Social Welfare and Pensions Bill 2014: Committee Stage

Sections 1 and 2 agreed to.
SECTION 3

Amendments Nos. 1 to 9, inclusive, form a composite proposal and may be discussed together, by agreement. Is that agreed? Agreed.

I move amendment No. 1:

In page 6, to delete lines 7 to 9.

As they amendments are similar, we have no difficulty with their being grouped.

On Second Stage, we flagged the fact that we were opposed to section 3 and outlined the reasons that was the case. We indicated that we would table amendments on Committee Stage and have done so. Earlier in the year the Dáil engaged in a very interesting Private Members' debate on a motion tabled by Independent Deputies on using the services of An Post in the making of social welfare payments. As the Minister will know, when that debate took place, the trade unions involved were very concerned about any move that would strip post offices of services and their ability to provide them. That concern arises as a result of the very precarious position in which some post offices, especially those in rural areas, find themselves. Post offices are important to the social fabric not just of rural areas but also of communities the length and breadth of the State.

We are concerned about section 3 in the context of the move to replace the term "An Post" with that of "payment service provider". I listened to what the Minister had to say on this matter during her reply to the debate on Second Stage and also in the Dáil. I did not, however, find any comfort in her words. If one reads the explanatory memorandum, it appears that section 3 is benign enough. The explanatory memorandum states the section "provides for changes to enable functions relating to payment of benefit or assistance and related payment services to be provided under arrangements with selected payment service providers". The problem is that neither the Bill nor the explanatory memorandum refers to An Post. In fact, the purpose of section 3 is to delete all references to An Post from the principal Act. The Minister has previously indicated that this is necessary as a result of what is deemed to be the privileged position An Post holds, particularly in the context of any consideration of service provision in the future. I do not have a difficulty in this regard. An Post should hold a privileged position, especially in view of the hugely important role post offices play in communities throughout the State. The post office network is crucial to the social fabric, especially in rural areas but also in urban neighbourhoods. The removal of An Post's status creates the possibility of a multinational company or bank with no connection to communities swooping in and acquiring the contract for social welfare payments. That would not be in the best interests of social welfare recipients or the wider community.

The Minister will be aware of the Grant Thornton report on the future of post offices which was published some time ago and highlighted how up to 557 of the 1,150 post offices could close if the social welfare contact was removed from An Post.

The Senator does not even believe that himself.

The Minister cannot-----

This is just scaremongering. The Senator is seeking to make people such as pensioners worry. That is his political job and he should continue.

Senator David Cullinane to continue, without interruption.

In the first instance, the Minister should not pretend to know what I think. Pensioners and other social welfare recipients are more concerned about what she has done to them than anything which my party or I might do to them.

There will not be a post office in the country if Sinn Féin enters power.

We will see about that. The reality is that Deputy Joan Burton is the Minister who reduced social welfare payments by €1.5 billion and has made the lives of many pensioners and those in receipt of lone parent's and carer's allowance a misery. I do not believe they will be at all touched by her concern for them in the context of anything I might have to say. She has engaged in a number of such outbursts recently. Perhaps there is an election in the offing within her party. That matter has obviously exercised her mind in the context of the impact made by Sinn Féin recently. However, that is a matter for another day.

The Senator should confine himself to the amendment.

The Minister can rubbish the Grant Thornton report if she so desires and is entitled to do so. I am merely reciting what was contained in it. It stated there was potential for 557 of the 1,150 post offices to close if the social welfare contract was removed from An Post. The figures in this regard may not be correct, but there is absolutely no doubt that if the contract were to be removed, post offices would come under huge pressure. The contract is vital for post offices because the service to which it relates is pivotal and attracts customers in the first instance. It also makes post offices central hubs in the communities in which they are located. That is what the Grant Thornton report states and the Irish Postmasters Union has made the same point. Its members have struggled to survive in a very difficult environment. Instead of creating even more difficulties, the Government should be developing a national strategy to protect the post office network and the jobs of the 3,000 people employed within it.

The Minister can see what we are trying to do with the amendments in the context of amending any section which replaces the term "An Post" with that of "payment service provider". An Post should continue to occupy the privileged position with which the Minister seems to have a problem. I await her response, but I assume, on foot of her interjections, that she is not of a mind to accept the amendments. I would have inferred this from her reply to the debate on Second Stage. She may have a job to do, but so do we. The nature of that job is to hold her and her Department to account. That is what we will seek to do in dealing with this issue. We will also seek to stand up for those who work in post offices throughout the State.

I thank the Senator for the concern he expressed about post offices. I am sure he is aware from reading the Grant Thornton report that a grand total of four post offices have closed. Most often, such closures are due to the death of the proprietor or postmaster.

We are all - particularly those of us on the Government side - concerned and anxious that post offices and sub-post offices have a viable and successful economic future. We want to ensure they will continue to provide services and employment in the areas in which they are located.

Sometimes during the debate, one would think post offices and sub-post offices were mainly in rural areas, including very remote rural areas, but the fact is that there are a significant number of sub-post offices in urban areas. The latter are just as important as the sub-post offices in rural areas.

The measure is designed to have a number of objectives, one of which is to protect the State and the contract with An Post from challenge by third parties. A legal issue arose some years ago in which the post office contract or relationship with the Department of Social Protection was challenged. Under European law and the various rules of the European Union, it is possible for other providers or potential providers, whether one likes it or not, to challenge existing providers if they feel there is a flaw in how the business and contract-awarding has been conducted. Such cases are taken and such a case was taken. The latter found its way to the European Court of Justice. Very serious legal advice was given to the effect that the contract ultimately had to go out to tender.

Senator Cullinane did not say that An Post bid for and won the contract but I am delighted to do so. Given the Senator's wish to be positive about post offices, I am a little surprised he did not congratulate An Post on winning a contract which represents enormously valuable business. The contract is for an initial period of two years and this is renewable for a further period of four years. This amendment deals with the legal advice as to how to represent properly the payment service provider in law so the basis of the contract would not be open to a further legal challenge, as happened during the period of the last Government. One must remember, however, that unless Sinn Féin wants to say there will be no right for people to use commercial law to seek to exercise what they believe to be their rights under EU and Irish legislation, its position is questionable.

