Seanad Éireann debate -
Thursday, 16 Mar 1989

Vol. 122 No. 7

Social Welfare Bill, 1989: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Cregan

I hope we do not have issues like this every morning. After those few words, we need a jolly discussion to cool the atmosphere. I am not surprised that some Members are annoyed at the statements that have been made but, at the same time, people are entitled to their opinion.

The Minister has recognised the need to help the less well-off but I do not think he has gone far enough. In the course of his speech, the Minister recognised that his Department are only concerned with paying out benefits and I do not think he has done enough to encourage those on social welfare to seek work. The Minister takes credit for having saved the State a lot of money in the last two years and that represents good work by him. Indeed, if all Ministers were as attentive our financial position would be much healthier. It is sad to think that we have to pay out so much on social welfare.

It is not good enough to concentrate on the elimination of abuses. The Minister has suggested that employers should pay more to the social welfare system but he has not given any incentives to them to take on more employees. For example, the Minister has not said that employers who take on more workers will not be asked to pay the maximum amount in contributions to the State. Under the social employment schemes introduced by the former Minister, Deputy Hussey, in 1986 not as many people qualify for full unemployment benefit. That was not the intention at the time. It was not the intention that we should say to a person if he or she works for three days, that they will be paid £70 and be entitled to work elsewhere.

It appears that agreement has been reached between the social partners and the Government that those on long-term unemployment who are employed on a social employment scheme should do any work available for £70 per week. That has occurred at local authority level following agreement between the Government and the unions. Many employees in State bodies have been let go and replaced by part-time workers. In other words, we have let people go who earned £130 per week and taken on people to do the same work at £70 per week. I do not think we should use the social welfare system to do that.

I am surprised that the Minister, who spends millions each day, has not encouraged employers to take on more workers. He has not said he would like to reach the stage when his spending would be reduced from £6 million per day. I should like to give examples of what I find wrong with the system because I do not think it is right to criticise it if I cannot produce the evidence. In the last three or four weeks in Cork, I have heard of many people being employed on a part-time basis. It appears that the popular thing to do today is to hire people on a part-time basis. That suits the State because people are taken off the live register. The Department accept that a person over 60 is entitled to have his dole posted to him and that he can work up to 18 hours per week. However, the same does not apply to young people. I am aware of a young man who trained as a fitter with Cork County Council but at 22 years of age can only obtain part-time work, earning £50 for four hours work on four mornings each week. The employer is happy, and the State is happy because he is not on the live register. On the other hand, we are telling people over 60 that they can collect their benefit and work 18 hours per week. That is not fair. If the Minister wishes, I can give him details of the company and the individual.

The State tells employers that if they wish to employ people they must pay more PRSI. I do not think that is an incentive to business people to take on employees. When are we going to say that there should be one tax? PRSI is a tax. We should make a health comtribution, but that is not what PRSI is in reality. The tax should be set at a single percentage rather than 22 per cent from the employer and the rest from the employee. I am very much aware of the amount of money the State gets in from contributions from employers and employees. The whole system should be simplified.

A person working part-time and getting £50 a week still has to pay a certain amount of PRSI. A person in Great Britain who earns under £43 a week pays only 2 per cent. Here there is a disincentive in that both the employee and employer must pay. Here one pays PRSI up to an income limit of £16,700 and after that one pays no more because one does not get any service. I see no reason why a person earning over £16,700 should not continue paying because he is earning most. We should be taking less from the person who earns less, in other words, the person earning under £120 a week. I make no apology for suggesting that people should pay PRSI even after they have reached the income limit of £16,500 because although they get no benefit after that they are usually covered by the VHI and, because of our health situation, more and more people are joining the VHI. In 1992 people will join other insurance companies to get private health cover because the cover available on the national health at the moment is not too good.

There are no incentives to employers to employ more people. The Minister has not said he wants fewer people on social welfare. There are over 240,000 people out of work and over 30,000 a year leaving the country. They are the official figures. I wonder how many are really leaving? In my city there are certainly 200 a week leaving. In every family young people are leaving and this is very sad. Last year the Minister saved £90 million, yet the numbers unemployed or emigrating are the same. How does the Minister reconcile those figures? How did he save that money? Was the situation created deliberately, in that if people were left without social welfare for long enough there would be a saving? I have to say that in the long-term there is no saving.

I am confused about the whole thing and now I am getting very annoyed about it. Since 1980 the number of people out of work has doubled and it does not seem to matter which Government are in power. There is no incentive. Employers do not want people working for them. They just do not want to take on extra workers. The welfare system is such that there is no incentive to work. There are 109,000 people on long-term unemployment assistance.

The Minister makes a distinction between the unemployed and the long-term unemployed. They should be treated similarily. They are all people on social welfare. We recognise that there are 32,000 people leaving the country each year. Imagine what we are not prepared to recognise, but agencies like the Combat Poverty Agency will recognise it for us and give us our answers. It seems we are not prepared to face up to the facts. There were 6,000 extra jobs created last year, yet there are more people on the unemployment list. We are saying rationalisation is needed and advocating that a person giving up his job should get a lot of money.

Not more than three weeks ago a company I know of with 15 people working decided they could carry on with fewer workers by bringing in English subcontractors. The 15 workers got on average £52,000 per person. This money was tax free, but if the tax and other deductions had been made, that figure would be nearer £75,000 or £80,000 per person. The following week that company had only five people working earning £300 each a week. Three of the people who got £52,000 got another job, and the State allowed that. Is that a fair system? One of the people who got £57,000 got a pension of £130 a week and, in addition, got a job with another company. This person is only 51 years of age. I am not saying he should not work, but we are creating a situation whereby the people left in that company are working ten hours a day rather than eight hours and probably doing three runs instead of two.

There is a need for a serious review of the workplace on the part of management and workers. We are creating this situation and yet we have only to walk 100 yards to meet a person who is working 22 hours a week for £50 a week while another person gets £57,000, £130 a week pension and another job. The £130 a week should be enough for him if it were tax free — and it should be tax free if it is a pension. I will admit that between the £57,000, the pension and the earnings from the other job that person is taxed very highly. I have no objection to that. This person is paying a lot of money and coming home with 50 per cent of his money because of the present tax system. The State makes by taxing him more.

We have created a situation where we are making 15 people richer while another five people, who could have been given a job, remain unemployed. That is what is happening with our welfare and our tax systems. We then say we want people to come into the country to create jobs. Employers take on people on a part-time basis and give them £40 or £50 a week for working 20 or 21 hours, with the result that these people cannot get any other benefit. If the person worked only 18 hours a week he would get benefit. Under the social employment scheme a person could work for three days a week and his employer would have no objection to him working elsewhere for the rest of the week. He would not even want to know how much the person earned for those days. The employer's attitude is that he pays the person £70 a week and he is saving the State money. I resent that. It is the Minister's duty to simplify matters and to have a situation whereby everybody will be treated on an equal basis. Priority should be given to the people who need work.

I put a very strong emphasis on the fact that everybody should have some kind of work but there is nothing in the Bill to provide for that. I would like to see employers employing more people but the Minister has given no incentives in this regard. People are making a lot of money in chemical plants and in areas of high technology and they then leave the country when they have their money made. I am not saying we do not want these people in the country; we do want them and I would like to see more of them coming here. The Minister should provide an incentive to employers, particularly in the private sector, to take on more people without having to pay PRSI for these people. The employer has to pay 17 or 18 per cent and he also has to pay a certain amount for the employee. We should create incentives in our local areas for employment such as glass factories, timber plants and so on. The Minister should have discussions with the Minister for Labour, Deputy Ahern, and with social partners with a view to creating incentives for employers by reducing the amount of PRSI they have to pay. Many companies are not making as much money as the high technology plants which are situated throughout the country.

People may criticise the Minister and say that he is giving money to one area and not to another. He has recognised that there are many people who are entitled to benefits, such as deserted husbands. At long last they are entitled to the same benefit as deserted wives. There are now more deserted wives and unmarried mothers and I make no apologies for saying that these people should be looked after. It may not be an ideal situation but it is fact of life.

