Vol. 1 No. 1
I welcome the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, and his officials, Tom Mulherin, Tim Quirke and Jane Dempsey.
Today's deliberations on the Bill are due to run until 8.30 p.m. I suggest we take a sos from 5 p.m. to 6 p.m. Is that agreed? Agreed. We can continue our deliberations tomorrow if necessary.
SECTION 1.
I thank the committee for allowing us to take Committee Stage today. Members will be aware that there is a time constraint in respect of both Houses of the Oireachtas passing the legislation. Section 1 provides the short Title and construction of the Bill. It is a standard section.
Section 2 contains the usual definitions of the various Social Welfare Acts referred to in the Bill. Again, it is a standard section.
I move amendment No. 1:
In page 5, before section 3, to insert the following new section:
"3.-Not less than every 3 months commencing on the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas a report on any provisions of the Social Welfare Acts which are not yet in force, and the plans, if any, for bringing such provisions into force.".
I welcome the Minister and I hope we will have a fruitful debate. I do not believe I congratulated him earlier on introducing the Bill but I now offer him my best wishes.
I am seeking to insert this amendment because provisions are often made in Acts but orders are not. The previous Administration made an order in respect of people receiving supplementary welfare allowance being able to appeal decisions. Provision was made in that regard by the Minister's predecessor but no order was made. It would be helpful if a review took place every three months to deal with such inaction. I hope the Minister is in a position to accept the amendment.
The proposed amendment is unnecessary. Any information a Deputy might require in respect of the implementation of outstanding provisions in social welfare legislation can be provided in the normal way through replies to parliamentary questions. I made a comprehensive reply to one of the Deputy's Labour Party colleagues in recent weeks detailing the various provisions in the legislation which have not been implemented in the past number of years.
I am familiar with the reply to which the Minister referred. However, it would be helpful if the legislation contained a statutory requirement that such information would be provided every three months without the necessity of tabling parliamentary questions.
The problem is that such information could be repetitive and a great deal of the Department's time would be used correlating it. The most recent reply I gave Deputy Quinn illustrated the current position. I believe the amendment is unnecessary and I cannot accept it.
The section is self-explanatory.
Amendments Nos. 2 to 5, inclusive, in the name of Deputy De Rossa are out of order as they involve a potential charge on the Revenue.
Section 4 together with Schedule A provide for the increases in social insurance benefits as announced in the budget. The personal rates of benefit for pensioners aged 66 or over and those aged 65 or over in receipt of invalidity or retirement pension are being increased by £5 per week. All other personal rates are increased by £3. Increases of approximately 3 per cent in respect of qualified adults amount to a minimum of £1.20 extra per week. These new payment rates set out in Schedule A will be paid during the week commencing 1 June 1998. This means the increased rates will be paid for a total of 31 weeks in 1998 as opposed to 29 weeks in 1997. Following on the increases, an old age contributory pensioner will receive £83 per week and a couple on old age contributory retirement pension will receive £135.50 per week where the dependent spouse or partner is under 66 or £139.90 where the spouse or partner is aged 66 or over. The personal rate of widows' and widowers' contributory pension is being increased from £74.10 and a widow or widower with two dependent children will receive £108.10 per week. The personal rate of invalidity pension is being increased to £72.20 per week where the recipient is under 65 and £83 where the recipient is aged 65 or over. A couple on invalidity pension with two children will receive £149.10 per week. The personal rate of unemployment and disability benefit is being increased to £70.50 per week. The weekly rate payable to a couple with two children will be £138.10 per week. The personal rate of pension payable to a widow or widower under the occupational injuries benefit scheme will be £94.40 per week and will be increased by £17 per week for each dependent child.
My amendments to sections 4 and 5, which deal with allowances and the non-contributory pensions, sought to bring the starting date for the increases to the beginning of April to coincide with the tax changes introduced in the Finance Bill. The purpose in making the proposal was not to dismiss the fact that the payments are being made a number of weeks earlier than on previous occasions but to draw attention to the fact that the intention of the last Government was to bring forward payment dates for general social welfare increases to the April date so that they would coincide with the tax changes for PAYE workers and others. The purpose was also to draw attention to the fact that the budget for 1998 was introduced in early December, roughly seven to eight weeks earlier than in previous years. This meant a number of changes and increased costs in the budget were applied six, seven or eight weeks earlier than would otherwise have been the case. Therefore, people on social welfare payments were at a loss because those extra costs were imposed. I tabled these amendments to highlight the previous Government's intention. Is it the Minister's intention to progressively bring the increases forward to April?
I support Deputy De Rossa. It is not an Oliver Twist approach that we want more. It makes sense if it is possible and funding is available that we should try to ensure the social welfare and tax years coincide. What would the cost have been this year if we had brought forward the payments of benefit and assistance to early April? Does the Minister accept it in broad terms as a reasonable policy objective? If it is not possible to do it this year, is he willing to see if it can be done next year? Does the Minister accept that as a reasonable and fair approach, especially in the context of the amount of money now available to the Exchequer? The Minister will point out that it could have been done before and we accept that. However, in light of figures such as the January Exchequer returns which brought in an extra £100 million, will he give a commitment to accept it as a target for next year?
I congratulate the Minister for the increases provided in the budget and I thank him on behalf of those who deserve them. People in every party realise people on social welfare were not properly cared for in the past.
As regards Deputy De Rossa's point about bringing forward the starting date for increased payments to April, only a certain amount of money can be spent. If the date were brought forward to April, increases would be lower, whereas the increases proposed in the budget will remain as they are now if the date stays at 1 June. The Deputy is only playing with figures. As regards Deputy O'Keeffe's point about there being plenty of money, that same money was around when his party was in power, yet it did not give the same increases as the Minister.
I support the amendments tabled by Deputy De Rossa.
We are not discussing the amendments. We are discussing the section.
I support the spirit of the amendments tabled by Deputy De Rossa. A similar amendment was tabled by Fianna Fáil in last year's Social Welfare Bill. It is interesting how positions change. Is there any reason, other than financial, the starting date for increases in social welfare payments should not be brought forward to April to coincide with the tax year for PAYE workers? It does not make sense that increases should start at a different time. People feel aggrieved that concessions in the budget to taxpayers will commence in April but increases in social welfare payments will not. Child benefit allowances will not come into force until September and the improvement in family income supplement will not come into force until October or November. Are there any doctrinal, as distinct from financial, reasons they cannot be introduced earlier? Later we will discuss PIN numbers and the card to be introduced by the Department of Social, Community and Family Affairs to facilitate co-operation between Departments, means testing, etc. Would the bringing forward of increases to April not be in keeping with this and coincide with what is happening in other Departments?
How many months has payment been brought forward over the past three years? I compliment the Minister on the provisions in the budget, particularly the increases in old age pensions and other social welfare allowances, especially those for the needy. The Minister has a real interest in the elderly and the less well off.
I compliment the Minister on bringing payments forward to 1 June; he might signal whether it is his intention to move towards an implementation date of 6 April. For a number of years the argument has arisen as to whether payments should be made in July, June, May or April. It is time we fixed a date acceptable to everybody. The changes in taxation take place on 6 April and over the next number of years we should seriously consider moving towards paying social welfare allowance increases from April. The Minister should signal whether this is his intention.
Some of the measures being discussed today originated from Fianna Fáil during discussion of the last budget or Social Welfare Bill when the party was in Opposition. It is interesting and positive to hear Deputy Browne say we all want to move towards an earlier date for the introduction of these payments. For example, county councils, of which many of us are members, must make decisions on housing costs or charges for those on social welfare living in council housing. A rental increase of between £2 and £3 was introduced on 1 January while the increase in social welfare is not effective until June. This is an anomaly. We all welcome increases for those in difficulty, but it can never be enough. Bringing forward the date of the increase would be appreciated by everybody.
This issue has been raised for a number of years. The budget, for many good reasons, is being introduced earlier and the issue is being raised more than previously. We know that the Government or Minister who satisfies the demand will be forgotten - it is of once off value. Each year the Minister chooses whether to bring forward increases to 1 April and reduce the increase by £1 or maximise the increase to, for example, £5 and stick with the old date or move it forward one or two weeks. Many items seem to be introduced from 1 October or 1 November by Departments, probably on the basis that it is easier for Ministers to propose something by pointing out that the cost for the remainder of the year will only be, for example, £1 million. The Cabinet agrees and forgets to inquire about the cost for the following year.
The Chairman is learning fast. We started work on the budget in early September and one issue exercising me was that referred to in the amendments tabled by Deputy Proinsias De Rossa and others. The issue was exacerbated by the introduction of the budget on 3 December. The budget was a substantial package and in my deliberations I was concerned to give people a substantial increase while making some effort at introducing earlier dates of payment. The Minister for Finance in his budget speech referred to this issue - perhaps I drafted what he said - and spoke for me and the Government when he indicated the intention to progressively bring payments forward to the extent which that is possible.
The issue raised by Deputy Collins is valid, namely, that people are better off getting a higher increase somewhat later in the year than a lower increase earlier. This means, in effect, a higher base from which to move when getting an additional increase the following year. Taking these issues into account I decided on very substantial increases in old age pensions and considerable increases in general allowances which were well ahead of the expected rate of inflation of 2 per cent. It is the intention of the Government to bring forward payments as progressively as possible in the context of the budgetary position.
Regarding what happened over the previous three years, Deputy De Rossa will confirm that payments were brought back in his first year in office but not in the other two. Perhaps there was a feeling after the first year that larger increases were better in the subsequent two years on the basis of the reasoning I used.
The cost of bringing forward increases by nine weeks in 1998 as proposed by the Deputy would be £15.64 million in respect of social insurance and £15.61 million in respect of social assistance payments, giving a total cost of £31.5 million and this is in the context of a total budget package of £125 million. This is why I brought forward payments by two weeks.
What would be the cost per week?
It would amount to approximately £4 million or a little less. The allocation of available funds for this purpose, however desirable, would in practice rule out many of the amendments and initiatives we undertook by reducing the amount of available money for the increases. All weekly social welfare payments shall be increased in the week commencing 1 June 1998.
The principle of bringing them back to coincide with the tax changes is good. At one time they were brought in at the same time. I do not know at what point the link was broken, although I believe it was done at a time when it was difficult to find cash for social welfare increases and they were pushed back in order to make the allocation for the year smaller. At that time, it appeared the Department of Finance was not as fussy about the cost in the following year but it is much more astute these days in terms of the carry over cost for following years.
The fundamental point is that the budget is introduced at the beginning of December so the gap between the implementation of the increases and the introduction of the budget has grown by six to eight weeks. Therefore, any price increases in petrol or food will apply for a much longer period before the social welfare increases kick in. Even bringing it back by two weeks, those on social welfare are faced with an additional four to six weeks of increased costs.
