replace an obsolete model. She has the Irish channels but cannot afford satellite TV. She would love to have a computer but cannot afford it, nor could she afford broadband. She uses the computer at her local library to send e-mails. Barbara is concerned that changes in the forthcoming budget will, to use her words, "knock me off the edge altogether ... I'm living precariously as it is". Barbara's story and those of other older people are vividly presented in a forthcoming study, Feeling the Pinch: An Update, researched by Maura Boyle and Dr. Joe Larragy, National University of Ireland Maynooth, which Older and Bolder will publish shortly.
Older people are, in key respects, and, as Barbara's story illustrates, counter-cultural. They save before they spend. They do not whinge and complain; they make do and face the future with stoicism. However, they worry deeply with regard to their capacity to meet their own needs independently and with dignity. That is why Older and Bolder is campaigning with such determination to defend the State pension and associated supports in the forthcoming budget. We are supported in this regard by our member organisations, representatives from which are present in the Visitors' Gallery.
As part of our co-ordinated campaign, thousands have signed our petition to defend the State pension. Supporters have organised petition stands and have shared concerns with their local public representatives. We have touched a nerve and we believe the following are the reasons this is the case.
The first of these reasons relates to the risk of poverty. A majority of the current cohort of older people are reliant on the State pension, whether contributory or non-contributory, to protect them from poverty. Some 84% of people aged 65 to 74 are at risk of poverty before they receive social transfers, including the State pension. In the case of people aged 75 and over, this figure rises to 89%. In the case of older people living alone, the risk of poverty before receipt of social transfers is, as quantified by the Central Statistics Office, a shocking 96%.
There is a perception, which is wholly false, that older people in receipt of the contributory State pension are not at risk of poverty. For many of these individuals, as well as for those on the non-contributory pension, the State pension is a vital support and must be sustained at current levels. Data based on the consistent poverty measure is sometimes highlighted to make the case that older people do not really require the current level of State support afforded to them. On this issue, we refer members to the research paper, Measured or Missed? prepared for Older and Bolder by Professor Mary Daly of Queen's University Belfast. This paper - copies of which have been circulated to members - raises serious questions regarding the efficacy of the consistent poverty measure in identifying the needs of older people.
The older population is not homogeneous. There are older people who are wealthy but they are a minority of the older population. Some 7% of people aged 65 to 74 and 4% of those aged 75 and over are in the top income decile. In common with middle-aged and younger people, older people who are liable to do so pay tax on their taxable income, including the State pension. Older and Bolder's view is that a progressive taxation system is the most equitable and efficient method of managing the distribution of resources in our society.
The second reason relates to the fair and efficient use of public money. Expenditure on the State pension is a fair and efficient use of such money. Until now, it has provided a modest but secure - and much appreciated - income for older people. Furthermore, modest increases in the State pension in recent years have been efficient in reducing the depth as well as the risk of poverty among older people. The funding of the State pension cost €4.3 billion in 2008. In the same year, expenditure on tax reliefs on private pensions cost €3 billion. This State expenditure gives the greatest level of support to those with the highest levels of income. Low paid and part-time workers, those employed in the hotel, retail and leisure sectors, mothers and others contributing to our society outside the labour market gain very little from this system of tax relief for private pensions. In terms of equity and efficiency, the focus in the budget should be on reform of tax reliefs rather than cuts to the State pension, which benefits a wider section of the population.
The ESRI has estimated that standardising tax relief on private pensions at 33% - as proposed in the national pensions framework - would yield savings of €1 billion per annum. Older and Bolder's view is that the Government should target reform of tax reliefs on private pensions rather than cuts to the State pension. Older and Bolder is of the view that the State pension represents security and trust and is a fundamental cornerstone of our society on which we should all be able to rely. We all contribute towards this basic lifeline, not just through PRSI and income tax but also through the essential roles we play in our families and communities during our lifetimes. We make these contributions - financial and otherwise - in the trust that we will receive support, on retirement, when we most need it.
Older and Bolder has received countless telephone calls, letters and e-mails from older people who point out that they entered into a contract with the State when they commenced their PRSI contributions in the 1960s and who are adamant that they have already paid for their contributory State pensions. We endorse this view. The alliance also has concerns about the new universal social contribution flagged by the Minister for Finance in last year's budget. Payment of PRSI, as the ESRI highlighted in a recent paper, establishes people's entitlement to social welfare payments, including the State pension. We want to know what will happen to this entitlement if PRSI is amalgamated into a new social contribution? We hope that the Joint Committee for Social Protection will explore this issue further with the Minister for Social Protection, Deputy Ó Cuív.
Older and Bolder is concerned with regard to the erosion in the value of the State pension. Through the loss of the Christmas bonus, the rate of the pension has already been reduced by 2%. Its value has been further eroded by the effects of the carbon levy and dental charges. Prescription charges have been introduced and older people are acutely aware that, now that the precedent has been established, those charges may be increased in the future.
Regardless of their own preferences, in many cases older people are required to leave the labour market at the age of 65. They are then reliant on a limited fixed income and, perhaps, a nest egg to cope with the extraordinary health, transport, home repair and heating expenses that are a real concern for many of the individuals we meet. The expenses to which I refer pose greater challenges as people move from what might be termed "young" old age to "old" old age, with the attendant challenges of living alone, experiencing greater disability and having lower levels of income.
There are sound reasons - rooted in the inadequacy of our transport, health and social care services - older people agonise about the loss of medical cards, why they are desperate to retain increasingly costly private health insurance - even when they have those precious medical cards - why they retain private cars even when they have access to the free travel pass, which they cannot use due to deficiencies in our public transport system, and why they turn off the oil-fired central heating systems in their homes and heat and live in single rooms instead. There are sound reasons, rooted in the inadequacy of our transport, health and social care services, why older people agonise over the loss of medical cards, hold on desperately to increasingly costly private health insurance even when they have those precious medical cards, hold on to private cars even when they have access to a free travel pass, which they cannot use due to deficiencies in our public transport system, and turn off the oil-fired central heating when they have the system in their homes and heat and live in single rooms instead.
Some of the recent commentary on cuts to the State pension is reflective of a 19th century workhouse mentality which required people to be destitute before they received assistance. Older and Bolder believes that we should reject this approach and safeguard the dignity and independence of older people by protecting the State pension, contributory and non-contributory, in the forthcoming budget.
I thank the committee again for giving Older and Bolder this opportunity to address the Joint Committee on Social Protection this morning.
Mr. Eamon Timmins
On behalf of Age Action, I thank the committee for inviting us today to outline some of our pre-budget issues and some of the challenges which the current economic situation poses for older people.
Age Action is a national charity which works to improve policies and services for older people. Our goal is to make Ireland the best place in the world in which to grow old. We work to achieve this goal through campaigning and research, working with older people and older people's groups, and providing key services such as home visitation and DIY teams, computer training courses for older people, life-long learning groups and our information service. I am joined this morning by my colleagues, Ms Lorna Roe and Mr. Gerard Scully, who both have considerable expertise in this area.
The funding cuts envisaged as part of the December budget pose huge challenges for older people, many of whom are dependent on the State for their income, their health services and other vital supports. We are equally concerned about what will happen to the most vulnerable older people if the services they depend upon are severely curtailed by funding cuts.
The focus in the run up to the budget has been on the need to address the country's economic difficulties and restore economic stability. The Government, however, also has a major responsibility to address these issues in a way that protects the most vulnerable in society. The economic crisis cannot be used as a reason to abandon the most vulnerable of older people who are dependent on the State for their quality of life. In our submission, we highlight seven areas of importance affecting older people: income, fuel poverty, support for carers, health, housing, transport, and employment and education. Time does not allow us to go into detail here, but we urge the committee to read our pre-budget submission.
A significant proportion of older people are vulnerable. Nearly 60% have a chronic illness or disease and 30% have a disability; this increases with age, rising to 58% of 85 year olds. Over half of older people live on incomes in the lowest three income deciles and a quarter live alone, often running homes on single, often very low, incomes.
Despite being presented as "winners" of recent budgets, since 2008, the medical card has been means tested, the services covered by the card have been severely curtailed, especially dental services, the prescription charge has commenced, with the greatest impact being on the sickest and the poorest, day care services have been cut, home care services and hours have been reduced, night time and evening rural transport has been terminated and the annual housing grant funding of more than half the county councils had run out by July this year.
Nearly 50% of older people rely on income in the bottom third of income groups, with incomes in and around the poverty line. Just 5% of older people have incomes in the highest income group, compared to 12% of those of working age. Those on high incomes should be treated the same as any other section of society. We have an income tax system that should address high income pensions like any other form of income but the State pension cannot be cut on the basis of high income pensioners because of the hardship it will cause to the majority of pensions dependent on it. Our pre-budget submission also looks at an analysis of the cost of living. There is an argument that inflation has fallen while pensions have not been cut, leaving older people with more money. While the consumer price index had fallen by 2.9% between January 2008, the last time there was a pension increase, and July 2010, the cost of key services for pensioners had soared. The cost of bottled gas is up 17.8%, solid fuel is up 9.8%, hospital services are up 12.1% and health insurance is up by 32.8%. Although people are on low incomes, they will not sacrifice health insurance because it is an important support for them.
The low income levels and the fact that two thirds of pensioners are dependent on the State pension as their main source of income highlight why the State pension is such a vital support for older people. We are urging the Government not to cut the State pension, contributory and non-contributory. Against this backdrop, it was essential that the Christmas bonus be restored and that other key supports such as the qualified adult allowance and the over-80s allowance be protected.
