This annual Bill to implement budgetary changes in the social welfare system provides an opportunity for a general discussion on the state of the social welfare system. Two particular aspects of the Government's attitude to that system are reflected in the Bill. The first is a determination to protect the living standards of those who, through no fault of their own, have no other source of income for their livelihood. The second is the Government's equally firm resolve to stamp out abuses of the social welfare code which was clearly stated in the economic plan published a few months ago.
Social Welfare Bill, 1985: Second Stage.
Question proposed: "That the Bill be now read a Second Time".
An Leas-Chathaoirleach
Sorry, Minister, for interrupting you but the Senators have not got copies of the Minister's speech.
I presume I may continue, now that copies are being provided. I would like to set these provisions in a somewhat broader context. All over Europe the welfare state has come under tremendous pressure in the last five years. Social welfare systems are the life-blood of the modern European welfare state. It is those systems and their clients which have suffered most from the effects of the prolonged recession and the slow recovery from it.
The factors putting pressure on social welfare systems are also common to most European countries:
—first, a dramatic rise in the proportion of the population which is dependent on social welfare payments, due to a combination of unemployment and demographic factors
—secondly, an erosion because of budgetary restrictions of the capacity of social welfare systems to maintain a good level of service in the face of the huge increase in their workload
—thirdly an increased tendency for more and more people to become involved in marginal activities and to see a social welfare system under pressure as an easy "mark".
A final common factor now at work throughout Europe as a result of the effects of the recession is that fundamental questions are now being asked, and asked urgently, about the overall effectiveness and relevance of social welfare systems which were by and large built up incrementally in years of strong economic growth during the sixties and seventies, in response to demands from various pressure groups and what were then seen as significant new emerging needs.
That final and fundamental debate is taking somewhat different forms in different countries. In some countries the view has been taken that the welfare state has reduced the capacity of the economy to respond quickly and flexibly to economic crisis and that a radical reshaping and reduction of the welfare state is a necessary condition for reducing unemployment and relaunching economic growth. In others, such as this country, one of the principal concerns has been the fact that the welfare state is as much a producer of pressure groups as the product of pressure groups. For that reason it is particularly difficult to make the welfare state more responsive to changing needs and more effective in meeting real and present needs in a situation of limited budgetary resources, because to do so means taking from some in order to give to those who have less.
The social welfare system in Ireland has probably come under more sustained pressure across all those fronts than any other social welfare system in Europe.
Let me just give the main facts:
The total number of people and their dependents receiving social welfare payment of various kinds each week now averages about 1.4 million or 35 per cent of the total population of the country. Between 1974 and 1984 the total number of clients of the system increased by 30 per cent. Since mid-1981 the volume of claims for unemployment payments alone has increased by almost 70 per cent.
Social welfare expenditure this year will be over £2¼ billion, or one quarter of all current Government spending.
Social welfare expenditure now accounts for almost 15 per cent of total national output, compared with about 10 per cent ten years ago.
Those figures amply demonstrate the size of the task facing the social welfare administrative system in recent years as a result of direct demographic and recessionary pressures alone. In recent years, also, the scope of the system has been extended to cover new schemes of rent allowances and family income supplement, while a major additional undertaking has been the factual assessment of all smallholders' means as a result of the 1982 Supreme Court decision. In the last year or so yet another new factor has emerged to increase the workload — the large increase in the numbers of clients who have exhausted their insurance-based unemployment benefit entitlements and claim unemployment assistance, which involves the administration of a means test before entitlement can be proven. This is intrinsically a more protracted affair than deciding an entitlement simply on the basis of an insurance record.
The management of the Department of Social Welfare have used every means at their disposal to cope with the unprecedented increase in the workload. The large computerisation development programme has yielded very substantial productivity gains; staff have been redeployed within the Department to the most hard-pressed areas, notably the exchanges; working methods have been reviewed and changed in order to increase the throughput of claims. In overall terms, however, the administrative resources of the Department are limited for budgetary reasons and more particularly because of the embargo on public service recruitment. In fact, administrative costs as a proportion of total expenditure only account for 4p of every £1 spent. Staffing costs account for much less than 2p out of the 4p administrative costs. That figure is a good deal lower than in many comparable private sector bodies and lower than comparable public sector bodies in other countries. Given the limited resources at the disposal of the Department it has not been possible to prevent a deterioration in the quality of service which is showing up in longer average times taken to process claims and answer queries and representations.
In the means-tested schemes a major problem is that the inspection branch of the Department, whose officers carry out the means test, have had to cope with an overall increase in workload of about 14 per cent since 1981 on this type of work with almost unchanged manning levels. Despite increased redeployments manning levels in exchanges are substantially down, relative to workload on the levels provided even three years ago. The appeals system has also come in for criticism. There has been an increase of about 60 per cent in the number of cases being appealed over the last two years. The number of appeals in 1984 reached a total of 22,000. The small cadre of appeals officers was also affected by some serious illnesses during 1984. However, the management of the Department again took steps during 1984 to redeploy staff into the appeals area. The present position is that where it is possible for an appeals officer to decide a case summarily there is a delay of about one month. Some 1,200 cases are awaiting oral hearings at present. In the Dublin area the delay is approximately two months. Outside the Dublin area the delay is about four to five months.
Neither I nor the Department of Social Welfare are happy that the recession and overall budgetary requirements have resulted in a deterioration in the quality of service which the Department can offer. But I can assure Senators that we will continue to use every means at our disposal to improve the quality of service to the extent that our resources permit. Later on, when I am dealing with one of the specific provisions of the Bill, I will refer to a particular initiative which I took within the last week or so in regard to smallholder unemployment assistance applicants who are awaiting appeal hearings.
Despite the shortage of resources the Government are delivering in this Bill on their promise to maintain the living standards of clients of the social welfare system. This Bill provides for increases of 6½ per cent in the weekly rates of long term and 6 per cent in the weekly rates of short term payments with effect from the second week of July next. There have been attempts to say that the real value of pensions and other benefits is being eroded. But the facts are that with the increases provided in this Bill the real value of pensions, benefits and allowances will be maintained until well into 1986. Since this Government came into office and including the increases in the Bill, short term payments have been increased by 25 per cent compound, long term payments by 28 per cent and the long term unemployed received the highest increase of all, 33 per cent. Let me compare that to movements in prices and take-home pay in the same period.
In the period mid-1983 to mid-1986 the consumer price index is expected to increase by some 20 per cent compound while the increase in net take-home pay is expected to average about 23 per cent. There is no denying that this amounts to increased purchasing power for social welfare recipients. It has been achieved by this Government in the face of the most severe budgetary constraints. Moreover, I would remind Senators that, in response to the major problem of the growth in numbers of long term unemployed persons, the Government have consistently provided special permanent increases for the long term unemployed in October 1983 — an extra 5 per cent — and in July 1984 — an extra 1 per cent. Again, from July next the long term unemployed will receive a 6.5 per cent increase in their weekly payments compared to 6 per cent for persons who have become unemployed more recently and who may also be entitled to pay-related benefit.
Unemployed related expenditure now accounts for 27 per cent of the total budget of the Department of Social Welfare and is the biggest element of overall social welfare expenditure. Of the £6 million a day spent by the Department, over £1½ million a day goes to the long term unemployed. This is apart altogether from the other, developmental action taken by the Government outside the social welfare system, of which the latest measures directly targeted at the long term unemployed are the social employment scheme and the alternance scheme.
The third main factor which I identified earlier as putting pressure on social welfare systems is the tendency of some people to misuse that system. During difficult economic times that tendency increases and special attention must be devoted to controlling it. The Government are determined to ensure that social welfare funds are not misused by a minority at the expense of the vast majority who are in genuine need and of the working population who provide the benefits through PRSI contributions and general taxation. If redistribution from the better-off to the less well-off is to be effective, "leakage" from the social welfare system to those who are not genuinely entitled to benefit from it must be minimised. I would like to give the House some details of the problem and outline measures which have already been taken to combat abuse and my Department's plans to further tighten up the system.
In 1983, the amount attributed to known fraud was £2.3 million — just over one-eighth of one per cent of total expenditure. The biggest components of the 1983 figure were unemployment and disability benefit and unemployment assistance. A large amount of potential misuse of the system was directly prevented by the control measures operated by my Department. For example, in 1984 it was estimated that some £6.4 million in unemployment payments was saved as a result of people "signing-off" the unemployed register following special interviewing of claimants by officers of my Department.
Misuse of the social welfare code is not confined to the recipients of benefits. Abuse also occurs where employers fail to pay or delay in paying insurance contributions in respect of their employees. The practice of some employers of avoiding or holding off remittances of PRSI for as long as possible is simply not acceptable. Arrears outstanding at 31 May 1984 amounted to some £58 million which represented only actual underpayments established and does not include demands made on the basis of amounts estimated to be due.
Measures to curb misuse have been taken on two broad fronts. First, changes in the structure of the benefits payable to persons during sickness and unemployment were made in 1983 and last year which now leave us with levels of the short term benefits which are not out of line with wages generally. I am satisfied that there is little or no scope for further action on this front.
An extensive range of administrative measures have also been brought into force or improved over recent years, including control measures at local offices:
—an increase in the size of my Department's special investigation unit. There are now 30 officers at 18 centres engaged full time in the investigation of abuses and irregularities. The main role of the unit is in relation to the abuse of working and "signing-on" and they carry out special investigations in areas where fraud is suspected.
—the development of much closer liaison between the National Manpower Service and the local offices of my Department. The National Manpower Service are giving priority to the registered unemployed in filling vacancies.
—increased numbers of disability benefit claimants are being referred to my Department's panel of medical referees for a second opinion to ensure that only those who are genuinely ill are in fact paid disability benefit. The recent experience is that in the region of 35 per cent of those called for medical examination do not attend and about 26 per cent of all claimants examined are found to be capable of work.
—the panel of medical referees has been increased by four to 18.
—improved selection procedures have been introduced in the type of cases referred for examination to ensure that the appropriate cases are submitted promptly for examination.
—securing prosecutions against persons who fraudulently claim social welfare payments is a very important feature of my Department's drive against abuses of the schemes. All fraudulent cases coming to light are considered for prosecution where sufficient evidence is available.
—the Department's powers to prosecute for offences were strengthened and clarified in 1983 following the advice of the Attorney General in relation to certain defects in the existing legislation.
These measures should leave nobody in doubt that effective and reasonable action is being taken by my Department to eliminate unwarranted recourse to social welfare benefits. Certain measures to increase penalties which are provided for in this Bill should be looked at in the context of the other measures I have outlined.
The computerisation of the payments systems of the Department of Social Welfare provides a very powerful capacity to monitor and check expenditure and to provide better and quicker management information. My Department are pressing ahead with further computerisation to the extent that manpower and financial resources permit. This is a complex and labour-intensive process at the planning and commissioning stage. As it progresses, however, it will gradually make more staff available to improve the overall level of service to the public, which, as I have said, has suffered due to the sheer volume of claims to be dealt with, and to maintain full and effective control procedures. It is also as simple as possible — the complexities in the present system do not facilitate efficient administration and often create problems of understanding for our clients. The new child benefit scheme will, I hope, be the first major step along the road to simplification.
I have described the policy which has shaped the main objectives of this Bill and I will now deal briefly with the detailed provisions. I trust that Senators will have found the explanatory memorandum which accompanies the Bill helpful. Senators will be aware that there is a Bill currently before the Dáil to provide for equality of treatment as between men and women in matters of social security arising from the EEC directive on this matter. That Bill will be amended to incorporate the new rates being provided in the Bill we are now discussing.
The overall cost of the social insurance and social assistance rate increases being provided in this Bill is £56.9 million. This will come to about £118.4 million in a full year. The extra social insurance expenditure, £33.5 million, falls to be met out of the Social Insurance Fund which will benefit from the yield from the PRSI ceiling increases — £2 million — and from the £2 million savings arising from the increase in the pay-related benefit floor.
The increases in social insurance and occupational injuries benefits are provided in section 2 of the Bill. A contributory old age pensioner under 80 years of age will receive an additional £3.15 a week bringing his rate of payment to £51.40 a week. If he is married with a wife under age 66 he will get a total increase of £5.15 bringing the pension to £84.20 a week. A married couple both over pensionable age will get £89.75 compared to £84.25 at present. Higher increases are paid for pensioners over 80. Additional payments are also made for persons living alone.
The personal rate of widow's contributory pension is being increased by £2.80 a week to £46.25. Widows over 66 receive higher payments. A widow with, for example, three dependent children will receive £85.95 a week which is an increase of £5.25. The personal rate of invalidity pension goes up from £42.55 to £45.30 for a person under pensionable age and a married couple with two children will receive £96.65, an increase of £5.90.
A person in receipt of disability unemployment benefit will have a new personal rate of £39.50 a week, an increase of £2.25. Where the recipient is married the increase will be £3.70 a week. Maternity allowance is also being increased to £39.50.
The new rates of social assistance payments are provided in section 3. The maximum personal rate of non-contributory old age pension for a pensioner under 80 years of age goes from £41.30 a week at present to £44 a week. It will go up to £47.20 for persons aged 80 or over. The overall maximum payment for a pensioner under 80 with a dependent spouse under 66 will increase by £4.05 to £66.10. The allowance payable in respect of a prescribed relative giving full-time care and attention to an incapacitated pensioner is being raised to £24.60. Widows receiving non-contributory widow's pensions at the present rate of £40.50 will get an increase of £2.65 a week. A widow with two dependent children will get £66.75, an increase of £4.10 a week. Similar increases will apply to deserted wives, unmarried mothers and prisoners' wives.
Those receiving short duration unemployment assistance in urban areas will get an increase of £1.85 a week in their maximum personal rate. In rural areas the increase will be £1.80 a week. There are also increases in respect of dependents. An applicant in an urban area who has a wife and two dependent children will get an increase of £4.20 a week in the present rate of £69.65. The rates of unemployment assistance for long duration recipients of unemployment assistance are higher, for example, a man and wife with two children in an urban area will get £78.75 which is £4.90 more than the corresponding short duration rate. The maximum rate of supplementary welfare allowance for a married couple goes from £51.70 to £54.80 with additional payments for children.
The special rates of unemployment assistance payable to smallholders in certain areas with land under £20 valuation whose means are still assessed by reference to land valuation are being maintained at their existing levels. Senators will be aware that the system of assessment of means on the basis of land valuation is being phased out. Some 9,700 smallholders have been assessed on the factual basis of assessment since the notional system was changed in 1983 as a result of the High Court decision in relation to the constitutionality of the rateable valuation system. Of these, some 2,900 applicants are better off under the new system, some 4,100 had their entitlements reduced and about 2,900 cases had means which exceeded the limits set out in the social welfare legislation.