Deputy Crawford pointed out that local authority rent increases are applied from 1 January, yet social welfare increases for pensioners will not kick in until early June. There is an another issue apart from the question of linking it to the tax changes. There is now a larger gap between the date the budget is introduced and that at which social welfare increases are provided because of the change in the date of the budget.
Will the Minister tell us how the extra two weeks will be paid? There was a difficulty previously arranging that books, vouchers and cheques would be issued from the date due and that a lump sum had to be paid at the beginning of the period to cover the extra one to two weeks. Will it be incorporated into payments on the date announced or will a device be used to pay the lump sum for the extra number of weeks? What is the cash increase in the supplementary welfare allowance? What is the current level of death benefit and what is the new rate? How many people receive death benefit payments? This is an issue we need to address in terms of looking at a better way to provide assistance to people who lose a spouse.
On the supplementary welfare allowance, the cash increase is £3; the qualified adult allowance is £1.20. Some 558 people received the benefit.
How much is the death benefit?
I will get the Deputy the figures. There will be no delay because of the pulling back of the budget increases announced in December. There is ample time.
How much is the death benefit?
It is £92.40.
How much of an increase is that?
An increase of £3.
Are there any plans to reform the system of supporting people? Obviously, it is available only to people who have social insurance cover but there are many people who do not have such cover. Are there any proposals to change the way we assist people with a bereavement?
I have not examined that situation.
Amendments Nos. 6 to 9, inclusive, have been ruled out of order on the grounds that they involve a potential charge on the Revenue.
Section 5 together with Schedule B provides for increases in social assistance payments as announced in the budget. As in the case of social insurance benefits, the personal rates of assistance payments are being increased by £5 per week for those who have attained pensionable age and £3 per week for those who are under pensionable age. Increases in respect of qualified adults amount to approximately 3 per cent. The new rates set out in Schedule B will be paid in the week commencing 1 June.
There has been no increase in child dependant's allowance. Was this a deliberate policy decision? I understood that when there were increases for people on social welfare there was a corresponding increase for an adult dependant and a further corresponding increase for a child dependant. Is the Minister's explanation for the fact children were omitted on this occasion that he believes they should be left out? Perhaps it relates to the relationship between those on social welfare and those at work. Was it because of costs? I would be interested to hear the Minister's thinking. As somebody who has a strong interest in children I was appalled that there was not even a button for children under benefit or assistance.
Surely people of a certain age would not have children who would qualify?
On the point Deputy O'Keeffe raised, there has been a policy review of disincentives in terms of people returning to work and losing their benefits. As I said in the Dáil on a number of occasions, it is better to put resources into child benefit than CDA's in order to reduce the work disincentive. One makes income support more neutral when one pays it as child benefit as opposed to CDA; it is more neutral in relation to the employment status of the parent. One of the disincentives identified has been the issue of the loss of CDA when an unemployed person takes up employment. In recent budgets, increases have been given in respect of child benefit as opposed to CDA. I continued that practice in this budget and I hope to continue it in the future.
Does the Minister not accept that such thinking is predicated on increases in child benefit, which would be of relevance to those with children and those in need? The Bill makes provisions for increases in child benefit which do not come into effect until September, but these are nominal in value and only amount to 37p per week. I do not dispute the policy underpinning the Minister's approach and I am in favour of making child support available to people in employment, particularly the low paid, and those claiming social welfare benefits. However, that is surely predicated on granting adequate increases in child benefit. I am concerned that the Minister and the Government believe there is a case for not focusing on child dependant allowance rather than providing child support under the heading of child benefit. In that context, since there is a need for a more than adequate increase in child benefit which, to date, has not occurred, children lose out on both counts. Does that Minister accept this is a reasonable point?
I do not accept that the increase in child benefit is less than average; it is higher than the increase granted in the previous budget by the Government of which the Deputy was a member. It has been highlighted in various reports that it is better to provide increases in child benefit than in CDA. The final report of the Expert Group on Integrating the Tax and Social Welfare Systems came to this conclusion and recent policy has been directed and focused on targeting resources towards proper increases in child benefit. I share the view that child benefit remains one of the most effective means of tackling poverty because it channels resources directly to families. It is of particular importance to families on low income because, unlike CDA, it is not withdrawn when an unemployed parent takes up employment. Child benefit is not assessed as means for other secondary benefits, such as differential rents, medical cards, etc., and, as a result, it does not act as a disincentive to taking up employment. The previous Government correctly adopted the policy of increasing child benefit and, for the reasons I outlined, I have followed suit.
I do not disagree with the Minister in terms of the policy underpinning the approach. However, I disagree with the amount and late implementation of the increase allocated in respect of child benefit. Does he not accept that the previous Government, of which, incidentally, I was not a member——
I was referring to the broad church.
——focused heavily on child benefit which increased by approximately 60 per cent during its two and a half years in office? Does he not agree that this approach should be supported and that there should be decent increases in child benefit? I suggest an increase of the order of the 60 per cent given during the term of office of the Rainbow Coalition would be appropriate.
Deputy O'Keeffe and I could debate the merits of the current and previous Governments for the remainder of the day. While he might not have been a member of the previous Government, the Deputy obviously voted in favour of each of its budgets.
One of the other issues we considered, which will be very significant for the children of families on low incomes, was the provision of FIS based on net income. That, coupled with the increase in child benefit, will have a major impact on the lives of these families. In the early stages of the previous Government's term of office it increased child benefit substantially and I give credit to it for doing so. However, this proved to be to the detriment of other categories, such as pensioners. That is one of the reasons we considered pensions and made substantial increases in payments to the country's 300,000 old age pensioners. At the same time, however, we are committed to continuing to assist families, particularly those on low incomes, by providing increases in child benefit.
I move amendmentNo. 10:
In page 6, before section 6, to insert the following new section:
"6.-The Minister shall lay before each House of the Oireachtas a statement on the increase in the Consumer Price Index for the period of 1st January, 1998, to 31st December, 1998, within seven days of the publication of the relevant figures by the Central Statistics Office, and the statement shall compare the increases in Schedule A and Schedule B of this Act in percentage terms with the increase in the Consumer Price Index for the said period.".
I first want to speak on the existing section 6 which deals with child benefit. I welcome the fact that the Minister is continuing the policy initiated by the previous Government of freezing child dependant allowances in respect of social welfare payments and seeking to transfer those resources into child benefit. It is clear that child benefit is far more beneficial to families in general. It would make more sense if the child dependant allowance did not exist and child benefit was increased to an adequate level to compensate for that. I accept this will require enormous resources and that is why such resources were invested in child benefit by the previous Government.
Child benefit is not clawed back in respect of deferential rents, medical cards or if someone returns to work. As far as I can recall, child benefit is only assessed when a person makes an application for free legal aid. While in Government I sought to have that changed but I could not persuade my colleague in the relevant Department to do so. It makes sense that children should be supported across the board, regardless of the status of their parents.
The argument is often made that child benefit should be taxed. I disagree fundamentally with that. Will the Minister indicate his view on this matter? The theory behind taxing child benefit is that, because it is paid to all parents, regardless of their income, people on high incomes benefit from it. I do not have the precise figures but less than 27 per cent of families with incomes of £25,000 or more are in receipt of child benefit. That is because people enter the high earnings bracket when their children have grown up. What is the Minister's attitude to taxing child benefit? In my view, taxing child benefit would undermine its entire purpose. What will be the full year cost of last year's child benefit increase and the full year cost of the increase this year?
My amendment relates to inflation. The increases applied by the Minister are in addition to estimated inflation of 2 per cent this year, which is what the Department of Finance and the Central Bank projected at the time of the budget. There have been worrying indications in the last month that inflation could rise as high as 4 or 5 per cent. I hope that is not the case but if it is, a significant proportion of the real increases given by the Minister will be wiped out.
The purpose of this amendment is that the Minister will be obliged to tell us what impact the inflation rate is having on social welfare payments by the end of this year. We expect he will then bring forward a proposal to increase the social welfare payments to maintain the real increases, over and above inflation, for which credit is being claimed.
It is important that those on a fixed income who cannot go to their trade union and urge that their pay be renegotiated or cannot go to a shareholder's meeting and demand that a certain amount extra be paid on their shares or rewrite their contracts as executives or fiddle their tax or whatever, are protected. I ask the Minister to accept the amendment. I would have preferred to table an amendment which would oblige the Minister to index the increases in accordance with inflation. However, that would not have been accepted as it would have implied a charge on the Exchequer. I have used this device to have the matter discussed.
The consumer price index is now published monthly by the CSO. The report is issued about four weeks after the date to which it refers. It sets out in clear and concise fashion the rate of inflation for the month in question and the annual inflation rate. Given that the CPI is a high quality publication from the State body responsible for the production of statistics and is already available to Deputies and the public, I do not see why I should issue a separate statement on the matter.
Deputies have no need to be concerned about the issue raised by Deputy De Rossa - that these payments are lagging behind inflation. Inflation for 1998 is predicted to be 2 per cent. Even if it goes higher, as postulated by some, the rate of increases are well in excess of 2 per cent. The Bill provides for a £3 increase in all weekly rates of social welfare payments, together with a 3 per cent increase in general in the rates of qualified adult allowances. In addition, payments for those aged over 66 years have been increased by £5. In percentage terms, the £3 rise represents increases of between 4.2 and 4.6 per cent while the £5 rise represents increases ranging from 6.4 to 7.4 per cent.
With an expected rate of inflation of 2 per cent for 1998, the new payments represent real increases of between 2.2 per cent and 2.6 per cent for those receiving £3 and between 4.4 and 5.4 per cent for those receiving £5. As a result of the substantial changes, virtually all the social welfare payment rates will have exceeded the rates recommended by the Commission on Social Welfare.
The purpose of my amendment is not for the Minister to tell this committee what is the inflation rate but what effect any increase will have on social welfare payments. The Minister said correctly, on a statistical basis, that the increases he has given are in excess of the projected inflation rate, if it remains at 2 per cent, which we hope is the case but the Governor of the Central Bank indicated that inflation may reach 4 per cent by the end of this year. In that event, a significant part of the real increase in social welfare payments will have been eroded. The point of giving increases over the rate of inflation is to try to ensure the standard of living of those on social welfare keeps pace with that of those in work. The reality is that wage and salary incomes have increased way ahead of inflation and in some cases have been indexed against increases in inflation.
I do not doubt that if inflation reaches 4 per cent by the end of this year the ICTU and the social partners will want to renegotiate the wage elements of Partnership 2000 because they negotiated on the basis of 2 per cent inflation and their members' income will be eroded. The same must apply to those on social welfare.
The Minister implied that pensioners' income fell during the last Administration. However, it has been falling for a number of years because we tend to link social welfare increases to inflation, and marginally increase them above that. Other incomes increase ahead of that in terms of negotiated increases.
