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Seanad Éireann debate -
Thursday, 28 Mar 1996

Vol. 146 No. 19

Social Welfare Bill, 1996: Second Stage.

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

I am pleased to have the opportunity to introduce this important legislation today in the Seanad. I apologise for my inability to be here earlier due to the fact that I had to attend the Order of Business in the other House.

This legislation is important because its essential purpose is to protect and improve the living standards of the 800,000 people and their 700,000 dependants who are in receipt of weekly social welfare payments. This year's Bill goes further than that. The public perception of the annual Social Welfare Bill can vary a great deal. Some see it, for example, as a technical piece of legislation which does no more than give effect to the general increases in rates of payment announced in the budget. Others see it as a statement of my Department's work programme for the year. Neither perception is accurate as far as this year's Bill is concerned. The 1996 Bill gives legislative effect to the improvements in the rates of payment announced in the budget last January, but it also goes much further than that. It is a genuinely reforming Bill, introducing fundamental and far-reaching changes into the social welfare system.

The Bill makes provision for two new payments — the disability allowance and the one parent family allowance. The new disability allowance to be administered by my Department is a replacement for the existing disabled person's maintenance allowance, currently administered by the health boards. The new one parent family payment will amalgamate the existing lone parent's allowance and the deserted wife's benefit and will remove the concept of desertion from the social welfare system. This year's Bill also provides for radical reform of unemployment assistance, which will make it more attractive for people to avail of part time work opportunities, and for an independent appeals system for people whose claims for supplementary welfare allowance have been turned down by enabling them to make a further appeal to the social welfare appeals office.

By the same token the Bill should not be viewed in isolation but against the background of an ongoing work programme within the Department of Social Welfare. As Senators know, the social welfare system has been developed and adapted over several decades and has served this country well. It is now a large and complex system which provides a vast range of payments and services to our society. The level of expenditure by my Department serves to demonstrate this point well. I have already mentioned that weekly payments are provided to approximately 800,000 persons, in turn benefiting almost 1.5 million persons when adult and child dependants are taken into account. In addition, £2.9 million a day is spent on payments to elderly and retired people; £3 million a day is spent on payments to unemployed people; £1.4 million a day is spent on the sick and disabled; and £3.6 million a day is spent on family income support, including widows, widowers, lone parents, carers, families getting child benefit, families at work on low pay and other miscellaneous allowances.

There is unquestionably a need to reform and streamline this system and to enable it to interact more effectively with other services such as health and employment. It must be acknowledged also that this level of reform cannot be achieved overnight. The Bill before this House goes some distance along the right road, but it will take time to complete the journey. It is in this context that I refer briefly to some of the other ongoing initiatives in the social welfare area as it is important that this House and the public should have a greater awareness of the wider picture.

The Government has committed itself to the development of a major national antipoverty strategy. A high level interdepartmental committee is now working on drawing up the strategy in consultation with, and including participation by, those affected by poverty. This is the first time that an Irish Government has committed itself to set out an across the board national strategy designed to address all aspects of poverty and disadvantage.

The Minister for Social Welfare, Deputy De Rossa, last year piloted the establishment of the Commission on the Family, which is examining the needs and priorities of families today and which will recommend how they can be strengthened and supported for the future. The commission will make an interim report to Government through the Minister for Social Welfare by October of this year and will produce a final report by June 1997.

The work of the expert group on integration of the tax and social welfare systems is now being finalised and I expect that its report will be published by the middle of this year. This report will provide valuable guidance on the steps required to restructure the taxation and social welfare systems. My Department is also preparing a discussion document on social insurance and the PRSI system which will be published shortly and which will provide a focus for debate on this crucial aspect of the social welfare system. The ESRI has been commissioned to review the minimum adequate income rates that were recommended by the Commission on Social Welfare in 1986.

The report of the task force on security for the elderly has been published and last week the Minister announced that he had secured Government approval for a £6.5 million package of new measures to improve security for the elderly. This will bring the total expenditure in this area to £8 million this year. Among the wide range of measures approved are the extension of the budget tax relief measure, at an additional cost of £5 million, to include relatives who install security systems in the homes of elderly people living alone, and an additional £2 million in grants which will be made available this year by my Department to voluntary groups to support the installation of security equipment. I believe that these measures will prove effective in bringing about tangible improvements in the security of elderly people and, equally important, in easing the widespread fear that the recent attacks have engendered among them.

All of these initiatives are underway in parallel with the day-to-day work of my Department. The House will appreciate that it is not possible to reflect all of this reforming work in the Bill. As I mentioned earlier, however, the Bill contains a number of significant measures and I will now outline its provisions on a section by section basis.

The usual provisions relating to the short title, construction and definitions are contained in sections 1 and 2. The general increase of 3 per cent in the weekly personal and adult dependant rates of social insurance and social assistance payments, payable from early to mid-June 1996, is provided for in sections 3 and 4 of the Bill. Section 4 also provides for the special increases of £5 per week in the carer's allowance and the new living alone allowance of £6 per week.

Section 5 makes provision for the further substantial increase in the monthly rate of child benefit announced in the budget. With effect from 1 September 1996, child benefit will increase by £2 per child per month. This means that the monthly payment will now amount to £29 for the first two children and to £34 for the third and subsequent children. Senators will recall the very substantial increases in child benefit introduced last year, which reflected our desire to provide real support for families and to channel resources to those in greatest danger of suffering from poverty. Over the last two years we have provided increases of 45 per cent in respect of the first two children and 36 per cent in respect of other children.

Section 5 also provides for the increase, from £200 to £500, in the grant payable on the birth of twins. It further provides for the introduction of a new grant of £500 payable in respect of twins on reaching four and 12 years of age. This new grant will be effective from 1 January 1996 and has been widely welcomed. It recognises the substantial additional costs for the parents of twins which arise especially at birth and at the relevant ages.

Section 6 of the Bill provides for an increase of £10 in the income limits applied in determining entitlement to family income supplement from mid-June, 1996. The effect of this change is that most current recipients of FIS will receive an increase of £6 per week.

Section 7 sets out to remove what has been widely perceived to be one of the greatest disincentives to taking up work opportunities, the immediate loss of child dependant allowances on taking up employment. This section provides for the continued payment of increases for dependent children for up to 13 weeks to people in receipt of such increases at the full rate who have been unemployed for 12 months or more and who take up employment which is expected to last for at least four weeks. This is a practical measure which will help significantly to ease the transition from unemployment to employment.

A primary focus of the budget was on ensuring that the social welfare system was work and worker friendly. A crucial element of the package of measures contained in the budget related to PRSI reform. The necessary legislative provisions required to give effect to these reforms are contained in sections 8 to 12 of the Bill. These changes will come into effect on 6 April 1996.

Section 8 provides for a number of significant changes affecting both employees and employers. These include an increase of £30 in the 'PRSI Free Allowance' for employees insured at class A. The effect of this change is that these employees will not be liable for PRSI in respect of the first £80 of weekly earnings; an increase in the ceiling up to which PRSI contributions are payable by employees from £21,500 to £22,300 per annum; the reduction in the lower rate of employers PRSI from 9 per cent to 8.5 per cent; the reduction in the main rate of employers PRSI from 12.2 per cent to 12 per cent; an increase from £231 to £250 in the amount of weekly earnings below which the new reduced rate employers contribution of 8.5 per cent will apply; and an increase of £1,000 — from £25,800 per annum to £26,800 per annum — in the ceiling up to which PRSI contributions are payable by employers.