Fuel poverty is also a concern for Age Action. It is literally a life or death issue. The delay in introducing the promised payments for older people to compensate them for the impact of the carbon tax is hurting older people in a real way. It should be a matter of national shame that we have up to 2,000 excess winter deaths each year in Ireland, involving older people who die from cold-related illnesses because they cannot afford to heat their homes. It will be even more difficult for older people this year because of the carbon tax and the electricity levy.
The Government has intervened in the market to increase the cost of energy and so has a responsibility to redistribute some of the revenue raised to help those who are struggling. The carbon tax came into effect on home heating oil in May, and the Government told us it aimed to introduce the promised compensatory payment for low income families by October. This has not happened and should be addressed as a matter of urgency. It is bitterly cold outside today and the price of energy has gone up. Not only have we not paid the compensation payment, there is speculation we will cut the pension too. We have not specified any increase in payments in payments in our pre-budget submission bar the carbon tax compensation, where Age Action is seeking a €3 a week carbon tax compensation payment for each pensioner household. The funding for this is already being collected but the Government has not redistributed some of it to the poorest of people who are struggling.
We are very concerned about the health service. The impact of the funding cuts on the health service is an issue of significant concern to older people. It is one of the greatest threats in the current crisis to the well being of our older population. Our greatest concern is that if the HSE's budget is significantly reduced, and there is speculation that the reduction could be between €600 million and €1 billion, that the community services sector will take the brunt of the cuts. The type of care older people need is less acute and tends towards the management of chronic health conditions, rehabilitation and a mix of health and social care services. We are looking at supports such as home helps, meals on wheels and day care centres. Those supports keep people in the community and we know from past events that when HSE funding is cut, it does not close acute hospitals, it cuts community services. That is the major threat in the next for years for those trying to support those living at the edge in the community.
Even before the current economic crisis, Age Action has observed a trend of health cuts in community services, going back to 2009. The most recent data from July showed community services provided did not meet their national service plan target; taking home helps as an example, provision was 6.4% below the target. These decreases are not only lower than what was planned for 2010 but are also lower than what was provided in the same period last year, which was itself a reduction on 2008 levels. We fear that older people will bear the brunt of any further reduction in provision for community care. This will lead to increasing pressure on the acute hospital sector, an area that has already suffered severe cut backs.
Our submission also covers areas such as primary care, hospital care and nursing homes. Among the recommendations are that dental services for medical card holders be reinstated, the prescription charge be abolished, that increased effort be made to establish primary care teams. By the end of July 275, teams were in place and the Government's goal is to have 500 teams established by 2011. There must also be adequate funding for the fair deal. Despite the problems we are having with it, if funding for the fair deal runs out, we will return to the pre-1993 situation for older people.
The economic crisis poses a major challenge for older people, many of whom are dependent on the State for their income or other essential services such as health care, transport and housing. The priority for those deciding the budget must not only be stabilising the State's economy, but also the protection of the most vulnerable in society. We urge the committee to ensure that the impacts of any budget measures on the vulnerable are carefully assessed. Every step must be taken to ameliorate the impact of cuts on older people. The community and voluntary sector can play a role in this regard and Age Action would be willing to work with the Government and statutory agencies, for the good of older people.
On 17 November, we will be holding a public meeting for older people and we are inviting all Deputies and Senators to attend to hear what this budget means for older people. It is taking place in the Arlington Hotel at 11 a.m. on Wednesday, 17 November. We urge all parties to work with the Whips and allow for pairs because it is important older people have an audience of the politicians who are making these difficult decisions in the coming weeks and that they are informed of what it means to be an older person in Ireland in 2010.
We will ask the Minister to come in. Do members agree that we will ask questions of the Minister when he has concluded his presentation?
Chairman, we should be allowed to comment on the presentations made by the two groups. We will address the Minister following that.
There is no problem with that. Deputy Shortall was first to indicate that she wanted to speak.
Do we know if the Minister is under any pressure in terms of time? He is here.
We will ask the Minister to come in. We will proceed.
I welcome the representatives of Older and Bolder and Age Action Ireland and thank them for their comprehensive presentations, which covered many of the issues I intended to raise with the Minister. I compliment them on the job they do.
I have never seen such fear as the genuine fear expressed by the members of the two groups. People are frightened by what is coming down the tracks. These two organisations, along with us as politicians, must reassure people. The Government should send out a message that older people will not be marginalised. Messages coming from the Government this week indicate that it does not intend to touch the non-contributory pension or the State pension in the budget. The Government has an obligation to reassure people that they do not need to be frightened about this budget. Older people have experienced bad days in the past but they worked through them. Along with everybody else, they know what they have to do. They did it before and they will do it again. We should not frighten them in the way we are frightening them. That is something I have been concerned about in recent weeks. I meet people on the street who ask me if they will survive after this budget. They tell me they can hardly survive as it is and if there is a cut in the budget that will affect the fuel allowance or other benefits they will not be able to survive.
A message must be sent out from the Government and this committee that the people who depend on a non-contributory pension or a contributory pension alone will not be targeted in the coming budged. They cannot afford to be targeted. However, there is another category of people who have State pensions along with the contributory pension and, in some cases, private pensions and that is a different ball game.
The three comforts older people like are safety in their home, warmth, and not have to worry about their health. The recent carbon tax was an outrageous attack at a time when we were unable to afford it. The carbon tax should have been introduced ten years ago when we were in a different economic climate. It is wrong to introduce it now. Fuel prices have increased massively and the Government has an obligation to immediately bring in a scheme to deal with the rise in fuel prices resulting from the introduction of the carbon tax along with the public service obligation, PSO. I am aware that in regard to heating the Minister has increased the number of units allowed but it is not enough. People continue to depend on coal, briquettes and other fuel and they are paying much more for it now. Old people are frightened. We must send out a message to them that they will not be attacked in the forthcoming budget.
I welcome both groups, Older and Bolder and Age Action Ireland and thank them for the work they do advocating for older people. I also thank them for the research work they do, which is very helpful to members of this committee. I thank them also for their presentations.
The clear message coming from both groups is that the State contributory and non-contributory pensions should not be touched in the budget. We are picking up that message from our constituents. What Deputy Ring said is true. There is a great deal of fear around the country among all people. People fear for the future because they do not know what will happen to their incomes and they are terrified to spend any money because of the looming budget.
Pensioners, in particular, are terrified. They are listening to what is being broadcast on the airwaves and hear Ministers saying everything is on the table for discussion. They hear that there is no question but that social welfare has to be cut but there is spinning going on in regard to everybody having to make a contribution. That is nonsense. Saying that people on minimum incomes must make a contribution to sort out the problems while leaving other sectors untouched is nonsense. There are people who can well afford to contribute to this country's recovery and afford to make sacrifices. That kind of spinning is damaging to morale among people generally. Statements to the effect that social welfare payments have to be on the table are contributing to the terror being experienced by many pensioners.
I am also concerned about the game playing we have seen in recent weeks where a succession of Government backbenchers come out saying they will not stand for any cut in the pension. That is playing politics with people's lives. We need a clear statement from the Minister responsible and from other Ministers who comment on this that the State pension will not be cut in the forthcoming budget. We have to nail our colours to the mast and say it will not happen. We should stop playing games with people's lives. We will put that point to the Minister later in the meeting.
The other point I would make is that the line was put out in last year's budget that pensioners were protected. The basic State pension figure was not affected in last year's budget but pensioners were hit by the abolition of the Christmas bonus, which represented a 2% cut on an annualised basis, but also by the stealth cuts introduced which are impacting on pensioners in terms of the prescription charges and the cuts in dental benefits.
We need a commitment from Government that it will not negatively impact on the standard of living of pensioners, and it is a meagre standard of living in the case of the vast majority of pensioners, either through a cut in the State pension or through the associated benefits. We do not want the Minister saying on the one hand that the pension will not be touched while on the other hand introducing a raft of further stealth cuts in terms of other benefits. We must be clear about the people who can afford to contribute to this country's recovery and those who cannot and clearly those people who are dependent on the State pension cannot afford to suffer any further diminution in their standard of living.
There is a great deal of talk about people on contributory pensions being able to afford to take some kind of cut. People who are on non-contributory pensions are solely dependent on that pension. That is the reason they are on non-contributory pensions. We must be clear that they have no other means. The people who have a contributory pension have that pension because they have worked, in many cases for 40 years, and contributed to a pension. That is the basis of a social insurance scheme. They have paid into it and they are entitled to receive their contributory pension payment without it being cut or threatened by Government.
I welcome the point made by Ms Conboy on the difficult decisions facing the country and the Government in the upcoming budget in terms of where cuts have to be made. In respect of pensions in particular, it is extraordinary that in the private pensions area, people who are very wealthy can have pension funds of €5.5 million. When they come to retire they can take €1.3 million tax free. That is an extraordinarily generous private pension arrangement for the high rollers. I have not yet heard a single Minister mention that extraordinarily generous arrangement for rich people and the need to tackle that area.
It is grotesque for Ministers to be talking about the fact that they may need to cut the State pension while not mentioning the extraordinarily generous arrangements that are in place for very wealthy people. We should put all the pension issues on the table. We should note what the very rich get in terms of pension entitlement through the tax relief system that currently applies and start talking about some of those people making a contribution and a sacrifice rather than hitting people who are at the very lowest level of income.