The Minister has also recognised that people who are looking after their relations in the home should receive benefit and I welcome that. These people never received benefit up to now and it is not before time that it was introduced. I congratulate the Minister for that. The Minister is prepared to recognise the need for benefits in this area but he should extend them to other areas also. I know the Department of Finance will say they do not want to spend more money and that if they extend the benefits it will be an extra charge on the State. The Minister should put strong emphasis on employers creating more work. I will be pressing this matter on Committee Stage and I will be asking the Minister why he is not prepared to reduce PRSI for employers.

When the social employment scheme was first introduced the intention was to get people off the unemployment list and allow them to work not alone in the public sector but also in the private sector. As I said here before, employers should be allowed employ people on a part-time basis. If a job card was introduced for workers it would mean that the Department would not have to employ as many people to investigate irregularities. Every person in the State, irrespective of where they are working, should have a job card. The Irish do not welcome the idea of having identification. Every employee should have a PRSI number and his signature should be on his job card which would be held by the employer at all times. When the employee leaves the employment the job card would be sent to the local exchange where it would be put through the computerised system. That would save a lot of money.

It has been recognised at long last that we have a high rate of poverty. The Minister for Social Welfare saved £90 million last year. In this year's budget he provided an extra £70 million for social welfare. It has been recognised that over one-third of the population are living in poverty. Rather than saving £90 million the Minister should have given, say, 10 per cent of it to the people below the poverty line but that did not happen. They did not even get 5 per cent. In comparison with other Minister, the Minister for Social Welfare has done excellent work at Cabinet level. Cutbacks have been made in the Department of the Environment and other areas and I congratulate this Minister for not cutting back in the social welfare area. He has shown the other Ministers he can save money, at least in the short term.

There are people living in poverty, people on social welfare, who are suffering as a result of loan sharks. I know the Minister has put a lot of work into this area and is very much aware of the problem. I would like him, in his reply, to tell me what assistance he is getting in this regard from credit unions and banks. What are they doing as regards getting more and more people away from these loan sharks? The Minister is taking particular interest in this area. It is sad that many people on lower incomes are suffering as a result of these loan sharks.

There is concern also about pension allocations. I have heard of a number of cases of people claiming non-contributory allowances who are being assessed on their gross bank savings. For instance, a couple with up to £6,000 savings in the bank seeking a non-contributory pension would be given a contributory allowance but the assessment is being made on the gross amount of their savings. In other words, if they are receiving interest of between 7 per cent and 10 per cent on their savings in the bank they are assessed on the gross amount. Even though it was agreed three years ago to abolish DIRT — on the basis that it would not yield very much — it is now being admitted that the yield from it is greater than had been anticipated. Yet, the person being assessed for a non-contributory pension has not been given the benefit of being assessed on his or her net savings. The Minister should examine that aspect because it is most unfair to such people. Many people with such savings reserve them for their funeral or burial expenses. I am aware that others have greater savings. I know of many pensioners who have savings they contend are sufficient only for their burial whereas, in fact, they would be sufficient to bury half a village. That is the other side of the coin which has been acknowledged from the DIRT yield and which has been advanced as an argument in favour of its retention.

Why is it that the oldest people receive more than those in greater need? I have been advancing that argument to the Minister for the past three years. I am glad that the Minister is recognising that anomaly at long last. I contend there is no difference between a person of 79 years of age and another of 80. Yet the 80 year old receives more than his or her counterpart aged 79. Again, a 79 year old receives much more than, say, a 65 year old or 55 year old. Until such time as that anomaly is abolished I will continue to press the point. I do not see any reason that a son of, say, 55, with three children, should receive much less money than his parents of 75, 77 or 81 even though the parents may not need it. I do not see the logic in that. I shall be pressing that point on Committee Stage.

I am glad that the Minister recognises that there are people who are defrauding the social welfare system. While the Department are tackling the problem of abuse of the system it has to be said that there are also people being investigated who should not be. I resent that practice. Indeed, any savings effected through the elimination of abuse should be given to those most in need because it is an undeniable fact that there are some people more in need than others who are not benefiting. Until such time as that is rectified I will continue to press the point.

Miss Wallace

The Bill before the House enables us to examine the record of the Government in a critical area of public policy. Indeed the crucial test of any Government is the manner in which they treat the vulnerable, defenceless and the marginalised. In this domain the record of the Administration is of the same high standard achieved in other areas when thankfully, care of the weakest in our community has been maintained even in the difficult financial climate obtaining.

This year there is a general increase of 3 per cent in widow's and old age pensions, unemployment, disability benefit and other weekly payments. There is also a 12 per cent increase in the personal rates of long-term unemployment assistance and an 8 per cent increase for the short-term unemployed and those on supplementary welfare allowance. The child dependant allowance is being increased to a minimum of £10 per week with payment of the higher rate of monthly child benefit of £21.75 in respect of the fifth child. These increases are indeed to be welcomed especially by the unemployed with families.

However, in the changing climate of the late eighties, it is not sufficient to increase payments within the context of an unchanging welfare system. I am particularly pleased to note that the Minister is committed to reform along with the payment of increases. Since 1987 we have witnessed the Minister's systematic streamlining of the social welfare system undertaken in a methodical, logical manner. The greater efficiencies effected to date benefit the claimant as well as the overall administration of the system.

For example, the number of different rates for children has been reduced from 36 to 12 and the rates of unemployment assistance from 17 to 6, leading to a greatly reduced administrative network. Legislation must reflect the needs of society. I am pleased to note that section 6 provides for payment to widowers and deserted husbands with dependent children on the same lines as non-contributory widow's pension and deserted wife's allowance. Such improvements were long overdue and introduced some sanity into the social welfare code. However, it would be unwise to indulge in a round of congratulatory back-slapping in the belief that the task of reform has been completed. I know the Minister is aware of that fact and is committed to further reform.

There is inequitable treatment of social welfare claimants in similar circumstances. For example, widows, regardless of age, are entitled to a payment from the State at the time of bereavement whereas a deserted wife whose husband may leave her before the age of 40 is not entitled to such payment until she reaches the age of 40. This creates an anomaly between, say, two women living in the same housing estate, one a widow and the other a deserted wife, both of whom may have ceased to work on marriage. Both circumstances are similar. Yet, the deserted wife will not be entitled to anything from the State until she reaches the age of 40. This is another matter which must be examined in the changing circumstances prevailing in society today.

In the course of his remarks the Minister referred to the six separate social assistance payments to lone parents. There is also the proposal at present that unmarried fathers receive such payments which would increase the total of that category to seven. It is only reasonable to streamline that provision, leading to further simplification of the system overall. It is opportune to move in the direction of having claimants or recipients fall within one or two categories; either a person is unemployed and available for work or he or she is a lone parent and unavailable for work because of their commitment to their children. That type of approach has much to recommend it. It would represent a further rationalisation of the system, reducing the number of categories from seven to one and would ensure that claimants are treated by the State based on their being available for work. A crucial factor in all of this is the reduced bureaucracy and its attendant costs when much of the present paperwork would be greatly reduced. It would also ensure that departmental officials would have more time available to deal with individual claimants rather than sorting through the technical difficulties within the different categories of claimants.

There are other advantages to be considered. For example, there is a tendency at present to categorise people, when many claimants find themselves allocated within a group to which there is a social stigma attached. I do not suggest that redefining her social welfare payment category will change the reality or fact of a woman being an unmarried mother, the wife of a prisoner or a deserted wife. However, I submit that for many such people living bleak lives the weekly reminder of their status by the Department, the way in which they tend to be viewed, places yet another burden on their shoulders. We must always be conscious of the dignity of the individual, remembering that dependency on the State constitutes a significant blow to self-esteem. I encourage the Minister and hope it would be possible for the Department to see their way to bring this about.

I would like to stress the importance of the employment schemes. No matter what Department are involved, the employment schemes are extremely important and have a great bearing on the social welfare position. The manner in which schemes under the aegis of different Departments overlap can give cause for concern. For example, under the start your own business scheme, once a person avails of the opportunity to start his or her own venture, should it fail that person is not entitled to a second chance under that scheme. The Minister might discuss this with his counterpart in the Department of Labour because it has a huge bearing on social welfare.