Section 9 caters for self employed people. In the first instance, it provides for the existing PRSI free allowance to be increased from £10 to £20 per week, or £1,040 over a full year. Second, it provides for a reduction in the minimum social insurance contribution payable by the self-employed from £230 to £215 per annum. Third, it provides for an increase in the annual income ceiling, from £21,500 to £22,300, up to which PRSI contributions are payable by self-employed contributors.

Section 10 provides for an increase, from £520 to £1,040, in the amount of reckonable income in respect of which optional contributions are not payable by share fishermen under the optional social insurance scheme. Section 11 provides for a reduction, from £230 to £215, in the annual rate of voluntary PRSI contributions payable by a person who ceases to be a self-employed contributor and subsequently becomes a voluntary contributor.

The extension of class A insurance to community employment workers, currently insurable for the purposes of occupational injuries benefit only, is provided for in section 12. This extension will affect community employment workers in two ways. Those commencing work on a community employment scheme on or after 6 April 1996 will be compulsorily insurable at the class A PRSI rate. Those who are already participating in community employment on 6 April 1996 will be given the option of either paying class A PRSI or of continuing with their existing class J PRSI which gives cover for occupational injuries benefit only. The circumstances in which existing community employment participants may elect to pay class A PRSI will be provided for in regulations but with the proviso that a further change of mind will not be allowed for the duration of participation in community employment.

The sponsors of community employment workers will be exempt from paying the increased employer contribution arising from this extension and they will continue to be liable for their contribution of 0.5 per cent in respect of occupational injuries benefit. Workers participating in the pilot part-time jobs opportunities scheme, administered by the Conference of Religious of Ireland, will be treated in the same way as community employment workers for the purposes of this section. Section 12 also includes provision for regulatory powers to modify the social insurance status of Telecom Éireann employees so as to enable their reduced PRSI status to be maintained in the event of Telecom Éireann forming a strategic alliance.

I referred earlier to the fact that this Bill provides for the introduction of two new payments. The first, the disability allowance, is catered for in sections 13 to 16. This new social assistance payment will replace the disabled person's maintenance allowance which hitherto has been administered by the health boards. It represents a major step forward in our provision for people who are unable to return to work due to illness or who have disabilities.

A notable feature of the new payment arises from a commitment given by the Minister for Social Welfare last year. Under the existing arrangements a lower rate equivalent to half the rate appropriate to a married couple applies when both members of a couple are in receipt of disabled person's maintenance allowance. Under the new arrangements for disability allowance, however, qualified couples will receive two personal rates of disability allowance rather than the lower rate.

Section 13 sets out the eligibility criteria for receipt of disability allowance, outlines the basis on which means will be assessed, provides for the weekly rate of the allowance and for increases in respect of adult and child dependants. A number of transitional provisions are required to effect the transfer of existing recipients of disabled person's maintenance allowance onto the new disability allowance scheme. These are contained in section 14.

Section 15 makes the necessary amendments to the Social Welfare (Consolidation) Act, 1993, arising from the establishment of the new scheme. This section also makes appropriate provision for the inclusion of disability allowance in the system of continuing payments for six weeks after the death of the recipient and provides for a number of other consequential technical amendments to legislation. Section 16 is a standard measure providing that the new allowance will be brought into force by way of a commencement order.

The second of the new payments which are being introduced under this legislation is the one-parent family payment. This new payment will replace and enhance the existing lone parent's allowance and deserted wife's benefit. It is envisaged that it will come into effect from the start of next year.

The new payment has two main objectives. In the first instance, it will remove the concept of "desertion" from the social welfare system. Second, it will ensure equality of treatment for men and women in the area of lone parenthood. The necessary legislative changes required to facilitate the introduction of the new payment are contained in sections 17 to 21.

Section 17 sets out the conditions of entitlement for the new payment. These are broadly similar to those applying currently to the lone parent's allowance scheme. It makes provision for improved earnings disregards for lone parents in employment or self-employment and for a change in the method of assessing the value of capital. In the case of persons who have applied for, or who are already in receipt of, the lone parent's allowance, this section provides for their transfer to the new scheme and ensures that their entitlements will not be reduced by virtue of that transfer.

Section 17 also provides regulatory powers to exempt a social welfare recipient from the obligation to transfer to the Department of Social Welfare or the health board any payments they receive from a liable relative. These powers are being taken as a consequence of the new arrangements being introduced for lone parents whereby a proportion of maintenance payments can be retained towards their housing costs.

Section 18 ensures that the position of women in receipt of deserted wife's benefit, deserted wife's allowance or prisoner's wife's allowance is protected. Similar protection is extended to women who have applied for any of these schemes and whose applications have not been finalised prior to the introduction of the new arrangements.

The deserted wife's benefit scheme will be discontinued for new claimants once the new uniform payment for lone parents is introduced. Special transitional arrangements are being made, however, for women who by virtue of being aged under 40 lose entitlement to this benefit because they no longer have a child dependant and who would otherwise have re-qualified for benefit under the existing arrangements on reaching 40 years of age. Section 18 provides that the entitlements of women aged 38 and under 40 on the introduction of the new arrangements, who would otherwise have re-qualified for deserted wife's benefit on reaching 40 years of age, will be maintained.

Section 19 provides for the appropriate amendments to the social welfare legislation consequent on the introduction of the new one parent family payment. Section 20 provides for the definition of a qualified parent for the purposes of the payment to include a parent who would otherwise be a qualified parent but for the fact that his or her marriage has been dissolved. Section 21 is a standard measure which provides that the arrangements in respect of the introduction of the one parent family payment will be brought into effect by way of a commencement order.

Section 22 provides for the fundamental reform in the manner in which earnings from unemployment are assessed for unemployment assistance purposes. The existing arrangements are extremely complex and frequently act as a disincentive to people faced with an opportunity to avail of part-time or casual work opportunities.

I referred earlier to the work of the expert group on the integration of the tax and social welfare systems. While that work had not been completed prior to the 1996 budget, it was nonetheless in a position to make a number of valuable recommendations which we were able to take on board in drawing up the budget proposals. The reform of unemployment assistance contained in section 22 is the direct result of one such recommendation.

Under the existing legislative provisions, unemployment assistance is payable in respect of a day of unemployment provided the person is unemployed for at least three days in a period of six consecutive days. As a result, someone who works for four or more days in a period of six consecutive days loses entitlement to unemployment assistance for the remaining days in that period. Furthermore, unemployment assistance paid for days of unemployment in the period of six consecutive days is reduced where earnings from days worked exceed a certain threshold or disregard. This disregard amounts to one sixth of the maximum weekly rate of unemployment assistance appropriate to the person's family circumstances plus £15 for each day worked.

Any earnings in excess of the disregard are assessed as means and are deducted from the appropriate rate of unemployment assistance. The resulting amount — the weekly rate less means — is then divided by six to give the daily rate of unemployment assistance. It is this daily rate which is then payable in respect of each day of unemployment in the six day period.

That brief summary of the existing arrangements serves to underline the complexity of the system. We are now setting out to make the system more user friendly. The new arrangements will provide that unemployment assistance will be payable in respect of a week of unemployment rather than in respect of a day of unemployment as at present; a week of unemployment will be defined as any three days of unemployment in a period of six consecutive days; unemployment assistance will be payable at the weekly rate — in other words it will be paid in respect of both days of employment and unemployment in the week of unemployment — and earnings will be assessed at 60 per cent. for claimants with children. For claimants without children, a daily disregard of £10 will be applied for each day worked and earnings in excess of this amount will be assessed at 60 per cent. This daily disregard will protect people without dependent children from losses which they would otherwise suffer.