Many of the people concerned have appealed against the revised assessments and I was concerned to ensure that these appeals should be heard as quickly as possible. I was pleased to announce last week that the Government have approved in principle the appointment on a temporary basis of up to eight additional appeals officers. These officers will be dealing with appeals from smallholders at oral hearings in the west, south-west and north-west of the country. Details of the arrangements are at present being worked out with the Minister for the Public Service.
Section 4 provides for adjustment in the income limits up to which family income supplement is payable and for increases in the maximum amounts payable under the scheme. These changes follow from improvements in personal income taxation announced in the Budget Statement and from the increases in the rates of short term social insurance benefits provided for in the Bill. The levels of weekly income up to which a supplement is payable will be increased from £95 to £100 for a family with one child and by a further £18 per week for each additional child, up to and including the fifth child. The income levels at which the maximum supplement is payable are also being adjusted, for example, from £63 to £68 per week for a one-child family.
These changes will take effect from 11 July 1985 and will apply to claims made on or after the date. Claims in payment prior to July will receive the benefit of the revised income limits when they reapply in the normal way at the end of 12 months.
Section 5 of the Bill provides for an increase from £43 to £49 in the earnings disregard, or "floor" for pay-related benefit purposes. This change will affect new claims only from the beginning of April next where entitlement to pay-related benefit is involved. Since the introduction of the pay-related benefit scheme in April 1974, a proportion of reckonable earnings has always been disregarded in calculating the amount of pay-related benefit payable in addition to disability, unemployment, maternity and injury benefit. In 1974, this disregard or floor was £14, over twice the prevailing rate of flat-rate benefit. The floor was not increased until 1981, even though the level of flat-rate benefit rose significantly in that time.
The latest increase in the floor continues the policy that has applied over the last three years of progressively raising its level. However, if the floor had been maintained at the same level in relation to the flat-rate benefit as it had in April 1974 it would now stand at £79 instead of £49 proposed in this Bill.
Section 6 provides that the earnings ceiling for PRSI contribution purposes be raised from £13,000 to £13,800 with effect from 6 April 1985. For the third successive year there is no increase in the actual rates of social insurance contributions. However, there will be a small extra contribution of 0.1 per cent levied on employers, following the establishment of the Redundancy and Employers Insolvency Fund in place of the previous Redundancy Fund. This fund is operated by the Department of Labour.
Sections 7, 8 and 9 make provision for social insurance cover to be extended to members of the Labour Court. Members of the court, including the chairman and deputy chairman, are appointed by the Minister for Labour for a fixed duration of up to five years which may be renewed. Their employment up to this has been held to be not insurable because it is not employment under a contract of service. Section 7 provides that the employment in question will be added to the existing list of insurable employments.
In general, employment which is not subject to a contract of service is not insurable for the full range of social insurance benefits. The effect of section 8 is to enable the provisions of the Act to be modified by regulations in respect of employment in the Labour Court and to provide the Class E rate of contribution which gives cover for all social insurance benefits with the exception of unemployment benefit, pay-related benefit and occupational injuries benefits.
Section 9 is a consequential amendment excluding members of the Labour Court from occupational injuries insurance because they are not employed under a contract of service.
Section 10 provides for the extension of social insurance coverage to commissioned officers employed as doctors and dentists in the Defence Forces. They will be insured on the same basis as their fellow non-medical commissioned officers at the modified Class C contribution rate which provides cover for widows and orphans pensions and deserted wife's benefit. They will not be covered for occupational injuries benefits because members of the Defence Forces in general are specifically excluded from such cover. The continued general exclusion of doctors and dentists from social insurance can no longer be justified and this is a matter which the Minister will be putting before the Government in the near future.
Sections 11 and 13 provide for changes in the unemployment assistance scheme. Section 11 enables long term unemployed persons who have participated in either the social employment scheme, the enterprise allowance scheme, the alternance scheme, the teamwork scheme or AnCO-approved courses for up to one year to resume their entitlement to unemployment assistance at the long term rate of payment and without serving a three-day waiting period. At present long term unemployment assistance claimants who resume signing-on after attending AnCO courses of over 20 weeks duration are obliged to serve a three-day waiting period as if their claim was a new one. In addition, such persons have to revert to the lower rate of assistance because the link with the previous "long term" claim is technically broken where attendance at a training course lasted for 20 weeks. The effect of the proposed amendment is that periods of up to one year's participation in approved training schemes or social employment schemes will be disregarded in determining whether periods of unemployment can be linked for UA purposes.
Section 13 provides for the clarification and strengthening of the powers and duties of social welfare officers in relation to the unemployment assistance scheme, in particular in the area of combating abuse. It includes a specific provision governing the investigation of unemployment assistance claims by social welfare officers on similar lines to that which exists at present for social insurance purposes.
Section 12 provides for increased penalties for social welfare offences in line with the commitment in paragraph 5.68 of the Government's plan Building on Reality 1985-1987. At present a maximum fine of £500 or 12 months imprisonment, or both, can be imposed on summary conviction of a person found guilty of a prescribed offence in respect of the various social insurance and assistance schemes. In exceptionally serious cases where conviction on indictment is obtained the maximum fine is £2,000 or two years imprisonment, or both. This section will increase the maximum fines to £1,000 and £3,000 respectively.
Section 14 provides that volunteer workers employed in a developing country will not have their occupational injuries benefit entitlement reduced by reference to their earnings from employment abroad. Under existing legislation the amount of occupational injuries benefits are limited by reference to the pre-accident earnings of the insured person. It is proposed that this limitation should not apply in the case of volunteer development workers who might receive nominal amounts of benefit because of their low earnings from employment abroad.
It is part of Government policy in regard to development co-operation to encourage and facilitate as far as possible the participation of Irish individuals and organisations in the Third World and in this context the various issues involved in protecting the interests of development workers are kept under continuing review.
The lack of social insurance cover for returned workers has been identified as a source of concern to many such workers and the Government have therefore decided that continuity of social insurance cover will be provided for those development workers who are paid pocket money rather than a wage so that they can avail of the relevant social insurance benefits on their return.
Broadly speaking the volunteer workers fall into two categories:
—those who have no history of employment before their departure and consequently no social insurance entitlements.
—those who have an employment history and social insurance entitlements prior to going abroad, but who at present lose those entitlements because they are not entitled to credited contributions while abroad.
Arrangements will be made to safeguard the position of each of those two groups, and consultations are taking place currently with the different bodies who have an interest in the problem. The Minister will shortly be making regulations to deal with this issue.
This move has been welcomed as a practical demonstration of the Government's desire to encourage and facilitate as far as possible the participation of Irish individuals in volunteer development work in the Third World.
While on this topic I would also like to mention that a draft EC recommendation on the provision of social security for volunteer development workers who operate in Third World countries and are paid wages at a rate similar to local conditions is being urgently discussed. This recommendation proposed that various member states should recognise the achievement of social security cover for volunteer development workers as one of the objectives of their social policy. It sets down the broad principles which member states should aspire to and lays down various ways in which these principles might be implemented. The regulations which the Minister will be making shortly will reflect the principles enshrined in the recommendation.
I would like now to refer to a number of social welfare improvements which do not require legislation. This year's budget saw a number of innovative measures designed to improve the level of service being given or extending existing services to priority groups to the extent that the very limited resources permit. One of these is an important extension of the existing treatment benefit scheme from July next. This scheme at present provides optical, dental and medical and surgical benefits to qualified insured workers. These benefits will be extended from July next to the expectant wives of such workers. In practical terms this means, for example, that all basic dental treatment such as examination, fillings, scaling and polishing, extractions and root treatment and, on the optical side, sight tests will be available free of charge.
This extension, will increase the potential catchment of the scheme by up to 30,000 married women per annum. It is a response, to the repeated demands which have been made over the years to have the benefits available under the scheme extended to all spouses of qualified insured workers. However, the cost of such an extension would be prohibitive, being of the order of £6¾ million per annum and the Government have therefore decided that as pregnant wives can be regarded as a priority group to extend the scheme to them initially. The details of the extension are being worked out at present and will shortly be brought into law by means of amending regulations. As soon as these have been made, appropriate publicity will be arranged.
In 1983 and last year £0.5 million was provided for various voluntary organisations who do invaluable work in the social services area. The grants are mainly for once-off projects and are payable in addition to any grants made by health boards. This year an increased sum of £650,000 is being made available. An advertisement has been placed in the national press inviting interested organisations to complete an application form and submit it to the Department before 29 March 1985. The health boards will then be consulted and the grants will be paid to the approved bodies as soon as possible afterwards.
Some 103 organisations benefited from grants under this heading in 1984. The following is a cross section of the type of work which these agencies carry out: day care centres for the old; meals on wheels; services for the physically handicapped; youth club facilities; day care centres for the homeless and help for unmarried mothers.
The value of the fuel vouchers under the national and urban fuel schemes is being increased from next October from £4 to £5 a week. This will benefit some 168,000 people at a cost of £5 million in a full year.
This Government place a high priority on social welfare. It is significant that today there are three separate Social Welfare Bills going through the Houses of the Oireachtas. The proposed child benefit scheme is due to come into operation next year and a framework for a national pension scheme will be published later this year. I mentioned early on in this speech that, apart from our concern with the efficient functioning of the present system, more fundamental-questions have also been asked about the relevance of the present social welfare system. The Government have in effect addressed this issue by setting up a commission to make recommendations for a new social welfare system to serve the late 1980s and the 1990s. I look forward to the challenge which will undoubtedly be posed for all of us by their recommendations, which I expect by the end of the year. I commend the Bill to the Seanad for favourable consideration.
Debate adjourned.
Sitting suspended at 12.30 p.m. and resumed at 1.30 p.m.
The principal aim of the Bill is to provide for the increased rates of payments in schemes of social insurance, social assistance and occupational injuries benefits. The Minister referred to them in some detail this morning and I will briefly refer to some of them. Section 2 provides for increases of 6½ per cent in the weekly rate of long term and 6 per cent in the weekly rate of short term social insurance and occupational injuries benefits with effect from the second week of July 1985. It also includes an increase for old age contributory pensions and retirement pensions are increased by £3.15. There are other increases also.
On the day when we are talking about a Combat Poverty Agency endeavouring to eliminate poverty and helping the poor, the sick and the unemployed, these increases are indeed a pittance for those in dire need because increases of 6½ per cent and 6 per cent, if they were for a full year, would be just in line with inflation. As we all know, they will not operate until the second week of July. In real terms the increase will be in the region of about 4 per cent, well below the rate of inflation. In the Joint Programme for Government, I recall quite clearly a call from the Labour Party indicating that even in a recession social welfare recipients should not be penalised. This Bill is contradicting the Labour Party aspiration. It has proved quite conclusively that we do not have a caring Government.
In the period from the budget to the second week of July, for example, the cost of many items of food and other essentials will have increased. In past budgets there have been increases in the VAT rate on fuel and clothing. The VAT rate on footwear went from nil to 10 per cent. The people we should be protecting are those who will be hit hardest by these increases. Since 1983 the Government have treated the poor, the old, the sick, widows and the unemployed with great inhumanity. They have deliberately attempted to mislead the recipients of social welfare and indeed people generally since 1983 and have indicated that large increases have been given whereas the increases have operated for only eight or nine months of the year. This policy continues in this budget. I deplore this degree of dishonesty and deception on the part of the Government. It is certainly not indicative of a caring Government.
To be political on this Bill, it is no harm to quote comparisons which I read recently with regard to the three budgets of the Coalition over the past three years. In 1983, long term social welfare recipients received an increase of 12 per cent and short term recipients an increase of 10 per cent which came into effect in June of that year. In 1984, the long term recipients received an increase of 8 per cent and other benefits were increased by 7 per cent to take effect from July of that year. This year the rates have been increased by 6½ per cent and 6 per cent payable from the second week of July. In 1980 and 1981 Fianna Fáil gave increases of 25 per cent in long term payments and 20 per cent in short term payments, all payable from April. In 1982, general increases were granted of 25 per cent, again from April. We implement what we preach. Unfortunately, the Government parties, particularly Labour, say one thing and do the opposite.
The Government programme Building on Reality heralded the family income supplement as if it was the be all and end all of social welfare reforms. I can remember saying at the time that perhaps a better way of tackling the problem of low incomes might be a minimum wage. I recall that when food subsidies were cut in 1984, Deputy Mervyn Taylor strongly suggested that the family income benefit should be brought forward from the starting date, which was to be 1 November to 1 September as if this were going to solve all the problems of the poor and of recipients of social benefits. The benefit was subsequently paid from September. The Government were indicating that the family income benefit was to be the saviour of the nation whereas we all know now that it has failed totally, very much like the £9.60 per week for housewives of some years ago. We were told that something like 35,000 families would benefit under the family income scheme but, up to February 1985, there were over 9,000 applicants and only 4,400 of those got some form of benefit. I repeat, that is a failure in the area of social welfare and not for the first time on the part of the Government.
The question of the administration of the Department of Social Welfare has been raised many times, not just here and in the other House but at county council meetings and other places. The Minister admitted in his speech that there were problems. The opinion of many people is that if the operation of the Department of Social Welfare continues as at present the Department will collapse. Certainly, the position is extremely bad at the moment. The processing of claims for unemployment and disability benefit and non-contributory old age pensions is taking weeks. The Minister admitted that in some cases appeals were taking up to five months. While applicants can seek aid under the supplementary welfare scheme while awaiting the result of their claims, these long delays result in a degree of poverty and hardship. Claims must be processed much more quickly in order to obviate this hardship and poverty. I note that, perhaps because of the long delays in appeals, there might be an increase in staff and I am glad to hear this. We assume that the Minister for the Public Service will agree because this is certainly an area of need.
There is a large degree of concern about the means testing of social welfare recipients. The problems that have arisen over the past few months of thuggery, the burning of houses and so on have led to queries in this regard and, naturally, concern has been expressed generally. Much of this problem is caused by the fact that many old people, instead of lodging their money with a bank, a building society or a post office, are hiding it under the mattress or some where else in the house. They feel that putting their money into a financial institution will make them ineligible for old age pensions and other social welfare benefits. This is a recipe for disaster. The fact that these old people keep their money at home gives the criminals a field day. The Department should spell out to these people what the exact position is and that money invested might not affect their benefits.