A report was submitted to the Minister by the ESRI which looked at the 1986 Commission on Social Welfare report which suggested levels of social welfare. The Minister said most of the rates have reached that point or exceeded it, although some are below it. The ESRI report shows that applying that rule of thumb means some people are falling behind others, relatively speaking, particularly in a booming economy. We must find a way of linking social welfare payments to the increases of income among the population. That report put forward a number of mechanisms which should be debated by this committee.
In Deputy De Rossa's reply to my last point he stated that traditionally social welfare payments had been linked marginally ahead of the rate of inflation, but that is not the case in the budget where we gave very substantial increases ahead of the rate of inflation. People in receipt of welfare will get percentage increases that other taxpayers may not get in their wages. As the Deputy pointed out, the economy is doing relatively well and there was a substantial social welfare package this year.
It would be remiss of me to speculate about inflation and if it will go over 2 per cent. There have been speculatory reports in the media by some people with vested interests in the inflation rates but most people now accept that it will be around 2 per cent. If it does increase substantially the Government will have to take that fact into account when framing next year's budget, particularly in relation to social welfare payments, etc.
I have a number of questions on child benefit.
In relation to the thrust of the proposals for child benefit the policy has been to increase child benefit as opposed to CDA. Another reason child benefit is more beneficial to children and families is that the payment is made direct to the mother. Most child benefit recipients have large families and low incomes and that is why the payments are weighted after the first two children.
The total cost of child benefit for 1997 was £25.04 million and in the budget year it was £8.33 million; in 1998 it is £28.38 million and in the budget year it is £9.46. Some Opposition Deputies tried to make the point that it was only 37p; it is more than was given the previous year. This should also be taken in conjunction with a considerable increase in the family income supplement. It was the aim of Partnership 2000 to increase child benefit and family income supplement.
I welcome the broad discussion about social welfare increases, etc. In percentage terms some of the increases have been substantially above inflation, but in reality someone totally dependent on social welfare is living in poverty. Individuals living alone, such as a widow or widower, people living on unemployment assistance or a pensioner, have no money to spare. These people need a substantial increase in their benefits if they are to live comfortably. We all would find it difficult to live on £75 a week.
I excluded my colleague, Deputy O'Keeffe, the spokesperson on Social Welfare, from speaking on child benefit, because there was an increase for twins and as he has twins he would have to declare an interest in this. In relation to the increase of £1.50 per week in child benefit, 60 per cent of mothers in receipt of this payment rely on it because it is their sole income - I am open to correction by the Minister on this. It gives mothers working at home a bit of freedom and independence. When the increase is put into context, it is very small. It is a pity it was so small bearing in mind that it increased from £20 to £30 in two consecutive budgets. I ask the Minister to look at this in the coming years.
As regards poverty and social welfare recipients, as the Minister pointed out, child benefit is one way to give money to the most needy. If a family has four dependent children the child benefit will be £140 to £150 per month, which is a reasonable amount, but this should be increased to £200 per month. This would deliver income to the coal face of poverty. I attended a conference where a man said he did not need child benefit and deposited it in his bank every month to use it as his family's holiday fund. He also said taxpayers should not have to pay for that. I believe his views would be held by a very small minority. I ask the Minister to review child benefit payments.
I regret that the increases mentioned in section 6 range from only £1.50 to £3 per week. As more families have a smaller number of children, the lower figure of £31.50 might be increased substantially.
I accept Deputy McGrath's general comments in regard to social welfare payments. While the percentages are large, I fully accept a £5 increase in the context of the cost of living today is not great but when approximately 300,000 will receive that increase every week, it amounts to a large sum of money. A total of 566,000 people will receive a £3 increase and this adds up to a huge amount of money in the context of a budget package worth £125 million.
The points the Deputy made on child benefit are relevant and it is one of the issues Deputy de Rossa touched on earlier when he referred to taxation of child benefit. Ensuring child benefit goes to families who deserve it as opposed to those who do not need it raises many issues which are not in the Programme for Government. The previous Government increased the benefit for the first two children by £1 and by £5 for subsequent children in an election year whereas I increased the payment by £1.50 for the first two children with a lower increase for subsequent children.
Everyone wishes to see social welfare payments going to the those who deserve them most. That raises the issue of fraud and anecdotal aspects of that and there is a great deal in the system. Successive Ministers and the Department have spent a great deal of time and energy trying to weed it out to ensure the money spent on behalf of the taxpayer is given to the right people.
I am bemused by the reference to the increases provided in an election year which has been made on other occasions by the Minister and other spokespersons for Fianna Fáil and the Progressive Democrats Party. What has an election year got to do with social welfare? It portrays a particular attitude of the Minister and the Government parties. Does this mean the sooner a general election is called, the sooner Fianna Fáil will provide even greater increases in social welfare?
In general over the three budgets for which the previous Government was responsible the increases in child benefit were enormous. There was a £1 increase for small families but significant increases for bigger families. That was in the context of trying to bridge the gap, the Recommendation mentioned in the report of the Commission on Social Welfare, which we were obliged to do because of the agreement entered into under Partnership 2000. There are swings and roundabouts as the Minister is aware.
How many anecdotal families are there who are so wealthy they do not need child benefit and refuse it? How many have returned their child benefit books because they do not need it? Is child benefit automatically paid when a child is born or must one apply?
One must apply.
So the person who complained about having to save it for his children's holidays applied for it.
Perhaps Deputy McGrath could contact the individual and suggest he does not claim it.
I should talk to his wife; I am sure she would have something to say.
The benefit must be physically claimed and if it is not, one can do without it. We do not have figures on those who returned the benefit.
We do not have figures of the number of many families with children who do not claim. A survey has never been carried out.
Similarly, we do not have figures to indicate whether the child benefit is the only welfare payment for 60 per cent of women. It may be an interesting exercise.
Amendment No. 10 is out of order as it involves a potential charge on the Revenue.
I move amendmentNo. 12:
In page 6, before section 6, to insert the following new section:
"6.-The Minister shall prepare a report on measures to close the differential between the rates of periodical benefits and rates of periodical social assistance paid to a beneficiary and the rates paid to a qualified adult and he shall lay the report before each House of the Oireachtas not later than six months from the enactment of this Act.".
This amendment refers to the difference between the main rate and the qualified adult rate. I seek a commitment from the Minister that he will, on a progressive basis, endeavour to close the gap between the qualified adult rate, which used to be known as the adult dependant's rate, and the main rate. In most cases, the qualified adult is a married woman while in a minority of cases it is a married man usually when unemployment assistance and pensions are involved. It is, correctly, an issue of significance given the increasing demand by women in the home for an income in their own right. Women with children regard the child benefit as an income paid to them directly because they are not dependent on their spouse to receive it.
The adult dependant rate has fallen as a proportion of the main rate in the budget. That is not to say an increase has not been provided but the rate of increase is less than the main rate. The Commission on Social Welfare recommended that we aim to maintain the rate at a minimum of 60 per cent of the main rate. What is the proportion in regard to unemployment benefit, unemployment assistance, old age contributory pension and old age non-contributory pension? We should move to close the gap between both rates. If we are serious about recognising the value of the person who carries the responsibilities at home on a full-time basis - and normally one can only claim the qualified adult rate if one does not have an income - we should move the qualified adult rate in the direction of the main rate whether it is a man or a woman.
It would be simplistic to equalise the situation between the adult dependant rate and the personalised rates and it would be very costly. However, I agree with the thinking behind Deputy De Rossa's approach. One of the best things done in the area of social welfare was to ensure that child benefit was paid directly to the mother. This measure was introduced by Brendan Corish but one of the problems is that too little of the money paid in social welfare reaches the household; frankly too much is spent on drink and the result is misery and hardship. It is accepted that the payment of child benefit to the mother has largely ensured that this money is spent on the household. I would be interested in measures which may not be costly but which would ensure that more money reached the person running the household - in most cases this is the mother; she is normally the person who suffers because of an alcoholic profligate husband - but I am not sure how this can be done.
The spouse can apply for the direct payment of the adult dependant allowance but the problem is that this is often the only money available for the household. The bigger personal allowance is for the person living alone who runs a household as well as looking after themselves while the adult dependant does not have the costs of running a household. I am not sure if this is the theory. If it is, there must be some way of ensuring that if difficulties arise between spouses and there is a payment direct to the adult dependant, not alone would that allowance go to the wife but so too would that portion of the personal rate payable to the beneficiary which is applicable to the household.
There should be an appeal system. We would want to ensure that the system was not unfair to either side. We should look at this area, not just in the context of paying more by way of the adult dependant allowance but from the point of view of fairness where there are difficulties within the home. We should operate on the premise that, where possible, if there is hardship because social welfare payments are being wasted on drink or otherwise, we should try to find ways to alleviate the situation. I am putting this to the Minister by way of supporting Deputy De Rossa's proposal.
I support the concept of the adult dependant rate being the same as that paid to the recipient. It will be costly but we should move towards that goal as quickly as possible. There are a number of reasons for this. The Constitution values marriage and the family and we should aspire to formalised marriage arrangements. If two people live together and one or both are making a false declaration for social welfare purposes, they can draw two individual payments from the Department amounting to approximately £130 per week between them. If they decide to marry and use the same address officially, their income is cut as one of them becomes the dependant. This results in a loss of about £20 per week. It seems unfair that we should penalise that couple because they decide to get married. Many might argue that this is reasonable but I believe we should not penalise people because they decide to get married. We should be encouraging rather than discouraging marriage.
Deputy Shortall produced a report on couples who are in this kind of situation. The Committee on the Family examined some of these anomalies. With the help of Colm Rapple, who was the special adviser, we picked cases which highlighted particular problems for couples who might decide to get married and found that some of the weekly differences are very large. The problems revolved around the issue of dependency.
Deputy O'Keeffe rightly stated that couples can appeal to the Department for separate payments. Wives often do so. If the householder - the wife in most cases - joins a FÁS scheme there is no facility for receiving a separate payment from FÁS. In such circumstances, the woman would be depending on her husband for funds to run the household. This can lead to difficulties. I am dealing with such a case at present. Is there any way that the Department can examine this? What difficulties would be involved in making such payments? This may be slightly outside the Minister's remit but he may be able to do something about it.
I wish to take up some of the points made in support of the amendment. Much of this comes back to payments made to women in the home who are experiencing difficulties. Particularly in the case of pensioners, why not issue two books and leave it up to the couple to decide whether they want one book. It could be the norm to issue one book for each spouse and couples not experiencing difficulties could get one book. This would not cost any money.
The same applies to child benefit. Many women have husbands who are well off but this does not mean that the women have money. When women reach pensionable age, particularly those living on social welfare, they experience difficulty because they never get any of the money into their hands. What is the Minister's opinion on the allocation of two separate books for old age pensions?