I wish to make two further points. From looking at the research and from first-hand experience in my constituency, two particular issues are pressing in respect of pensioners. The first, which has already been alluded to, is the situation in which single pensioners find themselves. Pensioners living alone are at the highest risk of poverty. We know from all the research that has been done, particularly by the Vincentian Partnership, that they do not have an income to live a basic life with any level of basic comfort. That cannot be done on the existing level of the pension. We know that from the very detailed research that has been done, not to mention anybody who is trying to keep a car on the road or, for example, keep a pet or buy presents for grandchildren. Those little small extras cannot be afforded by people in receipt of the State pension at its current level. Therefore, there is no question of those people being able to bear any cuts. That point needs to be made very clear.
I am also concerned about the area of health charges in the case of pensioners under the age of 70. We know that since the arrangements were made for pensioners over the age of 70 to have medical cards there has been no improvement in the income limits for pensioners under the age 70. Pensioners between ages 60 and 70 are at risk because of the fact that in many cases if they have any income over the State pension, they do not get a medical card. They are at a point in their lives where their medical needs are increasing and, as was pointed out, many of them are struggling to maintain their VHI payments because they are terrified of becoming sick. This is another area that needs urgent attention.
The final area I wish to raise is that of fuel poverty. This point was well made by Mr. Timmins. The Government introduced a carbon levy in last December's budget. When it was announced by the Minister, Deputy Brian Lenihan, he said there would be compensating measures for people living in poverty to offset the cost of the carbon levy. That promise was repeated again in February by the then Minister for Social and Family Affairs, Deputy Hanafin, when she said that before the carbon levy would be introduced, compensating measures would be introduced. When it was raised with the current Minister by this committee, he gave an undertaking here that prior to the autumn and the onset of the cold season, compensating measures would be introduced. It is now some 12 months later-----
Is this filibustering going to continue?
-----and following three Ministers having promised to introduce off-setting measures, there is no sign of them. We want answers on that from the Minister today.
I want to make a few points, but I do not want to delay the Minister any longer as he has work to do in the Dáil and in government today in Dublin. It is important work and part of it is to listen to what the groups and Members have to say. I thank the delegates from the groups for coming in. Like every TD, we meet older people on a daily basis, many of whom are involved in active retirement associations and many of them are involved in the delegates' organisations, which do a fantastic job. The delegates do not need to hear any more compliments but my sentiments are genuine and their work is appreciated.
We will certainly make every effort to go to the delegates' function next week but it will not be only a matter of the Whips system in the Dáil Chamber because committees could be scheduled to sit at which votes could be called. However, I, and I am sure, other members certainly hope to go to it.
The Opposition bleats on about the State pension. The last time it was in power, and this is all one can judge it on, it raised the State pension by 60 pence in a year and it boasts about that. That is the track record it has. It can complain about us and everything we have done but the State pension has been increased dramatically during the years we have been in power. Our record stands in stark contrast to the Opposition's record.
We want to protect the vulnerable. The idea that Fianna Fáil Members are not allowedto speak out about protecting the vulnerable is nonsense when our track record is one of protecting the vulnerable over many decades. The Labour Party can complain about that but we are the party that has protected the vulnerable.
Old people by and large are vulnerable and at serious risk of poverty, particularly in the area of health. Other groups are also at risk of poverty. The debate on pensions is crucial and I do not want the State pension to be cut but it is important that we do not take our focus off other vulnerable groups. That is an important point to make.
We have heard the Labour Party's "tax the rich" mantra again in referring to an alleged rich pensioner who has €5 million in the bank. We are aware that the Labour Party will know all about the wealthy. The Minister and the Government have said that everything is on the table and that includes tax reliefs, but the Labour Party does not seem to know that the vast majority of the beneficiaries of pension tax reliefs would be civil servants, teachers, doctors and nurses who pay AVCs. I am sure the Government is debating and putting on the table pension tax reliefs and it is important that it does that, but it is important we do not simply say that there are a few rich people who get serious levels of benefits. If there are, we need to tax them but we should remember that the vast majority who get pension tax reliefs are ordinary public sector workers who pay AVCs on top on their pension contributions.
The bulk of tax relief goes to high earners - it goes to the top 20% of earners. The Deputy should check the figures.
I would like to make a brief contributions. I have met the two groups represented on a few occasions. Each time the delegates have been here they have demonstrated to us in public life the importance of having people like them on the ground.
I want to correct Deputy Thomas Byrne on a point he made. Fianna Fáil has been in government for 27 of the last 30 years and when the coalition took office in 1997 it had to clean up the mess left by Fianna Fáil.
That is correct, and we will have to do again.
We will have to do it again, unfortunately, because the Deputy's party has brought the country to its knees and it has brought fear to the doorsteps.
We have not, it is the Opposition that has-----
Let the Deputy speak. She did not interrupt the Deputy.
I will not be accused of bringing fear to the doorsteps. We have not done that.
I would not normally go into this because there are more important issues to be identified here, namely, those concerning older people. However, the Deputy should not trot out the line that we only gave pensioners an increase of 60 pence. On leaving government in 1997, there was a surplus in the Exchequer and this Government has spent every bit of it-----
Why did the Deputy's party not spend more on increasing the pension when it was in power given that it is bleating about the State pension all the time now?
-----without leaving any of it to provide for the rainy day. That is as much as I would like to say on that.
I want to see older people living in dignity, with a little bit of independence. If they want to remain at home in their community, close to their families and where there roots are, that is where they should live. There should be no such thing as people having to be put away in homes or institutions. We should provide services on the ground to enable people to stay at home in their community with their neighbours next door who care for them and who will always be there for them. It is only when, for example, Mary does not go to the local shop to collect a bottle of milk or the newspaper that people in the community learn there is something wrong. We need to go back to basics. The things that happened 30 years ago when people cared for each other in their neighbourhoods, are still the important things that happen today in our society.
I want to comment briefly about the poor standard of housing. I visit many people on a daily basis, often in the evening time. I am fed up raising with Dublin City Council the circumstances of people living in sheer poverty in bedsits. I am appalled that in some Dublin City Council flat complexes in my area people are still living in one room units. They cook, eat and sleep in the one room. In God's name we should be able in 2010 to ensure that people have proper living accommodation. That is one of my big gripes, that many older people have to live in very poor standard accommodation. I can only say thank God for organisations like Alone who give people some dignity and a place to live.
The next issue I wish to raise is the area of health. There has been an increase in the number of elderly people calling to my clinic, and I am sure the same is the experience of other Members, complaining that they can no longer afford to go to the chemist. They are afraid to get a prescription because of the charge that has been brought in. We need to assure elderly people that if they are sick, they need not think they have to stop taking the pills and medication prescribed for them. We must drum that into their heads. Elderly people are getting sicker because they are afraid to fill their full prescriptions. I am appalled. Daily I hear from the shopkeepers in the many local shops in my constituency that elderly people are cutting back on basic items such as fruit and milk and little luxuries such as a cake at the weekend.
Yesterday, I attended an open forum in UCD on the abuse of the elderly in this country. I was appalled at some of the statistics that were given. The only way to prevent abuse of elderly people is through caring for them in the community and bringing back the old-style neighbourhood practice whereby people looked after their neighbours.
I was talking to elderly people in Thomas Street and Meath Street two weeks ago. The single issue many of them raised was the Christmas bonus. They said the Liberty market would not be the same this year because they would not have their few bob to spend. What a shame on a Government that has been in office for 27 years. It took away the bonus at the end of the year which is a basic requirement for people to bring them over that particular edge. Deputy Shortall put it very well. It is one of the basic things people sought, that they would have a few bob in their pockets at the end of the year to spend on their grandchildren. We have taken that away from them.
I could say more but I will not. I thank Older and Bolder, Age Action Ireland, Alone, the Society of St. Vincent de Paul and all the other people who will help to assure older people this Christmas that they need not be frightened or cold and, above all, that they can have a decent meal when they need it over the Christmas season.
I will be brief as we are anxious to hear the Minister answer our questions. I welcome the groups' representatives and pay full tribute to them for the work they and the associated groups involved with them do daily throughout the community to help people, particularly the old and vulnerable. The Labour Party wishes to take cheap shots but we are supposed to be muzzled and not fight for our demands. It seems it cannot wait to get into power, when none of these cuts will be implemented. That is not why we are here this morning. We are here to listen to these organisations and have a proper, meaningful discussion with the Minister, rather than say we should be muzzled if we say something is wrong or we do not agree with it. I do not know what its members want. They appear to want a stick to beat us and a stick to shut us up as well.
The Deputy says one thing in his constituency but he votes differently here.
Deputy Ring was able to talk without interruption. I am here for a meaningful discussion, with none of the cheap shots across the floor. We are here to respect these people and do what we can for them.
I congratulate Age Action Ireland and Older and Bolder on their presentations, their ongoing useful work over the years and for the documentation they supplied to the committee. We all work in our constituencies and, like the Deputies who spoke earlier, I met a number of people, particularly in the past year, who are struggling to make ends meet. With regard to the Christmas bonus, in the period before the budget last year we knew, and it was highlighted by a number of groups, what the effects of its removal would be. Was any study carried out by either group after the fact in January and February on how it impacted on people and how they got through Christmas? I have anecdotal evidence of how it affected people, especially some of the older people who use the bonus to pay for additional fuel during the harshness of the winter. They did not have that extra money last year, and consider the winter we experienced. Perhaps such a study was not carried out, which is a pity.