The impact of these changes is substantial on two grounds. First, by greatly simplifying the existing arrangements, unemployment assistance recipients will be in a better position to assess readily the effect on their net income of undertaking part-time work. Secondly, the new arrangements provide a significant improvement in net income for those who take up such work. To take one example, a married recipient of unemployment assistance, with an adult dependant and three dependent children, who earns £90 for three days work will now be better off by £9.50 per week. If that person earns £60 for the three days work, he or she will better of by more than £27 per week.

Section 22 also provides that unemployment assistance at the higher longterm rate will be payable to claimants who, immediately before claiming UA, were in receipt of the carer's allowance.

Section 23 makes provision for two amendments to the rules governing the means test for unemployment assistance and the pre-retirement allowance. First, it provides that allowances in respect of accommodation provided for a child, paid by a health board under the supported lodgings scheme, will be disregarded in the assessment of means. Secondly, it provides that a specified amount, which will be set initially at £2,000, received under the rural environment protection scheme, will be disregarded in the assessment of means for the purposes of unemployment assistance.

The purpose of section 24 is to incorporate into primary legislation provisions relating to homemakers, made under regulations in 1994, which enable contribution years spent working in the home on a full time basis caring for a child or an incapacitated person to be disregarded in calculating a person's yearly average number of contributions for the purposes of the old age contributory pension. This section also increases from six to 12 years the qualifying age for a child under this scheme.

In addition, section 24 will also remove an anomaly in the existing provisions whereby the year in which a person commences or ceases to be a homemaker cannot, in practice, be disregarded since the person involved is required to be a homemaker for the entire contribution year in order to benefit under this provision. The amendment provides for regulatory powers to award credited contributions in the contribution year in which a person first becomes or ceases to be a homemaker and to prescribe the time and manner of making applications to be considered as a homemaker.

The provisions of section 25 arise from the proposed discontinuance of the deserted wife's benefit scheme — to the extent that it affects women without children — and the deserted wife's allowance scheme. It provides for an extension of the pre-retirement allowance scheme to separated men and women aged 55 years and over who have not had an attachment to the labour force within a specified preceding period.

Section 26 provides that a person who is entitled to a pro-rata old age contributory or reciprocal pension, an EU pension, or a pension under a reciprocal agreement, will be entitled to receive whichever is the higher. A technical amendment to the Social Welfare (Consolidation) Act, 1993, arising from regulatory changes made in April 1995 providing for the extension of full social insurance to new entrants to the public service, is also catered for in section 26.

Section 27 provides for the survivor's pension to be renamed as widow's or widower's (contributory) pension. It also provides that a widow or widower will remain entitled to a pension at the rate which would otherwise have been payable had they not remarried. At present, in the case where a widow or widower remarries and where the second spouse dies, it is possible that the widow or widower may, on reapplying for a pension, fail to satisfy the contribution conditions or qualify for a pension at a lower rate than that payable before remarriage. The pension position of these people will now be protected under legislation.

Provision was made in the Social Welfare (No. 2) Act, 1995, giving effect to the commitment that no spouse would lose out in terms of his or her social welfare entitlements on becoming divorced. A corresponding provision is made in section 28 as a result of the renaming of the survivor's pension to the widow's or widower's contributory pension. Section 29 provides that the provisions of sections 5 to 28 will be brought into force by way of commencement orders.

As Minister of State with specific responsibility for customer relations I am particularly pleased that the Bill makes provision for an independent appeals system for people whose claims for supplementary welfare allowance have been turned down by the health boards. The absence of an independent appeals system has been the subject of sustained criticism for some time past by Oireachtas Members, other public representatives and interest groups. The Ombudsman has also expressed concern about the adequacy of the current arrangements.

Section 30 provides for regulatory powers to give effect to these new arrangements whereby claimants of supplementary welfare allowance who are dissatisfied with the outcome of an appeal to the health board against an adverse decision may make a further appeal to the social welfare appeals office. Section 31 provides for regulatory powers to specify the procedures to be followed on appeals decisions relating to claims for both social welfare payments generally and for supplementary welfare allowance. Regulations to be made under these powers will provide that all such decisions and determinations will have to be given to claimants in writing and will have to set out the reason or reasons for an adverse decision.

An amendment to the existing provisions relating to revised decisions by deciding officers, appeals officers and officers of the health board in the case of supplementary welfare allowance is contained in section 32. This relates to cases where a new fact comes to light resulting in a revised decision being made which reduces a person's entitlement. The deciding officer will now have discretion to decide that the reduction in entitlement should only take effect from a current date where, for example, he or she concludes that the person concerned could not reasonably have been expected to know the relevance of the fact. The purpose of section 33 is to provide an immediate avenue of appeal to the social welfare tribunal — without first having to appeal the deciding officer's decision to the chief appeals officer — to people who are disqualified from receiving unemployment payments by virtue of their participation in a trade dispute.

The Bill also contains a number of miscellaneous measures which I will outline in brief. Section 34 provides for an amendment to section 261 of the Social Welfare (Consolidation) Act, 1993, relating to the award of expenses to representatives of appellants at oral hearings. The practice at present, by agreement with the Incorporated Law Society, is that expenses of £30 are awarded to solicitors and to other professional witnesses in respect of attendance at an oral hearing. This practice has been the subject of a successful challenge in the High Court. Accordingly, the current legislation is being amended to provide that costs incurred by a person in relation to any matter referred to an appeals officer will not be awarded but that expenses will continue to be paid as at present. This section is modelled on the legislative provisions applying to the Employment Appeals Tribunal which similarly does not award costs.

Section 35 is designed to deal with the specific problems facing people moving from short-term payments, such as unemployment benefit, unemployment assistance and disability benefit to old age pension. Under the existing provisions, these short-term payments are only payable up to date on which the person reaches age 66, whereas the payments of old age pensions do not commence until the next following Friday. Section 35 provides regulatory powers under which the short-term payment may be continued until the date on which payment of the pension commences. This will ensure that there is no gap between the two payments.

My Department is also currently implementing a new computer system known as the integrated short-term payment system. The purpose of the new system is to improve service delivery for claimants of short-term payments. This system will encompass the making of supplementary welfare allowance payments, a function which, under existing legislation, is vested in the health boards. The regulatory powers required to enable supplementary welfare allowance payments to be made by my Department are provided for in section 36. It is important to note here that entitlement to these SWA payments will continue to be determined by the health boards as at present.

Section 37 provides for a number of amendments to the Third Schedule of the Social Welfare (Consolidation) Act, 1993, to improve the provisions relating to the assessment of means for social assistance payments. These include, for example, a prescribed amount of earnings in respect of employment of a rehabilitative nature which will be disregarded in the assessment of means for social assistance purposes; provision is being made for the deduction of child minding earnings before the 50 per cent disregard of remaining earnings is applied in the case of lone parents; the disregard of allowances paid by a health board in respect of accommodation provided for children under the supported lodgings scheme in the assessment of means for social assistance payments other than unemployment assistance, which is being provided for separately in section 23; and the disregard of payments up to a prescribed amount awarded by the tribunal in hepatitis C cases.

Last year's Social Welfare Act provided an extension of child dependant allowances, where appropriate, up to age 22 where they were in full time education. This year, section 38 provides for a further extension of that age to the end of the academic year after their 22nd birthday.

Under existing legislation an increase of disablement pension, known as the constant attendance allowance, is payable where the degree of disablement is assessed as 100 per cent and the claimant is so incapacitated as to require someone to attend to his or her personal needs. Section 39 provides regulatory powers for the payment of the constant attendance allowance in cases where the degree of disablement is assessed at less than 100 per cent. The amount of the increase payable in such circumstances will be less than the amount payable where the degree of disablement is assessed at 100 per cent and the rate may vary in relation to the degree of disablement.

Section 40 provides that fees payable to the Comptroller and Auditor General in respect of an audit of the accounts of the social insurance fund will be borne directly by the fund. This amendment arises because the Comptroller and Auditor General is now legally entitled to charge an audit fee.

