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Seanad Éireann debate -
Wednesday, 15 Dec 1993

Vol. 138 No. 14

Social Welfare (No.2) Bill, 1993: Second Stage (Resumed.)

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

I welcome the Minister to the House, it is the first time I have spoken in the House in her presence. I also welcome the Bill. I will be very brief. I want to explain a few things about the Bill because it affected me at one time and still affects the people who work on my boat.

The Revenue Commissioners were very hard on fishermen. They wanted the owner, skipper or skipper-owner of a boat to make tax returns for people who worked on it. The owners and skipper-owners were against this; their view was that while they were the owner of the boat, the people who worked on the boat were not getting a wage. They were paid on a share basis in accordance with the money made from the catch in any given week. I own a 36 ft. boat which goes to sea regularly and there were five shares in it; divided as follows: When the catch was sold the money made was calculated and expenses, food and diesel, were deducted. The remaining money was divided in five parts, two parts of that went to the boat and one part each went to the three people working on the boat, even though it was skipper-owned. Boats were cheaper then but have become more expensive. Up to 40 people could work on any one boat but the whole system has changed. There can be up to 22 shares in a boat and only two of those shares would be divided among the crew because of the huge expense involved in running boats of that size.

I was of the opinion until today that the IFO, supporting McLoughlin, took the Revenue Commissioners to court. I want to point out to Senator Cregan that the Department of Social Welfare did not go to court, it tried to do its best for share fishermen at all times.

The Government?

The Revenue Commissioners took the fishermen and owners of the boats to court because they maintained that fishermen working on boats should pay tax as employees and that the owner or the skipper of the boat was the employer. The court ruled that this was not the case since these people were paid on a share basis in accordance with the money made. It left the deck hands — as Senator Magner would know — the workers on the boat, in limbo for a long time about what would happen. At present if I have a boat I make my returns at the end of the year. I co-operate with the Revenue Commissioners as I have a responsibility to tell them who was working on the boat and what I paid them. Many skippers did not do that.

This Social Welfare Bill will be welcomed. I felt that Senator Cregan went off on a tangent dealing with matters which had nothing to do with this Bill because it deals with——

What I said was relevant to the Minister's speech.

Perhaps, but this Bill deals with specific groups of people who have not until now been properly catered for under other social welfare legislation and it is looking after those groups. It was not the Department, as I said, that went to court, it was the Revenue Commissioners and the fishermen and this Bill is the result. It is some time since that case was in court and the matter has been in limbo since. I thank the Minister for bringing the Bill before the House as it has cleared up, once and for all, the circumstances of the share fishermen and gives them their own niche.

Perhaps on Committee Stage I will ask a few questions on certain details. If we go back to the concept of treating skippers as employers there seems to be a contradiction in the Minister's speech. The Minister said: "Share fishermen became insured as self-employed following the High Court decision ... A substantial number of the skïppers involved regard themselves as employers. However, others do not." I do not disagree with that. The part I disagree with is that if the skipper or the skipper-owner of the boat is not the employer, section 14 of the Bill "provides for regulatory powers under which employers and other people will be required to maintain certain records." If some of them do not want to be employers why then, if they fail to keep records, will they be guilty of an offence?

The point I am trying to make is that if the Department of Social Welfare look on share fishermen as being self-employed then the Minister will have to look again at the section which provides that the skipper-owner of the boat — we will call him the employer for the time being — will be committing an offence if he does not keep records. There seems to be a slight contradiction there but apart from that I agree with the Bill. I also welcome the other groups being brought into the scope of the Bill. It is a pity the legislation was not in place a couple of years ago as it would have made a great difference to share fishermen.

I welcome the Bill which is legislation to deal with a unique situation for fishermen. Due to the nature of their occupation, particularly its seasonality, and that for long periods of the year they are unemployed, it is necessary to have a special arrangement in place for them. To a large extent the public attention in relation to this legislation has focused on the position of the share fishermen, but there is more to the legislation. When the Minister introduced the Bill she covered a broad area of the social welfare code and some of the proposed changes are long overdue.

In particular, I compliment the Minister in taking the initiative in relation to the volunteer development workers. From her own experience as a volunteer development worker, she will be fully aware of the anxiety of many of the personnel involved in the overseas development effort about the shortcomings in the code which left them at a disadvantage when they returned here. I had occasion to have discussion for a period with the representatives of the voluntary organisations who were rightly concerned that people who made large sacrifices to work in areas of enormous need and deprivation found that when they returned home they were at a great disadvantage. That provision alone in the Bill before us today makes the legislation welcome.