Some Sinn Féin Members suggested in the Dáil that people should not be allowed to have their pensions or child benefit sent to them via their bank account. I would love to know how many Members of the Seanad in receipt of a payment such as child benefit have it paid into their bank account or whether they queue up at their local post office. I would like to be enlightened on that. The move nowadays is towards electronic funds transfers, particularly in the case of people who already have bank accounts. In Ireland, however, very significant numbers of people do not have bank accounts and, therefore, if they are receiving an income from the Department of Social Protection, having access to the post office is vital.

As Minister, I require that all jobseeker payments, particularly to new jobseekers and those under 62, be made via the post office system in order to ensure that people present at the post office to collect their payment in person. That is an extremely valuable piece of work that the post office does in connection with social welfare payments. It is one of the services that we specified in the contract. With a view to deterring fraud, including identity fraud, it is important that people show up in person. As the Seanad may be aware, we are rolling out a new personal services card that allows for a much higher level of scrutiny of identification details, through the photograph of the person presenting to collect money. Owing to this, we needed in this legislation to provide An Post, as the Department's contracted payment service provider, with the necessary authority to assist the Department with its anti-fraud and control measures. Therefore, the measure supports the contract, which I signed before Christmas. I am a little amazed the Senator did not congratulate An Post; perhaps he did not know it won the contract. I am surprised he did not congratulate the staff in An Post on their successful bid for the contract. The contract is currently in place and it will maintain continuity of cash payment services throughout towns and villages.

Concern was expressed by the Senator's colleague last week that this matter could have a devastating effect. Winning a contract, according to the Senator's colleague in Sinn Féin, is devastating for An Post. I do not know whether the party would like to rethink that. I believe An Post should be congratulated on winning the contract. So many people on a social welfare payment collect their money in cash or do not have a bank account. Without a bank account, they are not in a position to avail themselves of any other service.

The concerns that have been raised are baseless. It may be good politics to scaremonger. Many people are delighted with scaremongering as a political objective, and some parties specialise in it. Whether it is better in the long-run in terms of the confidence people in various locations have in their services is for the Senator to decide.

The measure provides a solid legislative basis for the arrangement under which payment services will be delivered by An Post as a payment service provider. It will also enable An Post to carry out the activities that will contribute to the prevention of welfare fraud and, therefore, make sure the payments go to the right people. That is important. Last year we had recoveries in regard to overpayments, most of which arose from fraud and errors on the part of the customers. They amounted to well over €70 million, which is a very significant amount. It is almost equal to what the Department spends on the travel arrangements and free travel, which I am delighted to say is not under threat. However, I understand that some organisations consider it to be the case that there is a possible threat. As Minister, I must state I value the free travel arrangements introduced by a previous Government, just as I value the post offices. The arrangements have continued for 40 or 50 years, or more.

These amendments will actually consolidate and enhance the position of An Post as the service provider and make the contract less subject to legal attack from others, who have actually taken cases against An Post and who took several references to the court, which they are perfectly entitled to do, during the time of the previous Government.

We are opposing the section. I was not going to engage in debate on this. It is inevitable that, because of the wording of the various amendments concerning section 3, the Minister and Senator Cullinane will engage on this at the heart of the debate.

I have just a couple of points. Will the Minister outline the terms of the contract? Of course I congratulate An Post. This is not my first time. The achievement of An Post was very laudable. Perhaps the Minister might provide the context for this. Did many tender for the contract? What were its terms and was any indication given that the payment provider, as the provider will now be called, would have to provide a comprehensive service? This leads me to the question of whether, in the future, some other entity could advocate that it could provide the service. I refer to supermarkets, for example, which seem to be moving increasingly in this direction, aided and abetted by An Post. It is cutting its own throat in this regard, and I just do not know why it is doing so.

Perhaps, the Minister could outline that.

We have had an exchange of views already on the legal challenges. However, the Minister has not answered a question I put on Second Stage and which Deputy O'Dea put in the Dáil. I would be grateful if she would address it for me for the record. In 2007, there was a High Court judgment which came to a particular conclusion in a case taken in the context of the 2005 legislation, which already included reference to An Post. What has changed since? If it was thrown out in 2007, why has it been reinstated? The Minister made the point that a Fianna Fáil Government introduced this, but both this Government and the last have just been trying to be good Europeans. Perhaps, we should take a leaf out of the French book. The French post office network has been completely protected and does not seem to be succumbing to legal challenges from Europe. I often wonder if we in this country are perhaps bending over backwards to help the Brussels bureaucracy contrary to our own national interest. Here is a situation where we should just put it up to Europe and say "Challenge us". The Minister should write into the legislation in relation to contracts a preference for an entity which can provide the type of service An Post can. While I appreciate the Government would have to be careful with the wording, it should not be beyond the competence of the legal draftsmen and women to bring forward wording which would ensure the post office network was protected. It can be done under social legislation yet there seems to be a marked reluctance among certain elements in Europe to engage in the debate.

I was a parliamentary representative on the Charter of Fundamental Rights, which now seems to be long forgotten but was incorporated into the Treaty of Lisbon. I remember the solid hostility to the introduction of proposals to protect social services, particularly in rural parts of Europe such as in Ireland where there was a need to ensure that all citizens were treated equally in terms of the provision of utilities and services. This is part of the same thinking that is going on within Europe to the effect that big business should win out and the smaller and rural communities across Europe, particularly in western Europe, should just be forgotten about. It should be incumbent on any Irish Government to protect its citizens and their rights to ensure they have the same service in the heart of Achill Island as in the heart of Dublin. They should have the same services in Waterford and Leitrim as are available to people in Dublin. It seems, however, that we are developing a two-tier society and the Bill is a reflection of that.