While I am not suggesting that the State should provide funds for people to use in ventures of questionable merit, on numerous occasions I submit that having but one chance at the start your own business scheme is restrictive. It could be the case that a sound idea could fail to yield the expected results due to factors outside the individual's control, and should the same person develop another commercially viable idea he or she is excluded from benefits of this scheme. Given this situation, many people are left with no alternative other than to seek payment from social welfare. I contend that with the scarcity of funds available to all Departments — the one we are interested in today is Social Welfare — it is highly debatable as to whether the Department of Social Welfare should have to pay people who are denied the chance to be self-sufficient and contribute to the economy by virtue of rigidities of an employment scheme. A relaxation of the rules or an improvement in these schemes holds potential for much employment and thus savings in the Department of Social Welfare.

The social employment scheme, which was mentioned earlier, gives much needed work experience and can assist the unemployed in getting a foothold in the jobs market. Yet, its relationship with the tax system can cause difficulties. Should a person be engaged under this scheme — it affects a married person in particular where his or her spouse is employed — the payment under the scheme is liable for tax. This is a clear disincentive to take up the opportunities under the scheme when other things such as travelling to work, etc. are taken into account. There is a definite need for remedial action as many people are financially better off remaining on unemployment benefit as distinct from taking up the social employment scheme because of the taxation of their spouse's income. This is a pity because people are missing out on the opportunity of becoming more employable and getting involved in the workforce. I am aware of a number of cases where people had to give up the opportunity of working under a social employment scheme because they would end up with less money at the end of the week.

With regard to the part-time employment scheme, the one difficulty I have found — and I do not know if it is possible to get around it but perhaps it could be considered — is in relation to the self-employed. I had a case where a person got part-time employment with the local parish co-op. Because the co-op could certify his work each week, he was then considered to be an insurable employee. However, the co-op were only involved to get him started in the job and when they withdrew the Department regulations did not allow him to continue under the part-time allowance scheme. I know this is difficult because the Department need the certification from the employer to say he is only employed for a certain number of hours, but in this case the person was employed by the co-op for seven months and they had certified that it was only a part-time job, and there was only work for two and a half or three days each week, but as soon as he became self-employed he was no longer entitled to benefit under the part-time allowance scheme. Unfortunately he was ineligible for the start your own business scheme because he was no longer long-term unemployed since he had spent seven months on the part-time scheme. He could not even join a social employment scheme because he was not coming off the dole after 12 months. All schemes were closed to him because of his participation on the part-time allowance scheme for seven months. It is in the area of self-employment where many jobs will be created, and I hope the Minister will do something to help these people.

Against this background it is clear that the manner in which the State schemes work and the fashion in which decisions of one Department affect another, can militate against efforts to clear the labour market. This is what we are interested in. At a time when the Government are striving to increase employment, it is farcical that a lack of co-operation between relevant Departments could result in the attempts of the State to aid employment being thwarted by the consequences of other State policies, however unintentional. We must endeavour to ensure that those who could work productively are not left on unemployment assistance by virtue of such obstacles. I appeal for greater emphasis on improving the financial incentives of these schemes. This could have a huge benefit in increasing the employability of the individual and getting the long-term unemployed back to full-time employment.

I am pleased by the Minister's decision in the Bill to allow such amount of social welfare payment, as is reasonable in the circumstances, to be paid directly to the spouse in the case of separate payments. From my experience this is a valuable reform. All too frequently those in receipt of social welfare payments encounter other social problems as the Minister mentioned earlier — gambling, alcohol abuse and so on, which seem to prey on the weakest sections in the community. Women in receipt of separate payments are often in difficult financial positions due to the differences of at least £12 between the maximum personal rate and the adult dependant rate. The ideal situation for these people would be to have just one adult rate but this would not be feasible as an equal division between the two rates would have drastic effects on the single adult recipient. I am satisfied that the proposals in the Bill cater well for the situation and illustrate a keen awareness of the realities of life faced by many families. In facilitating the alleviation of their plight, the Minister has helped to humanise legislation which previously failed to reflect this reality. This is very welcome.

The requirement now being made of deserting spouses to contribute towards the payment being made under the welfare code for the maintenance of his or her family is very necessary. The number of women in receipt of deserted wife's benefit or allowance has more than doubled in the past decade and now that the new deserted husband's allowance is being introduced regrettably it is evident that many spouses are walking away from their responsibilities towards their families and leaving the bill to the State. The Minister seeks to impose a liability on the husband to contribute towards the maintenance of his wife and family or, with the new arrangements, to a wife to contribute to the maintenance of her husband and family. This Bill contains clear provision which will enable the Department to obtain contributions from deserting spouses. There is no doubt that this is important and necessary.

The proposal to extend the child dependency allowance is significant. The initial extension to 19 years is the first step towards eventually extending the period of payment of child dependency allowance where the child is in full time education to 21 years. I hope that it will progress to 21 years soon as it provides support particularly to long-term social welfare recipients while giving vital help to the child in his efforts to gain academic qualifications and enhance employment prospects. There is no doubt that many families have not been able to give their 18 year olds the opportunity of continuing in education because of their income. They needed the income which the 18 year old could bring home and the loss of the social welfare allowance was unsustainable in the household. This extension will I hope open education to many more people in this age group.

In the current economic climate the effective management of funds is crucial and efforts to eradicate social welfare fraud have been an important feature of the departmental policy over the past couple of years. I am pleased to see that there is a continuation of this policy in the Bill. Moves to ensure that employers in construction, contract cleaning and security industries notify the Department when they take on new employees ensure that a loophole for welfare fraud has been closed. The thorny issue of subcontractors not fulfilling their responsibilities in terms of tax and PRSI has demanded action for some time. A sensible development is the amending of legislation to provide for the notification by the employer of the employment by him of any subcontractor. In addition each subcontractor would have to notify the Department of any person engaged by him or working with him.

The Minister gave us figures of the number of people that have already been involved in this notification. It places the emphasis where it should be placed, on the employer who has been colluding to defraud the social welfare system. It should cool the ardour of many unscrupulous individuals who have built up a small industry in cheating the taxpayer and their competitors.

The provisions of section 20 and 21 of the Bill reflect the manner in which records are kept today and simplifies the task of establishing the culpability of offenders in legal proceedings. This is very important with regard to the administration of the Department.

Section 22 of the Bill is most satisfactory. Under the section employers guilty of collusion with an employee to defraud the State shall be liable for the repayment on demand of the amount received by the employee as a result of that collusion. These sections redress the balance in favour of the State. Corrupt employers shall not be permitted to use social welfare outlays as a basic payment which they may top up. I have no doubt that this was taking place across the board. Legitimate, law abiding employers are entitled to expect the State to endeavour to provide a level playing field on which they may do business. It was starting off £100 better off than employees in competitors' firms. It is only fair to legitimate law-abiding employers that this type of thing be tidied up. I am glad that this proposal has been so successful since it has been invoked. A competitive environment is no excuse for criminal activity on the part of employer or employee and the sooner this message gets across the better. I wish the Minister and his officials well in their attempts to stamp out offences.

The urban and rural rates of unemployment assistance which were both outdated and unjustifiable have caused problems for some time. In Meath the people in our only large town, Navan, received the lower rural rate of assistance. The move to have the population growth reflected in the legislation is welcome. In Meath apparently nobody was paid on the urban rate, so most people will benefit this year from the increase. I welcome that tidying up of the whole system.

Through the increases in this Bill and the improvements in streamlining the welfare code, the Government have kept their commitment to the most vulnerable in society. The Minister deserves our credit and gratitude for the caring manner in which he has performed his role in social welfare. I commend the Bill to the House.

Mr. O'Shea

It would be dishonest of me not to say that the Minister has shown a considerable flair in relation to aspects of this Bill. There were anomalies which caused injustices and the Minister has dealt effectively with a number of them. I commend the Minister on that. There have been increases in various payments and whereas we in the Labour Party do not consider them adequate, at the same time we acknowledge that the Minister has made worth-while strides for which I again commend him.

The Labour Party hold that the report of the Commission on Social Welfare should be implemented. Here we will be talking about a basic income of £60 for a single person and £96 for a married couple. The rate of payment for disability or unemployment benefit for a married couple with two children will be £95.80p which is far short of the £96 that the Commission on Social Welfare recommended for the couple.