The purpose of section 41 is to extend, from two to six years, the period within which legal proceedings may be brought against the estate of a deceased person for the recovery of over-payments of social assistance. Under the household budgeting scheme operated by my Department certain social welfare recipients can opt to have deductions made from their payments and paid over to specified bodies, such as the ESB and local authorities. In response to requests from existing participants, section 42 extends the scope of the scheme to include bodies not currently covered.

Section 43 is a technical amendment designed to update a reference in the Social Welfare (Consolidation) Act, 1993, to section 9 of the Minimum Notice and Terms of Employment Act, 1973, which has been replaced by section 3 of the Terms of Employment (Information) Act, 1994. Section 44 provides for an amendment to the Combat Poverty Agency Act, 1986, under which the period within which the board of the agency is required to submit each three year strategic plan may be extended, by not more than six months, by the Minister of the day.

Section 45 and 46 provide for an increase from £178 to £188 in the amount of weekly earnings below which employees are exempt from liability for the health contributions and the employment and training levy. The corresponding annual income exemption level for self-employed people is being increased from £9,250 to £9,730. These changes are being made at the request of the Department of Health and the Department of Enterprise and Employment and will take effect from 6 April 1996.

This Social Welfare Bill is wide ranging and innovative. By providing for increases in weekly rates of payment which are in excess of the projected inflation rate for the year, it will improve the living standards of people dependent on social welfare. It will simplify many aspects of the very complex social welfare system and remove disincentives to employment which currently exist. It will also consolidate the pro-work, pro-worker and pro-family policy directions which this Government has fostered since coming into office. It is the most far-reaching and important social legislation presented to this House for many years.

I commend the Bill to the Seanad.

A year has gone by and another Social Welfare Bill is before the House. I thought the Minister got off to a great start with his introduction to the Bill but when he announced that it introduces fundamental and far-reaching changes in the social welfare system I began to question the whole thrust of his delivery. I have spoken on three Social Welfare Bills, both while in Government and in Opposition, and at times I despair when I look at the structure of the country's social welfare system. If we are to be serious about far-reaching implications which favour work, the worker and the family, tinkering around with the structure of the present system will never achieve it. Any Member of this House, the other House or anybody at the coalface of the problems associated with our communities knows that as long as we are stuck with the present rigid structure we will never achieve social solidarity and a proper incentive for people to find work. We can talk about minimal reductions in PRSI, minimal increases in child dependence allowance or in general social welfare payments, but the basic fact of the matter is that there is no incentive for people on social welfare to take up low paid work. We have reduced the rate of PRSI from 12.2 per cent to 12 per cent and have reduced it further at the lower level, but this is just tinkering with the basic problems.

The different agencies, including Combat Poverty, which have been set up to analyse the problems of poverty, suggest we are not moving in the right direction at present because if the social welfare system was successful, there would not be the present huge array of social problems. At present, 800,000 benefit directly from social welfare payments each week and another 700,000 benefit indirectly through adult or child dependency allowances. This shows how important the social welfare system is to 1.5 million people in this country but we have done nothing in the last 20 years to move with the changing and evolving society.

If you look at the number of women who are trying to leave the household to find work, you can see we have done nothing to address the area of childcare. A woman who is trying to find employment to bolster the household income cannot take up low paid work at present because she is probably worse off by the time she has paid for childminding facilities. This must be acknowledged in the social welfare and taxation systems and all the other employment agencies would suggest that. However, we have done nothing.

The Minister of State suggested here that the changes are far-reaching and fundamental and the Minister for Social Welfare, Deputy De Rossa, stated in the other House that it was a radical Bill. I am confused by what they mean by far-reaching and radical. If these are major changes, we should just drop the word "major" and say it is just a change. We should acknowledge that it is just a change in the right direction as it is far from being radical. By the time we leave this House, if we will have at least acknowledged that the present structure of the social welfare system seems to be going in the same direction it did previously, we will have accomplished something.

I listened to the debate in the other House and have spoken to people who are involved at the coalface with the problems in society. They will tell the Minister straight out, as he is well aware, that because of the present confining rigid structure at the Department of Social Welfare and in Government thinking on the matter we will never achieve what we are trying to do. We spend £4 billion per year on people who are deprived socially or marginalised, yet we have done nothing major to advance their plight. I am not one to be irresponsible and I welcome most of the provisions of this Bill because that is the way the system is structured at present. I implore the Minister to acknowledge this time next year, if he is still Minister, that we are not going in the direction to which society is evolving.

The Minister for Social Welfare and Leader of Democratic Left, Deputy De Rossa, acknowledged that last year's 2.5 per cent increase was a paltry sum; that is as I described it. Indeed, most of the agencies involved in dealing with social problems and working with the communities at large would have suggested it was a minimal increase and an insult to people who are still well below the levels recommended in commissions which were set up to analyse poverty. This year he gave a 3 per cent increase. All I can say is that I welcome the increase, but again it is a slow movement towards addressing poverty.

The St. Vincent de Paul report states that many pensioners, in particular those who rely on State pensions for their means of support, have probably only one coat, one per of shoes and live on a minimal nutritional diet. These are elderly people about which we are to be concerned as a nation with a social conscience. To give them a 3 per cent increase after a 2.5 per cent increase last year would suggest we are not as interested and concerned as we would like to think we are. We can talk about it all day long. There is an old saying: put your money where your mouth is, and we have not done that on this occasion either.

We welcome the child dependence provision. It is a move in the right direction. It puts money directly into areas where we know poverty exists as it is a direct payment to a person with a dependent child. The problem, however, is that the system does not make direct payments in areas where there is no dependent child in households, that is, to old age pensioners and people who are living alone with no dependent adult or child. These are the people for which the budget and this Social Welfare Bill have done little to address.

Indeed, the Minister for Social Welfare set up a taskforce on security for the elderly. I am not sure when this taskforce was commissioned but I presume it was created rather rapidly when the Minister realised that his acknowledgement of a tax allowance for elderly people to install security alarms was berated by the public, the Opposition and everybody who deals with the elderly. The Minister thought he was doing something of major importance to alleviate the suffering and fear among the elderly by giving such a tax allowance when most of these people do not have an income other than from their State pensions. I welcome the taskforce and some of its provisions, but we do not need to set up taskforces and commissions to point out what is an obvious problem — that people who have only a State pension are not receiving adequate sums of money. The onus is now on the voluntary bodies to come up with different ideas on how to secure the elderly in their homes.

There are positive aspects to this taskforce report but, on examination of the statistics, of the 408,000 people aged 65 and over, 60,000 people are in the tax net, 15,000 people are in the tax net and living alone and 100,000 receive a living alone allowance from the Department of Social Welfare. This suggests the vast majority of people aged 65 or over would not have benefited from this famous tax relief for the installation of a security alarm. First, they would not have the means to come up with that sort of money and, second, they would have no taxable income to avail of the allowance.

The family can do it for them.

I appreciate that.

An Leas-Chathaoirleach

Senator Kelleher must be allowed to make his contribution without interruption. Senator Cregan will have his opportunity.

I apologise.

Senator Cregan's contributions encourage me.

We now find the 3 per cent increase does not do enough for the elderly. If the Minister is still in Government next year, he should at least acknowledge this and do something about it. I am not trying to score political points on this issue but it must be acknowledged. It is not good enough for a Minister to sit smugly behind PR machines, set up task forces on the elderly and make promises and then present a Bill that gives a minimal 3 per cent increase when the commissions set up to monitor poverty have stated many times that people on old age pensions are not receiving adequate amounts of money.