I would be grateful if the Minister would clarify those issues. Why is it necessary? Who put in the legal challenge? Where did it come from? In light of the success of the An Post contract, the Minister says it is for two years and can then be rolled over. Does that automatically mean An Post will have it for a further six years?

Unless it wanted to walk away from the contract, which is unlikely.

The Minister will then have to engage in a new round of competitive tendering.

Not after two years.

What about after six?

The Minister might outline who was involved in the contract. How many companies were there and what were the terms of the contract? It seems to me that this is an area where Government could word legislation in such a way as to ensure that an entity like An Post would be the obvious choice to win a tender if the other competing interests could not provide the type of service its network can provide.

I thank the Minister for her lengthy response and take the opportunity to record my praise for the post office in winning the contract. Hopefully, post offices will benefit from it for a long number of years, not just the six.

My concerns and those of my party can be dismissed cheaply by the Minister if she so wishes. That is fair enough. I am not all that interested. However, I am articulating concerns that have been raised with me by people who work in the post office sector, the trade union involved and service users. It is their concerns I ask the Minister to address, not just those of Fianna Fáil or Sinn Féin. I agree that there are certain parties who are very good at scaremongering. In her response to my contribution, the Minister misrepresented the Sinn Féin position absolutely, which is what she tends to do. She waffled on about things neither my party nor I ever said.

She referred to a concern Senator Kathryn Reilly raised on Second Stage, however, and said it would be a disaster. I agree. It could be a disaster if, at a future date, An Post did not get the contract but some other provider did. Senator Mooney hit the nail on the head when he talked about Europe. If we cut right to the chase, we have had for a long number of years a threat to public services and a liberalisation of the market coming from Europe. That has been happening consistently in a whole range of areas. I see this as part of the same drift. The Minister and the Government are in essence hiding behind the threat of court action to implement European policy. That is what is happening here. Competition is good and it can be healthy but what we are seeing from Europe across a range of areas is the distortion of the competition argument to the advantage of larger business, including multi-nationals. Smaller networks such as post offices and credit unions can be the losers in that.

Our concerns are not baseless. When I say "our", I include the Irish Postmasters Union, postmasters themselves and others who work in the post office sector. While I am sure they are very happy they got the contract this time around, there is a concern that they will not always have it. It is open to this Government or any future Administration to award the contract to somebody else. That would spell disaster for post offices. Our concerns are well founded. There is no difficulty in giving a preference to post offices. If we do not, it goes right to the heart of what Senator Mooney spoke about, namely, the drift in European policy in recent times to promote competition above the provision of core public services. It is something I certainly do not believe in and I did not think the Labour Party did either. Of course, we have been proven wrong about that over the last number of years. The electorate have certainly seen that and will see it again for some time to come.

Last week, I was contacted by people from the Irish Postmasters Union. They stated that they understood they could not be included by name in the legislation. I wanted to record that.

There were a couple of questions from Senator Mooney which he also raised on Second Stage. They were on the nature of state aid, social services and economic contracts. The Commission does not specifically define what is meant by the term "social services of general interest". However, it has described such services as economic activities which deliver outcomes in the overall public good which would not be supplied by the market without public intervention or would be supplied under different conditions such as quality or affordability. One can look at this either way from the point of view of a public or private service with which to compete.

They could not compete with the post office network. There is no one.

I ask the Senator to bear with me. They can launch legal action, as they did during the time of the previous Government in 1999. This goes back to then. The payment services provided by An Post to social welfare clients are similar to the payments services delivered by banks and, nowadays, other operators using mobile phones and the Internet. In relation to social welfare clients, the services are being delivered to the Department. Many other customers of the Department who have bank accounts choose to have their payments from the Department, including child benefit and retirement pensions, paid into those accounts directly.

That is something that has been ongoing in Ireland not just in respect of social welfare services but also financial transactions in general. The services provided by An Post are delivered as part of a commercial arrangement, with a market price being paid. Therefore, any activity that consists of the offering of goods or services in a given market is deemed to be economic within the meaning of EU competition rules. The Senator has, understandably, concentrated on the social impact and significance of sub-post offices. I accept this and I am a very strong supporter of them, but it is also an economic activity; therefore, under EU competition rules, it is open to somebody else to compete.

The Senator asked what were the conditions of the contract. I will read some of the conditions. The contract was awarded on 2 January 2014. An Post is required to provide and maintain a network for the term of the agreement ensuring at a minimum outlets are available within 3 km of 95% of clients in an urban area and 15 km in a rural area. This means that it must have a very wide network of branches available to service clients. It has been required to consult the Minister in advance of introducing any significant change in the number, nature and distribution of offices. Therefore, it could not arbitrarily decide that it was going to go out of business in some region or a significant section of the country. It is required to ensure services are designed such that they can be accessed by all clients, including those with particular language, sight, hearing, access or literacy requirements; those who require a nominated person to collect a payment on his or her behalf; other vulnerable clients; and those with an atypical lifestyle. As the Senator is aware, the post office service provides services for all comers and all types of people. An Post must ensure payments will be disbursed in accessible, safe and secure environments. Outlets must be clean and accessible, meet health and safety standards and facilitate access for people with disabilities. The payment services shall be provided by An Post for a minimum of five and a half days each week during normal business hours. Welfare payments shall be issued in cash in full to the authorised client or his or her approved nominee as provided for under the contract. No deductions can be made from cash payments other than those provided for under statute or in accordance with the provisions of the contract. As the Senator is aware from previous legislation, I have enhanced the legislation dealing with household benefit payments via An Post. They have become a significant additional stream of income for it and sub-post offices from the Department of Social Protection as a result of the legislation passed. An Post must confirm the identity of clients or their authorised agents before cash payments are made. One of the things I have done is insist on all new jobseekers under 62 years collecting their cash in person from the post office. As we roll out the identity card - presumably, post offices will also invest in the technology - they can verify their identity to the standard of a biometric photograph in the same way as such a photograph is used when people are travelling through airports. It was because An Post could provide these services at an agreed contract price that it won the award. It is a very valuable contract for it.

