Seanad Éireann debate -
Thursday, 27 Nov 1997

Vol. 152 No. 16

Adjournment Matters. - Social Welfare Bonus.

Mrs. A. Doyle

I thank the Minister for coming to the House to deal with the issue of Christmas bonuses. I have a copy of a recent press release issued by the Minister so I am aware of the state of play this Christmas. This scheme has been well received by long-term social welfare recipients on contributory and assistance payments. Over 722,000 people and their dependants will receive a Christmas bonus this year that will cost £41 million.

There is a difficulty with the categories not included in the Christmas bonus scheme which is inequitable. We should be fair to all categories. This scheme was discretionary when it started, but once anything is given under the social support system, it quickly becomes a right. It is now a part of the budgetary planning of families who depend on social welfare. Among the categories who receive a Christmas bonus are families on employment support payments, such as the back to work allowance, and those who are on CE schemes.

If people are working on a CE scheme, they earn little above their social welfare payment and receive a Christmas bonus. If they came off a CE scheme two weeks ago, having completed 12 months, they will get no Christmas bonus. They miss out by a week and in many cases are on a short-term payment, usually reduced unemployment benefit or short-term unemployment assistance.

This is hard to explain to someone who got a Christmas bonus last year on a CE scheme and who is taken off it because they can only participate for 12 months. They are now on less money, with the same number of children to feed, four weeks away from Christmas. The logic of this defeats them and it is hard to defend the principle on which the scheme is operated.

We are trying to encourage people to work and our social welfare system should be constructed to do this. This problem is a disincentive. I came across an example recently of a woman from Wexford with eight dependent children. Her husband finished a 12 month CE scheme three weeks ago. They are now on reduced unemployment benefit, which is not much more than the unemployment assistance rate. Last year while he was working on the CE scheme, they got a Christmas bonus, which mades a difference when providing for such a large family. This year he will not get any Christmas bonus. Ironically, he has been offered a place on another CE scheme, as in certain circumstances someone is offered another scheme without having to wait the requisite time to qualify. He is reluctant to go back on the CE scheme which is starting on Monday week in Wexford. He reckons he will be taken off the scheme before next Christmas and will again miss out on the bonus.

This bonus is important to people, particularly those with large families. The timing of its beginning and end can be critical to them having a worthwhile Christmas. If the Minister or I had eight children and very little money, we would like to be in a position to provide the basic necessities so they could enjoy the same Christmas as their peers.

I ask the Minister to look at the matter of supporting people who want to work. Those who come off a CE scheme should be entitled to a Christmas bonus, if they are entitled to one when they are on it. There is no logic in the present system and I am not sure how it evolved. Many social welfare support schemes evolve and we tack on extra categories every year. There are incentives to keep people on schemes — they are allowed to keep their medical cards, etc. but we build up secondary benefits which disadvantage people further down the road. This is what has happened here without any deliberate intent.

We want the long-term unemployed to participate in CE schemes. However, when they come off them, they should not be disadvantaged when compared with those on long-term unemployment assistance who have never participated in a scheme. Can the Minister explain the logic of denying them the Christmas bonus if the scheme finishes two or three weeks before Christmas?

We need a good social support system to help those who cannot help themselves. As our economy grows, the State must provide for these people. We must not create disincentives for those who want to work. We must not make it less attractive for people to go on CE schemes where they acquire extra skills and get back into the work cycle.

I would like to reach the point where all those on social welfare get 70 per cent of their weekly payment as a Christmas bonus, regardless of what it is. I am not sure how much this would cost. There is a large number of categories who receive the bonus — old age pensioners, those who have retired, the blind, invalids, widows and widowers, orphans, those on disability benefit, one parent families, those in receipt of the carer's allowance, pre-retirement allowance, disability allowance, long-term unemployment assistance, employment support payments and participants on FÁS and CE schemes. There are probably as many people, in terms of cost, on short-term unemployment assistance and unemployment benefit.

We are approaching the point where we could perhaps afford to remove the anomalies and the division from the Christmas bonus system and ensure that all those on social welfare receive 70 per cent of their payment. I particularly want to see if this year the Minister can sort out the difficulty for those who have just come off CE and FÁS schemes to be sure they are looked after.

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

I thank Senator Doyle for her kind remarks on my first appearance as a Minister in the Seanad. I thank her also for raising this issue which has exercised the minds of quite a few of her colleagues in the Oireachtas over the last while.

I am pleased to have the opportunity to set out the background to this issue for the Seanad today. The issue arises directly from the introduction of class A PRSI for community employment scheme workers, which was provided for by my predecessor in the Social Welfare Act, 1996.

The purpose of this measure was to enhance the PRSI status of CE workers and to put them on a par with other class A workers. I understand that its introduction was largely prompted by representations from groups such as the Scheme Workers Alliance and the Irish National Organisation for the Unemployed. It is my understanding that the issue of the possible loss of secondary benefits was pointed out at the time to the groups who pushed for CE people to have a class A stamp. Certain structures were put in place in order to alleviate that in relation to people who were then on CE schemes.

Class A PRSI provides cover for a full range of benefits and pensions available under the social insurance scheme, including, as the Senator said, for example, unemployment benefit, disability benefit, maternity benefit, retirement pension, old age contributory pension, widow's contributory pension, treatment — dental and optical — benefits and occupational injuries benefit.

One of the consequences of the introduction of Class A is that CE workers who revert to the live register when their CE scheme finishes will have qualified or requalified for UB by virtue of having paid 13 Class A contributions.

In the case of such persons who qualify or requalify for unemployment benefit, their earnings in the relevant tax year will determine whether or not they receive a graduated rate or the full rate of unemployment benefit. Persons who qualify for a reduced or graduated rate of unemployment benefit and who have an underlying entitlement to unemployment assistance are entitled to opt for unemployment assistance if it is more beneficial to them. However, long-term unemployment assistance is not payable where the claimant is entitled to full rate unemployment benefit in accordance with the relevant social welfare legislation.

The social welfare secondary benefits of the Christmas bonus, free fuel allowance and butter vouchers are payable only with long-term social welfare payments. Unemployment benefit claimants do not therefore have an entitlement to these benefits.

I should mention at this stage that the secondary benefits can, however, be retained if the person transfers from a CE scheme to a back-to-work allowance scheme or a job start scheme. That perhaps gives an indication that the people who organised these schemes have a view that there should be, as the Senator said, efforts to make sure people go back to work.

I should also mention that as regards income-related secondary benefits such as rent allowance or mortgage supplements under the supplementary welfare allowance scheme, medical cards and differential rents, the position is that in the normal course former CE workers who are solely dependent on a social welfare payment should continue, where appropriate, to receive these benefits.

Mrs. A. Doyle

Why not the Christmas bonus?

Mr. D. Ahern

While I recognise the difficulties faced by some CE workers who requalify for unemployment benefit when their period of CE finishes, I trust Senators will appreciate that I cannot introduce special concessionary arrangements for such people without having equal and due regard to the position of other people who are on short-term social welfare payments. Any such concessions would, accordingly, carry an extremely high cost and could only be considered in light of available resources and in the light of other priorities within the wider social welfare system.

Mrs. A. Doyle

Has the Minister put a cost on extending it to them? Any figure?

Mr. D. Ahern

No, I have not.

The Seanad adjourned at 4.45 p.m. until 12 noon on Wednesday, 3 December 1997.