Encouraging people to work is an age old problem. People would rather stay at home for fear of losing their medical card, rent differential or other State handouts. This is a big problem. In Cork North-Central, or any other large urban constituency with a large social welfare dependency, people will openly say that it does not pay them to seek low paid employment because they will lose their entitlements and almost immediately enter the tax net. While I welcome the few changes made to child benefit, they are not enough. This Bill is not far-reaching enough and will not revolutionise the social welfare system. It is only tinkering with the problem and juggling a few figures.

Not enough was done to deal with the problem of young people being forced to leave their homes. Far too often we have heard about a young person having to leave their home to qualify for unemployment benefit or rent allowance. If this Bill is to be pro-family, that measure must be discouraged to ensure that people stay at home and are not forced to leave because of financial necessity.

If we are to be serious about low paid workers, we must examine our child care system. The Nordic countries have a successful child care policy and operate State créches. If we at least encouraged people to work by giving them tax allowance for child care facilities, it would bring that area out of the black economy. It would also encourage people to set up créches, which creates employment, and would allow people to avail of those facilities.

We talk about encouraging people to leave their homes and work. However, the biggest obstacles to women — the Commission on the Status of Women and the Oireachtas Joint Committee on Women's Rights have acknowledged this — entering the workplace are that they cannot afford current child care facilities and do not have the expertise currently required, because they were minding their children, to advance their education. That area must be examined.

It is the responsibility of every person to highlight this issue, but little has been done about it and it does come under the Minister's auspices. Nobody is trying to evolve our society from its present standard and advance every-body's case. I will be tabling several amendments on Committee Stage to highlight some of the inadequacies and anomalies — all of which the Minister stated had been cleared — in the Bill which the Minister said was revolutionary and far-reaching.

I am disappointed with the levels of increases. I do not understand why the Minister is only giving a 3 per cent increase across the board. While I realise he must find the money from somewhere, this will victimise a person without a child or adult dependant. However, the Minister bolsters people's incomes with increases in adult and child dependant allowances. The Government is reneging on these people.

I look forward to a constructive Committee Stage debate. The two sections of our community who are suffering most are women in the home and old age pensioners. Women seeking employment or trying to further their education have received nothing from this Bill. The Minister has always tried to answer any questions I raised on Committee Stage and I hope he will continue to do so.

The increase in child benefits to £29 for each of the first two children and £34 for each child thereafter is welcome. They are direct and immediate payments to poverty stricken people. The increase in child benefit for twins to £500 is also innovative and welcome. However, these are only PR issues as opposed to tackling the real problems. While there are not many twins in our country, this measure was announced in a blaze of glory. We still welcome it. The provision giving twins another £500 when they reach 12 years of age is also welcome because it acknowledges that there is an extra burden on rearing two children. One must allow for these issues.

However, this Bill is far from revolutionary and describing it as far-reaching is a farce. It only tinkers with a rigid social welfare system that must change to cater for our evolving society.

This is one of the largest Social Welfare Bills that has come before us for some time. Senator Kelleher is correct when he says there is a need for further examination of the Bill on Committee Stage.

I am particularly impressed with the thinking behind what can be achieved by this Bill. For many years we have discussed the structure of the Department of Social Welfare and the money it consumes. It may be one of our biggest expenses, although the Estimate for the Department of Education could be higher. We are spending approximately £4.4 billion a year, or over £12 million a day, on social welfare payments. Is that money going to the people who need it most or could it be used in a better way to create a higher standard of living? I felt we could have done better in many areas.

I am happy that we are at last discussing something positive, particularly in section 22. Members of this and the other House and relevant bodies have made recommendations to create initiatives to help people on social welfare to find work. I was one of the Senators who pushed hard for this over the years. Deputy Woods, in particular, had a constructive attitude to rationalisation of the social welfare system. We say the system has been rationalised, but I must ask if we are really trying to rationalise it or create the best system. I do not think so.

Arguments could be made about the methods of payment, whether there are too many types of payments or too many payments paid in advance or a week behind. Why can we not further simplify the system? I admit there was a time when there were 36 different types of payments to children. It has been reduced to six or eight because we argued there were too many. That represents a simplification of the system, but the number of payments is increasing all the time. Unfortunately, there are over 1.2 million people who are dependent on our social welfare, which is supported by approximately 3.2 million people. That is a sad reflection on us and it is sad that we cannot create a better system. Senator Kelleher made that point, but one must ask how we can change it.

Section 22 is concerned with changing the system. I compliment the Minister and the Department officials on that. Section 22 provides that if people go to work, we are prepared to assist them. We did that with the supplementary allowance for people in low paid work. Unfortunately, I do not agree with the way the system works. I have always maintained, even with other Ministers, that if one is giving an extra benefit it should be given directly. Why should people pay PRSI and get a payment the following morning? Why should an employer or employee pay PRSI and have somebody else get it back through another system the following morning? That is not simplifying the system; it confuses the system. I am not saying the system is wrong. The idea of the system is good but it is implemented wrongly.

Disability allowance is coming back from the health boards and that is long overdue. There was no reason why health boards should decide those applications. Their decisions were not always in the best interests of the claimants. That payment is now being brought into the welfare system, meaning that the money which will not be paid out by the Department of Health this year will be paid out by the Department of Social Welfare.

We must continue the debate as to how we can create a better system to enable people to do something for themselves. A 43 per cent increase in child welfare allowance over two years is very good. This recognition of the family was overdue. For many years Governments concentrated on individuals. We now recognise that the family must be kept together and we are making this payment. The increase was not considered by other Governments. A mother can now point to the benefit she gets for each child, which is £29 per month for the first two children with an increase for subsequent children. That is not a small allowance and it goes directly to the mother every month. Up to some time ago the children's allowance was given to the husband, but we changed that.

The welfare system requires radical changes. We should be constructive and say where we think those radical changes should be and where we think the money could be better spent. That is why I mention section 22. It is opening up the system and creating an opportunity for us to say we will assist with our money. We must eliminate the black economy in our society; we cannot deny that it exists. It is a sad reflection that we are spending £12 million a day and we cannot get on top of the black economy.

Section 22 is a step in the right direction. We made changes in the last three years, but on a smaller scale. We should do more to rationalise the system. I have always maintained that a person going to work should have a work identification card, which they could get from their local exchange or barracks. Unfortunately, one could not mention identification cards for many years. Now, because of Deputy Woods and others, every 17 year old is issued with a card bearing their PRSI number. That is a recognition that each person is ready to work and has a PRSI number.

Every person in the nation now gets that plastic card. My own sons and daughters have cards with their PRSI numbers even though they are still at school. I am not saying they will get work easily but it is a recognition of their situation. We should go further if we want to eliminate the black economy. Senator Kelleher mentioned that employees can lose benefits. I have argued for many years that if a person wants to work for two days they will lose all benefits.

Would somebody explain the difference between unemployment assistance and unemployment benefit? Can we not simplify it? Why can everybody not get the same benefit? There should be no difference between assistance and benefit. The Department will say that one person is entitled to the benefit while the other person is entitled to assistance because he did not make the necessary payments. This should not be the case, particularly as regards unemployment payments. We should simplify this as we have done in other areas.

Section 22 opens up new avenues and creates opportunities, which is welcome. An adult with an adult dependant and three dependent children who is in receipt of unemployment assistance and earns £90 for three days work will now be better off by £9.50 per week. If this person earned £60 for the three days work, he or she would be better off by more than £27 per week. In other words, if one earns less, one can be better off by £27 per week while if one earns more, one will be better off by only £9.50 per week. Where is the initiative there? The Minister can correct me if I am wrong.

