I thank the Chairman for the opportunity to come and discuss with the committee the Revised Estimates for the Department. Our officials have provided committee members with detailed briefing material for use at the meeting, which includes comprehensive financial and recipient data. This briefing also provides updates on the Department's performance on its output targets for 2018.
On foot of the observations made by the Chairman at last year's meeting, the briefing this year provides for a clearer comparison with last year's expenditure and the Estimates for 2019. Tables have been provided which show last year's outturn excluding the payment of the Christmas bonus allowing for a like-for-like comparison. Additional columns have also been included which explain the variance between actual expenditure for 2018 and the Estimate for 2019. I hope this provides more clarity to the committee.
As members know, the work of the Department is broad in scope and has widened over the last number of years. Throughout the life cycle, the Department offers services and income support to people from the payment of child benefit to supporting people through income support until they reach pension age. The Department's expenditure, at €20.5 billion for 2019, is the largest of any Department and accounts for 35% of gross current Government expenditure. To put this in perspective, each week, over 1.3 million people - pensioners, people with disabilities, people on maternity or sick leave, carers, and jobseekers - receive a payment from my Department. In addition, over 628,000 families receive child benefit each month in respect of 1.2 million children. With this level of expenditure, we must ensure that our social protection system is properly structured and that it provides support when people need it most. We also aim to ensure that the system is flexible enough to deal with changes in the economy and society in order that we are ready to deal with changes and challenges if they emerge.
Without the social transfers we provide, we would see a society in which poverty and social exclusion were much more extreme and acute. We are grateful to be able to do that. As I mentioned, the €20.5 billion departmental budget represents 35% of gross current Government expenditure and it useful for a moment to consider the areas in which this money is to be spent. The biggest single block of expenditure in 2019 will be on pensions, which will amount to more than €8 billion, or 39% of overall expenditure. As our population ages as, thankfully, people are living longer and healthier lives, an increasing proportion of departmental expenditure will go to pension provision and providing income support for people in their older years.
Expenditure on illness, disability and carers' payments amount to €4.4 billion in 2019, representing 22% of expenditure. We will see a further reduction in expenditure on working age income support schemes in 2019, largely driven by the ongoing downward trend in the number of jobseeker payments. Working age income supports will account for 16% of our output, or €3.2 billion this year. That also includes one-parent families, maternity and paternity payments and supplementary welfare allowances, as well as jobseeker payments. In parallel, expenditure on employment supports, including community employment, back-to-education allowances, Tús, the rural social scheme and various employment and activation programmes, amounts to €724 million this year or 3.5% of expenditure. Expenditure on working age employment supports is decreasing, reflecting reduced demand in the context of rising employment and reductions in unemployment, which we all think is a great thing.
Expenditure on children and families will account for over 13%, or €2.7 billion, of which €2.1 billion is spent on child benefit and €416 million is spent on working family payment supports. Expenditure on supplementary payments like rent supplement and on agencies like the Citizens Information Board and miscellaneous services accounts for €806 million or just over 4% of expenditure.
As I mentioned, 2018 saw a continuing fall in the live register and improvements in the labour market. Last week, the live register was at 193,300 people, more than 37,000 fewer people than was the case at the same time last year and over 75,000 fewer people than two years ago. This is great and welcome but we must not forget those people who are still unemployed. The Department's schemes and services are continuously adapting to ensure that they encourage movement from unemployment to employment or training and that we support people through activation services and employment opportunities and programmes where they need additional help to find a job.