The other question relates to the Government intervening in the market to increase the cost of energy. Not only should some of the carbon tax be ring-fenced to increase the current fuel benefit in some form but a large portion of it should be ring-fenced to retrofit the homes of elderly people. That should particularly be fast-tracked for people on non-contributory pensions, who are often the poorest and, by virtue of that, the most sick. We can ensure that the little money they have for fuel can go further if their homes are properly insulated. It is a more efficient use of the money and another benefit is that it will create employment for people.
The other issue is the debate about how great Fianna Fáil, the Progressive Democrats and the Green Party have been in terms of increasing pensions. Would the representatives agree that for every increase in the pension in recent years there was also an increase in the cost of living, in terms of fuel bills and recent reductions in services as well as prescription charges? Even though the pension increased, at the same time costs also increased. There is a negative effect in the long term because the money could not increase the amount of food people got or increase the heat in their homes.
I thank Age Action Ireland and Older and Bolder for their presentations. In a previous role I had the pleasure of working closely with both organisations and I am very aware of the good work they do. I have the height of respect and admiration for their endeavours and commitment, and wish them continued success.
My philosophy since I entered public life has always been towards great support for older people and I always try to improve and develop the services. We have changed the system in the House in terms of the committee structure and other structures that are in place. Has it been of benefit to both organisations to be able to put their case and to be kept au fait with developments in the areas in which they have an interest? Are there other mechanisms they would suggest and, with regard to the mechanisms they are currently using, are there any improvements they would recommend, including in dealing with the Department? Do they sometimes feel they are at a loss dealing with this committee in it not coming back to them on certain issues or points, or is this committee somewhat hamstrung in not having a direct connection with either the Department of Finance or the Department of Social Protection? We all recognise there are restraints within the system. We do not expect the Minister, who is present today, to tell us what will be in the budget on 7 December. However, within the mechanisms with which the organisations currently work, is there room for improvement and what improvements would be beneficial to both organisations?
I wish them well in their continued good work.
I thank the representatives of Older and Bolder and Age Action Ireland for their excellent presentations. I will not delay as the Minister has been waiting for a long time.
What I found most striking was Ms Patricia Conboy's remark about people having entered into a contract in the 1960s with regard to their PRSI payments. That is correct. It is morally wrong and illegal to cut pensions now for people who paid into them for so many years. The contributory and non-contributory old age pensions should be left intact. Like Deputy Ring, I have people calling to my office who are absolutely terrified because they cannot make ends meet. It is a myth that prices have gone down; they have increased. Mr. Timmins is right to mention the number of people who are trying to keep warm when solid fuel and electricity costs have risen. It is a shame to think that 2,000 people have died because of cold related illnesses. In addition, stealth taxes have been put in place via the removal of medical cards, the lack of free dental treatment, rising hospital costs and prescription charges. The State pension, both contributory and non-contributory, must remain intact. It cannot be interfered with under any circumstances. I thank the witnesses for their wonderful advocacy on behalf of the elderly.
Does either group have anything further to say or will we invite the Minister to reply?
Mr. Eamon Timmins
Deputy Ó Snodaigh's questions about research on the impact of the loss of the Christmas bonus and the carbon tax are somewhat interrelated. The carbon tax compensation payment is only one element of dealing with the impact of fuel poverty on older people. Insulation is also a part of it. Energy prices and enabling people to have an income to afford energy comprise the third element. We are part of a wider alliance of groups including the Society of St. Vincent de Paul. We have made a specific submission to the Government on fuel poverty to examine those three issues, including retrofitting. Our excess winter death rate rises by 22% in the winter compared with 11% in Finland, so fewer people are dying of cold in much colder countries. That is partly because of insulation. If all our homes were insulated to a high level, this would not be an issue. Unfortunately, however, those affected are living alone in poor housing stock with low incomes. In addition, one in five people who struggle with fuel poverty have a disability. Invariably we are looking at all the people who are going to tick those boxes. They struggle more than the rest of us, although we will all struggle with energy prices rising. We will have to tighten our belts and put on an extra jumper, but it will have a much harder impact on some people.
I will now deal with the loss of the Christmas bonus. In some ways, to call it a Christmas bonus gives the idea that people used it to buy boxes of chocolates and bottles of whiskey, whereas it is used to buy bales of briquettes and other fuel. The timing of the bonus cancellation last year was unfortunate in that it coincided with the coldest winter in 43 years. It really had a stark impact with some people having to choose between food and fuel. A number of older people told us that they would cut back on food or fuel, which is a dangerous strategy, because food is equally important in keeping such people alive in their homes during very cold periods.
We have funding from CARDI and are working with the Dublin Institute of Technology, the Institute of Public Health and the University of Ulster on an all-Ireland fuel poverty study. We are examining how cold weather affects older people and we hope to have the early results in the next couple of months. The preliminary results are from the first three months of 2009. It was not a particularly cold winter, but there were cold patches in parts of the country. We examined the death rate in the first three months compared with the same period in the previous years and there were an extra 661 deaths from that cold period. We know that cold kills and we also know that the Government can do something about it. There is a longer-term plan for how we can help to get people through this winter. The promise of having their houses retrofitted next year or the year after is no good, however, because it will not keep them alive.
We found the committee to be useful concerning changing mechanisms. It is a fantastic structure to be able to talk to people who are all interested in the area of social protection and who are all members of a dedicated committee. We hope the national positive aging strategy. The problems for the aging sector not only include social protection but also housing, energy, transport, employment and health care. Older people's issues are all interconnected. With a national positive aging strategy and an aging population we need a better mechanism to interact with Government in order that different arms of Government can start to interlink, especially with the aging population. Now is the time to do it. While the aging population may be used as a threat to people, it is actually a fantastic opportunity. We still have a young population, but it will age. Many other European countries are ahead of us in this respect and are dealing with some of these problems. We have a fantastic opportunity, but the positive aging strategy needs to be published in order that we can get it up and running. We also need structures established in order that we can engage and contribute meaningfully to the running of Government.
Mr. Tom O’Connor
I wish to pick up on a couple of points. To answer Senator Callely's question, we greatly welcome the opportunity to appear before this committee and interact with it. The Older and Bolder organisation has also found that politicians of every party have been more than willing to grant access and give of their time. Whenever we have sought meetings with various political parties in the Houses of the Oireachtas we have always been granted them and have had a genuine dialogue.
A series of issues have been raised in this session and I do not intend to repeat them. I emphasise that the pension issue is vital. The information coming in every day to Older and Bolder and through our member organisations underlines what has been said by a number of people in this meeting about the fear engendered by the possibility of the pension being withdrawn or somehow reduced. It should be borne in mind that the contributory pension is the basis of a contract between the citizen and the State. People have contributed all their working lives to that pension. It is as if the Government suddenly decided to take away benefits accruing to people who have been paying into a private pension scheme, as many have. That would be deemed to be robbery. We would regard any attempt to reduce the contributory pension in the same way. It would be a rapacious action by the State.
We are becoming increasingly frustrated with the slowness of the supposedly ongoing dialogue on the national positive ageing strategy. The objective is a genuine one, to see a society with equal treatment for every citizen, particularly older people. As Mr. Eamon Timmins has said, it is a multidimensional issue, covering issues such as equality, health care, transport and so on. We are becoming increasingly impatient, however, about the non-appearance of a draft document. We hope that within the coming weeks we will at least see the basis of a discussion document. My colleague, Ms Patricia Conboy, would also like to make some comments.
Ms Patricia Conboy
I will be very brief. I welcome the positive comments from members of the committee who have emphasised the need for a proportionate response concerning the budget. That is Older and Bolder's position. Targeting people on incomes of €12,000 to €13,000 per annum is not a proportionate response to the forthcoming budget. Tax relief needs to be examined in terms of bringing forward proposals that are in the national pensions framework, given that such relief currently benefits the better off.
There are also questions about data and bonuses. Older and Bolder has undertaken qualitative research on older people's experience of living on the State pension and the use of State benefits. We will publish an update that will be launched on 23 November. We would welcome a clear statement from the Minister, such as has been requested in this debate, that would allay older people's fears.
As regards Senator Callely's question, we think it would be very beneficial if members of the committee and other political representatives examined the development of administrative systems to enable us to have information for planning purposes. One of the issues concerning the State pension is that it is difficult to identify individuals who are solely reliant on the State contributory pension. If we had better information systems we would be able to act on planning and resource allocations.
Ms Lorna Roe
Deputy Thomas Byrne made a good point on the track record of protecting vulnerable people. He highlighted the importance of the State pension given that poverty levels have gone from a high of 44% in 2001 to 11% in 2008. When examined more closely, the statistics show people's dependence on the State pension. It emphasises the point that current pension levels must be maintained. Our most recent statistics show that 86% of people would be at risk of poverty without any State pension, so we want to highlight the importance of maintaining the State pension. We are calling for reassurances on that point.
Deputy Ó Snodaigh referred to purchasing power and the cost of living. There is a problem with the cost of living because prices have been increasing over the past two years while services have been reduced. It should be remembered, therefore, that people will be relying on their State pension to go further.
Mr. Gerard Scully
I do not want anyone to think pensions are the only issue. There are secondary benefits such as those included in the household benefits package which are also being spoken about and questioned and under attack. They are also of vital importance to older persons. The speculation about them is causing as much fear as the speculation about what might happen to pensions. The speculation and scaremongering in the media are causing tremendous fear among older persons. When people telephone us in Age Action, it is terrible to hear the fear in their voices in wondering what will happen to them or even whether they should apply for benefits or entitlements because they think either they will not receive them or they will not be available in the new year. It is time to bring the speculation to an end. Even if there is no statement on whether benefits are safe, please stop the speculation.