If a person earns £90 for three days work and is on unemployment assistance, he or she is better off by £9.50 at the end of the week, or £3 a day. There is no logic in working for £3 a day. The Department is giving the impression that a person is getting £90 but he or she will only be £3.50 a day better off. If the person earns £60 for the three days work, he or she will be better off by £27 per week, or £9 a day, even though he or she is getting less money from the employer. Who are we assisting? Are we assisting the employee or the employer? Are we telling this person that they should lose the three days benefit? Can we not simplify the system and tell people that if they earn £50 per week they will retain their benefits?

In other areas we give a supplementary benefit to a wife because her husband is in a low paid job. Section 22 is trying to create a new scheme, but we are actually embarrassing the person who wants to work for £3 a day extra. I want them to get £90. If he is earning £90 let us take a percentage of his unemployment assistance. I do not want to create a situation where the State should constantly be saying in the Social Welfare Bill that it always wants to assist. I want the person to get a full week's wages and I do not want the State to be involved at all.

While the section is particularly conscious of what it is trying to create, that part of the Minister's speech is questionable because it is only worth an extra £3 a day to go to work. However, if you are getting £60 or £90 for three days' work it is worth £9 a day to go to work, in which case you would be much better off. It creates a situation where the employer is being told not to pay a worker so much. I do not want the workforce to be used by employers who do not want to pay. The Minister should not allow that to happen.

Young people are in an unfortunate position. I took part in a debate on the Committee on the Family concerning young people who have to leave home because they are not entitled to unemployment benefits. We are now paying up to £25 if people have been means tested. We have to be very conscious of this area even though changes have been made by Ministers over the last few years. Too many of our young people are leaving home because they do not get benefits, and it is costing us more indirectly in supplementary rent allowances. If the Departments of the Environment, Health and Social Welfare do not realise that this is happening they must have their eyes closed. I do not say such things lightly.

As a member of Cork Corporation and Cork County Council, and a former member of the Southern Health Board, I am conscious of the amount of money now being paid to young people. Not more than a month ago, we received a report stating that over 5,000 people aged 18 to 21 years are receiving an average rent allowance of £60 per week each. I know students receive different payments, but these people have been assessed by the Department of Health, the health board and the local authority as being entitled to accommodation. The only way one can receive the supplementary rent allowance is by being assessed.

The total rent allowance bill increased from £30 million in 1993 to £44 million in 1994 and to approximately £60 million 1995. Rather than paying £60 a week to landlords for private accommodation for each of the 5,000 young people, it would be better to give them a home assistance or unemployment allowance to stay at home where they would be better protected and looked after. They should not be left alone at the age of 18 to 21 because we are not prepared to assist them. This is disgraceful. The figure of £60 million for rent allowances will increase this year to approximately £70 million, an increase of over 50 per cent in three years.

Why do we not recognise that young people have to leave home — even if their parents are well off — because they do not get assistance or recognition from the State? It would be better to let young people stay at home, give them some money to assist them to seek work, and do part-time work as covered by section 22. That would be better than spending more and more money on accommodation for young people living away from home. There is no logic in paying each person £60 to £80 a week rent allowance.

Senator Kelleher mentioned child care facilities for people who wish to enter the workforce. I make no apology for saying that the mother is the best person to mind the child. That is obvious. There is no doubt that she is the backbone of society. Of course the mother should be in the workplace, but the most important thing for a child is to have the mother in the workplace at home. The mother at home should be paid by the State. We have provided for children, for people on home allowances and, after much pressure in both Houses of the Oireachtas, for carers who look after the elderly. We should, however, recognise the right of mothers to payment in the home. I am not saying they should stay at home but if they are prepared to do so they should receive a monthly payment. What is wrong with recognising their work? They are doing an excellent and important job.

Unfortunately, many mothers have to work because there are fewer jobs for male workers. More and more women like to work, even on a part-time basis, and that is good for them. It broadens their minds and they are comfortable with getting out of the house for a few hours every day. We should recognise the importance of the family in society. The proof of that was in the last referendum on divorce. The 50/50 vote on that issue proved that there is great recognition for our children and for the family. We should not be afraid to stand up and say that not enough is being done for mothers looking after their families at home. Mothers say that not alone do they look after children but that their husbands are the biggest children of all. Perhaps they are right.

Should we have direct payments for mothers to stay at home until their children reach a certain age and can be minded by others? Why not give tax benefits? Perhaps there are areas other than crèches where tax benefits should be given sooner. Unless we give such tax benefits it may not be feasible for a person to go to work. I do not for a moment want to undermine the idea of women in the workplace because their participation in the workforce has broadened women's minds.

The Social Welfare Bill is a good one but the welfare bill is getting bigger and bigger. The welfare structure is becoming increasingly expensive. In addition, as the Minister said, it is increasingly becoming part of the general system, given the level of expenditure on it; perhaps we should consider amalgamating PRSI and PAYE. Why not? Why is it that if one earns £40,000, one only pays PRSI on the first £26,000, but one pays it in full if one earns under £9,000? The rich are being made richer while more is being taken from the poor. People are asked to do work for £3 extra a day in assistance. A sum of £12 million is spent every day and perhaps £4 million a day could be saved if the system was reorganised and the people who really needed assistance received it. This is the reason the black economy is doing so well. The system is working against people who want to take up employment.

As Senator Kelleher and others said, and as I said many times, a monster has been created. People become trapped in the structure and if they get £5 too much, they are forced outside it. This must be stopped and the people who want to help themselves should be looked after. However, given the system which exists, perhaps we have reached the stage where the Department of Social Welfare does not have the right to do this and the Department should give the Minister for Enterprise and Employment a certain amount of money for job creation.

Under the current system the Minister, the Minister of State and other Ministers want to help matters, but they cannot greatly assist in creating a situation where fewer people are receiving social welfare. For example, £350 million is spent on FÁS schemes. Are they succeeding? Who is getting that money? Perhaps a certain amount of money could be taken under section 22 and tied in with some of the funds devoted to FÁS schemes to create a much better system. Money is not being used correctly by all the Departments to create a better society. The structures are established in such a way that the Bill must take a certain approach. The system is becoming increasingly large and complex, but people then say that those who deserve help most are not receiving it from the Department of Social Welfare.

Perhaps the people who should be getting more are not receiving it. I am very conscious of elderly people living alone. Some are well cared for with the living alone allowance and the fuel allowance, which has been increased again this year. We cannot do too much to ensure the elderly are looked after, but perhaps in some areas this is done in such a way that people are encouraged to live alone. Perhaps a society of people living alone is being created, because if one is not living alone one does not receive benefits. A husband and wife who are over 65 or 66 years of age do not receive the same benefits as a person living alone. The elderly are recognised as individuals and they receive benefits if they live alone, such as free electricity and a free television licence. However, it is as cheap to give these to a couple as to individuals. The money they receive is relevant to the single amount a person living alone receives.

It does not happen any more since the introduction of equality legislation, but up to four years ago a couple received proportionately much less money than a person living alone. It was reckoned that two could live together more cheaply than one alone. This is probably correct, but do people who worked all their lives and paid social welfare contributions before PRSI was introduced in the early 1970s receive enough recognition? Do they receive enough and are people taxed too early?

Many aspects need to be changed and people should do better in some areas. I am glad children will do better as a result of the Bill and its predecessor. The Minister, Deputy De Rossa, is largely responsible for this. Other Ministers considered it, but no recognition was given to children for far too long. The moneys in the Department of Social Welfare should be used in a better way to create more opportunities under section 22. While that section is worthwhile, perhaps it should be examined to see whether more can be done with it. More could be done if it is opened up, but this aspect can be discussed on Committee Stage.