I will refer specifically to a few sections of the Bill. The increase of grants to voluntary organisations — who are doing extremely good work in the community — from £250,000 to £650,000 is meagre and will do very little having regard to the fact that costs have gone up. There is an increase in the free fuel scheme from £4 to £5 from next year. Again, with the price of coal and turf going up, it will do very little, if anything, for the people who benefit from this scheme.
Section 13 of the Bill refers to the appointment of social welfare officers and increased duties and fines, et cetera. There has been of late some criticism of social welfare officers by many people, including politicians from all parties. Perhaps, as in many other areas where there are many people working, some criticism is merited, but, by and large, social welfare officers do very good work, the terms of which are laid down by legislation passed by both Houses. We are now dealing with new areas for social welfare officers and this is an opportunity for people who have criticised them in the past to set out terms of reference for them. If they are not happy with the position this is the place and the time to spell out exactly what they think social welfare officers should do. If this Bill is passed, social welfare officers should be allowed to get on with their job, which is clearly defined in the Bill.
Abuses of the social welfare system are well known. The figure which the Minister mentioned this morning, £6.4 million, as being saved as a result of interviews is staggering. Abuses exist and every effort must be made to remedy the situation. I am not talking about the unfortunate social welfare recipient who might dig someone's back garden for a half day and get something like £5. I am talking about the well organised criminals and others who are siphoning off millions of pounds per year in bogus social welfare claims and also about the individual who signs on in three or four exchanges and collects money at each of them. We all know this is happening, and every effort must be made to introduce effective control measures in this regard.
The Minister said this morning that the continued general exclusion of doctors and dentists from social insurance can no longer be justified and that this is a matter which the Minister will be putting before the Government in the near future. I ask the Minister to say when this might be. It is right and proper that he should do this because the present system is unfair.
In the debate on the Combat Poverty Agency reference was made to falling standards of living. The people who should be looked after are finding it more and more difficult to survive. The provisions of this Bill will not improve the living standards of many people. For thousands on social welfare benefits it will have a worsening effect.
The budget of 1985 went down so badly and was known by the Government to be going down so badly that out of the blue in the middle of the important budget debate they introduced the Family Planning Bill, timed to take people's minds off the true position. It was a most unusual situation but was done for the express purpose of hiding the facts. The 1985 Bill has the lowest increases on record and are not even keeping pace with inflation. Claims and appeals are being deliberately delayed for obvious reasons. Services generally are at an all time low. I am convinced that this Bill will add further to the misery, poverty and hardship of many people. For that reason, we will find it extremely hard to support the Bill.
The Bill gives effect to the provisions of the budget. Despite what the last speaker said, it has come to be accepted by social welfare recipients in general as being something to which they are entitled and they are looking forward to it. The fact that the main speaker of the Opposition will not support it will be widely condemned because people depend on the Government to ensure that their living standards are indexed in line with take home pay. That is the commitment in the Joint Programme for Government. It did not say anything about indexation to cost of living but mentioned indexing social welfare benefits in line with take home pay. We must divorce completely the social welfare code from the Combat Poverty Agency Bill which covers a whole range of poverty outside the social welfare trap in which people find themselves. We have contributory pensioners on social welfare who have other incomes from employment in State and semi-State sectors, health boards, county councils and so on. It is appropriate that no means test is applied to people who have given a life service to the nation and contributed towards it. For a small country with a 35 per cent dependency rate, we still have a scheme of social welfare which gives benefits to people who contributed nothing by way of payments to the State but who have benefited from State schemes by transferring their assets and property to their relatives. In those cases it is appropriate that there should be a means test.
Senator Fallon mentioned the levels of increases given by the Government. The Minister said that short term payments have increased by 25 per cent compound, long term payments by 28 per cent and that long term unemployed received the highest increase of all, 33 per cent. These figures are satisfactory if you look at percentages but we have to look at the purchasing power of money also. Inflation has dropped from 20 per cent when we took office to an estimated 6½ per cent in the recent survey published by a research institute. If you take inflation into consideration, these purchasing powers are in some way comparable to the commitment that we have given. I am not suggesting that there ever will be enough but I am satisfied that, unlike other EEC countries, this Government, because of the Labour Party participation, have tried to ensure that these people, the less well off in our society, have been looked after in line with the amount of capital available to us. If you look at the overall expenditure in this area, spending of over £6 million per day is a fair indication of the concern we have shown for the people in this section of the community.
There are a lot of people who would love to work, are available for work, are ablebodied but unfortunately are unable to secure employment, and this Bill takes account of them. It is not justification for satisfaction on my part that we are trying to look after them. I would prefer if we could produce work for them. I am amazed when I see the tears shed for the unemployed when under previous administrations, even Coalition administrations, unemployment figures continued to rise in spite of the best efforts of everybody concerned. It boils down to the fact that, as a mixed economy, we are very dependent on the private sector. They have not matched the challenge that the State has given them to ensure that there is employment created in the private sector. It is obvious that the public sector are unable through their economics to provide work for every unemployed person in the country and that is a tragedy. One of the problems, to which the Minister also referred is a budgetary one.
Recently in the area of means testing, because of a decision of the High Court, smallholders, particularly in the west, were subjected to a means test. Many of us had reservations about how effective, fair or equitable that would be. There is no doubt that in the evaluation of a person's income in the west a lot of people have lost money although some have gained money, overall £1 million or so, although the Government made nothing out of it. Much unhappiness has been created for smallholders. One reason is that they subjected themselves because of a High Court case to a means testing process.
In the social welfare code alone there are 27 different ways of means testing. It is high time to put some semblance of reality into the area of means testing. How could any public representative or the ordinary people on the street understand the complexity of this system if there are 27 different ways of assessing people's means? You write off one percentage and take another percentage of the balance, then you talk about a person's income and what capital costs you allow against it. It is impossible to assist people by way of advice to see whether they are entitled to it or not. I look forward to the day when the Government will implement a pay-related national income scheme for everybody. People would contribute, depending on their means and earning capabilities, to the State and would qualify automatically for a pay-related income scheme which in some way, would do justice to the people who at present pay nothing in and benefit by transferring their assets. When industries like Fords or Dunlops in Cork close the workers who get redundancy lump sum payments find that after 12 or 15 months on unemployment benefit, which drops down to unemployment assistance, they suddenly find themselves, after 30 and 35 years working, subjected to a means test on the redundancy payments. At least the Revenue Commissioners write off some as not being taxable. The Department of Social Welfare should be able to look at the special position of people who have become redundant and have sums of money available to compensate them for the loss of jobs. I am asking for the whole area of social welfare, which is highly complex, to be rationalised with a degree of equity so that people will perceive it to have equity, which is very important.
As a member of the Labour Party I find it unacceptable that a large number of employers do not surrender employees contributions for cash flow reasons and so on, but when pressure is brought to bear on them by the Government or the Revenue Commissioners, they threaten to close down their places of employment with a resultant loss of jobs. That is not the way people should run their businesses. This is workers' money which is taken out of their pay packets and should be transmitted forthwith to the Government otherwise we will be unable to maintain the levels of social welfare payments we wish to. The Government should take any action necessary to maintain employment, but the employers, too, have a major role to play. They have a major responsibility when they employ people to do "nixers". If they get cheap labour in this way then they are deceiving themselves and the State because nobody could justify paying unemployment benefit or assistance to people who are working unofficially for employers who do not declare them. Even if these workers are caught by an inspector of the Department, their benefits are not disallowed because the employer must certify that the person was working for him. We are putting a great deal of trust in employers in this area.
For that reason alone, I was pleased to see the implementation of the social employment scheme which allowed people to work for part of a week and get social employment benefit from the State. This gave them the freedom to work for somebody officially and legally without running behind fences and ditches from social welfare inspectors. We are giving back to that person the concept of the work ethos. This scheme will be successful as can be seen from the applications we have had through councils and community development projects, in spite of the Opposition saying it would be a useless scheme and would do nothing for the unemployment situation.
There is quite a lot of criticism about investigating officers. In the area of unemployment, it is a black and white situation — if you are a non-contributor you prove that you do not have an income or that you have an income, and that is the end of the story; but in the case of social welfare disability benefit a person has to rely on the opinion of a medical investigator at local level to decide whether he or she is fit to work. I have always respected the professional view of the medical inspector on the ground, but the facilities available to that medical inspector or medical referee are not adequate for some decisions that, in recent years, they took when certifying certain people as unfit to work. In spite of the recipients doctors' opinions, given after a weekly or monthly examination, people surrender themselves at the request of the Department for an independent evaluation of their ability to work. I have seen people certified by officers as being fit to work in spite of the fact that I produced medical evidence to the contrary — not just a doctor's certificate, but hospital evidence, X-ray certificates and the actual X-rays from the radiology department. This evidence certified that not alone were those people unfit to work, but the long term prognosis was not good. The process of appeal went on for months and months, and in the final analysis the third referee said that person was fit to work. That person was admitted to Peamount Hospital within days of that certification, transferred to Dr. Steven's Hospital and certified as requiring medical treatment for an extended period. Then, and only then, did the Department condescend to pay the man his rights. He had worked as a miner all his life and is suffering from a disease which miners suffer from and the prognosis is not good. The man would be delighted if he was fit to work but he was told, and it was confirmed by X-ray, that not alone was he not fit to work but he was in danger of dying.
I felt the referee's decision was unjust and as a public representative I brought this matter to the Minister's attention and discovered that, by law, the deciding officer on the ground could make that decision outside of the Oireachtas and without reference to a Minister. He was given the ultimate power to decide if the man was fit to work. I had no recourse but to refer the case to the Ombudsman. If the Department of Social Welfare have sunk to the level that they will not accept the medical evidence produced by way of X-ray and otherwise, then this Department and the people acting on our behalf and paid by the State to make decisions like that, must have recourse to somebody and we should have some power to ensure that justice is done. There is a figure of 6¼ million people doing "nixers". I have no time for people who are able and fit to work and who have jobs to go to, but do not go. I am not making a case for them but I will defend the people who go through all sorts of processes to ensure that justice is done. I am putting this on the record again because I feel very strongly about it. I will proceed further if the Ombudsman fails, and this case might end up in a court. That is a measure of how strongly I feel about this.
Generally speaking, the improvements in the Bill are to be welcomed but we would all like them to be implemented earlier. There is always great play about the actual date on which they come into operation. I would not like to make comparisons with our friends across the water, whose social welfare provisions come into operation in November, that is over-doing it a little, but the increases are based on the actual implementation date. If they were to be brought forward to April, they might finish up with 4 per cent. The operative date sounds very important, but in reality it is only important if you relate total income to it.
I share Senator Fallon's reservations about section 10 which includes doctors and dentists in the Defence Forces. I know that people in the dental profession working full time in the health boards are also anxious to be included in the scheme but, unfortunately, they are excluded because we are awaiting approval from other medical people working with health boards. Apparently they had some reservations about this. Could the Minister state how far down the road we have advanced in this area? It is unacceptable that all the people working in the public sector are not included for orphans' and widows' pensions. People employed by the State should have the same privileges as everybody else. This is a contributory scheme and they would be prepared to contribute to it. I hope agreement can be reached with the organisations representing them, but could the Minister say what progress is being made in this area because I know that discussions have been going on? The Minister has given a commitment to the dental profession that he would include them in this Bill but because they are aligned with another professional organisation, with which agreement has not yet been reached, it is important that we should try to overcome the problems in that area and bring these people into the legislation along with everybody else.
I thank the Minister for his speech which was quite extensive and proves that there is a Labour input into this Government. We have always ensured that people in this category particularly were looked after to the best of our ability. I shudder to think what might happen in this area if there was not a Labour presence in this Government. In the past, in spite of all their condemnations of us, Fianna Fáil were not great. They were very generous to large families on one occasion, but that was very close to election time, so I could expect that from them.
Our record is there.
I commend the Minister for the efforts he is making and I ask him to take particular note of the areas with which I am concerned, particularly regarding the assumed responsibilities of medical referees in the field.
Senator Ferris's concluding remarks are a stunning indictment of his colleagues in the Fine Gael Party. He said he shudders to think what would happen if this Government did not have the Labour Party in it. I am not going to travel down that road any further.
The management of the Department of Social Welfare is very complex and difficult. We are faced with a massive proportion of our population being dependent in one way or another on social welfare. The total figure for those and their dependants in receipt of benefits is 1.4 million. This is a massive strain on the resources of the country, to try to deal adequately, fairly and comprehensively with the needs of this very significant proportion of our population. From what I have seen in the Department and in my own constituency, I think many of the people involved are making a genuine effort, but the whole system has become too complex and too bureaucratic and is not sensitive enough to the needs of our society.
The Minister said that given the limited resources at the disposal of the Department, it had not been possible to prevent a deterioration in the quality of the service which is showing up in a longer average time taken to process claims and answer queries and representations. In the Dáil the Minister for Health accused Fianna Fáil of clogging the system with representations. Is there any public representative making representations just for the sake of making them? I accept that representations clog up the system, but they are necessary because of the frustration felt by individuals who are unable to get what they statutorily qualify for. It is time we took a fresh look at and reviewed our social welfare system and its management and brought them as close as possible to the regions. There has been a degree of computerisation and transfers of resources from some areas to the more needy areas, but with a massive proportion of our population in such need and with the complex system that has developed, we will not be able to do justice to the needy cases if we continue with the present scheme.
Over the years a proliferation of different schemes has evolved and perhaps many of them should be reviewed in the context of a changing society. The variety of application forms for different schemes, could be tidied up and presented to the public in a simpler form and could eliminate some of this bureaucracy and do more for the people. I have in mind here the family income supplement scheme. In the Dáil on 14 March 1984 the Minister for Social Welfare said this scheme would be introduced at the beginning of November 1984. He said it would be administered essentially by the Department and that the scheme would benefit some 35,000 families at a cost to the Exchequer of £2.2 million in 1984, and £13 million in a full year. We saw the advertisements, the gloss, the glamour and the paraphernalia surrounding this new scheme. It was a life saver that was thrown out to the Labour Party as they were drowning after the removal of the food subsidies. This scheme is another component of this complex machine which, in many ways, is totally inequitable, as well as being in a shambles. Social welfare categories and the self-employed do not qualify for benefit under this scheme and families with more than five children do not get allowances for the additional children. The people in the Department when advising the Minister may have considered that 35,000 people should qualify, but not more than one-fifth of that number have so far applied.