We are dealing with a Minister who will deal with anomalies and make adjustments where possible. I will deal first with the free fuel scheme. It was a retrograde step to remove the free fuel scheme from the ambit of the health boards, particularly in the case of people on disability benefit. The Minister agreed previously that there are a lot of people who have been on disability benefit for a very long time and that in everything except the technical definition, they are long-term social welfare recipients. The health board scheme had a lot more discretion than this social welfare scheme and because the scheme has been removed from the health board such people have been excluded from payments under the free fuel scheme. I welcome the change introduced by the Minister so that a child aged from 18 to 19, of a social welfare recipient, will now be considered a dependant. That is a step in the right direction but will the Minister clarify the position in relation to the free fuel scheme? Under the scheme where a dependant over 18 years was in full-time education, even though no income was being paid to the parents for that student, because there was a person over 18 in the household, the family was denied free fuel. With the change which means that an 18 to 19 year old will be considered a dependant, does that apply to the free fuel scheme? I know the Minister is introducing a change whereby two social welfare recipients in a household who, if they were on their own would qualify for free fuel, will from next October receive a payment. What will the position vis-à-vis the free fuel scheme be with regard to a student over 18 years of age, as from October?

Another anomaly relating to the free fuel scheme is where a pensioner is also in receipt of disablement benefit. Disablement benefit is paid following an industrial accident or an industrially induced disease. Obviously payment of disablement benefit is a recognition that the person has special needs but because of the rules of the scheme if a person has an income of more than £5 a week in excess of the welfare payment, even though the payment of more than £5 a week comes from the Department, he or she is disbarred from receiving the free fuel allowance. The Minister should apply himself to this anomaly as it is an injustice under the scheme.

I welcome the fact that the injury benefits scheme has been extended to the Garda Síochána. The Minister in his speech said that compensation can be paid to gardaí under the Garda Síochána compensation Acts. I had occasion to attempt to introduce a Bill in this House in relation to compensation for prison officers. Because there were money implications the Bill was not allowed. Will the Minister say what the position is with regard to prison officers and occupational injuries benefit? If they are not at present entitled to it the Minister should look at extending the occupational injuries benefit scheme to the prison officers, particularly in the context of their not having a compensation Act to cover them for injuries or death arising in the course of their duties. Obviously we would prefer to have many fewer people on social welfare. At the end of the day, social welfare is not unlike the fire brigade, it is there when a certain type of emergency arises.

An issue that I have raised with the Minister's Department relates to community workshops and specifically in the context of community workshops in Waterford city. Long-term unemployed people do not have means. To become involved in community workshops where people can start up their own businesses, the enterprise allowance scheme is available under which £50 a week is paid. I know from experience of particular workshops however, that the enterprise allowance scheme proves inadequate for people, particularly over the first three month period. For instance, a married couple with two children would have £84.10. That income is grossly insufficient as things stand, but to consider reducing that to £50 a week, particularly at the initial stages where a business is being built up and maybe orders do not come in for some time is unreasonable. I would ask the Minister to consider extending payment of either unemployment assistance or unemployment benefit for the first three months of a business enterprise to assist people in getting businesses off the ground. This is an investment by the State in our people and it will assist them in getting back to work.

I am very pleased to hear that the Minister is at present considering proposals regarding the family income supplement scheme. However, an anomaly arose in the context of a case of which I am aware in my own area, where a man who had been unemployed for a long time succeeded in obtaining employment which was not a full week's work but was close to it. He applied in November for family income supplement and it was granted. On 23 December, just before Christmas, another child was born to that family but when he sought to have that child added as a dependant to his family income supplement he was informed that he would not get payment for that child until November 1989. The position is that you are granted family income supplement for 12 months and it cannot be changed. I suggest in the spirit of the way in which the Minister tackles problems of this type that arise in the social welfare area that this is a matter that he should look at, in the context of encouraging people to get back to work, getting people off social welfare and thereby, at the end of the day, reducing the cost to the State.

The provisions that the Minister is making to bring the urban and rural rate of unemployment assistance into line is to be welcomed and indeed is something that I have raised in this House. I unreservedly commend that change.

I would like to refer briefly to the free telephone allowance and to cite a particular case to highlight a weakness in the scheme. A widower in my area who was and still is on invalidity pension had a free telephone allowance until one of his children became 15 years of age. If someone needs to send for a doctor late at night, it is not advisable to send a 15 or 16 year old out into the night, quite often in situations where telephone kiosks are a good distance from the home. I would ask the Minister to consider that with a view to making the free telephone allowance available in a more humane way to families.

One aspect of the Bill with which I would be very much at variance is the proposal to raise the floor for the assessment of pay-related benefit from £66 to £69, particularly when the ceiling has not been increased correspondingly. Since this Government came to power, pay-related benefit has been decimated and less than £19 is the maximum amount of pay-related benefit for any recipient of unemployment benefit or disability benefit. I would see this as militating against the people in less well paid employment, and the Labour Senators will be opposing this on Committee Stage.

To sum up, the Minister has made very genuine improvements in social welfare generally and, in particular, has tackled some long-standing anomalies and for this I once again commend him. The underlying problem, as we in the Labour Party see it, is that payments under social welfare are still very inadequate relative to the needs of many people in our society. Figures like 1.2 million of our population living in poverty are very often heard and, indeed, we hear that 44 per cent of the farming community, for instance, live in poverty.

While the social welfare code applies to some extent here, I wonder if there is a full take-up. I know that there are many farmers that make less than their full contribution to the Exchequer but, on the other hand, I am equally aware that there are many family farmers that are virtually ekeing out an existence at the moment, living on very small incomes.

We will later on be moving amendments, for instance, an important one proposing that copies of all information secured by investigating officers shall be supplied to each appellant, with an appeal notice at least seven days prior to the appeal being heard for unemployment benefit or unemployment assistance. People should know the case that they have to answer and the evidence that is being produced against them before they arrive at an appeal.

As a public representative I have occasion to attend at appeal hearings against decisions of the Minister's Department. I can be helpful to the appellants in as far as I can explain to them what the system is about and what the issues may be, but people who may never before have had experience of such a tribunal can be very much at sea at the hearing. This is the case even though, let me say, in my experience the appeals officers of the Department make every effort to put people at ease and to explain to them what is happening there. At the same time, it is an intimidating experience for many people.

I wish I could say the same about all the medical referees in terms of how they treat people because a number of reports have come my way although obviously I have no way of checking them out. It would indicate to me that people are not always treated with the courtesy and dignity to which they are entitled. People should know what case they have to answer when they appear at a hearing. We will also be moving an amendment that an appeals officer shall provide a written report together with his decision setting out the reasons for refusing an application. Regarding the means testing for unemployment assistance we will be seeking that the means of the applicant only shall apply to applicants who are subject to means testing for the purpose of qualification. I ask the Minister to respond to these points.

Mr. Cullimore

This debate provides me with an opportunity to pay tribute to a ministerial performance of quality. Since taking office two years ago the Minister has presided over a process of reform and rationalisation which has improved immeasurably the manner in which the social welfare system operates.

It is indeed heartening that the Bill bears all the hallmarks we have come to expect. Despite circumstances dictated by the financial situation the commitment to updating our social welfare code endures. Needless bureaucracy has been reduced. As flexibility is improved and efficiency enhanced the funds allocated by the Department are disbursed in an optimal fashion.

The record since 1987 has been one of caring for those who, by virtue of economic conditions, handicap or family circumstances, cannot care for themselves or their dependants. Of course this is what we expect from a Government who stay in touch with the people at all levels of society.

This year we will create 36,000 new jobs yet there are those who cannot claim their part in the national recovery. I would much prefer that those availing of social welfare support could use their talents to contribute to the betterment and advancement of society. For this reason I am glad the Minister introduced a new flexibility in regard to unemployment claimants. Currently a person who has exhausted entitlements to unemployment benefit can requalify for benefit having worked and paid contributions for 13 weeks. This is an incentive for those wishing to take up insurable employment for a short duration. When entitled to or in receipt of unemployment benefit a person is not entitled to receive unemployment assistance but with new developments the rate of unemployment assistance is now higher than the rate of unemployment benefit which could be a disincentive to people to take up employment of short duration. This is a clear example of a State scheme operating in such a fashion as to introduce a distortion in the labour market. Therefore, the proposals to allow an unemployed person the option of claiming either unemployment benefit or unemployment assistance — whichever is more favourable — is a sensible and practical reform.