The essential feature in respect of wider EU legal issues is that it is possible for other potential providers to contest for the contract, as they did in 1999 and 2005. I would like to see An Post develop to the point where it would be in a position to provide basic bank account services. As I said on the last occasion, it provides savings services, but it does not provide bank current account services. It would certainly be welcome if it teamed up with another agency such as a bank to provide such services for clients. Given the trend towards automatic electronic banking, it would certainly assist it significantly in securing its future if it were able to provide the kinds of banking service provided by other outlets. The same is probably true of credit unions throughout the country which also provide an important localised service on a local basis.

Having read the explanatory memorandum, there are a few suggestions I would like to make. Giving the Department of Social Protection more powers to recover overpayments is a good idea, but I have seen situations during the years where the overpayment has not been the person's fault. I know of a case involving a couple who came home from Cyprus to look after a elderly person. They have declared all of their assets, income and savings.

We are dealing with the amendments.

Let me make just one point.

Very briefly because I would like to make progress.

The couple in question declared everything, but one year later they were told there had been an overpayment. If the Department had taken on board what the couple had declared, they would not have received a payment. I do not think we should give the Department too much power to take money from people where it is its mistake in the first place.

Question, "That the words proposed to be deleted stand," put and declared carried.
Amendment declared lost.

I move amendment No. 2:

In page 6, lines 11 and 12, to delete "a payment service provider" and substitute "An Post".

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 3:

In page 6, line 15, to delete "the payment service provider" and substitute "An Post".

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 4:

In page 6, to delete lines 17 to 19.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 5:

In page 6, line 23, to delete "a payment service provider" and substitute "An Post".

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 6:

In page 6, lines 35 and 36, to delete "a payment service provider" and substitute "An Post".

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 7:

In page 7, to delete lines 1 to 23 and substitute the following:

" "(2B) Information held by the Minister for the purposes of this Act or the control of schemes administered by or on behalf of the Minister or the

Department of Social Protection may be transferred by the Minister to An Post, and information held by An Post which is required for those

purposes or the control of any such scheme administered by An Post may be transferred by An Post to the Minister.",

(e) in section 263A, by inserting the following subsection after subsection (6):

"(7) Where a public services card issued to a person is presented to An Post for the purposes of obtaining payment of benefit, An Post may

withhold payment, confiscate the card and surrender it as soon as practicable to the Minister if—

(a) An Post becomes aware of a fact or circumstance, whether occurring before or after the issue of the public services card, that would have required or permitted the Minister to refuse to issue the public services card under section 263 to the person had the Minister been aware of the fact or the circumstance before the public services card was issued, or

(b) An Post is notified or becomes aware that the public services card is, without lawful authority or reasonable excuse, in the possession

or control of a person other than the person to whom it is allocated and issued under section 263.",".

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 8:

In page 7, to delete lines 24 to 28.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 9:

In page 7, to delete lines 31 to 36 and substitute the following:

" "289A. The Minister, with the consent of the Minister for Public Expenditure and Reform, may enter into an arrangement with An Post for the provision of services in relation to the functions conferred on the Minister by or under this Act concerning the payment of benefit or assistance.",".

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Question put: "That section 3 stand part of the Bill."
The Committee divided: Tá, 27; Níl, 15.

  • Bacik, Ivana.
  • Brennan, Terry.
  • Burke, Colm.
  • Coghlan, Eamonn.
  • Coghlan, Paul.
  • Comiskey, Michael.
  • Conway, Martin.
  • D'Arcy, Jim.
  • Gilroy, John.
  • Henry, Imelda.
  • Higgins, Lorraine.
  • Keane, Cáit.
  • Kelly, John.
  • Landy, Denis.
  • Moloney, Marie.
  • Moran, Mary.
  • Mulcahy, Tony.
  • Naughton, Hildegarde.
  • Noone, Catherine.
  • O'Brien, Mary Ann.
  • O'Donnell, Marie-Louise.
  • O'Keeffe, Susan.
  • O'Neill, Pat.
  • Sheahan, Tom.
  • van Turnhout, Jillian.
  • Whelan, John.
  • Zappone, Katherine.

Níl

  • Barrett, Sean D.
  • Crown, John.
  • Cullinane, David.
  • Daly, Mark.
  • Heffernan, James.
  • Leyden, Terry.
  • MacSharry, Marc.
  • Mooney, Paschal.
  • Mullen, Rónán.
  • O'Brien, Darragh.
  • Ó Clochartaigh, Trevor.
  • Ó Domhnaill, Brian.
  • Ó Murchú, Labhrás.
  • Quinn, Feargal.
  • Reilly, Kathryn.
Tellers: Tá, Senators Ivana Bacik and Paul Coghlan; Níl, Senators Paschal Mooney and Darragh O'Brien.
Question declared carried.
Sections 4 to 7, inclusive, agreed to.
SECTION 8

Amendment No. 10 in the names of Senators Cullinane, Reilly and Ó Clochartaigh has been ruled out of order as it involves a potential charge to the Exchequer.

Amendment No. 10 not moved.

Amendment No. 11 in the names of Senators Mooney, Byrne and other Fianna Fáil Senators has been ruled out of order as it involves a potential charge to the Exchequer.

Amendment No. 11 not moved.
Question proposed: "That section 8 stand part of the Bill."

Notwithstanding the ruling on the amendments, we are of the opinion that there needs to be some flexibility on qualifying payments. We tabled an amendment to section 8 which states, “(3) Where a qualified adult as defined under this section is temporarily resident outside the state in order to provide care for an ill relative, the provisions as outlined under this section shall not apply.”.