There is another consideration, apart from not catering for individuals or groups in society. Take, for instance, some very poor self-employed groups and the larger families. There is no useful purpose being served in introducing new schemes for these people. We would be better off trying to rationalise and put together a more sensible and easily understood system and trying to manage it as far as possible on a local community basis. We should have less of the too-ing and froing that is going on at present in the management of these schemes. Take, for instance, a person who is applying for unemployment assistance. He could complete a form in the local offices, have it referred to the regional office, then there could be a call from a social welfare officer. The form might be referred back and eventually be sent to Dublin for decision. It is ridiculous to blame Fianna Fáil or any public representative for clogging up the system. Every weekend people come to their doors asking for help because they have been waiting not just four or five weeks but sometimes a couple of months for benefits to which they are entitled, but because of the cumbersome way in which we manage these things, delays are inevitable and go on for months. It will require radical changes to remove some of the problems that exist here.
One of the main areas of expenditure under this Bill is on unemployment benefits. The fact is that we are now spending a total of £2,200 million on social welfare, 20 per cent of our total budget. Let us leave aside the necessity to try to improve the system. It is not within the ambit of this Minister or his Department, but it does focus our attention on the scale of the problem and the capacity of the economy to carry this burden indefinitely and we should try to do something positive for these groups. As the unemployment figures continue to increase, the strain on our resources is immense. We are not just talking in terms of the actual pay out by the State, because there is also personal hardship involved and the loss of dignity, and the loss to the community in terms of production and so on, is immense.
Senator Fallon referred to problems in rural areas which have been brought to our notice in recent times, but they have been part and parcel of the inner city for a long time, a drift into criminality, a drift into drug addiction and energies are not being utilised. We need to look at social welfare in a more positive way. I sometimes think the Minister for the Environment, the Minister for Health and the Minister for Fisheries and Forestry live in different countries. Our county engineer tells us there is a 36 year programme for the surfacing of county roads. In other words, if you live to the age of 72 years you will see the roads in your county tarred twice in your lifetime. A similar situation exists in the Department of Fisheries and Forestry. Would it be possible to make some transfers into these areas of need of the same pay-out every week so as to do something positive in the community rather than trying to satisfy a never ending chain of demand which is creating frustration, destroying initiative and forcing public representatives on all sides to continue to clog up the system by trying to get payments made. Take into account the losses and the hardship involved. Most of these people qualify for medical cards, but if they were employed they would not qualify. They would not be paying PRSI or income tax. If they are living in county council houses, they are probably paying the lower differential rent.
We should encourage the Minister and his colleagues to see to what extent part of this burden could be shared in a more positive way so that these schemes would be of some advantage to the community. I am not talking strictly about schemes that are totally economic. I am sick and tired of economists and accountants — we have seen the results of the advice they have given to big institutions that seem to be fraught with problems — saying that the only kind of positions that you can justify are ones that are economically sustainable. Is it viable for us to spend 20 per cent of our total budget on social welfare without thinking whether some of this money could be transferred into areas I have mentioned? There are many community projects which could be considered, which could encourage communities rather than dampening their spirits.
Senator Fallon was interpreted by Senator Ferris as not looking after the needs of the people when he said that he could not find it possible actively to support the Bill. Anyone who listened to Senator Fallon could not have reached that conclusion. The point he made was that he would like to see more being done for the needy sections of our community.
The Minister made reference to the introduction of the new child allowance scheme. If a scheme is to be introduced in one year's time, it should be announced at least once a week, if possible. We are not being told what the consequences of the introduction of such a scheme will be. In the national plan, Building on Reality, it was spelt out that the tax allowances for children will be abolished, that the remaining portion of food subsidies will be removed, and that the existing children's allowance scheme will be abolished. If you assess the value of these three schemes you will find that for the average family with four children, the difference between the existing scheme and the new much heralded child allowance scheme will be approximately lOp per week. We in politics do not do anything for ourselves by heralding in new schemes which do not achieve what we promise. Many groups and families will benefit under the new scheme but older people, widows and others will not benefit, and their income will be savagely reduced because of the removal of food subsidies. I ask the Minister to indicate if I am correct in saying that the three existing schemes will be removed on the introduction of the new child allowance scheme.
Reference has been made by other speakers and by the Minister to the small farmer's dole. This has created very considerable problems, not alone for the Department and the thinly manned system for operating the scheme after the High Court decision on rateable valuation, but in many parts of the country there is a lot of anxiety. People who are familiar with farming realise it is a fluctuating system. There are times when people are doing well and other times when the situation can be disastrous. I do not have to spell it out that even this winter the price of cattle dropped substantially, beef cattle prices dropped by 12p and 14p per lb since January this year. People can find themselves at the wrong end of the scale and it is impossible for the system which the Department operate to take all these considerations into account when making payments over six months or a year.
I support Senator Ferris's plea for a more simplified means test system which people could understand. The ACOT services should be involved and their examination of the system should cover the Department of Social Welfare's approach to these problems. It would be better if we were able to do something of this nature rather than being continually faced with the ever increasing problem of small farmers and groups in very poor circumstances becoming dependent on these payments so that when the payments are removed untold hardship is created.
There is another area where the Department of Social Welfare and the Government should be taking a more positive approach to these payments. For a long time I have held the view that there is something fundamentally wrong in regard to the payment of farmers' dole. I have referred to the question of the examination of incomes and the problems that have arisen from the High Court decision on rateable valuation, but I am not referring to the possibility that those payments would be made part of grant-aid for development, for encouraging farmers to produce more, to be involved in better management and wintering facilities and would be related on a yearly basis to additional production. Perhaps that would be a better approach than the kind of pay-out system which, over the longer term, tends to undermine the capacity of people to find solutions to their problems.
In relation to the means test and the inaccessibility of appeals officers to the public as a whole, much has to be done and it is encouraging to hear the Minister say that he is going to employ more appeals officers. One has to ask why this has been so long delayed. However, it is welcome even at this stage and hopefully it will improve the situation, which leaves much to be desired. There are one or two instances in my constituency where widows have been refused non-contributory pensions. While the husbands were alive they enjoyed full pensions. It seems extraordinary that in those circumstances, of trauma and tragedy in a family, the income on which they had relied, which would have been halved on the death of one partner, could be totally removed. A more sympathetic and understanding attitude and a more flexible approach to these problems is required. Obviously, the Minister will say he has to administer statutory instruments and must apply the provisions fairly. I would be all for this but individual circumstances do require sensitive treatment and that will not be possible unless there is an appeals system that is accessible to the appellant and not as far removed as the appeals system appears to be at present.
I would like to refer to a special group. These cases are all based on samples which have come to me in the course of my work. Some of the ancillary benefits for example, free telephone calls and television licences, are not available to citizens who hold a British pension. The total number of those in the country is between 20,000 and 30,000. These benefits are not so costly that they cannot be extended to citizens in receipt of UK pensions. In fact, many British pensions are somewhat less than those payable here. We should be proud that the pensions payable here are on a par with or in some cases greater than those paid by our neighbours. The ancillary benefits should be allowed. I would like to know if the Minister has considered or may at a future date be able to consider this question.
There seems to have been a more than usual number of applications for unemployment assistance refused over recent months on the basis that the applicants are not available for work, even where evidence is supplied of efforts made by them to obtain work. There are not many opportunities for employment. I would ask the Minister to say if the system has become much more rigid and strict. In view of the lack of employment opportunities it seems extraordinary that these benefits are being refused to such an extent at present.
This leads to the question of young people. We positively discriminate in the present system against young girls who for some reason or another are treated less favourably than young boys when applying for unemployment assistance. Applicants in both categories very often are held to be ineligible because they live at home and have some benefit deriving from that. We are continuing to put excessive stress on families and parents who already are under a lot of economic pressure. This sometimes forces young people to leave home. I would not like to say what has been said to me about the system in so far as some young girls are concerned. We need to do something more positive in this area and to be less strict and rigid in how we manage the unemployment assistance scheme.
I would like to refer to deserted wives' allowances. Over and over again, we find cases where court maintenance orders against husbands are not complied with. Yet, when applications for supplementary welfare are made to the Department, the amounts given cannot be as generous as they should be because of court decisions. I do not know how we can enforce compliance with court orders. I wonder whether the Department can do anything in this area. There has been a change of attitudes in regard to looking after dependants. Many of these situations are very sad.
Other areas that I would have liked to refer to have been covered by previous speakers. I would like to conclude by mentioning the free fuel scheme. I would ask the Minister to ensure that appeals in free fuel applications should not be deferred until after the winter in which they should have been paid. Very often the necessary preparation is not made in order that applicants can be catered for during the winter months. I am not so concerned about the value of the voucher, as to whether it is £5 or £6 but any increase is welcome. The putting into effect of the scheme before the onslaught of winter is the more important consideration. In November, December, January and February many people have still not received fuel vouchers because their applications are under appeal. There should be some preparation for the inevitable change of season. Whatever machinery is required to put this scheme into effect as quickly as possible should be provided.
We are always anxious to support any Bill that would help the needy sections of our community. We would be far more supportive of the efforts of the Minister if we were satisfied that the provisions in this Bill did anything to lighten the load of the dependent groups in our society. We fear that the Bill does not go far enough. We hope that some of the proposals we have made will get a response from the Minister in his reply and that some improvement can be made in the total management structure of the Department of Social Welfare.
I would like to thank the Minister at the outset for the wealth of information contained in his speech this morning, which gave every Member of the House an opportunity of appreciating what the Department of Social Welfare do and the services they supply and the costs and difficulties involved in implementing them. The more recent difficulties arose in regard to declaring the PLV system unconstitutional and the consequent delays that occurred in assessing the means of applicants for various benefits.
On a fair examination and assessment of what the Government are doing to help the less well-off section of the community, one would have to come to the conclusion that a generous effort is being made. We must bear in mind that social welfare expenditure this year will be over £2¼ billion, one-quarter of all current Government spending. By any standards and by comparison with what is done in other parts of the world, that is a reasonable approach and the social welfare classes are being treated to the best of the ability of the nation to pay. That is a factor that must always be kept in mind.
Another yardstick for assessing how well we are doing in this regard is that social welfare expenditure now accounts for almost 15 per cent of total national output compared with about 10 per cent ten years ago. That, too, shows that a genuine effort is being made on a reasonably generous scale to meet the problems of people in the social welfare classes. Much as people would like to see increases and perhaps to see the scope of some of the measures broadened to include yet still more people, we must remember that 35 per cent of our population is catered for under the Social Welfare Acts, 1.4 million people, more than one-third. When we come to the stage of believing that still more should be and could be done, nobody would oppose that if it were within the means of the two-thirds to give further help to the one-third. Two-thirds of the population bear the brunt of the cost of helping the one-third. If a reasonable case could be made for expecting greater contributions from the two-thirds in order to give greater benefit to the one-third, then we would all have to row in. But we must bear in mind the position of the taxpayers especially those who have no hope of dodging in any respect and must meet their full commitments under PAYE. It would be unreasonable to assume that they should make greater contributions out of their wage packets.
It is true that there are taxpayers not in the PAYE sector who manage to escape from meeting their full commitment. The Minister this morning mentioned some relatively small number of millions — I cannot find the exact figure now — of money that was got by fraud from social welfare schemes, something in the region of £3 million. On the other hand, we know that unpaid taxes amount to a figure closer to £100 million. That is owed by people who at one and the same time are depriving the social welfare class of perhaps greater help and imposing a higher burden on those who must pay the full tax levy. While everybody welcomes the statement in the Minister's speech about the need for the Government to stamp out abuses under the social welfare code it is equally or perhaps more imperative that every effort be made to catch up with those who are not meeting their due commitments to the State. If that were done, we would be in a position to perhaps reduce the burden of taxation on those who meet their full commitment or to give greater benefits to those in need of State help or perhaps devise a combination of both. It is a big problem and I hope the Minister responsible for that section of the Administration pursues tax defaulters with vigour and with the support of all parties in the two Houses.
There are abuses under social welfare schemes as we all know, but they are not as great as the abuses of those who will not pay their share. They are not as great as the abuses of those who, as Senator Ferris pointed our, collect PRSI from the worker and do not hand it in. That is a serious offence and up to date far too many people have got away with it on the pretext that if they are made pay up, they might close down and put people out of employment. It is a known fact that they withhold the moneys they have collected and thereby deprive the workers of benefits and sometimes close down for a very short period, make a change or two in the board of directors and open up again and carry on business again with this huge sum of PRSI not paid over to the proper authority. People who behave in that manner are just as guilty as the recipient of social welfare who manages to defraud the State. It would give the wrong impression if it were suggested here that the Government intend to deal firmly with those who are guilty of fraud by way of getting benefit they are not entitled to and at the same time not to pursue vigorously people who will not meet their due tax commitment and people who withhold workers' contributions. All three are guilty and should be dealt with and exposed to society.
Workers who are able to defraud the Exchequer do so in a number of ways, as everybody here knows. It is done by people who are working and signing the unemployment register at the same time, working probably for a lower rate of wages than the norm and getting time off to go and sign. The employer in that case is guilty of a crime against society. In parts of the country, at least in rural Ireland, the gardaí should be more active in stamping out that kind of abuse. It is well known that there are people in receipt of unemployment benefit or assistance and who are working at the same time and who are signing on at the Garda station. In some cases, at least, the gardaí know that this is taking place. We should have their wholehearted co-operation in stamping it out.
It is equally true that people can get a medical certificate for the flimsiest reason. There are probably thousands of cases of people with medical certificates which in the general opinion, they are not entitled to. Medical certificates are too easily come by. I know of a medical practitioner who practised in the United States for a number of years, who came home to practise in a provincial town in this country and he is simply astonished at the ease with which people can get medical certificates. He has refused to give them to anybody except those whom be believes, as a result of a strict examination, to be really unfit. His practice has suffered as a result but he believes it is worthwhile behaving in an honourable way and living up to the very highest traditions of his profession. I think that this is a matter which the Irish Medical Association should examine because it is the general belief all over the country that there is widespread abuse.
The declaring of the PLV to be unconstitutional by the High Court, on examining the claims of people for unemployment assistance, causes a big hold up, because a new system had to be introduced for the assessment of the means or the earnings or the income of the applicants. It was a relatively simple business to take the PLV figures, do some calculations on these and decide whether the applicant was entitled to unemployment assistance or not. That, as we know, was declared to be unconstitutional in the High Court and therefore that system could not be employed for assessing the claim of any applicant and a new assessment system came into force.