A recent European Community forecast report in The Irish Times showed that unemployment was set to fall from 18.6 per cent in 1988 to 18 per cent in 1989 and to 17.5 per cent in 1990 on current trends. While these predictions bear testimony to the Government's sterling efforts of the last two years their determination to reduce unemployment must be maintained. The Minister's proposal in relation to flexibility in claiming unemployment payments will facilitate all unemployed people, particularly the long-term unemployed, to find a foothold in the job market. For people who have been out of work for a considerable period there are proposals regarding the outdated nature of their skills and training. The Minister is to be applauded for his initiatives designed to help people to pursue educational courses and to take up part-time and voluntary work. The part-time education rule is invaluable because it encourages those who are out of work to avail of the latitude in the system which allows participation in part-time courses without infringing the availability of work criteria. It is to be hoped that such developments will be capitalised upon so that the number of people whose lack of employment is attributed to structural factors may be reduced.

Having dealt with those who may pay their contributions to economic growth and development, I wish to comment on those who have finished their working lives. After a lifetime of work the elderly have a right to expect State support. The Government's prudent economic policy has contributed to the low level of inflation. However, it is our duty to ensure that the basic income of the elderly is adequate to meet their needs. It is gratifying to see that having raised the old age pension by 25 per cent over the last three years, the Government are maintaining their commitment to keeping it ahead of inflation.

The decision to extend the free fuel scheme to include households where an old age pensioner is living with a long-term unemployed person is a positive move which will ease the strain and discomfort encountered by people in that situation.

The proposal to abolish the distinction between urban and rural rates of unemployment assistance is timely. The differential dated from 1934 and created many anomalies. It led to inequitable treatment of certain recipients. In my own constituency of Wexford under the social welfare code persons living in Enniscorthy received lower rates of assistance. I am pleased that this irksome situation has been rectified and that the growth in population in such towns has been recognised in the legislation.

Simplistic slogans and allegations of new Right economics from certain quarters cannot obscure the fact that the policies of this Government enjoy the support of the overwhelming majority of the people. Nevertheless, reform of the nation's finances is not an end in itself but a means to a greater end which will enable the country to realise its potential as a thriving independent State. While the Government are effecting a radical change in the nation's fortunes this Bill signifies that the weakest in society will not stand alone and unaided. The Minister and his officials are to be commended on this Bill.

Mr. Connor

Like other speakers I generally welcome the Bill which tackled a number of anomalies in the social welfare code. The Minister is to be congratulated for introducing such reforms.

I should like to raise the issue of unemployment assistance. The Minister has abolished the differential between urban and rural rates which dates back to 1934. This is certainly to be welcomed but I have a criticism in relation to rural applicants seeking unemployment assistance. I am speaking particularly about small farmers seeking small farmers' assistance and the old age non-contributory pension. I should also like to refer to the widows of such farmers who own a small farm and who are in receipt of a widow's pension. To qualify for a pension the first thing the Department do is to determine her means or income arising from an outside source, i.e., the farm. I submit that the means used by the Department in arriving at the income derived from the farm is unfair. I say that from practical experience as I have dealt with hundreds of these cases in the last number of years. Senator O'Shea talked about the intimidating atmosphere of an appeals hearing and the fact that an applicant goes through such a procedure without knowing the evidence against him. I support the Senators appeal for a greater amount of information to be made available.

In relation to the investigation of means carried out by social welfare officers operating under the 1981 Social Welfare (Consolidation) Act, in particular sections 146 and 156 to 159, it appears that some of the calculations made are unfair. Let us take a case I dealt with recently. In this case a small farmer with a small portion of land was in receipt of £150 per annum arising from the letting of this land. That was his only income. However, the official of the Department of Social Welfare stated that the letting value of the land was £500 per annum despite there being evidence from the auctioneer and the person who had leased the land that the actual amount paid was £150. This is an example which illustrates many other. The decision of the Department of Social Welfare which of course was final was that the letting value was £500 with the result that this poor man living well below the poverty line which is now about £48.50 per adult equivalent in a household was done out of perhaps £8 or £9 a week. This made the difference between living in hardship and grinding hardship.

In the determination of means, small farmers are not allowed a write down for depreciation of fixed assets, such as buildings. I wish to make a comparison with the tax code. In the assessment of means in the tax code, a large or small farmer is allowed a write down for fixed assets and allowed stock relief. We are not asking for this in respect of social welfare recipients but we cannot understand why a farmer cannot put a value on his fixed assets, and moving assets if he owns machinery, at the time he becomes entitled to a social welfare benefit, such as unemployment assistance. We cannot understand why he is not allowed, say, a 10 per cent write down per annum as this would have a positive effect in the determination of his means but the Department of Social Welfare take a contrary view. Under the regulations this is not allowed.

What is also very irritating is that in the assessment of means they use a category which they call "own produce consumed". I should explain that it is assumed by the Department of Social Welfare that everybody who owns land consumes their own milk and vegetables although the evidence may show that the applicant does not own a cow. Even if he was milking his cows he would be foolish to drink unpasteurised milk. When asked what is meant by "own produce consumed" they are told that it is milk produced and consumed on the farm. Even if the evidence shows that the farmer is growing no vegetables at all and there is nothing growing on the farm but grass it will still be insisted upon, because of the regulations, that he is still somehow producing vegetables, that is, food on his own farm. The maximum figure applied in these cases is about £150 per annum with the result they are deprived of about £3 per week in unemployment assistance.

I do not wish to lecture the Minister in relation to this matter. Being an urban Deputy, he may not be aware that these anomalies exist but I can assure him that they do. I said earlier I gleaned my experience from dealing with people at this level. I have attended dozens of appeals over the past few years and, here again, I have found wrong information and misinformation being given along with a basic lack of knowledge on the part of appeals officers. I do not wish to reflect in any way on appeals officers but they do not seem to realise that these anomalies exist and very often their rulings reflect this lack of knowledge.

The Minister in his speech said in relation to unemployment assistance:

It is envisaged that the new powers would be directed primarily at the long-term unemployed and would be used, for example, to allow persons to attend courses of education, subject to certain conditions, without affecting their entitlement to unemployment payments.

This is a welcome reform but it does not go far enough. It is very common nowadays for a school leaver of 18 years of age not to find employment and in order to survive they have to apply for unemployment assistance. If this teenager goes on any training course, such regulation which requires a person to always be available for work he or she would lose their entitlement to unemployment assistance. I would not be able to conceive of any regulation which would act as a greater disincentive for people to go on training courses than that one. The Minister states that the new powers would primarily be directed at the long-term unemployed. However, a school leaver cannot be deemed to be long-term unemployed. I ask the Minister to extend the scheme to school leavers who cannot find work and who in order to survive have to apply for unemployment assistance. If these school leavers go on some short-term training course they would find they would no longer be entitled to receive unemployment assistance with the result that they would no longer be able to continue on the course as by staying on the course they would be in receipt of no income at all. I ask the Minister to take a closer look at this problem.

The Minister also made reference to the prescribed relative allowance. I would like to draw the Minister's attention to the fact that in the past few years in quite a number of cases this allowance has been cancelled in rural areas. A typical example is where a social welfare officer, on instructions from the Custom House, visits a household where a son or daughter cares for a parent for the purpose of carrying out a means test. The applicant finds that the criteria used are far more severe than those used when he first applied for the allowance. I know of many cases where an injustice was done. In some instances the prescribed relative allowance was discontinued purely and simply because in the opinion of the Department of Social Welfare the prescribed relative was not giving full-time care and attention to the elderly parent or relative.

In a typical case a son or daughter, unmarried, decides to stay on the farm to look after ageing or infirm parents and, as a result, cannot go to work. Such people glean a small income, say, from their farms but because they do that, under the new directions from the Department of Social Welfare, in most cases I have become familiar with they lose their prescribed relative allowance. The prescribed relative nowadays would appear to be entitled to no income at all other than the value of the prescribed allowance which is about £30 per week, if that. The Minister will readily agree that to say that anyone could live on £30 a week is utterly contemptible.