There is a need to go even further in the preservation and protection of employment and the provision of employment opportunities for personnel who work overseas and I know it is a matter to which the Minister of State at the Department of Foreign Affairs, Deputy Kitt, is at present paying attention. If, through APSO and other organisations, we have hundreds of personnel working in overseas areas it is necessary to have a structure in place here which will enable them to fit in when they return, and to enable them to do so in a way which will be beneficial to the company or organisation with which they are involved. This part of the legislation, which to a large degree has been overshadowed by the emphasis put on the share fishermen, is worthwhile and overdue.

It is also timely to have a discussion on how the social welfare code is creating poverty gaps for certain people and how these can be avoided. The Minister dealt with this matter in her speech today. She identified some of the areas where these difficulties arise and ways in which they can be tackled. The work carried out by the working group in the Department of Social Welfare needs to be accelerated. It is time that a final recommendation or interim report was made available to give some indication of how the amalgamation of the tax and social welfare codes can be dealt with in a way that will improve living standards and, at the same time, will not be a disincentive for people to work.

In the other House, in some of the discussion on this legislation, there has been quite an amount of comment as to whether the welfare code is a disincentive for people to work. This is a delicate matter to deal with and I sympathise with the Minister's dilemma as to how this can be managed. Some new intiatives are being taken in other countries which it might be useful to examine. I particularly draw the Minister's attention to a number of schemes being tested by the French Government. One of these relates to a system of purchasing stamps at local post offices — stamps as credit for work. I would not like to delay the House by going into the detail of the new initiative taken this summer by the French authorities, which, I hope will create many opportunities for employment and at the same time loosen up a system which seems to stifle the prospects for employment. It should not be the case that the system chosen to protect the incomes of people who are unemployed and who face difficulties caused by disadvantage or disability, removes incentives to work.

Striking the balance between the provision of employment opportunities and incentives to get people to work while protecting incomes is a challenge for the Minister and I am sure that she will face that challenge as she faced other issues in her short period in office. I compliment the Minister of State. In a very short time she has demonstrated that she has a clear grasp of this complex and difficult system. I was a Minister in that office for a while and I know that it is like. The Minister has my support and my sympathy in trying to strike that balance. I wish her luck in her efforts and I compliment her on introducing this legislation.

With regard to share fishermen, a unique opportunity has been grasped by the Minister to deal with this complex area. It is fair to say that there is no occupation with the same associated hazards as fishing. The Minister will be aware from the results of studies that, in terms of occupational safety, fishermen probably face the highest risk of any sector in the community. The seasonality of the industry also ensures that there is great demand on the welfare services to maintain living standards and an income so that these people will continue to work in that industry.

When I was dealing with salmon fishermen, somebody said the fishermen would have been better off if all salmon net fishing had been stopped years ago because then the fishermen would have had to find some other occupation where they would have received a decent wage. The salmon fishermen on the lower Shannon have a six week season and their livelihood hinges on that. Their standard of living depends on whether they have a good or bad fishing season. I need not mention in the presence of Senator Fitzgerald, who is a professional, that the fishermen have suffered from low incomes because of the occupation's seasonality. Many have suffered due to the absence of adequate insurance cover to carry them through the lean periods in the height of the season and at other times.

One aspect of the Minister's proposal that concerns me and that is the pensions scheme. When in the Department of Defence, I was dealing with windows of ex-Army personnel who did not opt into the pensions scheme. The widows were severely disadvantaged when they discovered that their husbands had not availed of that option. It bothers me to hear about options or voluntary involvement in schemes of this nature. I do not wish to cut across what the Minister of State is doing, but a way must be found to ensure that the people who are dependent on the person who exercises the right to opt in or out of the scheme are familiar with what is on offer and that they do not find, when they decide to opt out, that they will be severely disadvantaged compared to their colleagues in industry. That aspect of the option arrangement in the legislation bothers me.

I would prefer a permanent and compulsory system. If it means two compulsory schemes to cover both categories, so be it. It may be more cumbersome and bureaucratic but it will deal with the circumstances I can foresee in the event of options not being exercised. I again refer to the widows of Defence personnel who were not informed by their husbands that they had not availed of the opportunity to opt into a scheme and who were severely disadvantaged as a result. They have been campaigning for a number of years, with only limited success, to have some of the mistakes made ten and 15 years ago rectified. It is very difficult and expensive to do that.

With these reservations, I welcome the Bill. I would welcome the inclusion of a formula to deal with people involved in aquaculture. I am not sure if that is covered under existing legislation. In future more co-operative arrangements for the development of aquaculture will be put in place by fishermen around the coast but due to the large investment involved it will not be possible for individual fishermen to undertake that on their own. Some of the larger companies in the aquaculture industry have drawn back from investment in that industry and the trend for the future will be an increasing number of shared fishery ventures undertaken by fishermen in the aquaculture business.