In the early days of that system it was too rigorous and people who were certainly entitled to unemployment assistance, were being ruled out by a very strict code. Then, as a result of representations to the Minister another set of guidelines were drawn up which enabled people to include the cost of running the farm, the cost of drainage work and application of fertilisers, fencing and so on. It did result in the Department officials having to take into account more of the real costs of running a farm than they were doing before. Sometimes the application is still too rigid. Last Tuesday I was in the home of an applicant who had been cut off unemployment assistance and I found out that the officer who called on him simply asked to see the returns from the creamery. There was no mention whatever of the other costs of running the farm, the cost of application of lime and fertiliser and drainage work, the cost of keeping a tractor on the road, veterinary fees or any of these, not a single word was ever mentioned. The officer in question just took a look at the creamery book and decided that this man's income was above and beyond what would entitle him to the assistance and walked away. The man was duly notified in a few days time to this effect. These inspectors who go around assessing these claims should be instructed to observe the guidelines produced by the Minister around the middle of last year. I understand the case made by the Minister with regard to the huge increase in the number of appeals and an increase in the number of people coming into the social welfare clases. One must be considerate and understand that there will be delays in the Department in processing this huge number of applications. But now and again public representatives come across cases where the delay is so long that it could hardly be justified on any extenuating circumstances. I have a case — still under consideration — of a man who appealed against losing his unemployment assistance as far back as October 1983. The case is going through the process of appeal and I do not really know where it has gone. The latest information he got about a fortnight ago was that it was now in the hands of an appeals officer and that the applicant would be visited in the near future. I think from October 1983 until March 1985 is much too long.
Also, the behaviour of people who defraud the Department by getting benefits they are not entitled to and people who defraud the Department by not paying the taxes they should pay or who collect money from workers without transmitting it to the proper quarters adds to the resentment of those who are paying their due share of income tax. They would pay with a greater willingness if they were convinced that everybody was paying a fair share. If they were convinced that those who collect PRSI transmit it to the proper quarters and if they were convinced that fraud was being eliminated, they would pay their contributions, heavy though they are, with greater contentment.
In general, the Bill is an indication, a genuine indication of the Government's intention to do the best possible within the means of the country and the people as a whole for the social welfare classes. It is worthy of note, as the Minister said this morning, that at the present time there are three social welfare Bills on their way through the Houses, which itself is a clear indication of the commitment of the Government to deal adequately with the social welfare classes in our community. For that I wish to express my gratitude. When we take into account, in addition to what I have said already about the amount of money contributed by the taxpayer to assist the social welfare classes, the fall in inflation, I think it must be conceded that the increases mooted in this Bill for the social welfare classes will help them to meet the cost of living because of the very significant decrease in the figures for inflation in recent times. It is now clear that before the end of this year the figure for inflation will be down to about 5 per cent as compared with the 20 per cent which it was just a few years ago. Taking that into account along with the increases specified in this Bill the Government are to be complimented on their efforts on behalf of the social welfare classes.
I welcome this Bill with certain qualifications, partly because a Social Welfare Bill can never be welcome either by the Government or by the Opposition with the total enthusiasm which one would like, because in the nature of things, obviously Members of the Oireachtas and the people as a whole would always like to give more money and more benefits to those who need them.
I welcome the two principles which were enunciated by the Minister both in the Dáil and here as being behind the Bill. The philosophy behind every Social Welfare Bill, and its first objective, is to maintain the standard of living of those who through no fault of their own need benefits from the State and cannot look after themselves. The second objective which was stated in speeches both here and in the Dáil was to stamp out abuses, which is equally important but much more sensitive and difficult to pin down.
I would like to make a special plea for the handicapped in our society. Those who are handicapped, or who have permanent injuries, or those who are born, through no fault of their own, with permanent injuries, or those who have imposed or inflicted on them loss of limbs or sight or hearing, come into a slightly different category from those whom otherwise one would like to help and who receive help from social welfare, such as the poor, the sick and the unemployed. This second category of people, while they are in a position of great difficulty, are not in a position which is, by definition, permanent whereas the handicapped are. Social Welfare Bills in the future should give serious consideration to giving some sort of preferential treatment to the handicapped.
I welcome the Minister's introduction of a broader context into the social welfare debate. It is time the whole concept of social welfare and the welfare of the State as we know it should be looked at carefully. It is time that the whole concept of the welfare State should be questioned. It is unfashionable in this country to question the basis of the State handing out money for no return. It is time that we questioned it in all sorts of detailed ways. There is a trend in the European countries who run social welfare systems similar to our own to start questioning the basis of this and to question whether the social welfare system hinders the economic growth of the country and whether it therefore hinders the ultimate wealth of the country to be giving away social welfare on such a vast scale. That is not to say that in any way those who need it should have benefits withheld from them; it is to say that it is not to be regarded as a "sacred cow" that should not be questioned by the Government of the day.
It should also be questioned whether the bulkiness, clumsiness and bureaucracy of the social welfare system, the enormous amount of staff and Government expenditure involved, are hindering the flexibility of Government finances, because the proportion of Government finances which goes towards social welfare undoubtedly hinders the flexibility of Departments outside the Department of Social Welfare. We should ask whether it is right that such a large proportion of Government money should be used in this way. We should ask, not necessarily whether it is morally right, but whether it is fiscally right for the system and whether it is efficient that this should be happening. As the Minister said, one-quarter of Government spending goes on social welfare. It is a devastating amount. That in itself is a fairly significant figure in that it demonstrates to us the state of our ecomomy, the amount of poverty that exists and the needs of many people. It does not necessarily mean it is wrong, but it reflects the state of the economy and of those who need social welfare. We should be looking at this and asking whether we can be more efficient or whether it is right to be giving a quarter of all our money to those in need of social welfare. We should be asking whether they need it.
Much has been said about the need to stamp out abuses. This is a very sensitive area. It is fashionable and common for Governments to say that abuses are minimal. Indeed, the Minister said that known fraud in 1983 was only £2.3 million. That is indeed a very small figure. It was one-eighth of 1 per cent of all expenditure on social welfare. That is what they call "known abuse", which I presume means detected abuse. The Minister went on to say that it is difficult to assess the amount which is drawn unlawfully. Of course it is difficult to do that because that which is not detected cannot be assessed. The important thing about abuses is that they should be detected. The penalties imposed for abuses are not particularly important because the important fact in criminology in this sort of matter is that you must catch the person who is abusing it, not necessarily punish him. Although the Minister says that he has increased his detection unit enormously, the abuses which are going on are very difficult to assess because most people do not believe that they are going to get caught in involving themselves in these abuses.
I do not want to tar too many people with the same brush. I do not want to tar many of those receiving social welfare with the brush of abusing the social welfare system. The anti-fraud schemes could be stepped up. If you step them up enormously the return you get is probably greater than your expenditure on detection. The abuses in terms of people claiming excessive amounts, of people actually claiming the dole, claiming social welfare, claiming the unmarried mother's allowance are not all that serious. The actual detail of it, while it goes on, is not all that serious. There is a whole other area which should be looked at in a much broader context which I will come to later.
The Fianna Fáil opposition to this Bill is understandable in political terms but in no other terms at all. There is always, in both Houses, a competitive, compassionate element when Social Welfare Bills come up for discussion. It is hypocritical, but politically fair game, to say "this is not enough". It is very easy for the Opposition to say that certain sections did not get enough and should have been given more, but the Opposition never have to sign the cheques.
A figure of 70 per cent in three years.
I am delighted Senator Cassidy brought up my next point. I think it was 75 per cent in three years which the Senator's party gave away. That is a very large sum of money and it is a very generous sum of money. It is very interesting to point out that it was not that Government's money. It is very easy to give away 75 per cent in three years if you borrow it abroad. I would like to congratulate this Government on not yielding to that temptation as the Fianna Fáil Government did. They could have given away a 100 per cent and borrowed a bit more. That is easy. That option was open to this Government as well — to give 75 per cent in three years. At some stage the hypocrisy of the Fianna Fáil Government in giving away money which was not theirs had to stop. Luckily, it is now stopped. People do not feel the benefit of it in their pockets. They do not feel the immediate short term benefits which they felt under Fianna Fáil. The 75 per cent which they gave them in three years did not seem to do much good because they did not even manage to buy an election with it.
The ultimate good of the country was considered by this Government who said "No, we are not going to borrow lots more money just to keep people happy temporarily". That is where the money came from. The money came from foreign bankers. Yet the Opposition here and in the Dáil have criticised this Government for not giving more money away without once saying where it is going to come from. It is typical of the reckless fiscal irresponsibility of Fianna Fáil in Government — and now in opposition — to start bandying around figures to please the electorate without saying where the money is to come from. Do you not think this Government would like to give 70 per cent in three years or do you think they do not want to give money away? They do not give money away because they do not have it and they are a little bit more realistic than Senator Cassidy is in this matter.
Obviously the Senator does not understand the position of the poor of this country at the moment.
I fully understand the situation of the poor and of the Government. I also understand that you cannot write a cheque when the money is not there. It is as simple as that.
Take it from the big boys.
Unemployment is an area which ought to be looked at. The abuse of unemployment ought to be looked at. Without any doubt there is a significant number of people drawing the dole who are not intended, according to the philosophy of those who give it out, to be drawing the dole. In other words, they do not need the dole. This is very difficult to detect. The Government could look at the whole area of the black economy. If social welfare is to be increased the money has to come from somewhere and not, unless the Government are highly irresponsible, from foreign bankers. It should come from those areas where the Government are not collecting taxes. I suggest that there is a large amount of money in the black economy being earned by people who are drawing the dole. That is wrong. It means that the ordinary taxpayer is paying more. It means that the Government have less money. It means that social welfare payments are less. I cannot understand why no Government have ever taken steps to enforce a system whereby those who are permanently unemployed contribute a certain amount of work to the community every week. There is a huge pool of unemployed in this country who are totally unproductive. That energy, ability and strength should be channelled into doing work for the community. God knows there is a lot that could be done.
Hear, hear.
I see no ideological objection to compelling people to contribute, not their money, but their effort and their abilities to the community when they are unemployed. I do not believe it should necessarily be full time. Neither do I believe that it is humiliating in any way. The worst thing about being unemployed is not the degradation but the boredom and the fact that you have nothing to do and feel useless. Many of the unemployed would welcome this opportunity to contribute to the community and be rewarded by the Government. It might be that they would be given a little in excess of their dole money every week as a result. In this way they would be receiving money from the State, but they would be handing something back to the State.
This would also, to some extent, sort out those who were truly unemployed and those who were not unemployed. Those who were truly unemployed would be capable of giving the time to do work for the State but those who were involved in very profitable measures in the black economy would have to sign off the dole and not take it any more. It would have an effect of siphoning off those who were abusing the system. Because of the abuses of the system there is a tendency for many to say that half of the people on the dole have jobs anyway. This is not true, and I do not believe any Member of this House believes it. But outside this House I have heard many people saying that a large proportion of those on the dole are abusing the system. It is not true, but it is time that those who abuse the system were weeded out because when they are weeded out those who are in genuine need will receive what they deserve and what the State should give them. Further they will not be in receipt of the sort of abuse which they get from the rest of the community for something which they have not done.
The Senator is on the right track.
I would like to join Senator Ross in condemning the abuses of the social welfare system. I agree with many of his remarks about the black economy. I look forward to a situation in the near future where it may be revealed that a very large organisation because of its irresponsibility is abusing the taxpayers of this nation as badly, if not worse, than the social welfare cheaters. Cheating is cheating no matter who perpetrates it. I look forward in a week or two to seeing if the same sort of condemnations will be forthcoming then. I agree totally with Senator Ross about the abuses of social welfare. I know that it deprives genuine cases of some assistance.
With regard to the Bill itself, you have to think in terms of whether or not you can meet the cost. You cannot just give it because you think it is a good thing to do. The best way I can put that on record is to refer back to the period 1973 to 1977 when the policy proposals of the National Coalition were set out. Those proposals had regard to the need for an economic strategy that had to take into account the then dramatic rise in the population which was something of the order of 150,000 in the four years preceding 1977. Obviously this called for a different approach and a different emphasis on planning exercises in the social welfare area. It was a good period and the impact of the increase in population necessitated some sort of plan that would have to include a number of major social issues. Unfortunately, it has not been possible to include them in this Bill. As a member of the Labour Party I should say that we would like to see that, but we have to face reality. The population increase at that time had an effect on education, housing, health and the social policies of that time. Nevertheless, a commitment had to be made.
Following on this commitment, which was included in that 1973 statement, the Government worked towards the creation of a more comprehensive social welfare system capable of meeting the needs of all citizens in respect of pensions, income maintenance and social assistance. The normal thing was to bring in a Social Welfare Bill to provide for increases in the existing benefits. It is now necessary in the light of the increase in population and other factors, plus the capacity of the economy to deal with it, to realise that you can no longer talk about bare increases. One had to face up to the various social problems. The Coalition did this. The policy they embarked on was to seek to implement overall programmes which could solve problems not only by identifying them but by searching out the root causes of them and accordingly introducing measures to alleviate, or even to make the problems less acute as a temporary measure.
We have had the national pilot scheme on poverty. We had the establishment of the research and development section within the Department of Social Welfare which has done a tremendous amount of work. We had the removal of the discriminatory elements from the social welfare code, the consolidation of the Social Welfare Acts in the 1981 Act, pay-related benefits, prisoner's wives' allowances, assistance for particular categories. For example, a girl coming on to the employment market at that time had nothing to look forward to. Eventually she could expect to receive the same benefits as a man. Pay-related benefits were introduced. The real value of social welfare payments had to be looked at to see where they had dropped back. The question of home assistance had to be examined and was replaced by a supplementary welfare scheme. The question of an appeals system had to be looked at during those years. Community care programmes were examined. The question of social insurance for the self-employed had to be looked at.
All those things happened in the context that they were necessary in the first instance and, secondly, that the economy on the occasion could stand it. It was a condition of the Labour Party going into Government in the Joint Programme on that occasion that a lot of those items would be tackled. The benefits that result from that programme for Government are very interesting. Senator Ross and Senator Cassidy had an exchange about a 75 per cent increase in three years. The developments between 1973 and 1977 are very revealing but for a different reason.
For example, in the old age contributory rate there was a plus of 124 per cent in that period. The widow's contributory pension was plus 125 per cent; unemployment benefit was plus 121 per cent; child dependent allowances went from 160 per cent in that period to 195 per cent; the old age non-contributory pension went to plus 124 per cent and the deserted wife's allowance to plus 128 per cent; unemployment assistance for a man and a wife was plus 120 per cent and the child dependant allowance went from 170 per cent to 220 per cent.
They were the good old days.