Other Senators have spoken about the problems regarding medical referees and I concur with them. I cannot for the life of me understand why when independent medical evidence is presented to a medical referee by a consultant who is very familiar with an applicant who has suffered some disabling illness or some disabling condition, the medical referee decides to disqualify such a recipient, yet medical referees have done that. Even with the evidence provided by, very often, eminent consultants, doctors and so on, certifying that these people are unfit for work and that to undertake work would be dangerous for them, the medical referees, in so many cases unfairly deem these people fit for work and, consequently, they lost their benefit.

If a medical referee disqualifies you from payment if you are suffering from some form of sickness or disability the next line of appeal is to an appeals officer and, in fairness to them, they very often reinstate such people. Appeals officers are not medical people but certainly they apply a little more compassion in their decisions than very many medical referees. What riding instructions — so to speak — have medical referees going out to investigate somebody who is in receipt of sickness or disability benefit? I cannot escape the impression that the instruction they are getting is to do everything possible to disqualify the applicant. I ask the Minister to have a close look at that because if that is taking place, then I suggest no greater injustice is done under the social welfare code and quite a few injustices are done under the social welfare code. I would have to single out the action of many of the medical referees.

I have an amendment down for Committee Stage relating to the free travel scheme operated by the Department of Social Welfare. Free travel applies to people over the age of 66. It applies to people in receipt of an invalidity pension either from this country or the UK, and it applies to all persons who are in receipt of disabled person's maintenance allowance, irrespective of age in that case, and in the case of invalidity pension either from this country or the UK. There is a very unfortunate category of people, very small in number, disabled people who have an income from some source which is above the maximum rate of the DPMA.

The disabilities I am talking about are loss of limbs such as arms or legs. Such persons may have acquired a skill — some are artists — which gives them an income of £50 a week or £100 a week. I find it a sad commentary on society that we have to disqualify such people from the benefit of the free travel scheme. I know of one unfortunate disabled person, who had suffered the loss of his arms. At a railway station on one occasion while trying to get his fare from his top pocket, which he had to do by the use of his mouth, suddenly he was set upon by hoodlums and his money was taken. This unfortunate man could not qualify for free travel because he had an income of about £53 per week which he earned from a certain skill he had acquired. I appeal to the Minister today to extend the free travel scheme to this category of people.

I am informed by the union of voluntary organisations who look after disabled people in Ireland that the number of such people here is in hundreds. If you are over 66 years of age and a millionaire — and there are millionaires in this country who go around in aeroplanes etc. — you are entitled as of right to free travel and this we do not question. Therefore, is it not only right and natural justice that people who for one reason or another are wheelchair-bound, who have lost an arm or both arms, a leg or both legs, nevertheless somehow can earn a little income for themselves which is about the maximum rate of disabled person's allowance, should qualify for free travel?

These are the points I wish to make. I will come back to them on Committee Stage, but I hope the Minister has taken note of some of them because I make them based on sympathy I feel as a result of the experience I have had of dealing with social welfare cases. I happen to live in a county where almost 50 per cent of the people in one way or another qualify — or should qualify — for some kind of social welfare or social assistance, so naturally dealing with their problems and the attendant poverty is a major part of my political experience. It is not the fault of any of these people. It is one of the accidents of history, geography and a number of things. It is the absolute duty of Government to address the problems of these people and very often redress the injustices that on very many occasions are done.

Mr. McGowan

I join with other Members of the Seanad in welcoming this new Social Welfare Bill. The whole spectrum of social welfare presents an important administrative problem for those who contribute to it, those who draw up the legislation and those who desire improvement. It is a vast area. Those of us who want to be fair and honest and who have experience on the ground readily admit that having regard to the enormity of the matter, the sectors to be covered and changing circumstances, the introduction of new legislation is not the complete answer.

I welcome the review, the new legislation and the benefits it brings to different sectors. Some people undoubtedly will say it is not fair, it does not do this or that and it does not cover areas they are interested in. Some people will focus on one section. That is not a workable approach. In providing social welfare benefits to the under-privileged, the aged and those generally who need them, the Department should review claims annually. They are doing a reasonable job and the Minister has adopted a very practical and positive approach. Comments in the other House and the fact that the Bill went through without a division make it crystal clear that it is a good Bill which brings about improvements in looking after those in need.

Every public representative who has an opportunity to comment has his own area of concern. I would ask the Minister to examine the possibility of getting more people back to work by introducing incentives. When we look at the live register and the number of people unemployed, it is not unfair to say that half of those people are not employable. They are either in jobs or they have no intention of working. We are all aware that if we need to have some jobs carried out in the house or in the garden, people are not standing around in big numbers waiting to be employed. There is no legislation that can resolve this problem. The way to reduce the numbers on the live register is to give a greater incentive to go to work. This would be a welcome development and I urge the Minister to consider it.

The Minister and the Department might also consider a low rate of PRSI contribution for boys and girls aged between 18 and 22 who get employment on farms. A number of farmers, especially small tillage farmers, have not the ability to pay a wage equal to the dole, together with PRSI. Many small business people are in the same position and cannot afford to employ people on a wage which would compete with income from the dole and some casual work. I am not revealing anything which the ordinary person does not know. There is no magic button which can be pressed to bring people back to work, but a low contribution from both employer and employee would be helpful. A contribution of £1 per week for an 18-year-old boy, increasing after two years' employment to £2, would not impose hardship and would not be a major obstacle to his employment on a farm. The same would apply in the business sector. I maintain that this is the only way to reduce the numbers of unemployed. If the Government changed tomorrow and we had a new Government comprised totally of those who would advocate a socialist approach, they could not achieve a reduction in the live register. It is not possible to talk it away. Even if we had vast resources of oil, it would still be impossible. I would urge the Minister to consider my point and plan for getting people back to work.

The social employment scheme is an excellent one. I recently attended a meeting of at least 200 people who claimed they were not getting enough under this scheme. Single men get £60 per week for two and a half days work and they can take up paid employment for the rest of the week. Somebody proposed that the scheme should be scrapped and this suggestion drew the loudest applause. I wonder why. Were the people there opposed to the scheme because it was interfering with their programme of drawing the dole and working at the same time? I could only conclude that these people wanted the scheme scrapped because they had such a programme which they were anxious to maintain, whereby they got about £120 while continuing to do nixers on the side.

The social employment scheme provides a starting base which should be widened to include work for local authorities or for small business people and farmers. It is a very worthwhile scheme which takes people back to reality and encourages them to get back to work. Those who participate in the scheme are anxious to be included within the PRSI system. This means that they want to go back on the dole again. I would not go down that road. The positive approach of the scheme would thereby be nullified. I would rather see the scheme extended so that people would become involved and adopt the right attitude to work. There is no way to reduce the live register except by getting the attitude right. If you want to teach a language you get hold of those coming into school and get the attitude right. There should be a time limit for those on the live register and there should be reviews. Nobody could dispute that this Minister has had a very positive approach. I should like to support that development. The Government should consider giving special incentives to young people starting up. Farmers and small businessmen should be encouraged to take on one or two more employees.

The provisions in the Bill represent a big improvement and all Members welcome them. My appeal to the Government is that they should continue to tackle unemployment. The Minister for Social Welfare is very alert to the need to carry out a review of the social welfare system and I am hopeful that next year he will produce a plan of action to get more people back to work.

Mr. Harte

Senator McGowan has tempted me to respond to his comments. He said that everything possible was being done to get people back to work, but I should like to point out to him that the private sector receive in the region of £1,250 million annually to create employment but they are not succeding. Had the wealth tax been implemented in the way we suggested, it would have meant an extra £25 million for the Government and that could have been used to create more jobs.

I welcome the improvements in social welfare benefits and in particular the increase for the long-term unemployed. I am pleased to learn of the determination of the Minister to eliminate abuses of the system. I am sure all Members will agree with the Minister in regard to that. I should like to commend him on the initiatives he has announced to improve the welfare system. Measures to improve basic welfare payments and to tackle the problem of homelessness were announced in the budget but they do not got far enough to redress the fundamental inequities that exist in society.