I mentioned the following matter many times previously, both in the House and at parliamentary party meetings, and I ask the Minister to consider it. The system under which PRSI and PAYE are two separate payments should be abolished and a single payment should be taken from every employee. This should not be a percentage of earnings, but rather a fixed amount. This would ensure that those who are less well off and earning less money pay much less. It should not be the case that somebody earning over £26,000 does not pay any more PRSI. If a person is making that much money, he or she should be in a position to pay more. There is no reason why they should not pay PRSI on amounts over £26,000 while a person earning £6,000, £8,000 or £9,000 — £160 a week — pays PRSI on the full amount. These matters should be examined.

I welcome the Minister's statement. The Department of Social Welfare has been blessed by the amount of energy put into it by the current and previous Ministers. This must also be a source of great relief to the departmental officials. It was previously one of the most complicated Departments in the State but its procedures have been greatly simplified. This is of benefit, not just to social welfare recipients, but also those working in the Department. It must have been most unsatisfactory in the past trying to explain the inexplicable to people applying for benefits. It must be recognised that huge improvements have been made.

Training in the Department obviously has been of a high level because I rarely receive complaints these days from people about the way their queries were handled by departmental officers. This is a joy and one of the reasons I was asked, when I first came into the Seanad, by the forum for people with disabilities to request the transfer of the disabled persons allowance from the Department of Health, where it was administered by the various health boards, to the Department of Social Welfare. They stressed that they felt they would be treated more justly by the Department of Social Welfare and I am delighted this area has been taken over by the Department. In the past it depended on how the health boards decided to administer the scheme and differences existed.

Last year I said the family income supplement should be paid to those with part-time jobs and in job sharing arrangements. I hope progress will be made in this area soon because women who are lone parents must carefully juggle the problems of running a family on their own while at the same time trying to bring in more finance.

These imaginative changes, which will cost the State nothing, are most welcome. This is an excellent Bill and it is very good to see time spent in the home being recognised for the first time. The word "homemaker" is used in section 24, which is the first time I have seen it used in a Social Welfare Bill. I agree with much of what Senator Cregan said about the need to seriously consider payment for those working full time within the home. We recognise this within the Constitution, but that is as far as it goes.

Will the Minister ask the Minister for Finance to consider the possibility of making child care and elder care allowances tax free? This would avoid in many cases, particularly in regard to elder care, people having to give up jobs to care for someone who cannot be left alone all day. If they could receive an allowance for someone to mind this person while they were at work, it would create employment. People involved in care of the elderly told the Joint Committee on Women's Rights what a serious problem it is. One woman said she thought she had given up work for three months but ended up giving it up for eight years. She then found she was virtually unemployable and had great difficulties in re-entering the workforce.

Children grow up, but what may seem a short term illness with an old person may turn into a very long-term problem. Will the Minister point out to the Minister for Finance that that end of the care spectrum should be looked at first as it would create employment and save on carers' allowances? I hope there will be some progress in that area next year. The child care area is also very important, but at least it is more predictable. The really serious aspect of elder care is that it is so unpredictable. It is an area in which the State would not incur a huge financial loss; in fact, there would probably be a gain because people would be brought into the workforce and others would not have to give up highly paid jobs in which they pay a great deal of tax.

Senator Cregan and Senator Kelleher discussed the worthwhile changes in section 22 very comprehensively. Everything possible must be done to encourage people to take up employment. One of the main problems I heard about when discussing these situations with unemployed people who had been offered employment of uncertain duration was the loss of the medical card. These areas are very important and must be supported. It is good to see imaginative changes in those areas.

The current employment situation is dreadful because many people do not know how long they will be in employment. I do not know how anyone can take out a 20 year mortgage nowadays because they have no idea if they will still be employed in 18 months time. We must constantly look at the changing pattern of employment. Most of it is very undesirable but we have very little control over it. This does not just apply to people in short term jobs in the building trade, depending on the vagaries of the weather. People employed in major companies are also seriously affected, perhaps due to international changes.

I am very pleased with the provisions in section 17 for one parent families. It is good to see so much stress being put on this area because everyone recognises it is far more difficult to bring up children on one's own than with two parents. One parent families have been very generously and wisely dealt with in this section. The more problems we can prevent developing in these areas and the more stress we can relieve the better. The shaping of our society depends on how our children are brought up and the education of the child within the family is most important. Anything which makes it easier for people to maintain as stable a family situation as possible, despite the loss of one parent, is most important. I greatly welcome the change of emphasis in this area. A few years ago widows were lucky to get any consideration, never mind prisoners' wives, deserted wives and single mothers. It is now recognised that single parents have to bring up the next generation on their own and we as a society are bound to make more of a contribution to these parents. There has not just been a financial change but also an enormous change in attitude.

A State old age pension and its associated benefits are of far greater value to many people than private pensions. When push comes to shove — not that I am that old but I can speak from my experience of dealing with elderly people — the State has done far more for many people than private pension funds or the VHI would have. Many people thought my criticisms during the debate on the VHI were rather unkind, because we have all been relieved to have our medical bills paid by the VHI. However, an allowance of £10 towards physiotherapy costing £30 is quite outside the reach of many old people, who must rely on the State facility which is provided for free. The amount of VHI aid for nursing care would not pay a fifth of the cost of a nurse. Such elderly people would be sunk without State care because, although they are within the private sector, they cannot afford to pay the excess.

Could the Department look further at trying to include more people receiving private pension schemes which have the same monetary value as the State old age pension — they are not a huge number — within its benefits? Small things matter when one is old, such as receiving a free television licence if one is in receipt of a State pension. It would be terrific if such small benefits could be extended to such people and I doubt it would cost an enormous amount of money. I am not asking for these benefits to be extended to every old person because some people receive enormous pensions from large corporations — almost as much as they earned — but only to those whose private pensions are equivalent in value to the State pension — for example, those who are entitled to medical cards but not to smaller benefits such as free telephone rental. Those who can get medical cards, for example, are still unable to get small things such as free telephone rental.

Small benefits could be introduced year by year. I like to give a target so the Minister could start next year with the television licence or, if he prefers, with the telephone allowance, although that would cost a little more. He can introduce a provision whereby people in private pension schemes, which yield much the same income as the State scheme, would be entitled to some of the fringe benefits available to those within the State scheme. I finish my contribution with that small request.

This is an excellent Bill and I am sure most Members of the House will welcome it. The different thrust in how we approach social welfare in this country is to be welcomed. I visited Romania last week and when I told the Romanians about our social welfare system their faces went quite ashen. They asked who was paying and I pointed out that we pay 48 per cent tax, which made their faces go even more ashen. However, by treating those who are most vulnerable in our society in as generous a manner possible we have created a more equitable society and a society in which I prefer to live. It is a system which benefits the country. I warmly welcome the Bill and applaud those who were involved in its formulation.

I welcome the Minister and congratulate him on his involvement in producing important and innovative legislation. The annual Social Welfare Bill is one of the most important Bills discussed in this House. Its provisions impact directly on the living standards of a significant proportion of our citizens. Consequently, it is important that we discuss the Bill thoroughly and I look forward to the forthcoming debate.

Obviously, one would like to comment on all measures in the Bill and highlight other measures which have not but should have been included. Unfortunately, that is not possible. Time restraints are a factor but the most significant problem is the complexity of the code. I note that the Minister intends to transfer responsibility for the administration of the disabled persons maintenance allowance from the Department of Health. I have encountered this problem on many occasions in my weekly clinics and this is a welcome move. It will make a major difference to the recipients of this allowance. The new payment is to be known as the disability allowance.

