I welcome the Minister back to the House. Before we commence I remind Senators that a Senator may speak only once on Report Stage, except for the proposer of an amendment, who may reply to the discussion on the amendment. Each amendment on Report Stage must be seconded.
Social Welfare and Pensions Bill 2009: Report and Final Stages.
I move amendment No. 1:
In page 10, line 1, to insert the following:
"(1) The Minister shall, within three months of the commencement of this section, ensure that all rents the subject of this section shall be renegotiated to reflect existing market conditions.".
I thank the Minister for coming back to the House and answering our questions so comprehensively earlier. I will not labour the issues. This is an amendment on which I inadvertently did not get to speak earlier. The changes in the supplementary rent scheme do nothing to protect vulnerable tenants and are likely to worsen their position. Due to the very many changes implemented, such as one in October and one proposed in this Bill, people will have to pay an additional €11 per week towards their rents.
The Minister indicated in her speech earlier that the Department of Social and Family Affairs hopes landlords will reduce their rents and release tenants from contracts which they have already signed but there is no incentive for landlords to do so. My amendment asks that within three months of the commencement of this section, the Minister would ensure that such terms would be negotiated and indicate how landlords would comply.
There is no legislation which obliges landlords to negotiate such terms. Tenants who are down on their luck and who have very little money are vulnerable and it can be difficult for such a tenant to negotiate with a landlord. It would be unfair to ask tenants to do this and perhaps there should be intervention on behalf of a tenant by a community welfare officer, the local authorities or some other body which would negotiate on behalf of the tenant, such as the Department of Social and Family Affairs. Such agents could call landlords to task and make them reduce rents where applicable.
We have evidence that rents are very different in different parts of Dublin. My colleague in the Lower House indicated yesterday that rents fell in Dublin by 13% and by 5.8% in Galway. The Minister has introduced a reduction of €11 nationally, so there is an unfair disparity. I ask the Minister to comment on that.
I second the amendment proposed by my colleague. I agree that the prospect of getting developers and people renting property to reduce their rents even based on present circumstances is slim and people on social welfare will be forced to pay the extra amount. People on the minimum social welfare benefit will have to pay €5 more when subsidies are taken into account. The people on the lower rungs will be the ones hit in this regard. The amendment put forward by my colleague is reasonable and I formally second it.
I do not propose to accept this amendment because in the first instance, the relationship in question is between the Department of Social and Family Affairs and the tenant rather than the landlord. The agreements remain between the tenant and the landlords and it is up to them to renegotiate any terms.
There are over 85,000 people currently in receipt of rent supplement, which is an increase of 42% since December 2007 and is a very significant number of people. I accept that rents are different throughout the country but there is no doubt that rents have come down and landlords are constantly reviewing rents with tenants, particularly for people who have either lost jobs or who have seen a drop in income. It is happening for tenants in the private sector and it is very important the State-supported sector should not be the one determining rents.
In fairness to landlords, they are reducing rents. Equally, tenants in receipt of rent supplement need to be in a position to negotiate with the landlord. We will be giving a letter to each of those rent supplement recipients so they can show their landlord that they are not getting as much money as they were and we will also be advertising so landlords will have this information.
Increasing the amount of money which the tenant has to pay is clearly a cost-saving measure. It also bridges the gap between rent supplement and what a tenant would be obliged to pay if he or she were offered a council house tomorrow. Some tenants turned down the offer of social housing because the private rented accommodation in which they were living was cheaper. Until today, they would have been paying a maximum of €18 per week. In most local authority areas, they would have been obliged to pay upwards of €25 if they were offered social housing. If tenants in Dún Laoghaire were offered the opportunity to go on the rental accommodation scheme at present, it would cost them €27. We do not want there to be a deterrent against people coming off rent supplement, which was only meant to be a short-term, temporary measure.
We must ensure people are encouraged to partake of the rental accommodation scheme, RAS. The fact that some 9,000 people will be moved onto RAS this year is encouraging. That is the route we want people to take.
I accept that in changing the requirements relating to rent supplement we are seeking more money from tenants. However, this is being done in an environment where rents have fallen. We do not want to be dictating the position. The rent limits only come into play when new tenancies are being formed — such tenancies are being restricted — or where rents are being reviewed.
I appreciate from where the Senator is coming and it goes without saying that we do not want to make people even more vulnerable. However, community welfare officers retain their discretion in circumstances where someone is particularly vulnerable or has an exceptional need.