I thank the groups represented for their most interesting presentations. I now welcome the Minister for Social Protection and his officials.
Ba mhaith liom buíochas a ghlacadh leat as ucht an cuireadh teacht anseo ar maidin agus labhairt leis an gcoiste maidir le cúrsaí dearbháin breosla agus an bónas Nollaig. I thank the joint committee for giving me the opportunity to appear before it today to discuss the issues of fuel vouchers and the Christmas bonus.
The Department of Social Protection assists low income households with heating costs through their basic payments, the fuel allowance scheme and the household benefits package encompassing electricity and gas allowances. These schemes have been improved significantly in recent years.
The fuel allowance is paid for 32 weeks each year from the end of September to early May. In the 2010-11 heating season it is estimated that over 350,000 recipients will benefit from the allowance at a cost of over €239 million. In budget 2009 the duration of the payment was increased by two weeks to 32 weeks, while the weekly value of the allowance was increased by €2 to €20 or €23.90 in designated smokeless areas. An additional smokeless fuel allowance of €3.90 per week is paid in designated urban areas. These compare with figures of €14 and €17.90, respectively, in 2006.
There are 380,000 pensioner and other households in receipt of the household benefits package which provides up to 2,400 electricity units free per annum, or the gas equivalent, during the year. It is estimated that 140,000 of these households are receiving the fuel allowance and the electricity-gas allowance under the household benefits package to assist with heating and other energy requirements. The electricity and gas allowances under the package cost €184 million in 2009. I recently announced that the electricity allowance had been increased with effect from 1 October to cover the cost of the public service obligation levy on domestic electricity supplies. This will increase the annual cost of the scheme by €12.6 million.
The Government is committed to protecting vulnerable households from the impact of energy costs through a combination of supports, investment in programmes to improve the energy efficiency of the housing stock and energy efficiency awareness initiatives such as the Keep Well and Warm booklet and accompanying associated website. Some 150,000 copies of the booklet have been distributed in the past few years. The warmer homes scheme administered by the Sustainable Energy Authority of Ireland, under the aegis of the Department of Communications, Energy and Natural Resources, is the primary mechanism for alleviating the key underlying cause of energy poverty - the thermal inefficiency of houses. Over 19,000 low income houses were retrofitted in 2009 with a further 22,500 targeted in 2010. In his carbon statement following the budget the Minister for the Environment, Heritage and Local Government outlined details of the €130 million in funding to be provided for insulation, €76 million of which will be used to assist low income families.
The Department of Communications, Energy and Natural Resources has overarching responsibility for the energy portfolio and convened an interdepartmental-agency group on affordable energy to co-ordinate and drive Government policy in this area. It was tasked with devising an energy affordability strategy which will set out existing and future approaches to addressing energy affordability.
It has been suggested the fuel allowance could be paid by way of fuel vouchers rather than as part of an individual's weekly payment from the Department. However, voucher schemes, by their nature, introduce stigma to a scheme. It is also the experience of the Department that voucher systems are administratively complex, inordinately costly and raise identity-security issues. For example, if recipients were issued with just two vouchers per annum, that would amount to 700,000 vouchers to be processed. Given that the face value of any vouchers issued would be relatively small, the administration cost of a voucher scheme would far exceed the cost of the scheme. Such a system would have to operate across a wide diversity of fuel suppliers, given the range and type of home heating products available. It would also require the putting in place of a separate administrative arrangement, adding further complexity to service provision for customers. Issues would arise with the distribution, reconciliation and control of vouchers. In addition, vouchers are easily lost and there would be much greater fraud potential, requiring more involved control procedures to minimise risks. Given the Department's previous experience with vouchers and the recommendations made in the review of the Department's e-payment strategy, it is not intended that a voucher system will be introduced in connection with any aspect of the payments made at this time. The carbon levy has not been introduced on solid fuel. It has been deferred for now.
I will now turn to the issue of the Christmas bonus. The decision not to pay the bonus was not taken lightly and must be viewed in the context of the overall social welfare budget. It is important to acknowledge that in the region of €21 billion will be spent by the Government in 2010 on social welfare provisions, €500 million or 2.45% more than in 2009. Social welfare expenditure has trebled between 2000 and 2010, far ahead of the increase of less than one third in the price of goods and services in that decade. In the current economic and financial crisis our main priority must be to restore stability to the public finances and the measures necessary to achieve this will impact on everyone's living standards.
The supplementary budget in April 2009 provided for the discontinuance of the Christmas bonus and no provision has been made for its payment in the 2010 Estimates. The cost of paying a 100% Christmas bonus this year would be in the region of €226 million. The payment was introduced in December 1980 for social welfare pensioners and those in receipt of long-term social welfare payments. There were a number of developments in the scheme since its inception, including upward and downward adjustments in the level of the bonus payment.
The Government is proud of its unrivalled record in increasing the level of social welfare payments, particularly for pensioners. Older persons who account for 11% of the population account for 28% of the overall social welfare budget and that is as it should be. In the past 12 years we have increased pension rates by 120%, unemployment benefits by 130% and child benefit payments by over 330%, while a new half-rate carer's allowance was introduced in September 2007, at a time when the cost of living has increased by about 40% over the same 12-year period. We have extended coverage, removed barriers and increased entitlements such that the level and extent of social support payments have been transformed beyond recognition. Social welfare expenditure for 2011 will be considered in the context of the forthcoming budget, having regard to both the needs and to the resources available to meet those needs. In an uncertain economic environment, my priority will be to ensure that the Government strategy to stabilise the financial position is advanced and to protect those most in need in a manner which is sustainable in the years ahead. I join with the concern expressed here today about rumours that circulate of €30 or €20 cuts in pensions and so on. These have no basis and I regret the scare-mongering that is taking place in this difficult situation. I have always found Members responsible in this regard and we have had good debates. I do not want to add any unnecessary fear to people's lives, but on the other hand, in order to maintain the kind of payment system we have introduced and the trebling of payment in social welfare that has occurred over the past ten years, we must make adjustments because one third of the money we spend is currently being borrowed. If we could not borrow the money, the catastrophe that would face social welfare recipients would be much greater than if we make the adjustments now, stabilise our national finances and ensure we can continue to maintain the majority of the payments we have introduced in the past ten years to the highest level possible.
The job of the Minister for Social Protection is very difficult at the moment. The Department must look across a wide range of people who get payments from the Department, try and balance all the competing interests and look at poverty rates across the spectrum of society. There is an issue on which I have common cause with Deputy Shortall. When I raised this issue last May there was a cacophony of criticism. As she pointed out so eloquently today, not all pensioners over 65 or 66 are in the same situation. Some are very wealthy. I agree with her. When I raised this issue in the spring, there was huge criticism. In trying to protect those on the lowest income, we must look across the spectrum to see where we can make the cuts in the most equitable pay possible. To re-echo what Deputy Shortall said, saying that nobody over 65 could afford to make a contribution is patently nonsense. Some people over 65 are extremely wealthy and we must look at those people. We cannot exempt people just because they have reached a certain chronological age and say that they cannot be taken into account. I fully agree with Deputy Shortall on that and thank her for making that point.
I welcome the Minister and his officials. I note we are currently in a serious economic crisis. Last year, when the Minister suspended the Christmas bonus, it was the greatest setback to people on social welfare. People have always budgeted for Christmas in expectation of the extra bonus Christmas payment and its loss caused great hardship. I suggest that moneys which were gathered from carbon tax, which were to be ring-fenced by the Government, could be used to pay even a portion of the Christmas bonus. That is money the Government did not expect to have and perhaps some of it should be given to the most vulnerable in society. While the Minister cannot pay out the €26 million the Christmas bonus costs, it would be good if he could even pay out a small portion of it, because the failure to pay anything extra last year caused great hardship. Unfortunately, we had the worst winter we have had in 43 years and people suffered and had to pay extra costs for fuel and food. I urge the Minister to examine whether he can use any of the ring-fenced moneys raised from carbon tax. This was money that was not expected and I hope he can find some way to use some of it to pay a portion of the Christmas bonus.
On the matter of the fuel allowance and the 32 weeks of the year for which it is paid, in our difficult climate people need a fire almost every day of the year. We do not have the climate and weather other countries have and people here seem to need a fire and heat almost every day of the year. This is costly. I am aware the carbon tax has not applied to solid fuel, but I know that proposal is something the Minister is considering. Over recent years the cost of all kinds of fuel - heating oil, briquettes, coal etc. - has increased. Elderly people need and like to keep warm. Is there any way the Minister could ensure the fuel allowance is paid for the full year, because people need that extra funding to provide heat? I agree with the Minister with regard to the voucher system and I am not a fan of that system because it can be abused. However, I would like to see a direct payment in the form of the fuel voucher paid for the 52 weeks of the year. I am aware there is a cost factor in that. The Department has tightened up in the area of fraud and we have saved over €460 million. This again is moneys the Department had not expected to have. Fraud should be tackled more strongly and whatever savings are made in that area should be used to help those who need it more. The message should go out from here that people defrauding the State and social welfare are taking the money from people who need it more. They are taking money from everybody's pocket so that we are left unable to provide for the most vulnerable.
I urge the Minister to look at these two areas. Can he increase the fuel allowance from 32 weeks to 52 weeks in the forthcoming budget? I know there is a cost factor, but he could get the money from the carbon tax or save it through tightening up on fraud. Fuel is important for elderly people.
Before calling Deputy Shortall, I am slightly disappointed with Deputy Ring because he never mentioned turf when he mentioned all the different types of fuel.
I forgot the turf.