Section 8 sets out the rules for those who are absent from the State. Under section 8(2)(b) a new subsection (6A) provides that State benefits "shall not be payable for any period during which the qualified adult is — (a) resident, whether temporarily or permanently, outside the State, or (b) undergoing imprisonment or detention in legal custody.”

There is a need for some flexibility because a situation could arise where a person is temporarily resident outside the State, providing care for an ill relative or other legitimate reason that removes him or her from the State for a short period. What are the Minister's views in that regard?

I understand the amendments have been ruled out of order. The social assistance payments are means tested and are payable on the basis of income need. The situation between somebody who is ordinarily resident and domiciled in the State is slightly different from the person who may be in the State for a period of time - I think it is important to keep that distinction - but who may qualify for social welfare payments under the HRC and his or her spouse qualifies for a qualified adult payment.

In general a person who is getting the principal payment but who is detained in prison or legal custody is disqualified from payment throughout the period of detention. This disqualification applies to claimants and recipients as well as to qualified adults of the claimant or the recipient because the State is paying to maintain the person while he or she is in prison.

Since I became Minister we get the PPS number of anyone who is detained lawfully in custody and we would not continue to pay him or her a social welfare payment because the State is covering his or her maintenance while he or she is in prison. The disqualification is informed by the principle that where a person is in prison or otherwise being detained, his or her needs are being met by the agency of the State responsible for his or her imprisonment or detention. Deciding officers have the scope to adjudicate on claims for social assistance payments, having due regard to the need for adequate scheme controls while at the same time recognising the reality of people's lives.

There is a general disqualification for receipt of social assistance payments. We are referring to social assistance payments to a person who is going out of the State in the long term and not just for a week or two. Where the claimant or recipient is resident outside the State, the payment is allowed for short periods to facilitate the person to visit a sick relative, for family emergencies including attending a funeral, attending to a relative who has fallen ill or accompanying a family member who requires treatment abroad. Social welfare offices are well used to dealing with those typical examples. There is no change in any of the arrangements.

These arrangements will also apply following the extension of this disqualification to the qualified adult of a claimant or recipient, where the qualified adult is resident outside the State for similar reasons. The current practice extends to the qualified adult.

If, however, a person is abroad for any extended period of time in order to care for a sick or disabled relative, that person may qualify for income support from that other state and it would not be appropriate in these circumstances to continue income support under the Irish social welfare system.

Let us suppose somebody immigrated into Ireland and the person's spouse or partner has been working here and is a qualified adult. They then return home to their country of origin, perhaps to care for somebody, and stay there for an extended period, not the short period we have described. It is hard to justify that we would continue to pay that person when the person's home country, which would have been their original domicile and where perhaps they now intend to stay, should be paying the qualified adult increase to them, or, indeed, paying for the principal person.

The understanding on which social welfare assistance payments are made is that the person is resident in the State and stays in the State. If they leave the State to pursue other things in other countries, save for the kind of family medical situations and brief visits I have described, they are then in another country and it is hard to understand why we should be paying them social welfare. I do not know if that is a reasonable explanation.

I take the point.

It was I who raised this issue on Second Stage last week in regard to those who might have to go abroad for medical treatment for a child or to care for a sick relative or a relative who has had an accident. The Minister might indicate what is the timescale involved in the word "temporarily". In one case I know of, a family had to take their child abroad for four or five months to have treatment. In another case, which involved a primary payment and not a dependent adult, a carer went to Australia for four weeks to visit their children. The person took the caree with them and was still caring for the caree in Australia, but their carer's allowance was stopped while they were abroad. People get the payment for three weeks and it stops after that, no matter how long a person stays.

I would like the Minister to give us some indication on this. There are occasions when people really and truly have to go, and they cannot determine how long they will be gone for. If a person is going to care for somebody who is terminally ill with cancer, it cannot be determined whether the person will die after three weeks, four weeks or five weeks, and they cannot tell the social welfare officers exactly how long it will be. Can we have some indication of what time period "temporarily" involves?

The Minister, in fairness, has given a comprehensive response and I would agree with a lot of what she said. The problem with this new subsection, as I see it, is that it could end up being a very blunt and crude instrument because, unfortunately, there are and will be situations where some level of discretion would need to be applied. That is what is being contested here, not primarily what the Minister is trying to do.

The section provides that qualified adult increases will not be paid for any period that the qualified adult is not resident in the State or is in custody. Essentially, by amending the definition of a qualified adult in the principal Act, section 7 subjects the qualified adult to the residency requirement. A number of questions then arise. Senator Mooney gave the example of a person who has returned home to their own country temporarily rather than for the long term, and asked why that person should not receive the payment. While our amendment was ruled out of order, some of the issues we raised are relevant, including situations where a person is held in custody on remand and is subsequently found not guilty. Is it fair in that case to disqualify the person? What if a person is legally detained for a mental assessment?

I assume the Minister is not going to accept the amendments and will, of course, not accept those that were ruled out of order. However, will she explain to us whether social welfare officers have some level of discretion if such situations arise? I would hope common sense would prevail and that the subsection would not end up being what I described it as potentially being, namely, a crude or blunt instrument which would not allow for common sense to prevail.

I will reiterate what I said. If somebody has become resident in Ireland and they then leave the country for extended periods of time, it is hard to justify why we should continue to pay qualified adult social welfare payments. However, if somebody is going for some kind of family issue or family emergency, such as a funeral or illness in the family, that is an entirely different issue. The deciding officers have the power to exercise discretion. Very often, in such cases of hardship, as I am sure Members know, the community welfare officer assists people and the actual practice in social welfare offices is to be extremely understanding.

With regard to somebody who is lawfully in custody, again, it is very difficult to justify double payments because the State is at a considerably higher expense than a weekly social welfare payment in looking after the needs of that person and, of course-----

What if the person is only being held on remand and is subsequently found not guilty?

That would not normally arise because, as the Senator knows, the principle in regard to remand in Ireland, except in certain cases, is that it is for relatively short periods, people normally apply to the courts and there is a court procedure for dealing with that.