I do not accept that the most vulnerable are not being affected. Regardless of how one considers it, these people are being obliged to pay an additional €11. People who live in bed-sits pay €169 per week but there is a cap on the rent supplement of €130 per week and they are, therefore, being obliged to make up the difference. What the Minister is doing is going to make matters worse. As stated earlier, people will not be able to afford to buy food or to keep warm because of the demands that will be placed on them in financial terms. I am extremely disappointed with this provision.
The Minister referred to local authorities. In the midlands, local authority rents would never be more expensive than those in the private rented sector.
If, at the time of his or her annual rent review, a tenant is of the view that his or her rent is too high, he or she may approach the Private Residential Tenancies Board, PRTB, which can mediate on his or her behalf. There is, therefore, a second fall-back position.
Amendment put.
The Seanad divided: Tá, 18; Níl, 24.
Tá
- Bradford, Paul.
- Burke, Paddy.
- Buttimer, Jerry.
- Cannon, Ciaran.
- Coffey, Paudie.
- Cummins, Maurice.
- Donohoe, Paschal.
- Fitzgerald, Frances.
- Hannigan, Dominic.
- Healy Eames, Fidelma.
- McFadden, Nicky.
- Phelan, John Paul.
- Prendergast, Phil.
- Regan, Eugene.
- Ross, Shane.
- Ryan, Brendan.
- Twomey, Liam.
- White, Alex.
Níl
- Boyle, Dan.
- Brady, Martin.
- Butler, Larry.
- Callanan, Peter.
- Callely, Ivor.
- Carty, John.
- Cassidy, Donie.
- Corrigan, Maria.
- Daly, Mark.
- de Búrca, Déirdre.
- Ellis, John.
- Glynn, Camillus.
- Hanafin, John.
- MacSharry, Marc.
- Ó Domhnaill, Brian.
- Ó Murchú, Labhrás.
- O’Brien, Francis.
- O’Donovan, Denis.
- O’Malley, Fiona.
- O’Sullivan, Ned.
- Ormonde, Ann.
- Phelan, Kieran.
- Walsh, Jim.
- Wilson, Diarmuid.
Tellers: Tá, Senators Maurice Cummins and Nicky McFadden; Níl, Senators Camillus Glynn and Diarmuid Wilson.
Amendment declared lost.
I move amendment No. 2:
In page 21, line 7, after "Pensions Act 2009,” to insert the following:
"or whose liabilities are commenced to be discharged after that date".
We are disappointed with the definition of insolvency and with the debate on insolvency earlier. It was one of the two amendments our party tabled on Committee Stage. We pressed the amendment on insolvency on Committee Stage and, as a result, are unable to resubmit it on Report Stage. We have submitted this amendment instead. We are disappointed the definition was not changed. It would not have required much effort and would not have made a huge difference in the overall scheme of things.
It has been a difficult time for the former employees of SR Technics and this amendment would have helped greatly by offering some positivity after the terrible time they have had. It is disappointing the earlier amendment was not accepted. I will not press this amendment. I can anticipate the Minister's response, that is, that this issue is already dealt with in the Bill. We will not split hairs about it. While we do not intend to press the amendment, we wish to register our disappointment with the failure to accept earlier amendments. I appreciate the work the Minister has done in this area, but I wish she had gone a little further.
I second the amendment.
Senator Hannigan is familiar with the situation. The text of the Bill makes provision for schemes that have not yet discharged their liabilities. Many more workers will benefit than might have previously.
Amendment, by leave, withdrawn.
Amendment No. 4 is related to amendment No. 3. Is it agreed that amendments Nos. 3 and 4 be discussed together? Agreed.
I move amendment No. 3:
In page 21, after line 52, to insert the following:
"(1C) The trustees shall have the power to set limits on the amount that shall be paid out based on the salary of the employee in the event of a winding up.".
I spoke earlier about giving the trustees the power to set the limits on the amount to be paid. While the Minister replied comprehensively, I do not accept her reply. Mr. Fingleton's pension stood at €27.6 million. He was the sole beneficiary of a defined benefit scheme and was paid €2.4 million last year. There must be an upper limit to ensure it is not inequitable. That is the bottom line. That is an extraordinary pension. The Minister explained the position in detail but this amendment is worthwhile and should be accepted. Amendment No. 4 proposes to include the power to make reductions on a proportionate basis. In the case of the higher earner, it would be reduced to cater for those on the lower scale.