In budget 2019, my second budget as Minister, I sought to focus on encouraging employment and supporting families with children. Building on the increases made in 2017 and 2018, people receiving weekly social welfare payments saw another increase in their rates, with €5 being added to the maximum weekly rates of payment, which is happening this week. Proportionate increases are also provided to qualified adults. Again, these increases will benefit our pensioners, people with disabilities, carers and jobseekers and will take effect from this week. Over the last four budgets, the Government has tried to increase the main weekly rates of payment by €15 per week and the main rates of State pension by €18 per week. This year, we are again increasing the rate for qualified children. Last year was the first time it was done and the rate is being increased this week by €2.20 for children up to the age of 12 and €5.20 for children aged 12 years and over. The rates are now €34 and €37 per week respectively. This represents increases for children in households dependent upon social welfare and is a direct response to evidence presented by the Society of St. Vincent de Paul, the Vincentian Partnership for Social Justice and Barnardos that the cost of raising and caring for children increases once that child reaches his or her secondary school years.
The rate of daily expenses allowance, formerly known as direct provision allowance, is being increased to the levels recommended in the McMahon report. The rate for an adult will rise by €17.80 to €38.80 and, for children, it will rise by €8.20 to €29.80. The income disregard for lone parents is again being increased by €20 to bring it to €150 per week and a new disregard for maintenance payments, which are used towards housing costs, will be introduced to the working family payment.
This year will see the introduction of a new jobseeker's benefit payment for the self-employed. My Department and I are currently working through the finer details of the scheme, which will provide a safety net not currently available to people setting up, running their own businesses and providing tens if not hundreds of thousands of jobs for others. In addition, a new parental benefit scheme will be introduced later this year which will allow both parents to access paid parental leave within the first year of their child's life. Other measures include the fuel allowance season being extended by one week, which will be paid in April, and a new hot school meals pilot programme, which is almost ready to be rolled out. The proof of concept for that started in January of this year and has gone incredibly well. It will be provided in up to 36 schools this year and, if successful, which I have no doubt it will be, my aim is to extend the scheme to a much wider audience. We are also commissioning research into the cost of disability which I hope will provide this committee and my Department with evidence to inform future policy direction, services and payments in this area.
The Department has also provided briefing in relation to progress against claims processing targets which I know is important to this committee. For many of the Department's schemes, claims are processed within or close to the Department's processing time standards. There were significant improvement in processing times for domiciliary care allowance in 2018.
However, for some schemes, the processing time standards were not achieved in 2018, particularly for illness related schemes. In mid-October additional staff were assigned to the carer’s allowance area and it resulted in a 35% reduction in the number of claims awaiting decision at the end of February 2019, as compared to the number at the end of September 2018. Given this reduction in the number of claims pending, it is expected that claim processing times will improve in the coming weeks. We will watch this carefully and reallocate staff if they do not. As I have said before, my Department is committed to ensuring claims are processed as quickly as possible and that delays are kept to a minimum. It is also worth mentioning again that anyone who is awaiting a decision on a social welfare payment can apply for a means-tested supplementary welfare allowance payment, pending the outcome of their social welfare application.
In comparing the Department’s expenditure in 2018 with the allocation for 2019 it is important to note that variances in expenditure under most social welfare schemes are typically explained by a combination of factors, including trends, including downward trends, in recipient numbers; changes in average weekly payment values; and differences in the number of pay days in any given year. In addition, comparisons in expenditure between 2018 and 2019 are impacted on by the measures introduced in budget 2019, including the increases in the weekly rates of payment, the carryover costs of budget 2018 measures and the payment of a 100% Christmas bonus in 2018, at a cost of €265 million. Provision for the bonus is made, subject to the financial position of the State, in October each year as part of the budgetary process and is not included in the Revised Estimates.
As I mentioned, I hope the revised presentation in the committee’s brief for this year provides greater clarity on the ability to compare 2018 expenditure and the 2019 Estimate. We live in uncertain times. What my Department and I intend to do is deliver some certainty to people when they meet challenges in their lives. The Department supports people during these life events when they cannot support themselves. Fortunately, as the economy has improved, we have been in a position to provide greater resources for improvements in the social protection system. In my statement I have sought to provide the committee with an overview of the scale and scope of the Department’s expenditure and how many people it reaches and illustrate how we could not manage without it.