Social welfare staff have special services for people who are in prison and, when they are coming out of prison, in particular to assist people in getting a home because there is always a very strong risk of homelessness as people leave prison. Very often, the only recourse people have when they come out of prison is the local community welfare service, and the social welfare services also provide significant support to the families of people in prison. Social welfare staff throughout the country have always been very responsive and approachable in regard to families and dependants of people in prison. I know some of the Senators here would have personal knowledge of this but I want to reiterate that this has been the practice for a very long period and continues to be the practice.

Nowadays we exchange data from the Irish Prison Service in regard to the PPS numbers of everybody who is sentenced to a term of imprisonment. Before I became Minister, there was a concern about the fact that, in some cases, people were having others collect their social welfare payments while they were in prison, which they were not entitled to do. We have pretty much closed that down.

Question put and agreed to.
SECTION 9

We move to amendment No. 12, although Senator Cullinane is not present just now.

I move amendment No. 12:

In page 12, between lines 19 and 20, to insert the following:

“(3) Section 232 of the Principal Act is amended by inserting the following subsection after subsection (3):

“(4) The Minister shall provide a copy of any regulation or variation to a regulation that she proposes to make under this section to the Joint Oireachtas Committee on Education and Social Protection and the Committee shall, having considered the proposal or proposals, report back to the Minister before any such regulation or variation to a regulation may commence.”.”.

I do not propose to accept this amendment. Family income supplement, FIS, is a weekly tax-free support targeted at low-income workers who have children. FIS provides a crucial support for over 44,000 working families and almost 100,000 children. We are spending some €280 million this year, which is a very significant increase in this payment.

The purpose of the support is to provide an incentive to workers to take up or stay in employment rather than claiming a social welfare payment. While weekly social welfare payments are increased according to the family size, weekly income from employment obviously does not take into account the worker's family size. Therefore, FIS is a very important supplement to the worker's weekly earnings where they have children. It is a very strong incentive to stay in employment when compared with the social welfare payments that might be available for somebody who decided to stay on social welfare.

Section 9 redefines what constitutes a family for FIS purposes and affirms that FIS cannot be paid to a claimant who is maintaining a child where that child does not reside with the claimant, unless the claimant is also maintaining his or her separated spouse or civil partner with whom the child is residing. It further clarifies that, in such cases, FIS cannot be paid if the spouse or civil partner with whom the child is residing is in receipt of a weekly social welfare payment in his or her own right.

Under the provisions in section 9 of the Bill, the circumstances in which a child is to be regarded as normally being a member of a household for FIS entitlement purposes will be specified in regulations which will be made in accordance with the Social Welfare Consolidation Act 2005. This is not an issue where the parents or guardians and children live together, which is straightforward. However, where the parents or guardians live apart, regulations are required in order to set out the rules to be used to determine which parent or guardian the children will be regarded as normally residing with for FIS purposes.

Amendment put and declared lost.
Section 9 agreed to.
Section 10 agreed to.
Amendment No. 13 not moved.
Section 11 agreed to.
Sections 12 to 14, inclusive, agreed to.
SECTION 15

I move amendment No. 14:

In page 18, to delete lines 1 and 2.

I do not propose to accept the amendment. The proposal is that 20 serving gardaí would be recruited into the Department of Social Protection to assist with a better emphasis on fraud detection and, where the fraud is significant, prosecution. That is a very important element of saving money for the Department. I mentioned earlier that last year the Department recovered over €70 million in overpayments, the vast bulk of which arose from fraud. I would like that to continue. The seconded gardaí will be issued with a certificate of secondment, which will clearly identify that they are appointed to work with the Department. The certificate will include a photograph of the person concerned. As a matter of practice, departmental investigators from the Department of Social Protection identify themselves and produce their certificates of appointments to all the persons with whom they deal.

The change in the Bill to remove the phrase "in uniform" is being made first to achieve consistency in social welfare legislation between section 250(16) of the Social Welfare Consolidation Act 2005, which requires a social welfare inspector to be accompanied by a uniformed member of the Garda Síochána. While section 250(16)(b) also requires a social welfare inspector to be accompanied by an member of the Garda Síochána, it does not have an "in uniform" condition. The change to the Bill would allow gardaí seconded to the Department to accompany social welfare inspectors carrying out activities under section 250(16) without the requirement to wear a uniform.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Section 15 agreed to.
SECTION 16

I move amendment No. 15:

In page 19, between lines 6 and 7, to insert the following:

“(3) The powers conferred on the Minister by this section of this Bill shall not be utilised until after the Department of Social Protection make all reasonable efforts to recover these payments through installed repayments.”.

The Minister will be aware of concerns expressed by Free Legal Advice Centres, FLAC, about this amendment, and I share some of them. This permits attachment of payments, including lump sums due under the redundancy payments Acts and the protection of employees (employers' insolvency) Acts apparently without the consent of the claimant. The proposal must be seen in the context of the fact that redundancy payments are a resource to a household to compensate for a loss of employment and income and that it would allow recovery from a person at a time when a household is at its most vulnerable following a loss of a job. The concern relates to the lack of an adequate, objective and fair system to ensure claimants and their families are not subjected to hardship in the calculation of what should be taken.

The concern is exacerbated by current practice in the recovery of overpayments under section 13 of the 2012 Act which permits the Department to recover historic overpayments from claimants up to 15% of their basic social welfare payment, and more than 15% if the claimant agrees. I understand that until these changes are introduced, the maximum the Department can take is €2. If that is the case, I have a certain sympathy with the Department's wish to increase that and have no problem with it in principle. According to FLAC, the Department always seeks to recover the full 15% without any evidence that the person's capacity to pay has adequately been taken into account.