There would be huge administrative costs involved in the latter suggestion were implemented and, ultimately, this would not justify the cost. However, I will examine the issue but I cannot imagine that it will be done. Deputy McGrath correctly points out that the CE payment issue is within the Tánaiste's remit. We could inform her Department that this issue has been raised by the committee. A report produced by a child benefit review committee in January 1995 refers to a finding in a report entitled "Income Distribution Within Irish Households", Rottman 1994, to the effect that "58 per cent of women receiving child benefit had no other independent source of income". Deputy McGrath was not far wrong.
Regarding the relationship between personal rates of social welfare payments and the rates payable in respect of qualified adult allowances, the Commission on Social Welfare recommended that the appropriate rate for a couple should be 1.6 times the personal rate. The 1998 budget provided for a 3 per cent increase in general in the qualified adult allowance payable with social welfare allowance. From June next the qualified adult allowance will range from 56 per cent to 68.6 per cent of the relevant personal rate of payment. Increases payable with all long-term social insurance payments, with the exception of invalidity pension for those over 65 or in excess of 60 per cent of the personal rate, the rates payable for long-term social assistance payments and short-term social insurance payments will amount to 58.4 per cent of the relevant personal rate.
Also, the treatment of married, cohabiting and one parent households under the tax and social welfare systems is currently being examined by an interdepartmental group established by my predecessor, Deputy De Rossa, last May under the chairmanship of my Department. It will submit its report in mid summer. Deputy De Rossa asked about the percentage of qualified adult allowance rates for old age contributory pension. From June 1998 it will be 63.3 per cent for those under 66 years of age and 68.6 per cent for those over 66 years of age. It is the same for the retirement pension; for unemployment benefit, it is 58.4 per cent and for long-term unemployment assistance it is 58.4 per cent. For supplementary welfare allowance and the short-term unemployment assistance it is 60.2 per cent. Approximately 129,000 people qualify for qualified adult allowance.
I thank the Minister for those figures. In what direction are these percentages moving? Does the increase in the qualified adult payment this year maintain the relationship of the old age contributory pensions between 63 and 68 per cent? Are they still at that rate or are they less? What is the rate as a result of this year's increase? Is the proportion for that rate more or less than it was last year?
We gave very substantial increases in the old age payments, which means that the percentage has dropped slightly. The figure has fluctuated over the years depending on the increases given, but it has always been accepted that the figure should be linked to the Commission on Social Welfare's proposal to keep it at or around 60 per cent.
That is for the contributory old age pension, but for the long-term unemployment benefit it is at 58.4 per cent. Is that up or down on last year's figure?
It is down from 59.3 per cent. Between 1996 and 1997 this varied in relation to issues such as long-term unemployment from 59.7 per cent to 59.3 per cent; short-term benefits, such as injury benefit and unemployment benefit, showed the same fluctuation. Invalidity pension for those under 65 moved between 65.9 per cent to 65.2 per cent and the old age pension moved between 66 per cent and 65.4 per cent.
So the trend is downwards.
Ever so slightly.
In general policy terms regarding qualified adults, given that the trend of the ratio between this and the main rate is downwards, does the Minister feel it should go in the other direction? Should it not be at 1.6 and rising?
I would rather not commit myself to that because the working group is considering this issue and I hope it will report soon. One of the group's terms of reference is to identify and cost ways of ensuring consistent and equitable treatment of household types concerned in the taxation codes. As that remit would extend to endeavouring to protect the other spouse in the household, obviously much of my future work will stem from this review.
Amendment No. 13 is out of order as it involves a potential charge on theRevenue.
I move amendment No. 14:
In page 7, before section 7, to insert the following new section:
"7.-The Minister shall consider the possibility of introducing a Parents Child Care Supplement of £360 per annum for all children up to the age of 5 years to be paid directly to the mother through the Child Benefit Scheme and shall lay a report on this proposal on the table of Dáil Éireann within 3 months of the passing of this Act.".
With this amendment I am putting down a marker for the future. We have common cause that there should be a focus on child benefit from the point of view of financial support for child care. Fine Gael is committed to State financial support for child care. If we are to adopt the child benefit approach we propose to use this provision to supplement the inadequate support for child care in the budget and in the Bill.
Some initiative is required to provide additional child care support for families with pre-school children. The reason for this is that when children go to school they benefit from State support which is channelled through the Education budget and this increases as they proceed with their education. There is no State support of any consequence for pre-school children. On that basis a child care supplement should be paid to parents for children under the age of five. The proposal is £360 a year. It could be paid to the mother through the child benefit scheme. In my pre-budget submission I suggested this scheme be introduced this year on a phased basis for one and two year old children. Deputy McGrath and I have been discussing whether the number of children involved would be in the region 50,000 each year. I appreciate there is a cost factor, but in so far as Exchequer funding becomes available for child care, I suggest priority be given to this area in the future.
I tabled the amendment on the basis of the Minister's report and I propose that it be introduced straightaway. All sides of the House should agree that this be a priority area if Exchequer funds becomes available.
There has been an intense debate over the past number of years that something be done in relation to child care. I believe the debate is gathering momentum and I am sure the Minister will address the issue in Cabinet when there will be various proposals put and recommendations made by different groupings. Many recommendations will centre round tax relief on child care expenses. That will cause an inbuilt imbalance because it will automatically say to the stay-at-home spouse that their service in the home does not count and their input is being ignored. This would be an unbalanced way of providing child care facilities. Various other systems exist.
Under the Australian system means tested vouchers are available and they can be used by either double income or single income families. This seems fair. In this country where there are no adequate child care services, no registration of premises and no child care professionals, Fine Gael feels that something needs to be done quickly. A direct payment to mothers with children under the age of five would be a way of providing an income for those who need it most. The highest expense in relation to children is in the age group up to five years. Payment through the child benefit system would be the best option. There are approximately 50,000 children in each year cohort at the moment, therefore, the system would cost approximately £150 million a year. Nonetheless, it would be a direct payment to the mother for looking after small children.
Very soon this Government, or successive Governments, must look at child care facilities. The expenditure on these facilities will be substantial. Perhaps this idea could be fed into the system of providing help for mothers with small children and at the moment, because of a lack of registration of premises and trained personnel, this might be a good way of doing it.
My colleagues make a case for all parents. However, there is a definite case for parents working outside the home, because they are paying for child care out of an income which has already been taxed. It may be more a tax problem than a social welfare problem and my colleague says that the tax does not give a fair crack of the whip to the person who stays at home. But in fairness to a mother who is out working and paying for the care of her children from money which has already been taxed, there is a definite case for their getting some relief whether that be through child benefit or tax relief. I have met many women who feel very aggrieved that they are paying for child care while out working and they get no allowance for it. This is a problem that must be looked at.
I support the proposal as an initial step. Child benefit goes primarily to women who are caring for children and it is not clawed back. If the parent chooses it can be used to pay for child care, buy shoes, clothing or food, or even to pay for a holiday. That is the choice of the parent. It is paid directly for the care of a child or children. While it would be a good thing to pay it up to a certain age initially, an equally strong case can be made for child care for children attending school because working hours do not coincide with school hours. The drop in the live register in the past month is due to women taking up jobs. That will create enormous pressure in support for child care. It will also create pressures for conditions to be improved, for standards to be applied and for child care facilities to be licensed. That is an area we must address quickly. I support this amendment as an initial step towards improving child benefit generally and to support people who are rearing children.
Sooner or later a scheme will come in covering both areas but I hope it will be more generous than is being offered now.
Any attempt to provide tax breaks for child care would be an unfair way of using money as the tax break for child care will benefit those in well paid work. If you are not in work, or in work where you pay little or no tax, then you will get no benefit whatsoever. Arguably, it is the low paid person who is least able to afford child care.
In the past some families benefited by being on social welfare rather than at work. However, there is one means whereby all families would benefit and it would make it easier to stay at home and mind their children or pay someone to mind them properly. I agree with the previous speaker that a tax break would not be the way to go about it.
The estimated cost of providing a supplement of £360 per year to all children under the age of two years - and it is estimated that there are 146,000 children under two - would be £53 million and for all children up to the age of five years - 305,000 children - the cost would be £110 million.
How many family units would be involved?
Families with children under two years number approximately 60,000 and 130,000 is the figure for families with children under five years of age.
It is an issue which all political parties in recent times have addressed and it has moved up their agenda. The Commission on the Family looked at this issue and I expect to receive a report shortly. Part of its remit was to carry out a comprehensive examination of child care issues. The commission's examination includes support for families and their child rearing responsibilities and the role of services for children, such as nurseries, crèches, play groups and other pre-school services. The dual issue of recognition of the value of work done by women caring for their own children and the cost of child care arising from the increased number of women working in the labour market has been considered by the commission. Its final report will present its findings on how policy may best facilitate parents in their choices in relation to the care of their children.
On the wider issue of child care services, the commission is adopting a child centred approach. It is the commission's view that the care of young children should focus on meeting the child's needs for the optimum experience of childhood. The provision of child care services needs to be considered in the context of the child's needs as well as the role these services have in assisting parents with their child care responsibilities, whether the choice is to work full time in the home or outside it.
To assist with its work the commission has undertaken a national survey of the care arrangements which families make for their children. The survey was carried out by the ESRI. Information has been collected about families with a parent working full time in the home, families where the parent works full time outside the home and the care arrangements which the families make, from relatives to crèches, nurseries and child minders, and the alternative arrangements families depend on during school holidays, periods of illness and family upsets. The findings will be published with the commission's final report which, hopefully, will be published fairly soon.
The Minister for Finance indicated in his budget speech that he will consider tax relief for child care in the light of the report of the Commission on the Family and under Partnership 2000 an expert working group has been established to devise a national framework for the development of the child care sector. This working group is broadly representative of a wide range of interests and expert bodies who work with children as well as Departments, national women's organisations, trade unions and employer organisations. The group is chaired by an officer from the Department of Justice, Equality and Law Reform and is expected to finalise its report in 1998.
This is an issue which has taxed the minds of policy formers in political parties and in the recent past the party of which I am a member looked at it. We made a proposal in an election document which we intend to implement over the period of our Government - tax relief in the area of child care for people who work and also for stay at home spouses. It is accepted that it cannot be dealt with in a tax situation alone and other assistance has to be made for families who do not come into the tax net. All these issues are being examined by the Commission on the Family as other speakers have acknowledged. One of the reasons it has not been addressed until now, and one of the main issues, is the huge cost involved, as has been acknowledged by the members who proposed this. The figures are dramatic but, while our education system provides assistance to young people, more focus is required on the four years and under age group. That is an area at which the present Government will look in the reports by bodies, such as the Commission on the Family, to decide what policy we can adopt.
What were the figures given?
Family units.
It will be appreciated from the figures quoted by the Minister why I was modest in mine. As an opposition spokesman I was so responsible in my approach that I was talking of approximately £1 per day per child. I acknowledge there are major cost factors involved.