I can understand how those who are involved in combating proverty and helping the underprivileged despair at the extent of the increases granted by the Government to social welfare receipients. They are concerned that because of our political system they are unable to tackle the problem of poverty in a real way. I have never been satisfied that increases in social welfare benefits announced in budgets deal adequately with the problem of poverty. Successive Governments have paid lip service to the problem of poverty in our society. Ministers take credit for increases in social welfare benefits but the problem of poverty deepens. We seem set on maintaining a version of society like that of the fifties when we had large scale unemployment and emigration. On the other hand, we claim to be distributing the wealth of the country equally.

When the wealth tax was set at 1 per cent many people objected and others were astonished that there was so much about. While the 1 per cent tax yielded very little when it was introduced it would be useful today to create jobs. In our budgets small improvements are announced for the less well off but because of the way the system works the division between the haves and the have nots deepens. People are finding it more difficult to survive. As a result of the cutbacks many people do not have access to our health care or education systems. In fact, they do not get an opportunity to participate in society. We contradict ourselves on many occasions. We say we are doing something for the most needs but our actions give a different impression, particularly in regard to the distribution of wealth. We may despair and wonder when the issues of inequality, poverty and exclusion will be faced up to, and I do not think that is likely to occur in the near future. The increases granted annually enable people to survive but do not amount to an improvement in their standard of living.

What is happening is that society is encouraging brash individualism. There is a lot of emphasis on that philosophy. I am not blaming the Fianna Fáil Administration alone for that because former Governments can be accused of it. The inevitable consequence of this philosophy is that the poor will suffer. It appears that all we are prepared to acknowledge is that there are poor people who are deserving of help, people who are down on their luck. I have always maintained that we could do a lot to help those people if we collected wealth tax, corporation profits tax and so on. I cannot understand why the Government do not have the political will to do that.

I will highlight the inequalities in our society at every opportunity. I regret that we cannot persuade our colleagues in Opposition of the need to tackle unemployment, inequality and poverty in our society. My colleague has made many points about the provisions of the Bill and I do not intend to repeat them. However, I should like to refer to an article by Paul Tansey in The Sunday Tribune on 26 February last on “Money Matters”. What he says is that ordinary workers who lose their jobs and apply for unemployment benefit this year will get less cash than they would have got three years ago; that in each of the last three budgets increases in the rate of unemployments benefit were announced with a flourish; that over this period the rate of unemployment benefit for a person with an adult dependant has been increased from £67.60 to £74 a week; that this represents arrears of 9.5 per cent in the basic rate of unemployment benefit since 1986. Despite these increases workers on average earnings who apply for unemployment benefit having lost their jobs in 1989 will draw less cash then if they had been made redundant in 1986. He then goes on to talk about the cause of cuts in benefit for the newly unemployed. He attributes it to the phasing back of pay-related benefit from 25 per cent right down to 12 per cent. I would like to hear the Minister's views on this. Is there any way he can show me that there is a balancing out? I have not found it.

Employees earning the average industrial wage who lost their jobs were able to have 80 per cent of a replacement ratio in unemployment benefits. As late as 1985 people who were made redundant were able to receive four-fifths of their previous income in unemployment benefits. However, since the reduction in the rate of pay-related benefit to 12 per cent in 1987, benefits have been sharply reduced. I would like the Minister to look at this. I would like to know if he agrees with me and, if so, if anything can be done about this reduction? If he does not agree, can he tell us how he can say this balances out?

That is my short contribution. I do not want to hold the House up any longer. In general I welcome the Bill except for one or two small anomalies that have also been mentioned by my colleagues.

Minister for Social Welfare (Dr. Woods)

I would like to thank the Senators for their contributions and for the very generous and warm welcome for those positive things that have been included in the Bill. I listened to what the Senators had to say. Here in the Seanad there has always been a very thorough analysis of the area of social welfare. Some of the Senators seem to be closely in touch with the reality of the difficulties faced by people with the social welfare system as a whole.

I said at the outset that these measures are an important advance in financial terms. Let me give an example of the nature of the improvements. A widower with five children on supplementary welfare allowance will have received an increase of £40.30 per week. In real terms, allowing for the effect of inflation in the period pre July 1988 to post July 1989, the net increase is £35.90. A widower with two children would have got an increase of £22.30. Deputies will recognise the importance of introducing this scheme. I am very glad it has received the welcome it did. The scheme includes deserted husbands as well as widows. It is a major development in our social welfare system generally. A married couple with five children on supplementary welfare allowance will have received, over the same period, £19.70 which in net real terms is an increase of £13.80. A married couple with five children on rural long-term unemployment assistance will have received an increase of £20.90 which in real terms is £14.60. A married couple on long-term urban unemployment assistance will have received slightly less, £19.10, a net increase of £12.70.

This indicates the size of the increases and the fact the Government have made a genuine effort to tackle the problem of lower incomes by identifying the people who are most likely to be at risk in our society today. These increases, the one last July and the one now, come after the assessment done by the ESRI. The assessment of the ESRI is based on 1986 and early 1987, but the improvements have taken place since that date and are a substantial improvement in the position of those on the lowest incomes.

Senators contributed over a wide range and I know they will not want me to deal with every single point because it would take quite some time to do that. I will pick out some of the principal points. Senator Cregan made a wide-ranging contribution. He was particularly concerned about people on disability benefit and instanced a case in Cork where someone was called from Kinsale into Cork for examination despite the fact that this person was obviously in no fit condition to go to Cork. There is a system whereby one can be certified by one's doctor as medically unfit to attend. Approximately 3 per cent of people who are called for examination send in such certificates; there were 2,760 last year. The total called was 92,000. The numbers are very large as the Senator will appreciate. All the relevant information is set out in the documentation which is sent to the individual. It is stated that if a person is unable to attend for medical examination they should get a certificate to that effect from their GP. I am not citing this by way of argument with the Senator. I am just saying the system was there and maybe the person in question was not aware of it. With the computer in operation people can be called in relation to the illness they have or the duration of the illness. It is obviously difficult to meet all situations but the time at which people are called is related approximately to the likely duration of the illness.

Senator Cregan also pointed out that in the UK they are now allowing people over 65 to work and earn some money. We, of course, have always done that for old age pensioners, and the British are just arriving at that situation now. Senator Cregan also spoke about incentives to employers to employ more people. I have to agree with him that we are anxious to have such incentives, but it is not so simple in practice to have incentives that work and are not open to abuse. The previous Government tried a number of things which did not have the effect that was desired. For example, there was the attempt through the PRSI pension scheme to try to encourage more employment.

The use of that scheme over particular periods when employment is at its lowest or when there are peaks of unemployment might be more beneficial. That possibly could be looked at further. Various studies have been carried out on this matter by the NESC and they cannot find evidence which supports the claim that to reduce PRSI contributions would increase employment. There might be other reasons for reducing PRSI contributions but from the various studies that have been carried out no positive evidence has been shown that more employment would be created by doing so.

In gross terms employers' PRSI costs amount to approximately 6.5 per cent of overall costs. Labour costs in general and employers' PRSI in particular are low in Ireland when compared with most European and OECD countries. I will not say any more on that matter. The one country whose costs are lower than ours is Britain and they have no ceiling, which means income is higher. I think it was Senator Cregan who raised the question of lifting the ceiling even further to give easement at the lower end. This can be looked at further but in Britain there is easement but you do not get benefit under a certain level. For people who work fewer hours there is a financial as well as a time yardstick. We are examining that matter at present but it is fairly complicated.

I am concerned about the whole position regarding part-time work. The amount of part-time employment is increasing and that is something I am concerned about. In tackling that problem you have to be careful to maintain benefits and entitlements. I can assure the Senator, and also Sentor O'Shea who raised the same question, that we are examining that matter fairly urgently at present. I am concerned about the development that is taking place in this area.

Senator Cregan asked if I want fewer people on social welfare. There are two answers to this. Naturally I would rather see fewer unemployed people but there will always be more elderly people——

Mr. Cregan

The young people are leaving.

Dr. Woods

People are surviving longer and that is the position all over Europe. In all the developed countries people are living longer and consequently there are more people to be provided for at that end of the scale. Senator Cregan also raised the question of numbers. Our figures are built into the Estimates at the beginning of the year. At the beginning of 1988 our figure for registered unemployed was 256,000 and at the end of the year the average number of people who received unemployment assistance throughout the year was 242,000 rather than 256,000. At the beginning of the current year the figure was 232,000. There is a difference in terms of numbers. One may argue what the difference is and what is causing it. We know there is a certain amount of abuse but the reality is that the number we have to cater for is being reduced.