People are not being allowed to cut turf any more.
I welcome the Minister and his officials. Will the Minister take on board the comments made by committee members and by both of the groups who appeared before the committee this morning with regard to the impact the speculation about cuts to the pension is having on people's lives? I am not asking the Minister to make a statement now or to give a commitment to protect the State pension, but urge him to think about the comments that have been made and about the thousands of people throughout the country who are living in fear because of the speculation. I hope he will consider making a statement as early as possible assuring them the State pension will not be hit in December's budget.
The Minister has responsibility for pension policy. I hope the Minister is not misrepresenting the comments I made earlier and that he will not use those comments as an excuse for hitting people who might have a small occupational pension. Many of our pensioners are entitled to the contributory pension and to a small occupational pension and have paid into both schemes.
The Deputy was very clear in what she said.
I am just clarifying what I said.
I made the point last May that a small number of pensioners, some of whom get a State pension, were very well off and that to exclude them or to infer that all pensioners are poor is fallacious. I have huge sympathy for people who have a State pension and a modest occupational pension. That is the way our system is built. I do not include those and do not infer the Deputy referred to those people. She was very clear that she was referring to people who have huge amounts of money. However, it may not be commonly understood that those people also often have an entitlement to the State pension.
In some cases. However, what I am talking about, is the Minister's responsibility for pension policy, which currently and for many years has allowed a situation where the State spends approximately €3 billion on tax relief for pensions. The bulk of that relief goes to the top 20% of earners and that situation is indefensible. I am interested to know whether the Minister plans to tackle this inequitable situation in the coming budget. I am speaking about people such as Mr. Fingleton who has a €27 million pension pot. It seems that the Minister's policy would leave untouched such people. I certainly hope the Minister will take on board this issue and that he will target the people in this category who are being hugely subvented by the State. These are extremely wealthy people who receive a vast amount of tax relief to build up these huge pension entitlements. The priority in the pensions area, if cuts will be made there, must be to tackle this situation. Hands off the State pension.
We know that even before the carbon levy was introduced last year, there was a problem with fuel poverty and an interdepartmental group was examining it. The carbon levy has greatly exacerbated the problem of fuel poverty for people who are dependent on home heating oil. The Minister has much experience of representing rural Ireland and therefore knows that a great many pensioners throughout the country have no option but to use oil for home heating. There was a 27% increase in the cost of home heating oil last year and since 2007 home heating oil has increased by 124%. Statements are on the record on what was promised for low-income people dependent on home heating oil. The Minister for Finance stated last December that a vouched fuel allowance scheme would be developed to offset the increases for low-income families depending on such fuel. The then Minister for Social and Family Affairs, Deputy Hanafin, stated that prior to the tax being applied to fuels for home heating, arrangements would be made to assist those most at risk of fuel poverty. On his website, the Minister wrote that the interdepartmental working group was due to report to the Government by the end of June to allow for any proposed measures to be implemented when the heating system started again at the end of September 2010. We are well past that point now. This morning, the Minister stated he does not favour a voucher system. That is fine if he has concerns about such a system. However, I am asking him to tell us what steps he will take to introduce the long-promised measures, promised by three senior Ministers, to offset the burden of the carbon levy which is now being placed on low-income families. What will he do about this? It has been promised for 12 months and there is still no indication of what the Government intends to do and there is still no relief. This is another area where the burden of Government policy is being placed on those least able to carry it.
Earlier, I raise the issue of lone pensioners, the group of pensioners most at risk of poverty. The living alone allowance has not been increased for approximately 14 years. Given that we know those people are most at risk of poverty and that they face very severe difficulties in making ends meet and trying to meet the cost of overheads on a single pension, is it the Minister's intention to address this matter and how does he intend to do so? When can we expect to see at least a draft of the long-promised positive ageing strategy?
I thank the Minister for coming before the committee today. He has been before the committee on a number of occasions since his appointment and this is very welcome. It is also noteworthy that the Minister - and the national media might take note - has gone out and about throughout the country. As recently as last night, he was in County Westmeath to meet people and hear their concerns, to listen to older people, to listen to people who depend on social welfare and to listen to the poor, vulnerable and weak as he described them himself. By and large, people are very appreciative of the opportunity for the Minister to hear their concerns. He has shown himself to be a listening Minister.
I also thank him for scotching rumours, some of which have been put about by people associated with the Labour Party. When the Minister came to my constituency he put to bed rumours about cuts of €20 or €30 to the pension. He has done so again today and I am glad of that. I do not want to see the pension cut. I do not state that in any threatening way and I do not think any of my Fianna Fáil back bench colleagues state it in a threatening way. I realise the difficulties faced by the Minister in the decisions he has to take. I also know that his heart is in the right place and that he really does want to protect the vulnerable, the poor and the weak. We hear so much about this from the Opposition but we have seen action from the Government on this issue. We have not seen everything we would like to see. I certainly would like to see something on the vouched fuel scheme which was promised last year. However, it has to be said that a very significant amount of retrofitting has been done under the warmer homes scheme and this has made a huge impact on people vulnerable to fuel poverty.
It would not be fair to ask the Minister to make a commitment here on the budget but he has heard the intercessions of his colleagues at private meetings, which of course have been dressed up by the media as some type of rebellion. It is not a rebellion at all, it is our concern for our constituents, which I know the Minister shares. It is a concern for everybody.
I am glad to see there is a consensus between the Minister and Deputy Shortall on the point that not every pensioner is vulnerable. I was almost going to ring Commissioner Rehn and tell him we have consensus on one point. The vast majority of pensioners live on very low incomes and let us acknowledge this fact.
The Minister has made the point very well that just because somebody can shout the loudest does not mean that he or she is the most vulnerable and that there are vulnerable people who have no voice whatsoever. It is very important that when the Minister is looking at his budgetary figures, he looks at every vulnerable group. I am thinking in particular of lone parents, who I see on a daily basis in tremendous poverty. I am also thinking of families with high mortgages who have lost their jobs. They are really struggling. With regard to fuel poverty, last week I met members of a family who had to move in with one of their parents. This is not because their house was repossessed - the bank is working with them - but they could not afford to heat the house for their children. Such people do not have a strong voice and it is very important in all his efforts to protect pensioners that the Minister does not forget the voiceless, of whom there are many. He is making great strides in doing so and I wish them well in the deliberations in government.
I thank the various groups who have addressed the meeting. I apologise for being absent as I had a date with the Ceann Comhairle which I had to fulfil. In particular, I compliment the Minister for coming before the committee. A number of Ministers are very good at coming before committees but a number of Ministers are not. Those willing to come before a committee and be questioned should be noted and all credit is due to the Minister for this.
I am a little concerned about the direction in which the conversation is going. I find it very difficult to hear the Minister being congratulated for not exacting the rumoured €30 per week reduction in pensions and being credited with not going that far. It is laudable, but I want to point out that in the present situation older people dependent on an income, in most cases a single income, find themselves very vulnerable and are frightened by talk about their future in this fashion - what they would call loose talk - even if nothing ever happens. I certainly will not support anybody who will set about stripping away what those people worked for all their lives.
The generation to which we now refer did not contribute in any shape or form to the economic downturn. In fact the reverse is the case as for years they contributed to building up this economy during the very bad times. When it comes to the time that they might get something back by way of recognition and recompense, suddenly we have become very severe and austere about the way in which they should be dealt with. I do not accept this and I do not think the Minister should accept it either.
The poor and vulnerable have been referred to by everybody and correctly so. This group is growing and will grow in the course of this year. It is down to the Department of Social Protection to protect those people in their hour of need. Nothing else will do it. Despite what his ministerial colleagues might say, it is for the Minister to ensure he has sufficient budget and sufficient staff to deal with the emergencies that will arise in the course of the next 12 months, of which there will be many.
I refer to what is called the State pension. I became alarmed when I heard it called the State pension because we used to have two separate pensions - the non-contributory pension and the contributory pension. I am concerned about a blurring of the two. It must be remembered that people have paid into the contributory pension over their working lives, some for a very long time and during difficult times. They did not say they would only pay in if they were guaranteed a return. The presumption is that when those lucky enough to remain in the workforce make a contribution they expect to be treated fairly when the time comes for paying out.
Deputy Shortall and others made reference to those who are wealthy. I have no doubt there are people of all ages, including older people, who are wealthy, but the taxation system is supposed to deal with that. Therefore, reference specifically to their situation should not arise in this context at all as the provision already exists. In particular I can assure you, Chairman, that the taxation system is there for those who are exceedingly wealthy who may have made tax efficient pension contributions over many years and now gain great benefit from them. Trying to apply specific reference to people who may appear to be wealthy across the board to older people in general who are in receipt of pensions is unnecessary, unwarranted and unwelcome.
Deputy Shortall referred to the living-alone allowance and the lone survivor. It is without doubt extremely difficult for couples who have lived together for 40, 50 or in some cases 60 years, helping each other out and contributing to the household costs, when one of them passes away. There is a fairly significant shock to the budgetary system as well as to the psychological system in such cases. As public representatives, we have all dealt with people in those circumstances who find themselves terrified as to what might happen next. In addition they have the possibility of talk about them without them, which is extremely scary. In all the discussions from now on, people should have regard for those who made their contribution and not expect to give them everything they want but to give them recognition for what they did and the times in which they did it. The great J.K. Galbraith said of people who were of retirement age and still had a contribution to make to society and the economy that one could not replicate experience very readily.