I believe there can be an injustice involved in tackling what we all agree is a problem area on a tax basis rather than a benefit basis. We should not differentiate between the mother at home and the mother who goes out to work. Having said that there is a continuing shortage of workers in certain sectors. Our greatest asset is women. Apart from the justice of providing additional child care, from a national policy point of view, if it helps free people to join the workforce, then that is better for the economy. That is one of the major benefits.
I accept Deputy de Rossa's point about acceptable standards of child care, whether one is talking about crèches or pre-schools or those looking after the children. We do not want a Louise Woodward case here. This is another aspect which must be examined.
I am confused by the figures quoted by the Minister. I knew there was an expense involved and I was working on the basis of approximately 50,000 children in each cohort from nought to one, one to two and so on. However, the Minister's figures suggest that there are 146,000 children in the first two years. Is this for a one, two or three year period? I understood that school numbers were falling.
The figures were taken from the 1996 census.
If the Minister is talking about up to two years, is he talking about, nought to one, one to two and two year olds? Is he talking about a two or three year cohort? I find it difficult to believe that there would be 146,000 children in a two year cohort.
All children from nought to two.
There are 146,000 children, that is, 73,000 for each year? I cannot accept that figure as correct.
I will recheck it but it is the figure we gleaned from the census.
The figure for those up to five years only averaged 60,000 children per year; the first figure is 73,000 per year. All the demographics and school provisions are on the basis that the numbers of children are falling. The figures quoted need to be rechecked. I was operating on the basis of approximately 50,000 for each year. If one allowed a payment on this basis for each cohort of each year, there would be an annual figure of £15 million. The Minister should check the figures and work out the exact cost. He should consider an approach along these lines in policy formation. I do not expect him to introduce it immediately.
I do not wish to have an argument with my colleagues. I understand the expense involved in rearing a child. However, in fairness to mothers who work outside the home, if they have one child it will probably cost a minimum of £60 per week and double that for two children. These mothers incur this expense as opposed to those who stay at home. I do not know why this injustice has been introduced into the income tax system. Why is there no tax break for those spending £120 per week and losing out financially for a year or two until their children are able to go to school? I am not arguing about whether people should be at home or out working, but there is an expense involved for the mother working outside the home. Can someone explain this to me?
I will speak quietly to my convenor colleague when we get back to base. Depending on the number chosen, 60,000 children would cost £21 million and 70,000 would cost £25 million. I believe the figure may be nearer 60,000. However, that is neither here nor there. The Minister has given what I consider a commitment that there will be equality of treatment for all couples. Whatever system is introduced it will have an equal effect on single income families and double income families. There will not be any discrimination against the stay at home spouse. In that context, when the issue comes up for discussion at Cabinet, will the Minister consider the Australian system? I have some documentation on the voucher system used in Australia which is particularly fair. They have a very good system in terms of the buildings used and regulations on the accreditation, registration and training of child care workers. We are not at that point yet but there is a lot to be said for the voucher system. I welcome the Minister's commitment.
The Department of Justice, Equality and Law Reform has direct responsiblity for child care. That is why it is heading the expert working group set up under Partnership 2000. The Minister of State, Deputy Wallace, has responsibility for this matter. Child care also crosses my Department because of its remit on the family. My Department will be working hand in hand with other relevant Departments, including the Department of Finance. The Minister for Finance gave some indications of his future proposals in his Budget Statement.
Amendments Nos. 15, 16 and 17 are out of order as they involve a charge on the Revenue.
I wish to use this opportunity to refer to the amendments which have been ruled out of order. They arise from a number of specific cases brought to my attention. Amendment No. 15 attempted to address the situation whereby some local authorities are taking the family income supplement into account in assessing differential rents while other local authorities do not do so. I tabled a question to the Minister for the Environment and Local Government suggesting that he ask local authorities to exclude family income supplement. His reply was as follows:
Local authorities are responsible, as an integral part of their housing management functions, for the determination of the rents of their dwellings and for decisions on the type of income to be taken into account in the assessment of rents. I have no proposals to change these arrangements which are in keeping with the Government policy of maximum devolution of functions to local authorities.
I agree that there should be a maximum devolution of functions to local authorities. However, no more than any other State agency, local authorities have no right to undermine measures introduced by Government to assist low income families. Local authorities which take family income supplement into account in assessing rents are under cutting the assistance being provided by the Department of Social, Community and Family Affairs. They are taking a claw back from the Department. That is unfair on the recipient and is not what was intended when family income supplement was introduced. Given that this issue cannot be dealt with here, I urge the Minister to raise this issue with local authority managers to seek a standard approach which excludes family income supplement when assessing rents.
I raised the back to education allowance at an earlier meeting of the committee. If someone is taking a third level course and has to spend some months abroad as part of it, he or she continues to be entitled to a third level allowance. However, he or she is refused a rent allowance. The effect of this is that the person must leave the accommodation in which he or she has been living for a number of years because he or she must go away for a number of months and cannot pay the rent. My amendment sought to overcome this problem by including an exception in the legislation under which social welfare would not be paid to people outside the State unless they were pursuing a course of education and in receipt of a back to education allowance.
The third point relates to community employment workers who were brought into the full PRSI contribution class by the last Government at their request. It is similar to the Minister for Finance, Deputy McCreevy's, experience of credit unions. Nevertheless, it was the correct decision because it means community employment employees are treated as workers in their own right and it enables them to benefit fully from the social insurance system in terms of pensions and unemployment benefit. The downside is that if the scheme finishes and they do not find work immediately they may lose secondary benefits. Some transitional measure should be introduced to cushion people when schemes finish. For example, if they finish a scheme close the Christmas, they should not lose their Christmas bonus at least in the first year. If they are still unemployed the following year, the position could be examined.
My amendment sought to establish that a person would not be denied any secondary social welfare benefits by virtue of having participated in a community employment scheme if he or she would be entitled to such benefits if he or she had not participated in the scheme. People would qualify regardless of whether they had participated in the scheme. I understand this position could not continue indefinitely and a transitional period would be required. However, it was the best I could come up with in the time available to table amendments to the Bill. I ask the Minister to comment on the three points and to indicate if he is willing to take any of them on board.
Problems were caused last Christmas because it was the first Christmas after the structures were changed. I know of a case where a community scheme ended on the last day of November and the people involved did not receive a Christmas bonus. This loss was significant to a man with a wife and five children who was on the scheme and it caused the family great hardship. The community welfare officer was not allowed to make up the difference and it was a problem for which the family had not budgeted. That can be put down to ignorance or whatever but the participants understood they would receive the Christmas bonus. People on another scheme which ended on 12 December received the bonus because the cheques were issued before they were out of the system. The anomaly was that people had finished schemes by Christmas but only some of them received the bonus. There should be some leeway whereby genuine hardship cases could be addressed.
I agree with Deputy Crawford and others. I mentioned to the Minister and his officials previously the difference between unemployment assistance and unemployment benefit for people coming off community employment schemes. It is a contentious issue and I received a letter yesterday from the INOU in Athlone. It is most aggrieved about the operation of UA and UB in terms of people coming off community employment schemes. This distinction can make a substantial difference. In extreme cases there can be a difference of £30 to £40 a week in addition to the loss of ancillary benefits, such as the Christmas bonus.
Members probably do not experience it, but a drop in income of £10 a week for somebody at that level has serious consequences. Given the level of work the Minister does in his constituency, I am sure he is aware that people on social welfare budget for Christmas. It is a big deal for them and in many cases the bonus is set aside for Christmas presents for children. Families rely on extra income at that time and every penny is counted.
During the debate on the credit unions I noted that in my local credit union approximately 600 people had taken out loans for Christmas presents, etc. and that the average loan was for £400. Many of the people who took out loans were probably in receipt of social welfare and planned to pay back the loan over a certain period. Any change in income for people at that level is significant.
I recall a case involving a man who came off a social employment scheme at the end of November. He felt he had worked hard for the previous three years, helping the community as a caretaker in a school. He was paid slightly above his social welfare entitlement and he felt he provided a good social service. When he came off the scheme, he was irate because he felt he was being penalised for having worked for the previous three years. His final words were that he would consider his position before he decided to join another scheme. Such problems leave a sour taste in people's mouths but I am not sure what the Minister can do in terms of his Department's resources. Nevertheless, he should examine this area with a view to equalising the position. Perhaps a transition period would alleviate such difficulties.
I thank Members for their contributions. The amendments are out of order because they involve a potential charge on the Revenue. Amendment No. 15 raises an issue which is outside the remit of my Department. It seeks to determine the criteria for the calculation of differential rents. Such rents are determined by local authorities and not my Department, but I take Deputy De Rossa's point. I understand some local authorities do not include FIS in their calculations. I have also encountered this difference. Local authorities can include it in their calculations at their discretion but it is primarily an issue for which the Minister for the Environment and Local Government has responsibility. I accept I have an ability to make my views known and the matter will be examined.
It is not the only area where there is a difficulty in relation to local authorities. As regards the household budgeting scheme some authorities are part of it and others are not. Although local groups have made representations on this matter, some local authorities are still refusing to deal with it. This is difficult to understand. It is probably an issue on which we can make our views known but, ultimately, it is up to the local authorities because of the devolution of power to them. I will do what I can in that regard.
I see where Deputy De Rossa is coming from in amendment No. 16, but residency is a key issue in regard to rent supplement. We would want to be very careful when considering any deviation from the principle of residency in the payment of taxpayers' money on rent allowance. For those reasons, I have no plans to alter the residency conditions.
The last amendment relates to one of the two issues - as well as the self-employed pensioners issue - on which I receive most representations. Like everyone else in the House, I received many representations in the run up to Christmas and it is an issue - I do not say this in a political way - of which I became aware when I became Minister.
It may well be that, as Deputy De Rossa stated, a number of groups involved in this area strongly lobbied the Government to regard them as full workers and I can see the logic in their wanting that. I would agree with the decision made. My understanding is that it was made quite clear to these groups, one of which Deputy McGrath mentioned by name, that, as in the case of the credit unions, when the overall body made representations the ramifications of what was being regarded as a good way to go were not fully realised by the troops. For that reason, the then Government introduced transitional arrangements to assist people who were on CE schemes at that time, but once the transitional period was over any new people taking part in the scheme would have known exactly what they were about and that they would lose these benefits. I do not think that word reached everybody because quite a number of people have made representations about this. This is a difficult matter. I cannot introduce special concessionary arrangements without having regard to the position of other short-term social welfare payments. For those reasons, I would not be able to accept the amendment even if it was in order. It would also carry a fairly significant cost.
I acknowledge these issues are very pertinent to the people involved. I accept what Deputy McGrath stated, that, at that particular level and particularly coming up to Christmas, these people felt they were entitled to something and found at a late stage that it was not coming. Perhaps the fault lies in a lack of information, but I think the people involved now know that these transitional arrangements do not apply anymore and that, if a person participates in a scheme, he or she will lose benefits to which others might be entitled.