Yes. It was possible to do it then. The reality of it is that no Labour Party would be satisfied with the bare increases at present. We are satisfied in the sense that it keeps the people ahead of inflation. It does not satisfy us in terms of the adequacy of the total social welfare code or our own commitment to socialism. It does indicate that the Labour Ministers in Government are very sensitive to the needs of the most deprived in our society.
One would like to see the other social changes that occurred between 1973 and 1977 being continued but circumstances alter cases. Unfortunately, the Labour Party have never been in the majority to carry through plans that they begin. On that occasion we changed the children's allowance, which became payable to the mother. Unmarried mothers were also looked after. I have mentioned prisoners' wives. There is the continuation of benefits for dependants of the deceased for six weeks and the introduction of free travel to invalidity pensioners. The earning allowance for the blind rose from £195 to £572. The valuation for unemployment assistance for smallholders was changed to take in £15, £20 and £30 valuations and they were assessed at £25 per £1. Those were the changes that were possible at that time. It was done because the will was there and it was in the programme. Our Labour Ministers were active on it and pressed the Government to give effect to it.
Another thing emerging at that time was the Report on the Status of Women. It was not possible to implement all of the recommendations but some of the recommendations were partially implemented, some of them totally and some we just had not got around to before we went out of Government. I deliberately put those facts on the record because of some of the contributions I have heard in the debate. The purpose was to try to drive home a message. The media do not do it for us nor do they talk about the Labour Party. I have got to drive the message home along with other Labour people who have a commitment to pursue the needs of the more socially deprived in our society.
Labour Ministers in Government will always be to the fore when the protection of the most deprived in society is at stake. Whatever other arguments we get into we have a common bond on that. In difficult economic circumstances, in the Social Welfare Bill they have managed to make sure that the most needy do not drop below the level that they need not to live well but to exist well. I say this having regard to the many constraints that were on the Government in the circumstances of the day.
Coupled with the economic argument I must draw attention to the question of trying to avoid imposing difficulties on local authorities. For example, where there is a local authority cost factor you have to be careful, apart from the general economic situation. If we had tried to extend the urban unemployment assistance, which we wanted to see extended, it would have been possible to do so taking section 156 of the 1981 Consolidation Act along with other parts of the Act. It is possible for the Minister to extend the boundaries and to bring in people in that way. It is possible to talk about abolishing the differentiation between the two rates. Unfortunately, one of the problems for the Minister would be that you could get into an area where the pressure to take it as a precedent and pressure for other social costs to be built into it would be considerable. In other words, there might be repercussions. Somebody would establish a precedent. Pressure would build up and the local authorities and the Government in general could be into a very serious cost area. That would have to be considered.
If you were to wipe out the rate directly there would be a £6 million cost. We must have regard, particularly as we are dealing with a Labour Minister, to what happened in 1973 and 1977, the circumstances which obtained then and those obtaining today. I see an important relationship between poverty and social welfare, for example, home help services, community care, meal services, the incapacitated, good neighbour schemes, day care centres and so on.
The Commission on Social Welfare are to report later this year. I do not know what their terms of reference are but I do not think they can avoid looking at many of those matters, including the question of the differentiation between the rural and urban assistance rates and making recommendations. They should also look at the question of the Government's treatment of the elderly, because in my 12 years in this House there has never been a serious debate in either House on that topic. The Government should relate directly to the elderly in a particular way because these are people who have served the nation and are still very much involved in the democratic process. There must be a better deal for the elderly and it should be something specific as in the case of the mentally and physically handicapped. Socialists should advance the argument for more public spending when possible although it has already been pointed out that it is not possible at present.
The wider issue of the elderly and the deprived should concern itself not only with the question of creating or improving benefits but with the distribution of money allotted for this area. Very often, a policy is laid down in regard to social welfare but examination of the pattern of spending might reveal that it is unrelated to the aim of the policy or to improvements in social benefits. Labour Ministers obviously were in the forefront in regard to improvements but other Ministers showed sensitivity and got the support of their colleagues. If only we had 1973 to 1977 over again a lot more would be realised.
I ask the Minister to consider three areas of concern. As a former negotiator I would accept full concessions from him but in the circumstances, where possible, he might see if anything can be done.
Former public sector employees who were forced to resign on medical grounds do not get free travel because they did not stamp cards. Is there any way that this facility could be extended to this category of people?
Those on disabled person's maintenance allowance are entitled to free travel and if married and accompanied by their spouse when travelling, the spouse also has free travel. On the other hand people accompanying a blind, disabled or mentally handicapped person do not qualify for free travel. For example, obviously a mentally or physically handicapped child will have to travel by public transport and must be accompanied by parents or guardian. Perhaps the Minister would ask the Commission on Social Welfare to make recommendations in this regard.
The single rate of unemployment assistance is £32.50. I do not think that anybody living alone could survive on £32.50 per week. It would be outrageously hypocritical to say that they could. There would be a cost factor involved but would the Minister consider bringing this figure up to £44, the minimum non-contributory old age pension?
I welcome the Bill. Naturally, as a socialist, I should like to see the social welfare code extended, abuses eliminated. I share the view of other Members that the Bill does not go far enough. Labour Ministers were to the fore in the period 1973 to 1977. Many people gained protection through laws passed in that period.
I should like to make a few points in relation to this Bill. Like my colleagues on this side of the House my main opposition to the Bill is that it does not go far enough or it does not come to grips with the problems in the community today.
The Minister in his opening remarks on Second Stage told us that the total number of people and their dependants receiving social welfare payments of various types each week now average about £1.4 million or 35 per cent of the total population. Since mid-1981 the volume of claims for unemployment payments alone has increased by almost 70 per cent. Social welfare expenditure this year will be over £2¼ billion. These are frightening figures, for a small country, and they will probably be higher next year. It is sad to see this situation because a large proportion of the payments made each week by the Department of Social Welfare is made to those who are unemployed, people who in recent times have found themselves without a job and who have to resort to the social welfare system in order to provide themselves and their families with the necessities of life.
A couple of years ago the Taoiseach, amid a great deal of publicity, launched a crusade and it is a pity that he and the Government do not apply their talents and energies to launching another crusade to try to get those people jobs, to give them a little hope and to assure them that there is a future in this country. That is where the Government should be leading us at present. If they did this, almost everybody would support them. Unfortunately, they have not done so and unemployment figures seem to rise week after week. Month after month factories close down, people who have been used to regular jobs for a greater part of their lives now have none and they have to go to the local labour exchange to sign on for unemployment benefit. These people do not want that kind of assistance; they want jobs. They want to make some contribution to their country and the best way they can do that is by working in the country and making a contribution through their jobs. The Government should apply their talents in that area and give some hope to young people who are tramping up and down the country trying to find jobs. In our cities, where there are thousands of people unemployed, it is no wonder that there is so much vandalism, because these young people are frustrated. They have nothing to live for, they go out and steal a car, break into a house and rob.
Unless the Government provide these young people with hope and with jobs, that kind of vandalism will continue for a long time. It does not matter how many gardaí and squad cars are on the streets, it will still happen because these young people have to vent their frustrations in some way. I feel sorry for them in many ways, particularly for people in urban areas. Young unemployed people in rural areas whose parents have land, can find some useful employment. Even though the payment might not be great, at least they have something to do. That does not apply to young people in the cities.
I do not propose to go through the Bill but there are a few items I want to mention, for instance, small farmers' assistance because this has caused problems for a lot of public representatives, particularly in the west in recent times. Over the past year or so, especially since the decision in relation to rateable valuations was given, which made the assessment of means on a valuation basis unconstitutional, we have seen a deluge of social welfare officers descending on small farmers in the west. In many cases these people were misguided because they did not know what they were after. They were sent out to do a job; they did not understand the problems of the small farmer in the west, and even though they were given certain answers by the farmers they did not want to believe these answers.
I have seen cases in the last six months where small farmers were prepared to submit receipts to those officers, showing the exact amount of expense they had in running their small farms in the past 12 months, but the social welfare officers did not want to listen. They had their minds made up before they came there at all that they were going to reduce that small farmer's unemployment assistance or disqualify him entirely and in many cases they have done that. They have created terrible hardship for these people.
The small farmer's assistance was introduced by Fianna Fáil many years ago to help farmers in the west. Because of the climatic conditions and the land structure, those farmers could not get as much from the land as their better off brethern in the midlands and southern part of the country. They were given unemployment assistance to supplement the incomes from small farms. It did a good job in many cases although we all know about the abuses. We hear about the unfortunate farmer who stays in town and drinks the unemployment assistance and leaves nothing for the wife and child, but that is a rare occurrence. The majority of people put that money back into the farms to fertilise them and to improve their output. The vast majority improved their farm buildings and so on and the money was circulating. The business people in the towns got something out of it; the farmers were happy and everybody was doing all right. Unfortunately that is not the situation any more, it is quite noticeable now that small western towns are practically dying because there is not the same amount of activity there every week. Small farmers are not getting unemployment assistance, therefore they have not the spending power they used to have and they are no longer able to support business people, who are now feeling the pinch.
The people hardest hit are those in dairying. We all know that it is very easy to have an income of £7,000 or £8,000 from nine or ten cows. When you are sending the milk to the creamery you are assessed on your total income and you can have from those cows a figure of maybe £9,000, £10,000 or £11,000 if they are doing reasonably well. But against that you might have a bill for meal and so on of £7,000 or £8,000. Unfortunately the assistance officers investigating these claims do not seem to have regard to this point. I should like them to come out for a month or two and live on one of these farms, particularly at this time of the year when fodder is scarce, weather bad and cattle and sheep are roaming all over the place looking for food, the farmer has to go to the co-op to buy meal and sometimes he is unable to pay for it in cash. He has to wait until he produces the milk and then the co-op deduct the price of the meal from his cheque. Small farmers are not millionaires as social welfare officers seem to think. They are finding it difficult to make a living and it is getting more difficult every year.
The price of fertiliser has increased by £30 or £40 per tonne this year. Over the last couple of weeks cattle prices have tumbled and farmers are very frightened. People who never looked for assistance are now going to the community welfare officer for aid. The Government do not seem to appreciate the problem. Social welfare officers are investigating farmers and telling them that they are not entitled to assistance. In regard to cases on appeal, I know of people who travelled to the Garda barracks week after week for 12, 13, 14, 15 or 16 weeks before their cases were decided. It is very frustrating for people to have to submit to that treatment and it is grossly unfair. There must be some way in which that can be overcome. I welcome the decision to appoint extra appeals officers. If the social welfare officers who investigated the cases in the first instance were not so severe, there might not be as much work for appeals officers.
The same problem exists in regard to the investigation of old age pensions. Recently, prominent churchmen and others called for the abolition of the means test and I should like that to happen. It would not cost a great deal of money and, in the present climate in rural areas it would be worth while. It has been proved that old people are afraid to put their money in the bank because they will be deprived of benefits and, in some cases, they may even have to pay tax. For those reasons money is hoarded in their homes. This is known by the blackguards who have been prowling rural areas in recent times and who have attacked old people in their own homes. It is a sad situation when that kind of thing is happening. People are afraid to keep money in their homes or to live alone. There was a time in rural Ireland when one could leave the key in the door all night and any caller was welcome but that is not the case any more. I hope that the Garda will shortly apprehend the people who are carrying out such savage deeds on old people and that they will be penalised for their acts of violence.
We heard a great deal about the amount of money being paid out each year through fraud under the various social welfare schemes. The Minister said it amounted to £2.3 million. That might seem a lot of money but when you consider the number of people who are drawing social welfare, it is not such a big amount. It is very small and insignificant compared with the amount of money spent or unaccounted for in other areas. We read in the Irish Independent on Tuesday last of the millions of pounds which have been paid to accountants, consultants and architects for buildings that were never erected. We read in today's paper of £7 million given to a State body, the IIRS, and a large proportion of that money is unaccounted for. The Government should look into this. It is dreadful to think that millions and millions of pounds could be lost to the Exchequer every year and that the people responsible are not accountable to anybody. Yet if poor unfortunate old age pensioners have a few pounds, which they have worked hard for all their lives, they are penalised. In many cases people who have not disclosed the few pounds they have in the bank have been brought before the courts and punished.
The payment of PRSI should also be brought to the attention of the Minister, with particular reference to firms who have a large number of people employed but who do not make PRSI returns. How often in the past have we seen factories closing down and firms going bust? We are told that they owed thousands, in some cases, millions of pounds, to the Department of Social Welfare in PRSI payments. It is a shame that that can happen. It is bad enough for people to find themselves out of a job with no future but even worse when they then find that they are not entitled to unemployment benefit or redundancy payments simply because the firm did not make proper returns of PRSI to the Department of Social Welfare. There should be a monitoring system whereby every month, at least, the Department would be able to check a particular firm's returns to ensure that the interests of the workers are being looked after because they should be their first priority. It is up to the Department to monitor the system and to ensure that firms, particularly large firms, because they are the greatest offenders, make proper returns and that the interests of the workers are protected at all times.
Many schemes have been introduced in recent years to try to take up the slack from the unemployment situation. Many of those schemes are only temporary — for example, the social employment scheme, the alternance allowance scheme, teamwork schemes, AnCO and so on. The Government seemed to have devoted a lot of energy to getting those schemes organised and getting them off the ground. I suppose they are quite good schemes but they are only temporary.
It would be far better if the Government devoted more of their energy to the long term situation to try to get full time jobs for the unemployed. Very often those schemes are for only three or six months and when they are finished people have to go back to the labour exchange. There is no work available for them. They now have to sign the register for unemployment assistance and the whole merry-go-round starts again. It is sad that we have people who are highly educated, many with degrees, and the only chance they have of involving themselves in a job is through one of those schemes.
I have made the point on a few different occasions and I will put it on the record today. I see every year, and more so in 1984, where county council workers are laid off in mid-November and even earlier. They have to sign the register for the dole even though plenty of work was available for them but unfortunately the county councils were not in a situation to pay them. I see no reason why the law is not changed so that the Department of Social Welfare would be able to give the money they are paying to those workers to the county councils to enable them to continue to employ those people to do the useful work they are now doing.
We have seen the roads of rural Ireland deteriorate in the last couple of years, certainly in the last six months. There seems to be an outcry from every county council throughout Ireland about the condition of the roads. Why cannot the Department of Social Welfare not pay that money over to the county councils and let them continue to employ those workers to do the job they are supposed to do, fill the potholes, maintain roads and so on? It should not be beyond the bounds of possibility. I would ask the Minister to take a serious look at it and if it involves bringing in new legislation, we will give him every support. I am quite satisfied that those people would prefer to work rather than draw the dole. They have been used to working all their lives and certainly they would prefer to be at work. The most unusual aspect of it is that many of them are better off drawing the dole than working. I have been told by many people that they are £5, £6 and in some cases £10 better off drawing the dole. A married man with a few children may receive £10 more in unemployment assistance than if he was working. This is another anomaly which would require examination because it is encouraging people to obtain unemployment assistance.