We deal with such cases on a daily basis. If one elderly person in a couple passes away, a son or daughter might come home from the United States or the UK after perhaps spending 15 or 20 years away to care for the surviving parent who might be ill. The question then arises as to whether they should refuse carer's allowance and all kinds of social welfare on the habitual residency clause. They have the option to remain at home and look after the parent if they can afford to or go back to where they came from and where their livelihoods and families are, and leave the State to cater for the remaining parent. It is about time we cut out the nonsense and dealt with that kind of situation. Ignoring it, hoping it will go away and pretending it is there to protect the State are nonsense. It is not protecting the State and is in fact punishing the people of this country who happen to be unfortunate enough, but caring enough, to return and care for parents or siblings as the case may be. The Minister should not mind what he is being told about the need to cut back in all corners. The cutbacks in some corners will have a very serious impact on some people and will come home to haunt the Minister.
It is demanding to follow my good colleague, Deputy Durkan. I wish to follow up on his point about us all dealing with many cases. I compliment officials in the Department of Social Protection who have always been excellent in coming back to us on queries we have submitted on behalf of our constituents and even in these difficult times that has not changed. It will be appreciated that the Minister took the time to attend this meeting in a week when people are making all sorts of remarks about where Ministers are and what they should be doing. He has attended this meeting to listen to committee members and witnesses, whom I compliment on their presentations.
Deputy Shortall and others have referred to the speculation about what might happen and the next 27 days will be very difficult in that regard. We should wish the Minister well because he has a difficult task. The issues that have been highlighted are important and I very much support what Older and Bolder and Age Action Ireland are doing and are trying to achieve. They will know that as all of us go about our business people are reminding us that the remit of the Department of Social Protection is wider. People are talking to us about the carers and representatives of that group have appeared before the committee. People are talking to us about disability and there has been lobbying on behalf of those organisations. People are talking to us about the rights of lone parents and their needs. People are talking to us about job seeker's allowance particularly as it affects the new poor. I understand that the Minister has much to think about and I wish him well in that regard. While I am not just throwing this out as a phrase, the bottom line for me is that he should do the utmost to protect the most vulnerable in society. All the issues raised are important.
The members of this committee, in an all-party approach, have raised concerns about the habitual residency issue that Deputy Durkan has highlighted and I hope the Minister will be in a position to listen to what we are saying. I wish the Minister well in his difficult task. His job is to protect the vulnerable and he has impressed me that that is what he is doing.
I apologise for having to leave but I had to attend another meeting. I welcome the Minister and his officials, whom I thank for the work they do and the assistance they give us. While it is even more challenging now, in the main they try to help. Based on meetings the Minister has had with me and my backbench colleagues, and from his own constituency work, I know he understands the types of people who need to be protected. The priority for those deciding the budget must not only be to stabilise the State's economy, which is very important, but also to give protection to the most vulnerable in society and that message must not be lost. People are frightened by the media coverage and the visit by Commissioner Rehn and others. There have been statements outlining how many billions of euro might need to be cut by a particular time and what this represents as a percentage of GDP etc. These can go above the head of many and in particular our senior citizens. I compliment the groups represented here. We are dealing with such people on a daily basis trying to help them. Physical help is one thing but psychological support is equally important because these people are being terrified by the announcements of austerity measures coming from Commissioner Rehn and other political sources. It is challenging for those groups, but it is very frightening for householders. It is even more frightening and challenging if they are single and elderly, or single and trying to rear a family. Many unfortunate people who were self-employed but have lost their businesses are waiting to get anything. They are an example of what Deputy Durkan earlier called "the new poor". A growing number of people are facing such new challenges. They are totally unable to deal with their problems because they never expected to be in this situation.
In fairness to our elderly, they were always thrifty. They played a huge part in building up our economy to Celtic tiger levels, without going as wild as other social groups. They were certainly prudent. They now find themselves under attack. It is important that we give them some reassurance. It is better for their health if they can sleep restfully in the knowledge that they will be protected. They are worried when they hear one story today, a different story next week and another story the following week. I am sure some of them are keen to budget for tomorrow. They want to be able to deal with whatever they will have to deal with and carry on with our lives. Business people in every rural town and village will tell one that elderly people have not stopped spending the small amount of money they have. They spend their money locally. They do not go on shopping trips, etc. They support local businesses, which are an important part of our economy. They spend what they get in the locality. They are very good at supporting all kinds of causes. It is in their nature to do so.
We have to show our understanding and appreciation of what has been said by the various groups in attendance, which represent bodies that are not in attendance. We are lucky to have an understanding Minister. I look forward to meeting him later today at another forum. I ask him to fight his cause at the Cabinet table. We must protect these people by removing the worry and trepidation they are feeling in advance of the forthcoming budget. It is not fair and it is not helping their good health.
I would like to ask the Minister a number of questions. Like others, I thank him for taking the time to attend today's meeting of the committee and to answer questions. Many Ministers do not make themselves available to the various Oireachtas committees.
The Minister for Finance would be able to answer the question I wish to ask about preparations for the budget. I assume each Minister focuses on certain priorities when the plans of his or her Department are being drawn up. When the Minister, Deputy Ó Cuív, was preparing the Department of Social Protection's expenditure plans for the year to come, did he ask the Minister for Finance to fund a Christmas bonus scheme? Did he forget about it because he did not feel there was any prospect of its restoration?
Other members have mentioned the use of the carbon tax to tackle fuel poverty. The Minister referred to the warmer homes scheme in his opening remarks. Is there any proposal to increase the amount of money that is provided under the scheme? I suggested earlier that the creation of jobs is one of the additional benefits of the scheme. Does the warmer homes scheme cover local authority properties? A number of such properties in this city should be condemned as unfit for habitation. Many elderly men, in particular, are living in substandard bedsit accommodation in certain complexes. While private bedsits are being phased out, a number of these hovels, which is the only way to describe them in many cases, are still being used to house local authority tenants. They cannot be properly heated because they were built before there was a concentration on the most efficient way of heating a home. It was a different era. I ask the Minister to find a means of accelerating the replacement of these units.
Has consideration been given to the complete removal of the tax relief on private pensions? Perhaps that would be a more appropriate question for the Minister for Finance. The provision of tax relief on private pensions means a huge amount of tax - well over €1 billion - is foregone by the State. If those moneys were collected in the form of taxation, they could be specifically diverted as a means of ring fencing the State pension and putting in place the supports needed by elderly people. It would serve the purpose for which the taxation system was established in the first instance.
I will leave it at that because most of my other queries have been mentioned by other Deputies. When the Minister was wrapping up his contribution, he mentioned that the priority in this uncertain economic environment is to stabilise this country's financial situation. There is an alternative to the view the Government has taken to date. It is not as clearcut as the Minister suggested it is. The decision to accept one view or another is a political one. The Minister can approach the issue of State and Government spending by imposing cutbacks, as he seems to be doing, or by accepting the alternative view that is espoused by my party, by a number of economists and by the trade union movement. I suggest that the alternative approach, which involves defending the current level of social welfare payments and thereby protecting the most vulnerable people in our society, is more realistic.
I would like to ask a quick supplementary question. Is the Minister in a position to make a brief statement on the rumours I have brought to his attention - I think they are circulating among union sources - about the future of the community employment scheme? It is an important issue for us all.
Many questions have been raised. I will try to respond to them as quickly as possible. The first thing I will say is there is absolutely no threat to the community employment scheme. I have had general discussions with FÁS. Everyone who has known me for a long time will be aware that I support activation measures. I am trying to see how I can extend activation measures, rather than cutting them back. The community employment scheme is an important activation measure. We will examine how we can improve and develop it. I do not know where the rumour mentioned by the Deputy came from. It certainly did not come from me. It seems to be raised everywhere I go.
I would like to respond to Deputy Ó Snodaigh's general point about the Government's economic approach. I suppose one can put it in simple terms. If one's household has an annual income of €32,000 but one is spending €50,000 a year, one could decide it does not matter that one has to borrow €18,000 per annum. In such circumstances, however, one's interest would build up and it would become harder for one to borrow because those who provide one's funding would not believe one would ever repay them. If one was a parent in such a household, one would be told one was irresponsible. It would be important for one to get one's borrowing under control. The combination of interest and the inability to borrow would eventually catch up with one and one would wind up in a disastrous situation. All of us have met individuals who have got into such personal situations. They did not curtail their expenditure to meet their incomes.
The Government has examined the matter in every way, based on all the information available to it. Other parties accept the Government's position that the 3% target has to be achieved by 2014. On the basis of the current growth predictions, that will require a €15 billion adjustment. That could change over time, obviously. Things will ease somewhat if the growth predictions are exceeded. While this approach is difficult, we believe it is reasonable in the long-term interests of sustaining the social welfare, health and education budgets to the best of our ability. The old sayings had a lot of wisdom, and in this case we are following the old adage that "a stitch in time saves nine".
The Government's policy on the issue of tax relief on pensions, which was published last February, is clear. Our intention is to reduce pension relief from 41% to 33%. Furthermore, those who are now paying zero tax or only paying tax at 20% will get the benefit of the 33% tax break. That will mean that for the first time the low paid will get exactly the same percentage tax break as those who are paid more. That clear Government policy is outlined in the pensions policy we published. That is much more equitable. I have been criticised severely by the pension industry for this policy but I assure members that I have no intention of rowing back on that decision.
There are many problems with that proposal. Leaving those aside, does the Minister intend capping the total amount of tax relief a person can receive?
The Deputy should please allow the Minister to continue, without interruption.
The second issue-----
Perhaps the Minister would respond to my question.