The other side of the coin is in many respects the most important one, and that is the number of people actually at work. The Senator mentioned that last year there was an increase of 6,000 in the number of people at work. That was the first time since 1980 that there had been an actual recorded increase in the number of people employed, and that was very heartening. The Estimates for 1989 provide for 36,000 new jobs. Against that we have to set the losses that would occur in one form or other. It is also anticipated that the number at work will rise further this year and at the end of the day that is the principal criterion. In regard to social welfare, it is estimated that 232,000 people will receive social welfare every week.

The Senator also mentioned loan sharks. We have set up a supervisory committee to deal with this matter and they are working in conjunction with St. Vincent de Paul, community welfare officers, banks and credit unions to discourage people from taking out loans from moneylenders, particularly unregistered moneylenders. This problem seems to be fairly widespread. We have to give that committee time to do their job.

The Senator also asked where the savings have gone. Essentially, they all went back into the system and were absorbed in improvements. Various things were done which it would have been difficult to do otherwise. I make no apology for having an efficient, effective system and I think Senators generally like to see that. Obviously when I get additional resources I will make improvements in the system.

Senator Wallace spoke particularly about reforms generally and the lone parent allowance. We are looking at this broader question of a lone parent allowance. There are various legislative implications involved and there are differences between the schemes but we are examining this matter at present and I would hope at a later stage to be able to introduce a co-ordinated and comprehensive lone parent allowance scheme. While some people may be categorised in people's minds they are not categorised in our books. There are two categories, one for widows and one for all other types of social assistance, and is not divided into unmarried mothers, deserted wives and so on.

Senator Wallace and a number of other Senators spoke about assisting people in starting up their own businesses. Senator O'Shea talked in particular about community workshops, the long-term unemployed and giving payment for a three month period to assist people in getting back to work. That is the purpose of the flexible arrangement we have provided for in this Bill. It will enable us to deem these people to be available for work for a period. That would require the sanction of the Minister for Finance but we will have power to bring in regulations along those lines. That is a matter that has been mentioned previously by Senators. I am very glad the Government have allowed me to do this because it is a fairly major change in the legislation regarding those on unemployment assistance.

This measure applied previously in regard to unemployment benefit but it was probably required less because people on benefit for the first 15 months were less likely to need it, and it did not apply at all to unemployment assistance. We have introduced a measure of flexibility in this regard and we will be considering regulations to bring that flexibility into effect.

Senator O'Shea mentioned specifically the community workshops. That is one of the things we had in mind. A group in Cork raised this matter with me and the Senator spoke about a group in Waterford. Obviously both Cork and Waterford are leading the way in a variety of matters. These two areas are very much to the fore in tackling the problem of moneylenders. We have been to the fore in tacking that problem and will be able to do so within the flexibility of the provisions of this Bill.

Of course, we will have to specify what we are doing which will apply to various educational schemes and courses which will be covered. We would be more anxious to begin the educational courses at a somewhat higher age level, rather than immediately on reaching the age of 18. I know one Senator advocated our beginning at the age of 18 which would be very close to the third-level education entry age. We do not want to be in conflict in that area. In any event we will have the power to implement that provision. I think it was Senator Connor who advocated that we cover people who would just have left school. Technically that could be done after the implementation of the provisions of this Bill. We will begin with the long-terms unemployed.

Senator O'Shea covered a wide range of subjects including the appeals system and the provision of documentation. The position at present is that, if a claimant requests copies of any reports or evidence, including reports of a social welfare officer, such documents will be supplied to him. For example, reports in relation to appeals can range from straightfoward means assesments carried out by social welfare officers to more sensitive reports relating to, say, the question of desertion in the case of social assistance or deserted wife's allowance and medical reports in relation to capacity for work.

Unemployment benefit and unemployment assistance cases, in which there would have been some involvement on the part of an investigating officer and which later give rise to appeals usually involve the questions of availability for work, or genuinely seeking work in cases where fraudulent claims have arisen. In such cases claimants on request would also receive copies of any documentation in relation to their cases. In any event, in accordance with the principles of natural justice, an appellant is fully informed at a hearing of their case that they must answer in order to succeed in their appeal. Senator Connor, from what he said, seemed to have attended a number of appeals cases. I have noted what Senators have had to say in that respect. I should say that the whole question of appeals is at present under review.

Senator Cullimore and others welcomed the abolition of the rural rate of unemployment assistance which must be acknowledged, was amomalous. From what Senator Wallace had to say I gather that nobody in County Meath had received the urban rate which, when one thinks about it, appears to be extraordinary. I was aware of the variations obtaining nationwide, particularly with regard to places like, say, Tallaght, the outskirts of the City of Cork, Waterford and other places. The abolition of that rural rate constitutes an historic step since that provision had obtained since 1934.

Senator O'Shea raised the question of the free fuel scheme. I should make it clear that health boards still have discretion in this respect on grounds of illness. I must stress that the discretionery powers, particularly with regard to illness, remain with the various health boards. I came across instances of health board officials contending they were no longer responsible for handling the provisions of that scheme. It has been pointed out to them that it is quite clear that responsibility still lies with them. There may have been such instances while the changes were being effected but discretion and responsibility rest with them.

With regard to the question of occupational injury vis-á-vis members of the Garda and whether prison officers are covered, I should say that prision officers are covered; they are covered by virtue of the fact that they are not excluded. Sometimes that is a problem that arises from interpretation of legislative provisions, ascertaning who is and who is not covered.

With regard to the assessment of means of widows and small farmers, I should say that there are fairly generous allowances generally available for such people. In the case of old age penisoners a couple can have up to £53,000 capital and still be eligible for the minimum old-age non-contributory pension. Senator Connor spoke about the maximum pension and a figure of £6,000 savings.

Many Senators referred to the difficulties encountered when people are subjected to a means tests. Bringing the self-employed into the taxation system will mean that, after three years, there will not be any means tests, with particular refrence to widows and small farmers which will constitute a tremendous improvement in their cases. However, for old age pensions it may take up to ten years to have that means test problem overcome.

Senator O'Shea also raised the question of dependants aged between 18 and 21. In the past season I have raised the relevant age to 21 which means that children in education will be regarded as dependants of their parents up to that age. At the beginning of the season I ensured that anybody still in education, not over the eligible age, would not be cut off from benefit in the course of the season. That constituted a step forward but, in the course of the year, I was authorised to extend cover up to age 21.

Senators would be surprised to learn of the number of improvements we have been able to effect in the system overall. We are aiming to have age of 21 as the "across the board" age applicable to all social welfare dependants who continue in education. Raising the age to 19 was regarded as a first step on that ladder.

It is true that type of case referred to by Senator Connor with regard to assessment of income can occour. We are taking action in that respect which will be helpful in the future particularly to old age pensioners and widows.

Senator McGowan raised the question of the need for greater flexibility in the system rendering it easier for people to get back to work. I am most anxious to encourage that trend. In fact, I shall be examining any measures we can take to ensure that people get back to work wherever possible. A number of Senators raised that point, as did Senator Harte who made some very pertinent remarks in that respect. Senator Harte wanted us to raise more money. By bringing the self-employed into the system we will raise additional amounts of money which are already proving beneficial. In the first year it was anticipated that the return would be £15 million from the self-employed. Some argued that the return might not be so great whereas, in fact, it amounted to £22 million. The present estimate is of a figure of £39 million for 1989 which may well prove to be slightly conservative. These are matters which must be worked out between officials of my Department and the Department of Finance at the beginning of the year.

It is projected that by 1990 we will receive £50 million. Obviously it will be more than £50 million because the rate and the level of contributions generally are higher than anticipated and consequently there is a good deal of money coming in. There is a sharing of the burden across the board. I would just point out to Senator Harte that it is more equitable.

I recognise that social employment schemes are very valuable and are very much sought after, but they are not a long term solution. Any means that we can use to assist people in getting back to work which are practical and workable we would certainly be happy to use.

I thank the Senators for their contributions.

Question put and agreed to.