A new scheme was introduced this year in the budget for the extension of optical and dental treatment for expectant wives. While this is to be welcomed — it is an addition to the social welfare code — I find it difficult to understand how the Department are going to successfully administer that scheme. Will it involve pregnant women having to produce certificates before they are put in benefit for this scheme? It would be much easier, even though it would cost a few million pounds extra, to extend the scheme to cover all dependents of people who are in insurable employment. It would do away with much of the red tape because women will have to produce certificates or some other means showing that they are pregnant and are entitled to this benefit.
We could talk about the various schemes. My main argument is that the benefits we are offered under this Social Welfare Bill are not adequate. We all know the cost of living is rising year after year. Families are finding it more difficult to try to provide the necessities of life. It is particularly difficult where there are young families, particularly where there are three or four teenagers who have finished school and are unable to find jobs. They still require food and clothes and for that reason the benefits under this Bill are not sufficient to cater for their needs.
I do hope that the Government will make every effort to try to reduce the number of people on the dole queues. That is the biggest social evil which afflicts this country at present.
I shall be very brief on this Bill because a number of the issues that arise in the course of the Bill have been covered by me in the larger discussion on the Combat Poverty Agency Bill. There are just a few points arising from that discussion and which are located in the Minister's speech in introducing this Bill to which I would like to make reference.
First of all, the speech is a very thorough one, ranging from the scope of social welfare to the economic context in which the provision is being made, to the organisation of the Department of Social Welfare, the implementation of schemes and so on. In that respect it is extremely valuable. However, I do feel that there are other aspects of it about which I would be less impressed.
I think there is a hidden philosophy in the Bill but I would have welcomed a more open statement. It is one that seems to tacitly accept a model of social policy without stating it. The late Professor Titmus, probably the most distinguished commentator on the welfare state, in his book Social Policy offered three models. One, a residual model, namely, where the welfare state existed to protect those who had fallen below a certain level. The second model was one that was rather a handmaiden model of social policy in which you saw the social welfare system running parallel to the economic system, and through insurance mechanisms and other measures, the people who worked hard were adequately provided for and so forth. The third model we discussed in some detail in the Combat Poverty Agency Bill was one in which we saw the welfare state as neither providing in a residual sense for those who had fallen below the bottom line nor indeed as serving as an accompanying factor to the economy but was consciously redistributive, that is, that it gave to those who had been excluded from economic participation, such measures and provisions that enabled them to come back and participate in society in terms of education, housing and so forth.
This Bill is in grave danger of ploughing the furrow of a residual view of social welfare without courageously stating it. I worry about this. I want to make a very plain observation, and it is one I believe research would sustain. The number of people who are entitled to benefit under the existing Social Welfare Acts and measures who do not benefit because they do not make a claim is very considerable. I discussed some of those earlier this morning when I was discussing the case of the elderly, particularly the elderly living alone. Because no member of the household is participating actively in the society and supplying information, there are a great number of provisions that are not being fully utilised by the people to whom they are addressed. The people who are entitled to benefits but do not draw them, are getting hardly any attention whatsoever.
On the other hand, the number of people —.8 of 1 per cent — who are involved in social welfare abuses are getting not only a great deal of public and political attention, but are also involving us in very considerable administrative expense. I would love to see the two sides of this equation balanced. That is, those who are not getting all they might reasonably be entitled to against the number of people who are abusing the system. I am not justifying social welfare abuses, as the Chair knows from what I have been saying, but I am questioning very seriously the disproportionate amount of attention that is being addressed to this. It is being used, for example, as the departure point, very unfortunately, for a questioning as to the nature of the welfare state itself.
I worry about this, because if you were to ask me to compare two areas of neglect and ask which is the worst abuse in the realm of social welfare: the .8 of 1 per cent who abuse the provision we make, or those people who have been responsible for designing social policy over the years and who have failed to come up with a coherent social policy, I have no hesitation in saying that it is those people who have not come forward with a clear social policy statement. This matter has been studied by Fionnula Kennedy, among others, in the 1970s tracing the development of social policy in the 1960s onwards. She gives 1963 as the year when we began to move towards a social policy and it was indeed an incremental one. We would have benefited in the last 20 years if we had had a debate on what we wanted our welfare system to do.
There is a lot of old, musty 19th century philosophy floating around. I was listening to some of it on the communications system we have to our rooms. For example, some people are arguing that perhaps we should think again about whether we might not be destroying the work ethic and so forth. That poor law mentality — I referred to it already this morning — I had hoped was long gone. Where is the research? It is incumbent on those who use these arguments to come forward and offer it to us. They should show, for example, that there are work shy people everywhere, massively living off the State, to back their argument when they say that the recovery of the economy and so forth is being impaired by the provision being made for them. Let us restore a little sanity to that argument.
Between 1961 and 1971 97,500 people left the agricultural sector. In the same period there was a gain in the industrial sector of 70,800 people, and an expansion in services of 42,500. You have to look at those figures against the background of what was happening in population and you have to ask the question: were we providing a sufficient number of jobs in terms of the number of people available? In so far as, in our thinking, we link disposable income and wages to involvement in the workforce, is it reasonable to suppose that we succeeded in making economic provision, having sufficient economic plans and sufficient social policy measures to absorb our population? You would find that there had been a very significant failure. Between 1971 and 1979 in the agricultural sector there had been a reduction of 35,000, an expansion of 48,000 in the industrial sector and an expansion of 102,000 in the service sector. You have to read those figures again against the background of our population need. In all cases, we were running short of the number of jobs we needed to put people into gainfully employed occupations. Again, we had a massive shortfall. I think we spent something in the region of £3 billion in a ten year period in the exercise of creating jobs to fill these gaps caused by population pressure, natural increase, the shift from the land and so forth. We did not succeed in many cases.
I find it rather curious that people like myself have had to wait a number of years for a debate on an industrial policy that has been so costly and which has manifestly — and I am not being partisan in the slightest about this; it would have been relevant whichever Administration were in power — fallen short of our expectations. Yet we are falling back on this obsessive interest in .8 of 1 per cent of those who are receiving social welfare benefits of one kind or another. There is an intellectual misery to it, frankly, and there is an intellectual cowardice to it in so far as we have stayed away from asking the questions about industrial policy, and in so far as the beneficiaries have been among the more powerful in our society. They involve agencies with very effective clout, individuals with real power, individuals who are within the network of private capital provision, institutions, powerful industrialists, foreign interests and so forth. Nevertheless we direct our attention obsessively at the powerless, by and large. I certainly support anybody, and I applaud anybody, who will act for the State wisely in removing the blatant abuses of the social welfare system. They always had my support and they would have it again — but I question the policy emphasis of all this. I am very distressed to find this rather minor aspect of the total social welfare provision being taken as a departure point and having hung around it an overall critique of the welfare state.
The Minister states in page 1 of his speech:
All over Europe the welfare state has come under tremendous pressure in the last five years. Social welfare systems are the life blood of the modern European welfare state. It is those systems and their clients which have suffered most from the effects of the prolonged recession and the slow recovery from it.
Yes that is so, but what is also happening in Europe among those who are studying social policy is that people are arguing in the other direction. They are arguing that in Europe there are 10 per cent below a poverty line by international poverty line standards 30 million people, and about the inadequacy of the welfare state and the fact that you need to integrate social provision into economic planning. I can assure the House that in the debate that is taking place on future European union, where people are talking about further integration of a common market, one of the contingent factors is the features that will have to be built into it so that unemployment and poverty will not be handled as a residual aspect of an integrated market, but that there would be built into an expanded market such structural features as would go far beyond the welfare state, and be built into the economic shape of the society. That is a more fruitful road for the Irish State to go rather than falling back on the rhetoric of the poor law commissions. It is like trying to use a motor car to bring you to the neighbouring village and trying to plough with it at the same time.
Certainly one could ask the question: how adequate is the Irish social welfare model? We do not have a welfare state. I am sorry to see that phrase occurring. I do not know when we arrived at it. We have a series of welfare provisions that have been added together in the consolidated Act and which constitute a provision, but I argue that that does not constitute anything like the nature of a welfare state. If you want to see the effects of that all you need do is take the social and medical statistics for the neighbouring island, or Northern Ireland, and compare them with the Republic of Ireland and you will get your answer very quickly. Even before we got the welfare state the late distinguished Archbishop of Cork, Dr. Cornelius Lucey, once said at the end of the forties that the welfare state is upon us and it will be the father and mother of us all.
People had been worried about the welfare state in Ireland for decades. The fact of the matter is they would have been better off debating what was the welfare state, what social policy they wanted in Ireland and what measures they wanted to locate within a policy. What we have had is a series of measures, tacked together in a mish-mash of bureaucratic confusion within the consolidation Act and which are administratively difficult. I spoke already this morning and yesterday about the difficulties of interpreting them, and I spoke last night about the distinction between discretionary powers under unemployment assistance. I heard truthfully from the Minister, who is very helpful in answering questions about matters like that, that there are no hard and fast rules in evaluating whether a person was available for work if he read a book or had a commitment to study.
Let us examine a hard reality. Are the people who are going around examining work orientation truthfully saying to all the people of this country who have not been able to get jobs that there will be work, as it can be defined, available to them in the short term? How are they defining "work"? How are they defining "availability for work" and what kind of characteristics are they imputing to such people? Under the Richard Nixon régime they brought in a thing called "work-fare". It was presumed, for example, that married women in the United States are really spongers on the State. Barry Gold-water spoke about the welfare chislers that were walking up and down the streets of American cities. They decided that they would drive them all back to work but they found that they had an interesting problem on their hands. People rushed to go back to work and found after they had the compulsory work schemes of three or six months that people asked where were the real jobs. They had destroyed the morale of the people. People who were flattened by being out of work had their expectations raised only to be flattened down even more by knowing that the economy had created no space for them. I find it very curious to see these ideas now surfacing in Ireland and coming from the most extraordinary places, that all round the place there are people, to use the offensive image of somebody I was referring to earlier today, who are like piglets, suckling from an inadequate sow. That kind of nonsense has to be knocked on the head for what it is. People do not look at the shape of the poverty in our society or at the nature of the demands that are being made in the social welfare state.
A question now arises, a fundamental one, and I am not so sure whether it will be answered in this debate, and that is whether we can say that you can answer the unemployment problem by a work creation model, that if you work you will get a wage and if you have a wage you have disposable income and you will be able to pay for all your outgoings. I believe that the time has long since come when we should be having more thorough discussions about income maintenance models that accept the fact that there may not be the opportunity of returning to total full employment in the very immediate short term. I am not justifying the abandonment of full employment as a political aim: I am simply saying that it is about time we began to think of income maintenance as a separate structure from our job creation strategies and so forth.
I am very worried about the administration of the social welfare structure. I know that the people in the Department of Social Welfare are over-stretched. I have many contacts with many dedicated people working in that Department. Obviously the volume of demand on that Department has now expanded enormously, in terms of physical provision and manpower provision as well as being caught under the embargo, and so on. They have my sympathy. I believe we miss in one Social Welfare Bill after another examining the features of the delivery of these social welfare services. I believe that the phenomenon of the hatch and the form, as it would be called in County Clare, still prevails — going up to the hatch, giving your number and people saying there is nothing for you, asking what is your name and your number. People are still sitting on forms that you can buy at secondhand auctions in Dublin once a month. That kind of provision for the administration of social welfare indicates a philosophy and attitude that I reject.
We used to have social welfare for the people who did not have much, but shortly there will be a situation in which there will scarcely be a house that is untouched by social welfare provisions. It will be a majority experience and it behoves us to ask what is the shape of that provision? Can we go on in these dirty and drab buildings? I remember at one time suggesting that it was a pity that the registration procedures for unemployed women were not staggered throughout the day and then it would not be necessary for all the women to queue outside in the rain, as I have seen and as the Minister of State knows well — pregnant women, children dragging out of them, pushing prams, queueing up to sign on and so forth. These are disgraceful conditions in the eighties. I am not being dramatic about it, I am just saying that it is offensive and wrong.
I am fed up to the eyeballs with people going on and on about .8 of 1 per cent in a week when we have the real danger hanging over us that as a body of taxpayers we may have to bail out a principal financial institution in this country. I would love to see the same flair for scrutiny addressed to the powerful that is addressed to the powerless. I have no doubt whatever that there is an element within the recipients — that .8 of 1 per cent that has been identified — who are taking what they are not entitled to take. We all know them but the people who do not come forward and condemn them or mention it to the Department of Social Welfare are reducing what is available for the more needy people. Yes, there are some abuses and they lessen what is available and they involve administrative costs in their detection but all of this could dislodge the proper emphasis, which is what is the adequacy of the provision being made in this Bill for the people whom it affects?
What forced me to depart in this vein were the number of minor headings. I agree with the Minister of State in identifying the problems of the long term unemployed and I support him, his Minister and their Department in making selective provision for the particular problems of the long term unemployed. Unfortunately, that paragraph is surrounded by other provisions headed the enforcement of the social welfare code, the extent of fraud, an extremely long paragraph on measures to combat abuse which dislocates the thrust of the speech and then we move on to the details of the Bill itself. I felt it very necessary to make these points because I want there to be a discussion of social policy that will not be so seriously imbalanced that we will not be able to see the wood for the trees.
There are a number of good points in the scheme, particularly the assistance that has been given to the voluntary organisations including those dealing with the old. I would welcome quite soon a more thorough debate on the argument about voluntary and State provision. Voluntary provision has a number of benefits including the question of the more personal nature of the delivery of the service, the number of people that are involved, its ability to identify new needs, a lack of bureaucratic procedures and so forth. That having been said, it is far less accountable than public state provision.
With all the criticisms that have been made of the people who work in Social Welfare and elsewhere, the fact is that when the State provides the State can be held to account. It is like everything else that the State does. The State is, at the end of the day, the most accountable feature of our society. People have all sorts of administrative appeals and then they are backed up by the formal legal system. In relation to arbitrary decisions by voluntary agencies providing some services you have no appeal against an eccentric person who might decide that you were not among the most deserving poor and so forth.