On the questions on the budgetary changes, all the decisions have been taken collectively by the Government. Deputy Ó Snodaigh inquired about the process that is involved. What happens is that Ministers provide information. We outline different scenarios. The Minister for Finance does it and the line Ministers do it. There is negotiation and discussion, sometimes bilaterally, but ultimately it is the full Cabinet which makes the decisions. The process continues over an extended period where all kinds of scenarios are considered to determine their effect, not only within each Department's budget but also to ensure we do not get cross-cutting effects. It is difficult.
The simple answer to the questions on budgetary issues is that I am concerned about the rumours that are abounding that have no basis in fact. Based on the figures we have published anyone could work out on the back of an envelope that those rumours do not have a basis in fact. I am concerned about the rumours. No matter how much I point out that some of the rumours going around do not have any validity, the rumour machine creates new rumours faster than I can dispense with the old rumours. That is something which concerns me because many people will worry unnecessarily about issues that will never happen, could never happen and that nobody ever proposed would happen.
On the other hand, people have been aware the budget would be in December. They have been asking about budgetary decisions I intend to make since May. Unfortunately, the world has changed a lot since May due to the uncertainty on the international markets that affects this country but does not relate to us alone. In certain ways it has taken a turn for the worse but in other ways it has taken a turn for the better. For example, earlier in the year we were up to €200 million behind in the tax take; now we are ahead on the tax take compared to what we had outlined. That is good news. Our expenditure is slightly under target. This year's budget will come in on target which is very important for confidence in what we are doing.
November is an important month in terms of the tax take. Therefore, the final decisions and the final wrap-up will take place literally in the days leading up to the budget. That is not to say that a considerable amount of work has not been done about having everything except the final changes ready. Members are aware that if one is writing a book, for example, one might have 90% of it written at an early stage but the final touches can make a significant difference. I am very much concerned about the fear factor that is engendered. The rumour about community employment schemes is a typical example of what is happening. I am meeting SIPTU to explain that wherever the rumour came from it did not come from me. I will be guided by the Chair. I will listen to everyone's point. It is only fair that I am given time to respond.
Issues were raised about habitual residency. We are issuing new guidelines. I am familiar with people coming home for various reasons, some to care, others because of difficulties they have experienced in other countries or people simply choosing to come home. There is no difficulty if someone has come home to stay permanently. The challenge arises if someone comes home to stay temporarily. We have to find a way to resolve the issue that is not in conflict with the principle in European law that all citizens of the Union, including Irish citizens, have to be treated equally. I am aware the Deputy met officials from my Department. I am open at any time to good suggestions on how to resolve the particular conundrum of, for example, a person who comes home for two years to look after a parent and who has a family abroad, and how one can legally deal with that situation without being accused of discriminating against citizens of another European Union country. If Deputy Durkan has a handy solution he should write to me or I can meet the committee.
The Minister should not worry. I will send him a file in the next couple of days.
Good, I will be delighted to get it because I would like to find a solution to that problem. I always listen to good solutions to problems no matter where they come from.
Deputy Ring inquired about the carbon tax and whether it could be diverted to the Christmas bonus. The carbon tax is factored into the national arithmetic as income. The expenditure associated with it in terms of the fuel efficiency schemes is also factored into the national tax. Therefore, it is not free money to divert. It is already counted as part of the income of the State for this year, which is what makes doing as suggested difficult.
There is another issue on which we have to do more study. Everyone would agree we do not find less fuel poverty in urban areas than rural areas. The problem of fuel poverty in urban areas is solved because we make a higher payment even though we know that, on average, less than 2% of people in the city of Dublin use solid fuel and therefore the smog allowance is paid even though they do not use solid fuel. I do not have the breakdown by age group. The most commonly used fuel in the city is natural gas which is much more fuel efficient and cost effective when compared to home heating oil. That shows how complex is the problem of fuel poverty. One of the issues that has been considered by the Department of Communications, Energy and Natural Resources is thermal insulation. This goes back to the case that was made so eloquently today about why the Finns have a lower winter death rate when it is freezing cold in Finland in winter. It is not because of the amount of fuel they use but because it is so cold that if one did not thermally insulate one's house one would not survive there for a wet week. The long-term solution to the problem is to expedite the thermal insulation of houses for older people.
Many years ago I recall canvassing older people in freezing cold houses. I changed the Gaeltacht grant system at the time to try to deal with that issue because I was aware that those people were burning a lot of fuel, in many cases in open fires. We gave them better heating systems which made the houses warmer. One will find that vulnerable people who suffer fuel poverty are in badly insulated houses. I have met the Sustainable Energy Authority of Ireland. In terms of activation schemes, one of the issues I am considering is expediting the warmer homes scheme. I would love to be able to say that every home in this country has good thermal insulation.
One other issue that came to the fore in terms of fuel poverty is that people in rented accommodation suffer to a greater extent than, for example, people living in detached houses. That might surprise people. It surprised me because we are all aware of country houses that are not well insulated. However, based on statistics the area of rental accommodation is of great concern. I and my colleague, the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Finneran, recently met officials from both Departments to discuss the issue of thermal quality and the standard of rented properties. The fuel allowance is given to many people other than older people. Those in rented properties are very vulnerable to fuel poverty and I am very concerned about them. However, I recognise that older people are not as mobile as others and that the need to make their houses warm is very great.
When one considers the various allowance rates, one will note that one gets €3.80 more in the city than elsewhere. One gets more if one has oil heating in the city than if one has it in the country. In respect of gas, which is cheaper than oil, one still gets €3.80 more based on the smog allowance. That, in itself, does not solve the problem because of the central thermal quality issue.
I have noted what has been said on the living alone allowance. This and the question of people living alone present a challenge, particularly for those who become widows or widowers.
The fuel allowance is quite efficient because it is means tested and targets people who do not have much other income. My general problem is that if one increases the rate of an allowance, one must take the money from elsewhere. If one begins with the premise that the Government should begin by determining the total saving it needs to make from taxation and reductions in capital and current expenditure and then applies this to the various Departments, with the result that the Department of Social Protection ends up with a pot of money, the next question must involve determining how that fixed sum of money must be allocated. One must recognise that if one increases payments, one must take the money from somewhere else. That is a basic mathematical premise that I have not found any way of getting around. It makes the challenge very great.
A question was asked about rate increases. There has been great variation in the increases pertaining to solid fuel, which is not subject to the carbon levy, home heating oil, kerosene, marked gas oil and natural gas. The rates have not increased uniformly. Natural gas has become very cost effective.
Since September 2001, overall inflation has increased by 20% while energy product prices have increased by 66%. Social welfare pensions, including the fuel allowance, have increased by between 77.6% and 88% in the same period. Social welfare pensions have increased very much ahead of general inflation and have even kept ahead of fuel inflation, allowing for the fuel allowances and bearing in mind that people need to clothe themselves and eat in addition to buying fuel. Pension rates increased above the rate of inflation in the period in question but I would be the first to admit the matter is not quite so simple because some fuel product prices have increased while others have decreased, with the result that there is great disparity.
What is the Minister going to do about that?
About the price of fuel?
I refer to home heating oil in particular, bearing in mind the carbon levy.
That is one of the issues we were considering. The strategy group is still considering it.
The Minister said he would deal with this by September.
The best answer would be to extend access to natural gas as much as possible around the country. It is the most cost-effective fuel.
In the meantime, what must one do?
I do not have an easy answer for the Deputy because it is very hard to identify, without doing a house-by-house survey of those in receipt of the free fuel allowance, patterns of usage of particular fuels in particular houses. This approach, which would be ideal, would involve an absolutely mammoth task. If there were an easy way of obtaining the information, it would be fine, but we do not have it available. It cannot be made available unless one literally-----
Is the Minister saying it is too bad that the cost of heating homes has increased?
I am saying having a focused, targeted solution in respect of one fuel is not as easy to achieve as it seems. The issues are under consideration by the group.
We do not have very accurate data - we are working on obtaining it – on the houses that have the greatest fuel inefficiencies. I am considering activation measures and working with the Sustainable Energy Authority of Ireland to determine whether we could obtain parish-by-parish, community-by-community and street-by-street data on the houses with the greatest fuel inefficiencies because all the data seem to indicate that having this is by far the most effective way of dealing with fuel poverty.
Could the Minister clarify that? Is he saying he will not introduce any measures to offset the cost of the carbon levy?
I am not saying that. The strategy group has not made its report yet. Those issues are still under consideration.
Is that the report that was supposed to have been received by June?
That is right.
A year has been lost now.
This is not a private meeting between Deputy Shortall and the Minister.
I thank the Minister in a very special way for attending and facing this barrage of questions all day.
I asked the Minister a specific question on the positive ageing strategy but he did not address it at all.
I will ask the Department of Health and Children to send the Deputy information on the strategy. It is the lead Department in respect thereof.
Does the Minister know anything about the progress on the strategy?
The work is ongoing. I will ask the Department of Health and Children to give the Deputy a detailed update on it.
The Minister did not answer my question on that. I was entitled to ask.
I did not and I apologise. I will have the Department of Health and Children send on the information.
I thank the Minister again for taking the time to come before the committee. This has been an extremely interesting discussion. I ask the Minister to advise the members of his requirements regarding Supplementary Estimates for his Department and also the Social Welfare (Miscellaneous Provisions) (No. 2) Bill 2010. Provisional dates have been set at the Minister's request for meetings of the select committee on Wednesday, 24 November 2010 for the Supplementary Estimates and Thursday, 2 December 2010 for the Bill.