There was no logic to the system whereby social welfare functions were carried out by health boards ultimately responsible to the Department of Health. I look forward to when the supplementary welfare allowance scheme is also administered by the Department of Social Welfare and I hope the Bill's provision to enable people to appeal supplementary welfare decisions to the social welfare appeals office is a step in this direction. It is imperative that the supplementary welfare allowance scheme is administered by the Department of Social Welfare in the near future.

Notwithstanding the completion of such a transfer, the code remains too complicated. In a recent report to the Select Committee on Finance and General Affairs, the Comptroller and Auditor General reported that he had identified 42 different means tests. While I accept that in some circumstances different means tests should apply, the existence of 42 such schemes is clearly unnecessary. I will be interested to hear the Minister's comments on that matter. It is hardly surprising that both the providers and users of the system find it difficult to navigate. Recent years have seen social welfare advice centres becoming an industry in themselves. The computations of the Department of Social Welfare are always a source of major concern to the unfortunate recipients of payments.

The Minister has made a start in this Bill towards the development of a more coherent and understandable system. However, he would be the first to admit that much work needs to be done. Comprehensive reform will take a number of years. The performance of Fianna Fáil in this regard is complex. Having presided over the Department for seven years uninterrupted, they more than anybody else were in a position to effect fundamental reform in this area. However, now that they are in Opposition they expect the current Minister to effect the same change in less than a year and a half. This confusion does not merely apply in the area of social welfare. Despite having also spent seven years in control of the Department of Justice they now expect the current Minister to legislate for their failures in that period.

This Social Welfare Bill provides for a general increase of 3 per cent in social welfare payments. On budget day the Minister for Finance expected an annual rate of inflation of 2.25 per cent. Since then reports have suggested that this year's figure may well be lower. One way or another, this year's increase in social welfare payments is substantially ahead of inflation. In addition to increases in general payments, the Minister has also increased child benefit by £2. This represents an increase of £9 in only two years. The Minister is to be congratulated. Child benefit has increased by almost 85 per cent since my party entered Government in 1992. This money is paid directly to women and it represents one of Government's best achievements in recent years. This is particularly the case when compared to the performance of the Fianna Fáil/PD Government which in its last year in office did not deem it necessary to increase child benefit at all.

I welcome the changes in qualification requirements for unemployment assistance. These changes are an important aspect of the Bill. Part-time work is growing in our economy and throughout the European Union. While there is a need for full-time jobs, the growth in part-time employment facilitates the entry into the labour market of people who otherwise have been precluded from entering it. In particular, part-time work often facilitates women with parental responsibilities. It is appropriate that, rather than trying to buck this trend, we make the best possible use of it and these measures go a long way towards doing that.

There are other welcome measures in the Bill to tackle unemployment. These measures are aimed at tackling poverty traps by targeting tax reform at the lower paid. The increase in the PRSI disregard from £50 to £80 should have an immediate impact for low paid workers. This complements the reduction in the lower rate of employers' PRSI from 9 per cent to 8.5 per cent and the reduction of the main rate from 12.2 per cent to 12 per cent. While the latter is not significant, businesses will also benefit from the reduction of the corporation tax rate on the first £50,000 of profits from 38 per cent to 30 per cent.

These measures are aimed at reducing the cost to employers of taking on new labour. They are part of the pro-employment package announced in the budget and contained in this Bill. The Bill will give effect to a number of measures to tackle long-term unemployment. The retention of child dependant allowances for a 13 week period after a long-term unemployed person takes up work is particularly beneficial, especially as those involved will also be able to retain their medical card entitlement. This is a good Bill for jobs. The loss of these benefits was one of the greatest deterrents for a person taking up employment. The retention of the medical card will have a major effect on the return of the long-term unemployed to employment.

Other worthwhile provisions in the Bill include the introduction of the one parent family allowance to replace the existing lone parent's allowance and deserted wife's benefit. This provision is important in so far as it eliminates the discrimination against men in this area. Section 24 confirms the Minister's commitment to the family. This section calculates the time spent at home caring for children for the purposes of determining eligibility for the old age contributory pension. This commitment is confirmed by the increase in the income limits for qualification for family income supplement. I welcome the recent attempts to increase the number of people who avail of this scheme. I also welcome the substantial increase in the carer's allowance which brings it into line with the recommended amount proposed by the Commission on Social Welfare in 1986. Many people in receipt of carer's allowance have expressed their delight at this increase.

Considerable progress has been made in recent years in bringing social welfare payments into line with the recommendations of the Commission on Social Welfare. In 1986 some payments were only 64 per cent of the recommended amount, but now there are none under 92 per cent. I hope the Minister ensures that all payments are at this level as soon as possible.

I welcome the changes in section 27 in relation to the widow's and widower's pensions. I have had representations from constituents who are unhappy about the title of survivors' pensions. The Minister is correct to make this technical change. It is a progressive step to ensure that a widow's or widower's contributory pension is protected in the event of a second marriage. I draw the Minister's attention to a case where a woman neglected to apply for a survivor's pension until three years after the death of her husband. As a result, she was entitled to only six months' retrospective payment. This is nonsensical, particularly when the Department would have been prepared to pay the full amount of money had she applied in time. This woman lost approximately £10,000 as a result. She is being penalised for the trauma of her bereavement and that is unacceptable.

I congratulate the Minister for introducing this Bill. In an age when social rights are being questioned in Europe, it is good that the Government is expanding rights and entitlements and promoting social cohesion. This will be a fundamental issue during the next general election and I am confident the public will support the Government's stance.

I join with other speakers in welcoming the Minister to the House. The living alone allowance should have been increased. In the budget the Minister for Finance attempted to address the security issue for those living alone. However, giving a tax free allowance to people who are not in the tax net is of no benefit to them. This matter was then referred to the task force on security for the elderly which published a report stating that a dependant could claim the allowance. However, that does not address the problem for those living alone. The only way to help them is to increase the living alone allowance.

I welcome the opportunity for people who apply for supplementary welfare allowance but who are not satisfied with the reply to appeal the decision. I am disappointed that provision was not made for an independent appeals system for medical cards. Appeals are currently dealt with by health board officials and by people who made the initial decision. I ask the Minister to examine this matter and to ensure a more equitable system of appeal for someone who is refused a medical card.

Section 12 attempts to change PRSI insurance, but I am afraid that could be unconstitutional. The Minister is attempting to apply public service PRSI rates to private employment. This provision was included to accommodate a possible new shareholder in Telecom Éireann. It seems that the lower rate of PRSI will apply, although it will be a private company which will become a partner in Telecom Éireann. I do not understand why we should accommodate an outside company by giving them such concessions. If it becomes a partner in the public service, it, not the Government or the taxpayers, should compensate the workers.

I am pleased to have the opportunity to discuss this important legislation because it affects 1.5 million people who are in receipt of social welfare payments from this State. This year the Government will spend in excess of £4 billion on social welfare. We must ensure that the recipients get the best possible deal and that the taxpayers are also satisfied with the return they get for their taxation.

Each year we have this opportunity to discuss social welfare issues. We must look at the challenges posed by the large numbers on social welfare and the scale of poverty in our society today. We hear so much about the country's great growth rates one would think we had a wealthy economy. However, we also have substantial numbers of unemployed which is causing a huge demand for social welfare payments. We must examine the unemployment issue.

Everyone agrees that our tax and social welfare systems must be integrated. The Government has set up a committee, under the chairmanship of Donal Nevin, to look at this. At what stage is its deliberations? When will it be reporting its findings to the Oireachtas? It is an issue we must address quickly.

The taxation system is very anti-work. High rates of personal taxation are discouraging people from moving into paid employment. In addition, the high rates of employers PRSI are discouraging employers from creating jobs.

Debate adjourned.
Sitting suspended at 1 p.m. and resumed at 2 p.m.