I reject the accusation by some fishermen that the spread of sea lice and the decline of white trout stocks are connected with fish cages along the coastline. White trout stocks have disappeared at certain periods without explanation over the last 100 years. In the 1940s and the 1950s the herring fishermen were accused of having depleted white trout stocks by the use of herring nets on the coastline. Now sea lice are blamed. Sea lice have been there since time immemorial; they are part of the sea environment and are not the result of fish cages. They were in the sea before fish cages, and I am sure they will be there after the fish cages have gone. It is irresponsible to try to connect sea lice with the demise of white trout stocks in certain areas. There is no scientific basis for that connection. Sea trout stocks have declined without explanation during different periods and other reasons besides aquaculture. If fishermen share in the development of aquaculture the facility of insurance should be provided for them under this legislation.

This Bill is worthwhile and timely. I sympathise with the Minister on the task she has ahead and I urge her to carry on her good work in the Department of Social Welfare. She is assured of the support of the House in that work.

I welcome the Minister to the House. With regard to her competence in the area of social welfare and this complex legislation, she has already chastised many members of her own parliamentary party who ask silly questions.

That does not surprise me.

We know the talent bank that existed there.

That is easily done.

I will ignore the combined weight of the opposition.

I welcome the provisions with regard to development workers. My son works in Zimbabwe and he would never forgive me if I did not welcome any improvement in his financial status, poor as he is. Ireland achieved a wonderful reputation abroad on the backs of such workers. Their remuneration is pitiful and the State should do anything it can to alleviate their circumstances when they return. I have often wondered about the effectiveness of our embassies abroad. They do not help to send newspapers to our people in other countries. Perhaps I should discuss this matter with the Tanáiste. I welcome this measure and I am sure it is welcomed by all sides.

In relation to share fishermen, I bow to the experience of the first Minister for the Marine, Senator Daly, and Senator Fitzgerald who is also an expert in this area. I know nothing about fishing, but I used to watch the fishermen from the deck of a supertanker in the Atlantic. When the waves hit the boat, I often wondered if the fishermen would come back up again. I was lost in admiration for their bravery and skill because it is a terrible job. As Senator Daly said, we must welcome anything which can be done to help their financial circumstances.

On behalf of my son, his wife and others, I welcome this development in relation to overseas workers. I am sure they will be delighted when they come home.

I thank all Senators for their warm welcome. Senator McGennis and myself are in two new positions today, having swopped our former relationship — which was stormy at times — in Dublin County Council. We are now in the more rarefied atmosphere of the Seanad.

I hope we also get our pensions.

I will refer to a number of points mentioned by Members. Senator Fitzgerald answered some of the points made by Senator Cregan in relation to share fishermen. This scheme will cover share fishermen who share the proceeds of a boat, not part-time fishermen. It is not a measure to deal with part-time workers, but with fishermen who share a boat's catch. As Senator Fitzgerald correctly pointed out, this issue arose as a result of a long standing case taken by the Revenue Commissioners. The Department of Social Welfare is providing social welfare protection and entitlements for this group of fishermen following the court's decision. This move was not initiated by the Department of Social Welfare.

The Bill permits share fishermen to be treated as self-employed. The point was made, and Senator Daly also referred to this, that there are different views in the fishing industry as to whether its workers are self-employed or if, particularly among the larger boats, there is a contract of employment. As I said, the Department of Social Welfare has taken the advice of the Attorney General in relation to this matter. However, there is not unanimity in the fishing industry as to what the situation should be. This Bill extends to share fisheremen the same conditions, entitlements and responsibilities as apply to self-employed people.

In relation to Senator Daly's comments about the pension entitlements of share fishermen, they are now compulsorily covered as self-employed people. However, I accept his point that many spouses are not aware of the responsibilities of their self-employed spouse and if they die they may leave their survivor or family without cover. As a result, the Department is developing its information section and Senator Daly was involved in this when he was Minister. We are trying to make people more aware of their responsibilities and entitlements and what the system can do for them and their families if they pay into it and if they need income support from the Department of Social Welfare. We will examine how this can be advertised to reach the spouses of fishermen who are not accepting their responsibilities under the scheme.

Senator Cregan made comments about fraud and I appreciate his detailed knowledge about how business works. Although I am a member of the Labour Party, I have also been involved in business. I am sure Senator Cregan will appreciate there are two consequences if employers do not meet their responsibilities by complying with PRSI and taxation requirements. The first is that they have an unfair competitive advantage over other employers and can underbid and undercut them. This is not in the economic interests of the country or certain sectors or regions, one good reason to ensure compliance. The second consequence is that where employers fail to comply with requirements in relation to paying social insurance reductions, employees, who have had a long period of employment in a company, may discover that moneys were not paid when they were due which jeopardises their entitlements. Senator McGennis referred to such cases.