Since this will now have an effect on how people weigh up the merits of whether to participate in CE schemes, does the Minister see merit in asking his partner in Government, the Tánaiste, to increase the rates so that the compensation is built in on a weekly basis over the period? This would make the CE schemes slightly more attractive, bearing in mind the debate about the down side of coming off such a scheme.
With regard to FIS and the local authorities, I accept that in certain respects local authorities have discretion about what they take into account for assessing differential rent, but it is done within guidelines issued by the Department of the Environment and Local Government. It seems that it is a responsibility of Government to decide that one agency will not undercut a payment being made by a Department or some other agency. If the Government of the day decides that a FIS is necessary to assist people who have children to remain in work or to take up work in order to create this differential between social welfare and paid employment, then it is not right or fair that a local authority would take some of that money back from the person concerned.
It is particularly unfair because some local authorities acknowledge that is should not be clawed back. I wonder whether this is an issue of natural justice: if I am living in Dublin city or county my FIS will be taken into account but if I am living 100 yards away, across the Leixlip bridge, my FIS will not be taken into account.
This is a question of fairness and equity in how local authorities are applying the criteria they have been given. I would argue strongly that it is a matter for Government to decide the integrity of the schemes should not be undermined by other agencies deciding to claw back what has been given out by another agency.
This type of issue has cropped up in another aspect of social welfare where, to a certain extent, I find it difficult to understand how a situation can remain the same. I hope to look at the issue.
I accept what the Deputy said. I undertake to raise the matter with the Minister for the Environment and Local Government. I would be inclined to agree with the Deputy that this income should not be treated differently by different local authorities, and I undertake to look at that.
Returning to an earlier issue, we have rechecked the figures and it would appear that, when we checked all those figures in relation to children, we were including children who were aged two and over. The number of children under the age of two is 97,500; the number of children under the age of three is 143,000 and the number under the age of five is 250,000. The respective costs are, therefore, £35 million and £90 million.
I move amendment No. 18:
In page 9, before section 8, to insert the following new section:
"8.-The Minister shall, within 3 months of the passing of this Act, lay before Dáil Éireann, a detailed report on the implications of the extension of the Family Income Supplement to the families of persons who are self-employed.".
This section deals with the FIS which we are anxious to extend to families of persons who are self-employed. The Minister has heard this argument before. We raised it in the Dáil during Question Time last November.
I think there is an injustice built into the system which excludes self-employed people. They make returns to Revenue and are taxed according to their income. If we take two families earning £200 per week, each with three children, the family whose income is taxed through PAYE is entitled to an FIS payment of about £40 per week, but the family of a self-employed person - be he a small business person, a farmer or something else - is not entitled to that subsidy.
Various people have recommended that FIS should be extended to the self-employed and there is no logical reason for excluding them, other than cost - the Minister said in the Dáil that the estimated cost was about £30 million. If a self-employed person brings a case to court, it would be against natural justice to deny him FIS because he is a citizen paying taxes and earning the same income as someone receiving the payment. The Department is saying it does not trust the Revenue Commissioners or the Department of Finance to have properly assessed the income of these self-employed people, so they will not make a payment. This is unjust and some future Government will sanction a change. The former Joint Committee on the Family made a recommendation - which originated from someone who is now a junior Minister——
Was the Deputy from a rural constituency?
Yes, from County Meath. In justice this amendment should be accepted.
I support this amendment because there are many injustices. It is not only rural or farming families who have this problem - there are many small shopkeepers and others struggling to keep industries going who should be recognised. I know of one family who built up a sizeable enterprise on a small number of acres which had little relationship to farming as such. Their figures were genuine but the banks were putting pressure on them and they had many other problems. They had no option but to close down the business and go on social welfare, at which point they were entitled to secondary benefits such as support for their house loan. The State is now paying them a lot more than it would have had it paid a small supplementary income. I hope that with time they will overcome their problem and get back into the business - it was a short-term problem which they could not survive.
I ask the Minister to consider this seriously. People often make flippant remarks about farmers being on the take and cooking their books, but they should consider the significant number who have left the land in the last 20 years. That figure is not too different from the present unemployment figure. We should take this issue seriously and help shopkeepers in small villages and towns. In canvassing north County Dublin I noticed areas which might benefit from such a scheme, so we should not regard this as for rural areas only. We want a report but we also want action in the not too distant future, or even more people will leave rural Ireland.
I support this amendment. It is not just a problem for rural areas. As I said on Second Stage, I am a member of a successful county enterprise board and meet young people with good business ideas whose big fear is that when they run into a bad patch, particularly in the first few years, there will be no assistance for them. Last weekend there was a television programme about farming in Wales and it was frightening to see people having to leave the land. The principle of family income supplement is to get people through a difficult patch; it is not meant to be a long-term payment. Anyone who pays taxes is entitled to assistance from the State if he or she hits hard times. This proposal should not be out of order or dismissed because it relates to taxpayers who should be assisted in the same manner as PAYE workers.
I am a little reluctant to contribute but I will nonetheless. I do not deny that small businesses may need assistance but I am not convinced that the family income supplement is the way to deliver it. I support the amendment because it calls for a report on the implications of extending FIS and I would be interested to see that. The Minister should accept the amendment; we should not have to divide on it. Such a detailed study could also show the possible alternative ways to assist small businesses.
It is wrong to say there is no help for small business people - they have various VAT concessions such as refunds and freedom from the need to register. Of the 100,000 farmers in the country, only 2,000 are registered for VAT and the others get VAT refunds of about £90 million per year. The back to work allowance scheme is also available to small business people and there is a range of other options. I am not arguing that there is no need to examine how we can ensure that businesses such as small shops can remain open in rural areas, but I am not convinced that FIS is the way to go.
As to the sentiment behind the amendment, all of us see the problems suffered by small businesses and farmers in rural Ireland. Has such a report been carried out before or does the Minister see an opportunity for the Department of Enterprise, Trade and Employment, the Department of Agriculture and Food, and his own Department to assess how these people could be helped? Family income supplement may not be the answer but many people have been seriously affected, so they are leaving business and going into the social welfare system. A report might lead to a new scheme being developed to help those people.
I fully support a report being prepared. It is not only small farmers who are affected but also small shopkeepers in rural areas and small towns. With the multinationals now taking over, an enormous number of small shopkeepers are going out of business. There should be some mechanism to assist such people whose businesses are falling apart.
This issue comes up a lot, but not perhaps as often as others. When we looked at the budget we felt the FIS's net income was more relevant and affected more people on low incomes. The estimated cost is £30 million but that costing was undertaken in 1994 - and times have moved on - on the basis of a 100 per cent take up, whereas FIS is not on a 100 per cent take up basis at the moment. The cost would be in addition to the existing expenditure involved in providing UA to self-employed people whose income falls below the rate of UA appropriate to family circumstances. Given that the Estimate was prepared in 1994, I have already asked my officials, as a result of this issue having been raised in the Dáil as a parliamentary question, to re-examine the Estimates to ensure their continuing validity.
There is also the wider issue of income support generally for self-employed and small farmers. That is something on which we will be keeping an eye. Because the main commitment in Partnership 2000 in related to a net income basis rather than gross wages, that was the issue I first addressed.
Like Deputy De Rossa, I am not altogether sure that FIS is the way to go in this area. The amendment asks for a report and, in effect, I have given the report, other than to say that I will look at the figures again. The Estimate is based on costs over and above the unemployment costs which are paid to some 2,700 self-employed families in receipt of UA and 6,160 smallholders with children, together with the cost of paying 17,500 new self-employed recipients with children who qualify. If FIS was to be confined to insured self-employed people only - in other words, those earning over £2,500 a year and paying class S PRSI contributions - the annual cost is estimated to be £27.5 million. This would assume a 100 per cent take up. It is an issue which I have asked the Department to examine. I do not want the House to divide on it, but I undertake to come back at Question Time and give an indication of the up to date costing.
This matter raises broader issues across urban and rural Ireland as to how, particularly in rural areas, falling income and supports will be replaced. I suggest that this issue should be taken up with the National Anti-Poverty Strategy which is under the remit of my Department and, if necessary, the Combat Poverty Agency, both of whom I have already asked to look at the whole issue of rural poverty and concentrate a bit more on it.
The National Anti-Poverty Strategy is an interdepartmental unit which will be able to involve relevant Departments. If the amendment is pressed I will obviously oppose it but, for those reasons, I would ask the committee to accept that we will look at the issue both from a costing point of view and from the broader perspective linked to the NAPS.
I thank the Minster for his comments and we will not push this issue to a vote. I am glad he has given a commitment that this matter will be pursued further. We are anxious to get a specific report from somebody. The Department has the wherewithal to bring forward such a report so there can be a public discussion on it. In that way we can examine all aspects of the issue publicly. I welcome what the Minister said and I hope he will take the lead in bringing forward such a report. It is not enough to supply figures at Question Time. I would prefer if there was a written report that we could scrutinise and talk about at another stage. I welcome the fact that the Minister is moving in that direction. Perhaps before Report Stage, he might discuss the matter with his officials and the interdepartmental groups to organise the preparation of such a report.
Does section 8 concern the PRSI disregard?
Yes.
If one compares single and double income families on exactly the same annual salary - for example, £20,000 - the single income family pays more PRSI than the double income one because the double income family has the PRSI disregard, of £100 for each person, twice. On the other hand, the single income family has one £100 PRSI disregard. That is unfair and it should be changed. While I know it would incur a cost on the Department but knowing his commitment to the family, I believe the Minister should look at this inequity. It is also mentioned in a later amendment.
Amendment No. 19 in the name of Deputy De Rossa is out of order.
I wanted to comment on this, but as we are approaching 5 o'clock and we will be taking a break I will defer it until after the break.
The Deputy may comment on it when discussing section 10.
Amendments No 22 is related to amendment No. 20 and both may be taken together. Is that agreed? Agreed.
I move amendment No. 20:
In page 10, subsection (1)(c), to delete lines 1 to 3 and substitute the following:
"'(r) other than in the case of disability allowance, an amount of £2,000 together with one-half of any amount in excess of £2,000 received under the following schemes:".
Under the provision introduced in the Social Welfare Act, 1996, the first £2,000 of REPS payments is disregarded for the purposes of assessing means for unemployment assistance, pre-retirement allowance and old age non-contributory pension schemes. In addition, any costs incurred by farmers in implementing the agri-environmental plan, as provided for under REPS, are also offset against other income from farming activities when assessing means. The Bill provides for an extension of the existing REPS disregard to the new scheme of compensation for compliance with special area conservation - SACs - conditions, which has been introduced by the Department of Arts, Heritage, Gaeltacht and the Islands.