Like Senator Hannigan, I appreciate the Minister has made a start on this issue. I look forward to the publication of the White Paper which she mentioned yesterday in the Dáil. This Bill is a start and I compliment the Minister on the work she has done, as have Age Action Ireland and IBEC. There is generally a positive response to it. I welcome the commonsense measure taken by the Minister but I believe it must go further.
I second the amendment. The trustees must be given the discretion provided for in both amendments.
I understand Senators' outrage that an individual in a scheme would gain extraordinary amounts of money, particularly when financial difficulties are visible throughout the country. As I indicated earlier, schemes are generally based on the contributions people pay into them. If the scheme is in deficit, the higher income earner will lose more. The Government is conscious of the fact that some people had almost no limit to the size of their fund. In 2005, changes were made to limit the size of a fund, which is now set at €5.4 million. At pension age one can withdraw just 25% of the fund tax free. Other changes were introduced in the last budget reducing the earnings cap for pension contribution purposes from €275,000 to €150,000. We are conscious of the self-administered pension schemes, but that is not relevant to this legislation. It is also not appropriate, particularly because schemes are generally not homogenous. There can be different schemes for higher executives from those for ordinary workers.
I accept that people can pay more into schemes. However, they also benefit more. I believe upper limits must be set. The Minister and I will have to agree to disagree.
Amendment put.
The Seanad divided: Tá, 18; Níl, 25.
Tá
- Bradford, Paul.
- Burke, Paddy.
- Buttimer, Jerry.
- Cannon, Ciaran.
- Coffey, Paudie.
- Cummins, Maurice.
- Donohoe, Paschal.
- Fitzgerald, Frances.
- Hannigan, Dominic.
- Healy Eames, Fidelma.
- McFadden, Nicky.
- O’Toole, Joe.
- Phelan, John Paul.
- Prendergast, Phil.
- Regan, Eugene.
- Ross, Shane.
- Ryan, Brendan.
- Twomey, Liam.
Níl
- Boyle, Dan.
- Brady, Martin.
- Butler, Larry.
- Callanan, Peter.
- Callely, Ivor.
- Carty, John.
- Cassidy, Donie.
- Corrigan, Maria.
- Daly, Mark.
- de Búrca, Déirdre.
- Ellis, John.
- Glynn, Camillus.
- Hanafin, John.
- MacSharry, Marc.
- O’Brien, Francis.
- O’Donovan, Denis.
- O’Malley, Fiona.
- O’Sullivan, Ned.
- Ó Domhnaill, Brian.
- Ó Murchú, Labhrás.
- Ormonde, Ann.
- Phelan, Kieran.
- Walsh, Jim.
- White, Mary M.
- Wilson, Diarmuid.
Tellers: Tá, Senators Maurice Cummins and Nicky McFadden; Níl, Senators Camillus Glynn and Diarmuid Wilson.
Amendment declared lost.
I move amendment No. 4:
In page 24, line 48, after "appropriate" to insert the following:
"including the power to make reductions on a proportionate basis to the amount that is paid out based on the salaries of the employees.".
I second the amendment.
Amendment put and declared lost.
Bill received for final consideration.
Question put: "That the Bill do now pass."
The Seanad divided: Tá, 24; Níl, 18.
Tá
- Boyle, Dan.
- Brady, Martin.
- Butler, Larry.
- Callanan, Peter.
- Callely, Ivor.
- Carty, John.
- Cassidy, Donie.
- Corrigan, Maria.
- de Búrca, Déirdre.
- Ellis, John.
- Glynn, Camillus.
- Hanafin, John.
- MacSharry, Marc.
- O’Brien, Francis.
- O’Donovan, Denis.
- O’Malley, Fiona.
- O’Sullivan, Ned.
- Ó Domhnaill, Brian.
- Ó Murchú, Labhrás.
- Ormonde, Ann.
- Phelan, Kieran.
- Walsh, Jim.
- White, Mary M.
- Wilson, Diarmuid.
Níl
- Bradford, Paul.
- Burke, Paddy.
- Buttimer, Jerry.
- Cannon, Ciaran.
- Coffey, Paudie.
- Cummins, Maurice.
- Donohoe, Paschal.
- Fitzgerald, Frances.
- Hannigan, Dominic.
- Healy Eames, Fidelma.
- McFadden, Nicky.
- O’Toole, Joe.
- Phelan, John Paul.
- Prendergast, Phil.
- Regan, Eugene.
- Ross, Shane.
- Ryan, Brendan.
- Twomey, Liam.
Tellers: Tá, Senators Wilson and Glynn; Níl, Senators McFadden and Hannigan.
Question declared carried.