We cannot do enough to stamp out fraud by employers, there are a limited amount of social welfare resources which must be targeted at those most in need. We must leave no stone unturned to ensure there is no abuse of the system.

Section 14 does not relate to share fishermen. It relates to certain prescribed industries, particularly the construction industry, forestry and others where abuse has been established by inspectors from the Department of Social Welfare and where it is important for employers to maintain records on site about all employees to deter fraud. Everyone should be in the PRSI and tax systems so that the burden may be shared fairly and that when people experience periods of unemployment or illness and reach old age they will have their entitlements.

I welcome the comments by a number of Senators about the volunteer development workers. When I worked in Africa for three years I was lucky to get leave of absence so that I had a job to come back to. However, many young volunteers, particularly nurses and teachers, are not in the same position. I take the points made by Senator Magner and Senator Daly that we should examine how the valuable experience which people have gained in developing countries may be used to make such volunteers attractive to employers. Volunteers who go abroad often live in remote areas and they take responsibility at a young age for substantial development programmes.

Senator Daly knows they have huge responsibilities in remote regions. They must deal with natural catastrophes, local governments, national governments, various issues such as planning and, as Senator Magner said, local Irish embassies and their personnel. It is a fantastic experience in terms of building up independence, self reliance and a vast human resourcefulness in people who work in this area.

It is a valuable resource. I accept we should look at ways of using these people when they come home and we should ensure that their period abroad qualifies them for whatever employment opportunities are available on their return. This is preferable to acting as a disincentive, whereby when they went away they were viewed as having disappeared for three years.

Regarding the comments by Senator McGennis, and alluded to by Senator Cregan, in relation to lone parents, the reason I raised this matter is because there has been considerable medial coverage, especially in the UK, of lone parents. They have been subjected, to some extent, to a campaign of vilification. I wish to put the facts about lone parents on the record as I am aware many Senators are interested in this issue. According to our survey, a high proportion, some 60 per cent, of lone parents return to employment, marry or go on to do other things. They do not remain permanently dependent on social welfare.

Nevertheless, we must be concerned, as I said, about very young lone parents, because they are most at risk of long term dependency on social welfare. The various moves by the Department of Social Welfare in opening up schemes fully to lone parents, for example VTOS schemes, have been hugely popular, as Senator McGennis said. The responce has been enormous. This is the best way of giving somebody an options and an opportunity to get back into employment and independence. The Department of Social Welfare is anxious to expand this whole area.

Senator Daly referred to the extension of the share fishermen scheme to people involved in aquaculture. This matter will be examined by my Department, with consideration given to the Senator's comments today.

In the absence of Senator Fitzgerald, I commented on section 14 of the Bill. This section does not apply to share fishermen. It is concerned with certain industries, such as the building industry, construction industry and forestry where there have been some problems, as the Senator may be aware, in relation to contractors, subcontractors and so on.

The section excludes share fishermen?

That is correct. It is a separate section dealing with specific industries, where, according to the Department of Social Welfare, there have been problems with employers fully registering employees for tax and social welfare. Essentially, it is meant to be another weapon in the fight against fraud.

Regarding the specific case referred to by Senator Cregan, I did not have an opportunity to discuss it with the Senator privately and in detail. However, from the details submitted by him I believe it is probably a question of part-time employment. There have been a number of cases like this around the country. It is one of the cases my Department specifically examined and it is something on which we hope to be in a position to take action in a future budget.

I appreciate the difficulties involved for people when they get caught between different elements of the social welfare system. It is one of the reasons the integration of tax and social welfare is a major objective for this Government, because we need to simplify the system, make it more transparent and give people every encouragement to take up whatever work is available.

Perhaps I misunderstood the case referred to by Senator Cregan, but I will discuss it with him privately. There have been a number of problems in relation to part-time workers. I have been on record in relation to the reversal of 1992 measures as saying that one of the most difficult areas remaining to be dealt with is the question of part-time workers. That did not arise as a consequence of the 1992 measures but as a result of the extension of social welfare protection to part-time workers. In other words, something universally regarded as progressive in bringing part time workers into social welfare entitlements has also caused problems for certain types of traditional, casual workers who are not meant to be caught by the regulations. I assure the Senator that it is high on my priorities, and on those of the Minister and the Department of Social Welfare, to find a solution which caters for part time workers, but which also takes into account what may be termed traditional casual workers in areas such as the docks and the meat industry.

I again thank the Senators for their contributions and their kind remarks.

Questions put and agreed to.

Agreed to take remaining Stages today.

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