The voluntary side of the thing is not an unmixed blessing. We need to be able to see how we can have a mixed relationship between voluntary and State provision. The provisions that are being made here are very welcome in a monetary way. I look forward to a fuller discussion about the appropriate mix in the roles of these two sectors in provision. There may also be a suspicion, which is sometimes politically useful for the opponents of the Minister and his Department, that the arguments about the merits of voluntary provision are a disguise for the State's withdrawal from its responsibilities and such discussion would help answer these arguments.
I know there are other speakers who want to deal with specific provisions in the Bill but I want to make one other point in relation to the experience of women under the Social Welfare Bill. When I hear arguments about the welfare state being a disincentive in its structure towards industrial recovery, I am encouraged again to reflect on that. How does that logic work? What is the basis of the recovery? Is it market-led? Will disqualifying people from social welfare enable them to produce such commodities so cheaply that they will beat off the Japanese intrusion into the European market? Would they beat off US commodities? It is a very interesting notion. We need to know a great deal more about it. Apparently, there is no shortage of people who want to write and talk on this subject. I hope we hear from them all. I hope that people will come forward and publish their views and tell us how it all works, how the disestablishment of the welfare state is going to shake out everybody so that the strong will take off and create a new Europe.
I have read that trash, a Chathaoirligh, before, and I call it that because it has no intellectual status, is not supported by research and it is not regarded by anybody in this area very seriously any longer. My point is in regard to the treatment of women. Where people have begun to question the adequacy of the disencentive effects of the welfare state and its provision where it exists, this is usually accompanied by the notion that it might be time to look at the possibility that we are moving too quickly towards the equality of provision for women, towards the scope of provision for women in circumstances of pregnancy and maternity and so forth. It is very timely in debating a Bill like this to say that anyone who wants to turn back the clock in this regard must be questioned as to his commitment initially when speaking about equality. If you believed in equality in times of economic growth — and it is a simple equality now — one that could be sustained within the corpus with the wonderful driving force of the European Court to help us make up our minds nationally, how can you argue that your commitment to equality can be tempered by the force of economic circumstances? I am not imputing to the Minister any malign intent in this regard; I am simply saying that it is part of the atmosphere in which this debate is being discussed.
I listened to one of my colleagues, Senator Ross, being carried away in extenso by the abuses of the Social Welfare Acts and I kept thinking of the Companies Act, the banking Acts and the stock exchange structures and the share transactions and how much they would have all benefited from a tiny part of his concern in relation to social welfare if only that considerable intelligence against the .8 of 1 per cent were so redirected. On occasions like this we should bring out into the open the systems we are using and try to elicit from them some sets of principles which we might reshape. We have arrived at a version of social policy that is now, it seems, to be an elaborated selective system. I do not see much of the features of a general provisions system in it. I see in relation to health and housing and to most of the benefits here more of the features of an attenuated selective provision rather than a general provision. I would encourage the Minister to take on these issues bravely. Perhaps due to the structure of these Houses we have had nearly 70 reports from the National Economic and Social Council and I cannot remember three of them being debated in this House and yet I think about a dozen of them deal in one way or another with social provision, including questions of social policy, transfers and different things like that. We would benefit if we had discussed these documents and the context and the framework against which we could examine what are the administrative provisions for next year on the basis of the budget allocations and so forth.
I do not want to make one of these long speeches about the plight of the poor. All of that has been done already; I am simply saying that a coherent analysis of how we transfer funds towards different categories of people requires to be handled on more than a mathematical basis. I have looked at the Acts over the years and I have looked at the speeches over the years and they are very much in the character of a long list of provisions rather than an adequate introductory statement of what it is hoped to achieve from the provision which follows.
Those remarks having been made, the reason I spoke was to some extent to try to reduce the note of hysteria which is creeping into discussions on social welfare. The greatest failures and frauds and the greatest abuses that are taking place here are the abuses, frauds and failures of those people who were given our taxes, opportunity, scope, education, the benefit of law, all the freedom they wanted. No stigma attaches to losing a mere £1 million in starting a factory, another £.5 million from an assistance agency, another £1 million in training grants, a few things in export tax relief and so on. There is no stigma there. On the other hand, even the people who are the properly qualified recipients of benefits from the State have to move into an ambience, into a setting and into a set of procedures that seem of their nature to require stigma.
I came into this House in 1973, 12 years ago. I remember asking, in my innocence at one time, if it would require a great deal of money to buy paint to paint the buildings into which these unfortunate people have to go to qualify. I got an attack of madness towards the end of the seventies and I asked did it make a great deal of sense in a small town or city, to have the unemployed going into a dark, grey building in which they could sign on for qualification for benefits and having other people if they felt an attack of work coming on going into Manpower offices that were open-plan, carpeted offices in another part of the town. In other words, we manage to separate the unemployed and the benefit-people from the workforce people.
One could write a book on Irish social policy about the time when the unemployed became "manpower" for a while. During times of economic growth when people began acquiring skills here and there that became "Manpower". Equally, when the economic collapses of different kinds came — the different oil crises and so on —"manpower" faded out as a word and they became the employed and the unemployed again.
There is so much that can be done in a human direction towards changing the way in which people experience the State in relation to social provision. I would urge that at least the same amount of resources, the same amount of staff and the same amount of imagination be allocated to it as we devote to other things, as we devote to this question of who is qualified, who is abusing and who is not. The amount of money required to make the changes I am talking about is tiny, if we want to do it. For example, I would probably be temperamentally most unsuited to be standing inside a social welfare counter in one of the offices dealing with people because I tend to get angry when I see a lot of the abuses.
At my clinic on Saturdays I find that I am drained in the middle of the day by all the hardship cases I see. There should be training for those dealing with the problems of the people who are coming to the social welfare offices. The person who is not entitled to benefit — I say this as a sociologist who has been interested in this area for many years. — needs ten times more time than the person who is entitled to the benefit. If you are entitled to benefit at the present time you can spend some time explaining it and getting it. It is very easily and quickly discovered if a person is disqualified. Yet that person who is disqualified, who has to get another strategy for survival, needs far more time. That is the way our thinking should be going. There should be periods of training and in-service training for dealing with the public in these human areas. There should be a total restructuring in relation to the way in which decisions are taken, giving flexibility and giving a great deal of discretion.
Discretion is not abuse. I am a bit weary of the fine people in the Department of Social Welfare telling me that if they exercise their discretion they nearly get writer's cramp providing long, justifying explanations as to why they exercised their discretion in a particular way. That is a waste of them; it is an insult to their intelligence and it is an abuse of our time, of our money and of our resources. To remedy all of these things does not need the discovery of oil or a great economic growth within our economy or some great benefit cutback elsewhere. It requires that we should change our attitude and change what is in our heads towards the benefit of receipts from the State.
There are transfers going in all directions. People say of someone who abuses social welfare, "social welfare sponger caught". I often got lists of people who had taken benefits from the State, the agricultural sector, the industrial sector, foreign companies, companies that would close down one day and restart from the same premises, changing only one word in the title of the company — which they can scandalously do today. These are people who are making mistakes. They meet at night and one may say, "Well, what are you doing these times?" and the other person replies, "Well, I am in such a company". You can have five or six companies in case one or two or three of them go broke. What are these people but recipients of our tax? Are they not receiving transfers from the State? Do we require the same accountability in all of those areas that we now require in relation to some poor unfortunate who is unemployed? I heard last night, in relation to unemployment assistance, that if you were found reading too much you might be a student who had not come out; you could really be a student and you could get disqualified, that your best idea was to be observedly bone idle whenever it was required.
I wonder about all of this thinking. I make a plea that before long there should be, in this House, a debate on those documents that have been produced by the National Economic and Social Council on social policy so that we will not be just having a debate on a long list of monetary provisions under a series of headings but will be able to evaluate what is a good speech by the Minister and a wide-ranging Bill against some criteria that will have been debated in this House.
After that eloquent speech by Senator Higgins I make my small contribution. We are all aware of the miserable increases granted to social welfare recipients for the current year, increases which do not come into effect until July, which is a long way off. For two successive years the Government have totally disregarded the most vulnerable and less well-off sections of our community. They have shown a complete lack of understanding of the problems these people face. I had hoped that this year the worse-off sections of our community would not be asked to pay the penalty for failed Government policies, as they are doing at present. Unfortunately, I was wrong in hoping for such a change.
In this Budget Statement, the Minister for Finance was bold enough to make big play of the Government's performance in respect of social welfare increases from 1983 to 1985. He implied that if one took into account the increases granted in the year 1983-84, long term increases of approximately 19 per cent in social welfare payments had been achieved by the Government and that these increases had more than met the Government's commitment to have these payments keep pace with inflation. The Minister conveniently neglected to inform the people that the increases in each of these years related to nine months in each instance. In the circumstances, it was dishonest of the Minister and the Government to mislead people in that way.
This year the Minister for Finance and the Government have again engaged in this policy of public deception. The small increases in social welfare payments will not become effective until 11 July. It is most peculiar that the date on which these increases come into effect is being extended each year. Last year it was during the first week of July; this year it is a week later. In the meantime, all of these people who must rely on social welfare benefits — people who are deserving of the greatest support possible from the State — must pay increased VAT on clothes, fuel and footwear. The Government have made no attempt to cushion social welfare beneficiaries against the effect of these increases. Could the Minister — or anyone else — say that any of these people will be better off because of the budgetary changes? We might also ask how much less, in terms of disposable income, these people will have after 11 July 1985.
Do the members of the Government realise that the various items to which the VAT increases apply are essentially items necessary to allow families to enjoy a normal, decent standard of living? It is only fair that we consider honestly and constructively the increases being offered.
A widow with two children, receiving a contributory pension, is to receive an increase of £4.40 per week, which will give her a total income of £72.30 per week. A couple in receipt of contributory old age pensions, both of whom are between the ages of 60 and 80, will receive an increase of £5.50, bringing their total income to £89.75. In the case of long term unemployed the increase is to be 6½ per cent. This means that a man in this category, with two children, will receive an increase from £73.90 to £79.75. The increase in respect of short term payments will be 6.3 per cent. This will relate to unemployment, disability, maternity and invalidity benefits.
Senator Ross seemed to think we were overpaying our poor. How can a married man with two children survive on £80 per week? I take exception to his remarks. I cannot understand how most of these people are surviving. As Senator Hussey said, quite often we find that many of these unfortunate people have to go down to the welfare officers and receive an extra few pounds to keep them in food.
A man with a dependent wife and two children will receive £88.50 if he is in receipt of unemployment or disability benefits. Surely then the increases are an insult in relation to increased costs. It is obvious that the unfortunate families depending on social welfare will have far less money available to them after 11 July 1985. This should be contrasted with the Fianna Fáil record. In 1980-81 Fianna Fáil granted an increase of 25 per cent in respect of long term payments and 20 per cent for short term payments. These increases were payable in April of those years. In 1982 we granted an across-the-board increase of 25 per cent to all social welfare recipients, payable in April. This gives a total of 75 per cent in three successive years. Clearly, the performance of the Coalition is weak in comparison with our own achievements, achievements of which we are justly proud and which we hope to repeat at the earliest possible opportunity and, by doing so, give the poor a decent standard of living.
Once again this Government decided not to grant increases in children's allowances. This decision must be regarded as cruel and insensitive and as a specific anti-family measure which is part and parcel of the kind of policies that are being pursued relentlessly by this Government. The children's allowance scheme is a particular support to large families. The Government have also stated that about 220,000 persons will be unemployed by the end of 1984. They must now shamefully admit that the real figure is 234,000. This figure is increasing all the time. Unless policies change, this figure will unfortunately continue to increase.
The Government know that unemployment benefit and assistance payments are the fastest growing elements in terms of costing. In the Social Welfare Estimates unemployment payments have increased from £345 million in 1982 to £526 million at the end of 1984 or, by a rate of approximately £10 million a week during that period. We all know that until the employment problem is solved ever-increasing charges will be placed on the Exchequer. For example, for every 1,000 people who become registered as unemployed the cost to the Exchequer will be £2½ million in State benefits. Surely the Government cannot allow the unemployment figure to rise any higher. Surely the responsibility is on them at least to try to arrest the huge rise in the numbers joining the queues at employment exchanges all over the country.
Unemployment is the greatest problem facing this country. This Government must come to grips with it. They must create an economic climate which is attractive to industrial development and employment in general and they must improve incentives for workers and employers. This can only be done by real changes in our taxation system which is crippling the economy at present. There is little or no incentive to either expand a business, if one is an employer, or to work harder if one is an employee because of these cruel and crippling effects of taxation.
We are all aware of the increasing burden of the PRSI payments on the wages of workers. I wonder if the PRSI system is fair or equitable. It is just another form of taxation. If it is unfair, we have an obligation to do something about it. Unfortunately, the ceiling for contributions was raised by this Government. Under section 4 of the 1983 Social Welfare Act the Minister raised the contribution ceiling from £9,000 to £13,000 effectively. Workers have being paying much more in social welfare contributions. The same applies to the 1 per cent levy introduced two years ago. This now takes 1½ per cent out of the workers' pockets. Once again the Government have maintained their set pattern of increasing the ceiling. This year it has been raised from £13,000 to £13,800. The ceiling for health contribution levies has been raised from £12,000 to £13,000. This together with the higher ceiling for health services cuts a further £445 from the workers. The additional yield to the insurance fund will be £13 million this year, affecting 130,000 workers.
The time has come to call a halt to these consistent increases in the demands on workers. The Government must decide that workers cannot pay any more or their families will be left hungry. The Government must realise that the basic essentials of life must be paid for. If that is to be possible the Government must stop taking such an alarming slice of the cake. How many people listening to the Minister's budget speech realised that they were being mislead by the budget strategy? Once again the Government played their characteristic three-card trick taking from the workers with one hand and giving with the other hand. Any increases the workers appear to have been gaining have been more than cancelled out.
There is much concern about the means-testing of recipients of social welfare payments. It is felt that this has led to many old people, especially along the western seaboard, hoarding money rather than investing it in banking institutions. People are hiding their money under their beds, in their mattresses and under their carpets because they feel that if they invest it in the banks they will be considered ineligible for old age pensions or other benefits they may be able to apply for. We are all aware of the traditions of our people and the independent spirit that many old people have. We are all aware that many old people consider it important to put money aside to ensure that they get a proper and respectable funeral when their time comes. I do not think there is anything wrong about that. Many people save because they do not wish to be an encumberance on their families. These old people are afraid to invest their money in case they may lose social welfare benefits. Instead, they keep their money at home thereby creating an incentive for criminals to attack and rob them or, as happened a short time ago, burn down their house.
Debate adjourned.
The Seanad adjourned at 5 p.m. until 2.30 p.m. on Wednesday, 27 March 1985.