There is also the question of the statutory right to a redundancy lump sum. In practice, where an employer does not pay a lump sum, it could take up to two years to get a determination. Once such a determination is issued, an application is made to the Minister for payment. However, this could be wiped out by an alleged overpayment which the claimant has not had the opportunity to challenge. Claimants' rights to fair procedures must be safeguarded and provided for in section 14. I share the view that the section is essentially unfair and has the effect of defeating a statutory right to a redundancy payment. The proposal is that section 14 should be amended to include detailed procedures to permit due process and fair procedures to a person who might be subject to these powers before any payment is recovered in this way. If this is not possible immediately, the section should not be commenced until such processes, including right of appeal, are in place. No sum should ever be recovered that risks a claimant's income falling below adequate levels.

The amendment relates to section 16, which allows for a notice of attachment to other State payments when the Department seeks to recover a passed over payment. There is a balance to be struck. In genuine cases of fraud, nobody would have difficulty with the Department taking every opportunity available to recover money obtained illegally or through fraud. The problem arises where people have been overpaid through no fault of their own, through a clerical error on the part of the Department, which often happens, and are asked to repay the money in an unsustainable manner. That can be unfair. A number of State grants, such as the sustainable energy home grants, could also come under this. These grants are claimed by people after they have spent the money, and it could put families in unbearable hardship if that money is seized as repayment for an overpayment may not have been their fault. I have a number of concerns about the section, not all of which the Minister has addressed.

During last week's debate, I also raised the issue of grants such as those paid to third-level students, the elderly and the disabled. While the Minister did not respond during the debate, in the interim she has given me written confirmation that these grants will be excluded from recovery of overpayment.

Different parties and individuals have different views on this matter. As well as having a responsibility to those who rely on a social welfare income, I have a responsibility to those who pay PRSI, income tax and other taxes to ensure payments go to the right people in the right amount.

To give members an indication of the percentages involved, approximately 42% of overpayments arise as a result of fraud - in other words, people who claim something to which they are not entitled. Third-party error accounts for 37% - people misstate their circumstances unintentionally or their circumstances change and they forget to advise the office. The departmental error level is about 8%.

It sometimes arises that after a person has passed on they are found to have left a very significant estate behind while they were collecting a means-tested social welfare payment. It has been the practice over a very long period to recover those funds from estates. When I came into office as Minister, €2 a week could be recovered. It was offensive to people living in an estate where one person was known to have significantly defrauded the Department. If a person wished to co-operate, as has always been the practice, he or she could pay significantly more. When mistakes have been brought to people's attention, most have volunteered to pay significant sums back as soon as they could, commensurate with their means, and that is quite carefully done, but some people have given the two fingers to the Department, paid back €2 a week and left the Department waiting 20 years for the money. The people living beside them in the same estate are working and paying tax and PRSI while those people are giving two fingers to the Department. We should bear in mind that last year the recoveries involved amounted to more than €70 million. About half of that is recovered by direct deduction. We have made changes in the law to provide that if a person has moved on and gone to work, we can still recover moneys from him or her.

In an examination that was carried out in conjunction with the Revenue Commissioners and that was reported in the public media sometime ago, it emerged that some people who owed the Department money had very significant amounts of money in their bank accounts. I recall one case in which a person had approximately €400,000 in a bank account. It is very difficult to say to people who rely on a retirement pension, as many people do, that a person who has very large bank deposits should not repay a sum of money that he or she owes. The officials in the Department are extremely careful to take account of personal circumstances. The 15% can be recovered only from the personal payment; it does not relate to any other payments made to individuals or in respect of children in the person's household. It is all done very carefully and effectively, but the end result is that the recovery of moneys has been significantly enhanced. It also happens in a more timely way, and the beneficiaries of this are people who rely on a social welfare income but also general taxpayers who have to pay taxes and PRSI to fund what is a very important social welfare system in this country. I suggest that Members would not want to see the social contract undermined by a belief that moneys cannot be recovered from a tiny number of people who have abused the system, to the detriment of the people who support the system and who pay taxes.

Amendment, by leave, withdrawn.
Section 16 agreed to.

Amendment No. 16 in the name of Senator Cullinane and others has been ruled out of order as it involves a potential charge on the Exchequer.

Question proposed: "That section 20 stand part of the Bill."

Amendment No. 16 not moved.
Sections 17 to 19, inclusive, agreed to.
SECTION 20

Section 20 is opposed by Senator Mooney.

Section 20 relates to the provision of personal public service, PPS, numbers to Irish Water. I know the Minister is aware that concerns have been expressed about how this information could be used by Irish Water. I seek reassurance that the personal data that will be conveyed to Irish Water will be used exclusively for the purposes as outlined and that it cannot or will not be sold on to a third party or used in any way other than what is specified in the legislation.

The information here which potentially will be of most value to Irish Water is in regard to children in a household - children whose parents are in receipt of child benefit. Obviously, for child benefit purposes and in many educational situations, PPS numbers are used, and this provides confirmation of where the child is residing. It is anticipated that Irish Water may use that data because there is a proposal, as I am sure the Senator is aware, to give a water allowance in respect of children. I anticipate that this will be the major significant use of this data - to identify the number of children in a household under 18 who would qualify and, obviously, their location.

My motive in opposing the section was that no assurances have been forthcoming with regard to what could happen to this data. I understand this issue has been raised by some of my colleagues at briefing sessions. I want the Minister to put on the record that the use for which the data are provided to Irish Water, which she has outlined, will be the exclusive use to which it will be put. There cannot be any scenario in which Irish Water can provide that information to a third party for commercial purposes, as happens with a variety of personal information that is provided. All of us will be familiar with what happens when shopping online, whereby if one does not tick a box one's information is provided to third parties for commercial purposes. By default, many people find their information has been provided to parties beyond what they had originally intended. I need the Minister's reassurance that the use to which the data will be put is exclusively that outlined and no other, and that Irish Water cannot use it for any other purpose. Can the Minister assure me that this is written into the legislation?