In addition to the above, the amendment proposes an easing of the assessment of moneys received under REPS and the compensation scheme for compliance with SACs for social assistance purposes. The proposal provides that the first £2,000 will continue to be disregarded with the balance being assessed at 50 per cent. There are approximately 8,000 recipients of small holders unemployment assistance and no accurate figures on the number getting REPS. The current take-up of REPS among all farmers is 25 per cent. Assuming a similar take up of own recipients, there would be approximately 2,000 small holders on unemployment assistance getting REPS.
Indications are that the typical REPS payments to small holders are low. The average shareholding is in the region of 30 acres, attracting a REPS payment of approximately £2,000. For farmers in SACs new compensation arrangements will increase the payment of £2,000 to £2,500. There is a considerable variation within this. Under EU law, farmers in SACs are now required to farm their lands in an environmentally friendly way. This is not optional. In the case of farmers in SAC areas, therefore, the main impact of the change in the means test is not to create an incentive to voluntary participation in REPS but to increase the compensation for farmers who have to participate in the scheme.
I welcome this provision. As the Minister said, REPS is a very well tried environmental scheme and is useful for small farmers.
This is FIS for farmers by the back door.
Amendment No. 21 is out of order as it involves a potential charge on the Revenue.
I move amendment No. 22:
In page 10, subsection (2)(b), to delete lines 27 to 30 and substitute the following:
"(q) in the case of old age (non-contributory) pension, an amount of £2,000 together with one-half of any amount in excess of £2,000 received under the following schemes:".
The means test for family income supplement, which is more generous, should also apply to the carer's allowance. Given the service to the community which carers provide, we should change the means assessment criteria for the allowance. There is a great deal of demand from carers for a relaxation of the means test. I know my amendment was ruled out of order but the Minister should consider that.
A review of the supports provided to voluntary organisations by the then Department of Health was completed in 1995 and, as a result, everything has moved to my Department. The carer's allowance is a social assistance scheme which provides an income maintenance payment to people who are providing elderly or incapacitated pensioners, or certain persons with disability, with full-time care and attention. The improvements asked for by many people have been looked at time and time again.
The carer's allowance began in 1990 and there was a feeling in the Department that it should be reviewed. The view was that it should include other Departments, particularly the Department of Health and Children, because it has broader implications for the long-term care of elderly or incapacitated people. A review was set up a number of months ago and we hope the results will be available shortly.
We felt we could not address the overall scheme, in terms of means testing and so on, in the budget until that review was completed. We decided to increase the payments by £5 and £3. In an effort to assist carers, we propose to give them the free travel pass in recognition of the fact that they are required to give full-time care and attention. That has been greatly welcomed.
At my recent meeting with the carers' association they raised the issue of full-time care and attention to the people in their care. We looked at the scheme again and reviewed the operation of the condition whereby carers had to provide the care recipient with full-time care and attention. We decided to adopt a much more flexible approach. Carers may now attend educational or training courses or participate in voluntary or community based activities for up to ten hours per week, provided the carer makes adequate provision for the care recipient in his or her absence.
In regard to the point made by Deputy De Rossa about means assessment, obviously it would be preferable if there was a uniform system of means assessment. This issue is being examined as part of the review. I hope we can speak about it further when the results of the review are available.
The situation of carers has improved dramatically over the past couple of years. However, there are still some difficulties. I have come across cases of self-employed people who do not have a reasonable income but are remaining in employment while caring for their mother or father. They are classified as having an income of £75 per week and are not eligible for the carer's allowance or for any help from the health board. They fall between two stools. In one case, if the man were married his income would come within the guidelines but he does not receive a carer's allowance because he is single and providing care for his mother.
Another anomaly is that people in rural areas who work in towns or factories but live on the home farm, mainly to provide support for their parents, are not eligible for the carer's allowance unless their house is adjoining, that is, built onto, the original home, although they may live adjacent to the family home. I appreciate this costs money but it is putting a great deal of pressure on families.
This section allows claims which have been delayed by the Department for a period exceeding 12 months to be paid. However, there could be other legitimate reasons for a claim being delayed for longer than 12 months. I operate on the basis that every man should be given his due. If someone does not pursue a claim to which they are entitled, for reasons of ignorance or inability, why should the State not pay them the full backdated amount? If money were due to the Department, would it confine itself to 12 months? Will the Minister consider an approach which would involve paying everyone their entitlements from the time they become entitled to them?
That is a valid point in certain cases, but it could mean having to prove carers were doing their job 15 months earlier.
Section 11 provides for compensation for claimants on the basis of Department of Finance sanction where payments are delayed for more than 12 months. The section also provides powers for payment in respect of loss of purchasing power in cases where the Department has delayed payment and the claimant has not contributed to the delay. The Department of Finance sanction also provides for the payment of costs actually or necessarily incurred with the claimant being liable for the first ten and the total liability of the Minister being limited to 50. It is intended to prescribe these amounts in regulations.
As regards late claims, where a claimant proves to the satisfaction of a deciding officer or an appeals officer that, on a date earlier than that on which the claim was lodged, he or she would have been entitled to a payment, he or she is not disqualified from receiving arrears. However, legislation provides that claims cannot be backdated in excess of six months with the exception of child benefit or contributory pensions. Child benefit can be backdated to the first month following the birth if there is a good cause for the delay in claiming. The 1997 Act provided for the making of regulations to extend backdating periods in certain circumstances. These regulations dealing specifically with contributory, widow's and widower's, retirement and old age pensions have been made and are being laid before the House. They put on a statutory basis the existing system of extra statutory arrangements operated by the Department of Finance which enable arrears to be paid beyond the relevant statutory periods. The type of case expected to be considered under these provisions are merely pension cases, especially where the claimant was employed in more than one EU country and there is a difficulty in obtaining contribution records.
Amendments 23 and 24 are related. Is it agreed to take them together? Agreed.
I move amendment No. 23:
In page 11, before section 12, to insert the following new section:
"12.-The Minister shall consider the implications of-
(a) establishing a £1,000 Carers' Respite Allowance payable to all carers including those who are presently excluded by the means test, and
(b) increasing the present weekly income disregard from £150 to £200 per week,
and shall report to Dáil Éireann on this matter within 3 months of the passing of this Act.".
Carers are people who are very close to my heart. All Members have an obligation to the carers in our society. Each Member received a letter from the carers' association after the budget which stated there was an unprecedented sense of hurt felt by carers as regards the proposals concerning them in the budget. That is the thinking behind these proposals which I lodged prior to the budget and which are a reasonable and sensible reaction on our part to the situation of carers. They are the unsung heroes of society. We should recognise them and take into account the huge savings they make to the State because of their work.
The amendment contains two proposals: the first is a respite allowance which should be paid without a means test. Even if people are above the means test limit, they still contribute and suffer a great deal because of the situation in which they find themselves. There is also the common thread of additional costs in every household where a family member needs full-time care. There is also the need for respite for those providing care. The Minister should consider a carers' respite allowance of £1,000.
The second proposal is more in line with that from the Carers' Association. It suggests the weekly income disregard be increased from £150 to £200. This proposal is justified and it would apply to an estimated 5,000 more carers. Of the 30,000 carers, fewer than 10,000 receive the allowance. If the disregard were increased from £150 to £200, another 5,000 carers would be covered.
There is a great appreciation on both sides of the House of the work of carers and we should show cross-party support for their position by trying to ensure a reasonable allocation towards improving their lot. I ask the Minister not to tell me what he did in the budget. I know well what he would like to have done, but what was done was an insult to carers. They had a legitimate expectation of a reasonable response but they were utterly devastated by the actual response. We should work together to relieve that devastation.
I support the amendment. It calls for a report to the Dáil within three months of the passing of the Bill which I presume is why it is in order. My earlier amendment No. 21 specifically called for an increase in the carers' allowance not exceeding £200 per week and it was ruled out of order.
Deputy O'Keeffe's point about carers is correct. There are no firm statistics but it is estimated that approximately 30,000 people provide full-time care and attention. It is estimated by others that at least another 20,000, if not more, provide care at some level for a relative who is either disabled or has a mental handicap. It is something with which we ought to come to grips. The Minister indicated the interdepartmental report is not yet ready and that he hopes to have it some time soon. It is an issue which must be dealt with before the next budget at the end of this year.
If the care some people receive at home was not provided, residential places would have to be found for them. That is not to say every person can be cared for at home. It is inevitable some will have to be cared for in a residential setting because of their disability or illness. However, we must acknowledge that people are providing full-time care for a pittance. They are doing it every waking hour, seven days a week, 52 weeks a year.
At a meeting in Limerick on the mentally handicapped which I attended, a case was outlined of a single woman who is 40 and is caring for her 50 year old mentally handicapped sister. It had reached the stage where she could not cope. She spent a number of weeks in hospital suffering from depression as a result of the stress and strain. When she came out of hospital, she sought respite care and could not obtain it. She could not find a place to take her sister for a few weeks so that she could get a break after coming out of hospital. That is intolerable and there are tens of thousands of people in similar circumstances.
There is a carer's allowance; it has been improved in the past and I accept the Minister has improved it further this year, but we are far short of achieving what must be done for these people.
This is a very serious issue. People looking after relatives at home are at least being recognised. While canvassing in Limerick yesterday I met an old age pensioner in one house who was very upset. She is looking after her husband who has motor neurone disease. It is very difficult for her. She was receiving a carer's allowance until she became an old age pensioner at which time she was no longer entitled to that allowance. The changeover to an old age pension resulted in her losing out financially. I did not realise such an anomaly existed. I met another person who was looking after her mother and whose husband had difficulty in parting with some of his hard earned money to help with this. The woman, who was not receiving a carer's allowance, was under severe stress. She felt that even £20 per week, which is less than the full amount, would constitute some recognition from the State for the work she is doing. I know everybody has come across similar cases. While not wishing to labour the points already made by other Members, I urge the Minister to set a date for bringing the review before the committee. This would allow us show carers and the carers' association that something practical is being done. It is not good enough to say the review is due shortly. It would be helpful to know when it is due.
I ask the Minister to seriously consider the amendments tabled for the benefit of carers and those being cared for. On Second Stage I proposed that the Departments of Health and Children and Social, Community and Family Affairs come together on this issue. The Department of Health and Children is saving the phenomenal cost of keeping these people in hospital.
Every year since entering the Dáil I have contributed to this part of the Social Welfare Bill. We had some great discussions on it when Deputy Woods was Minister. It is only part recognition to describe carers as the unsung heroes and heroines. Those being cared for are delighted to be at home as they are in their own surroundings and want to remain there. Those caring for them often give up their own income by staying at home. As others have noted, they are saving the State much money by keeping hospital beds free. They are also avoiding subvention in many cases. It is an area of our social life which we should look after as those being cared for are delighted to be at home while carers save the State money. I know the Minister is under pressure to provide money for all types of schemes, but carers deserve special recognition.