I am happy to confirm that for the Senator. The ability of Irish Water to use PPS numbers and access relevant information is compatible with the State's data protection obligation, as provided for under the Data Protection Acts of 1988. The use of PPS numbers by Irish Water will have a legislative base and it will serve a public purpose, but the Social Welfare Consolidation Act provides that it is an offence to use PPS numbers in a manner not provided for under the Act, and a fine and other penalties are provided for in the case of a person who is convicted of such an offence. It will be a source of valuable information, but that information will be covered by general protection and we are satisfied that it will not be used for any other purpose by Irish Water.

Question put and agreed to.
Sections 21 to 23, inclusive, agreed to.
SECTION 24

I move amendment No. 17:

In page 24, between lines 20 and 21, to insert the following:

"(2) Failure of the trustees to notify members of changes as outlined under this section shall be deemed an offence as prescribed under section 3 of the Pensions Act 1990.".

This is a matter on which my colleague Senator O'Brien had wished to contribute, but unfortunately he is not able to be present. On the thrust of the amendment, we believe there is a gap in the legislation in that it provides for certain obligations for the trustees. The Bill, in providing for the amendment of section 50 of the 1990 Act, states that the trustees of the scheme shall "within one month of the date of the notice, notify in writing such persons as may be prescribed of the following".

It goes into some detail. Subsection (5) states:

it substitutes the following paragraph for paragraph (b):"(b) the trustees of the scheme and the employer to whom the scheme relates shall make such notifications and provide such information to such persons as may be prescribed, when and in such manner as the Pensions Authority may specify," and

(ii) in paragraph (c), by inserting "within such period as may be prescribed," after "direction,",

It goes into some considerable detail as to the obligations of the trustees in respect of providing this information. However, we believe that failure to provide this information and failure to subscribe to the section as proposed should carry a sanction. There is no sanction whatsoever. The trustees can blindly ignore this provision and there is no sanction. They can be incompetent or inactive. That is the reason we have proposed that failure of the trustees to notify members of changes as outlined under this section shall be an offence as prescribed under section 3 of the Pensions Act 1990.

The Minister will be aware of growing concern about the power of trustees in companies where they can make changes to pensions without any notification whatsoever to the members. The members find out afterwards or, alternatively, as is happening in the case of Aer Lingus, in a situation where they believe their defined benefits can be changed without any recourse by them to the trustees. They can do it unilaterally.

In the context of this legislation there is, in our opinion, a need for some type of sanction because this area is becoming increasingly fraught with controversy, primarily because there is a shortfall in a whole variety of defined pensions and companies are constantly changing their pension rights and obligations to employees. There was a time when all of this was straightforward. As we look back on that time it seems that was a utopia when there was no controversy about pensions. One paid one's contribution into a pension scheme in a company, the employers paid the pension and one was given it at the end. As I am afraid that scenario no longer applies, there is a real need for some form of sanction. We want to ensure the trustees live up to their obligations and that we do not have the scenario where members are having rows and arguments with the trustees who can then hide behind legislation such as this and, as the Minister said in another context, give them the two fingers.

I appreciate Senator Mooney's concerns. The training and selection of trustees in obviously critical in pension funds. I do not propose to accept the amendment, the reasons for which I will clarify.

Section 3 of the Pensions Act already makes it an offence for a trustee to fail to notify members where the pension authority makes a direction for a scheme to restructure scheme benefits. Section 3 of the Act provides for a range of sanctions for those guilty of an offence, under the Act, including fines and or a custodial sentence. I put it to the Senator, with respect, that there is no requirement for this amendment as it is already covered in the Act.

For clarification purposes, it does not make reference to this in the actual section. Will the Minister point out the part of the section that refers to it?

Section 3 of the Pensions Act.

Is the Minister saying that it is covered?

Yes. There is already a provision whereby trustees have to notify members. The issue the Senator raised is slightly different in the sense that members may feel very aggrieved by the actions or the proposals of trustees but there is a requirement to notify them. That is subject to sanctions, as I have outlined, so it is already provided for.

Amendment put and declared lost.
Section 24 agreed to.
Sections 25 and 26 agreed to.
Question put: "That the Title be the Title to the Bill."
The Committee divided: Tá, 28; Níl, 13.

  • Bacik, Ivana.
  • Brennan, Terry.
  • Burke, Colm.
  • Coghlan, Eamonn.
  • Coghlan, Paul.
  • Comiskey, Michael.
  • Conway, Martin.
  • D'Arcy, Jim.
  • Gilroy, John.
  • Henry, Imelda.
  • Higgins, Lorraine.
  • Keane, Cáit.
  • Kelly, John.
  • Landy, Denis.
  • Moloney, Marie.
  • Moran, Mary.
  • Mulcahy, Tony.
  • Naughton, Hildegarde.
  • Noone, Catherine.
  • O'Brien, Mary Ann.
  • O'Donnell, Marie-Louise.
  • O'Keeffe, Susan.
  • O'Neill, Pat.
  • Quinn, Feargal.
  • Sheahan, Tom.
  • van Turnhout, Jillian.
  • Whelan, John.
  • Zappone, Katherine.

Níl

  • Barrett, Sean D.
  • Byrne, Thomas.
  • Crown, John.
  • Cullinane, David.
  • Daly, Mark.
  • Heffernan, James.
  • Leyden, Terry.
  • Mooney, Paschal.
  • O'Brien, Darragh.
  • Ó Clochartaigh, Trevor.
  • Ó Domhnaill, Brian.
  • Ó Murchú, Labhrás.
  • Reilly, Kathryn.
Tellers: Tá, Senators Ivana Bacik and Paul Coghlan; Níl, Senators David Cullinane and Paschal Mooney.
Question declared carried.
Bill reported without amendment.

When is it proposed to take Report Stage?

Now. Sorry, my apologies, next Tuesday. I was losing the run of myself.

Is the Deputy Leader suggesting the Minister should finish the job before the change of posts?

My apologies to the House.

Report Stage ordered for Tuesday, 8 July 2014.
Sitting suspended at 1.40 p.m. and resumed at 2.15 p.m.