The situation enunciated by Deputy Moynihan-Cronin seems anomalous and perhaps she will provide details for the Department. A carer who reaches 66 years of age does not have to transfer to an old age pension and would be entitled to the extra £5.
Deputy Woods, one of my predecessors, introduced the carer's allowance scheme in 1990. The view was that a review of the allowance should be carried out. The review is examining social insurance and whether care can be related to the social insurance scheme and the possibility of private sector involvement. The issue is relevant to health matters and this is why the Department of Health and Children is involved in the review.
Subsequent to the budget I met the carers' association and acknowledge their views. I allowed the association the new facility of having an input to the interdepartmental group. It was happy with this opportunity to make its views known to the group. I have asked that the report be presented to me earlier than the due date, which is mid 1998, in order that I am well prepared for next year's budget. I also suggested quarterly meetings with the carers' association, something it was happy to agree to.
I implemented a number of improvements but did not wish to do anything major which might not be in accordance with suggestions made by the review. In coming budgets I hope to do more in the context of the carer's allowance. It is an issue which cuts across my Department and the Department of Health and Children. I look forward to the result of the review in order, perhaps, that I can bring forward amendments which would give due regard to the efforts made by carers, the unsung heroes of the nation.
While I understand what the Minister says, and the possible developments he will embark upon, I am still not satisfied. The issue has been debated long enough and should have been dealt with. I will be pressing the amendment.
I have spoken to the Minister about carers who cannot live with the person they are caring for but who are living next door because of lack of accommodation. In my area one room in an old three bedroomed cottage where two elderly people are living has been converted into a shower and toilet. The carer, a daughter or relative, living next door is available 24 hours per day and some nights sleeps in a chair in the kitchen of the cottage when the patient is unwell. I ask the Minister to examine the situation of carers living next door who, because of a shortage of accommodation, cannot stay in the house of those being cared for and to treat them as carers in the context of the carer's allowance.
Deputy Brady and colleagues in Fianna Fáil have raised this issue with me. I told my officials that I feel the system is unfair and that some leniency should be shown in this regard. The Programme for Government includes a commitment to progressively relax the criteria for carer's allowance and to increase its value in real terms. We increased the value in real terms in the budget by £3 and £5, respectively. I hope during our tenure in office to fulfil the promise we made in our election manifesto.
I wish to bring to the Minister's notice an anomaly brought to my attention recently of a woman who lost her husband in tragic circumstances. She is a carer to her husband's mother and lost the carer's allowance when she was transferred to the widow's pension as her husband had been a PAYE worker. She not only lost her husband but she now has to live on £105 per week. She still has to care for her mother-in-law which is very difficult on that level of income. I ask the Minister to try to iron out these anomalies in the not too distant future.
I move amendment No. 24:
In page 11, before section 12, to insert the following new section:
"12.-Not later than 6 months after the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas a report on the following aspects of the carer's allowance:
(a) calculation of means on the basis of net earnings rather than gross earnings; and
(b) increase in the disregard of income from £150 to £200 per week.".
I move amendment No. 25:
In page 11, before section 13, to insert the following new section:
"13.-The Minister shall, within 2 months of the passing of this Act, lay before Dáil Éireann a report on the implications of paying all Child Dependant Allowances at the current maximum rate of £17 per week.".
Child dependant allowances are payable by the Department and we had much discussion on such allowances earlier. The Minister said the reason he did not increase them this year was that he thought it best to bring benefits to families by way of child benefit rather than child dependant allowances. While I accept the thrust of that, there is a great injustice in the child dependant allowance scheme. If one is the child of someone in receipt of unemployment assistance or benefit or disability or injury payments, she is worth £13.20 per week by way of child dependant allowance. If a person is in receipt of the old age pension or the invalidity pension and has a dependant child, that child is worth £15.20 per week, £2 more. If one is in receipt of a widow's or widower's allowance or a deserted wives' allowance, one's child is worth £17 per week by way of child dependant allowance.
It seems unthinkable that children should be put into different categories. It is grossly unfair to the recipients of social welfare that different payments should be made. There is a difference of 28 per cent in the child dependant allowance for the recipient of unemployment assistance and that for a person in receipt of the widow's pension, this is unfair. We need to change this and have a single child dependant allowance.
The Minister will say there were many different allowances until recently and that the situation has improved because now there are only three. However, we should not have three different payments. I suggest the payments should be rounded up to the higher payment of £17 per week. In the interests of justice, I ask the Minister to consider this proposal, prepare a report and bring forward the facts and the costings.
My colleague, Deputy McGrath, made this excellent point in the past. If support for children is to be concentrated on child benefit and if the child dependant allowance stabilises at its present rate, it should be stabilised at the top rate and this discrimination should be removed. I would like to know the cost of doing so this year and on an annual basis. If costs are not too great, I strongly urge the Minister to remove this unjust and unfair anomaly.
There were 36 different rates in 1996 and they have been whittled down to three. A change in policy took place recently in relation to CB as opposed CDA. The Commission on Social Welfare suggested a CDA rate of £10 which in 1998 terms would be £14. If we continued to pay CDA along the same lines that we have been paying child benefit, we would, in effect, be over the £14 suggested at this stage. The cost of standardising the CDA at the higher rate as opposed to the lower rate——
The Minister would not chance that.
——would be £55 million per annum 420,000 people, so it is substantial.
I do not want to question the Minister's figures but it would seem the bulk of recipients are being brought up.
How much would it cost to have two rates - to bring those in receipt of £13.20 up to £15.20? Would that be very expensive?
The bulk of recipients receive £13.20.
I will get the figures for the Deputy as I do not have them to hand.
I move amendment No. 26:
In page 11, before section 13, to insert the following new section:
"13.-The Minister shall, having regard to the financial difficulties encountered by widows and widowers, prepare a report and lay same before Dáil Éireann on the feasibility of extending to all widows and widowers-
(a) the free travel pass,
(b) the free electricity allowance, and
(c) the free telephone rental allowance.
Widows are the forgotten people in this country and for years we have discriminated against them. The amount they receive from the Department is very small. A widow living alone receives in the region of £67 per week, an abysmally small amount. A widow working and paying tax is taxed as a single person. In the Dáil some time ago I referred to the case of a widower whose wife died had left him with three small children. He was working and had lost his wife at a relatively young age. This man faced additional costs and still had to pay the mortgage on his house. The response of the State was to tax him as a single parent. Instead of moving on to the top rate of tax at £27,000 per annum, which he would have done as a married man, he moved to the top rate of tax at about £16,500. When his earnings and tax payable were computed, he was earning approximately £25,000 per annum. The net response of the State to his situation was that he would have to pay and additional £50 per week in income tax.
To reiterate what I said earlier, widows and widowers are the forgotten people. While those in employment gain a number of small benefits from earning a reasonable income, widows who are totally dependent on social welfare benefits are at the bottom of the ladder. We must do something about that. In such situations, we should put in place additional "freebies" to help these people live with a certain amount of self esteem. In that context, free travel passes should be given to widows. This matter has arisen on many occasions and action should be taken. The free electricity allowance and the free telephone rental allowance should also be payable to widows in receipt of social welfare payments. That would be a small price to pay and it would show that the State recognises they are undergoing difficulties in terms of their existing standard of living. I commend the amendment to the House.
I endorse the comments made by Deputy McGrath. Will the Minister indicate the costings relating to the different sections of these proposals? We should try to do more for widows. If something can be done which would not prove too expensive, I urge the Minister to do it.
I support the amendment which bears out my earlier point about the difficulties experienced by people who have been recently widowed. We should do what we can to provide them with assistance.
I also support the amendment because widows deserve every assistance we can give them. These people are deprived of their spouses' company and income and they carry on the work of both parents. I am amazed that they are treated as single people despite the fact that they are doing the work of two. I know a deserted husband who has to care for his four children, pay a mortgage, heat the house and buy food and he is also losing out on tax concessions. If something blew all the rules and regulations into oblivion, the Minister could start from scratch and rid the social welfare system of these anomalies. I do not know from where these differentiations originated. We should do all we can to help widows and widowers - although I accept that the latter are sometimes better off because they are breadwinners.
The cost of increasing the lower rate of child dependant allowance in respect of some 286,000 children from £13.20 to £15.20 per week would be £30 million in a full year.
Members will be aware that free travel is available to all persons over the age of 66 and to certain people with disabilities under that age. The other schemes are all available to those over 66 years of age and, subject to conditions, other people. This was extended in the budget. People in receipt of invalidity pension, disability allowance and blind persons pension who transferred to certain other social pensions will retain their entitlement to the free schemes. This measure will extend the current arrangements which only allow for invalidity pensioners who transfer either to retirement pension at the age of 65 or to widows' or widowers' contributory pension at the age of 66 or over to retain their free schemes. The cost of extending the free schemes to all widows and widowers who do not qualify at present would entail additional expenditure of £25 million. The extension of these schemes to include this category would have to be considered in the context of the budget.
There were 96,966 recipients of widow's and widower's contributory pension in September 1997. Approximately, 7.5 per cent of these are men. There were 18,845 recipients of widow's non-contributory pension in September 1997 and there were 1,700 widows and widowers in receipt of one parent family payments. The annual cost of free travel per person is £66, free electricity is £150 and free telephone rental is £175. Providing free travel to 40,976 people at £66 per person would cost just under £3 million; providing free electricity to 67,307 people at £150 per person would cost just over £10 million and providing free telephone rental to 70,186 people at £175 per person would cost over £12 million. This would lead to an overall total of £25 million.
The schemes advocated in the last number of amendments would wipe out the package I obtained in the budget and would not allow me to provide the substantial increases I have already put in place. An increase of £10.8 million - £18 million in a full year - was given to widows and widowers in the 1998 budget.
The figures quoted by the Minister justify the case he made when he engaged in a stand-up fight with the Minister for Finance. I urge him to remain the ring for the second round and to obtain more money.
The Deputy would not expect me to comment on that other than to say that a budget package of £125 million is not to be sneezed at, particularly in view of the fact that only £113 million was allocated in the previous budget which was introduced in an electionyear.
I accept what the Minister said about costings. Does he agree that widows are treated badly? Will he give a commitment to consider their case carefully? Will he also give consideration to widows who have no means of income other than social welfare payments? These people are in a special category and it would cost less and would be easier to achieve if we were only to supply them with the various "freebies" to which the Minister referred.
It recently came to my attention that, on reaching the qualification age, a person on widow's pension was advised by an official of the Department in Ballina not to transfer to old age pension. Is there a reason for that? By not transferring, that person lost out on certain concessions she would have received from the local authority.
She was advised not to transfer?
Yes, she was advised to remain on widow's pension.
Was it a non-contributory pension?
Yes.
That is because there would be a better assessment of her means.
A means test would not have affected her position.
Perhaps the official who explained the situation to her did not realise that. If it was a non-contributory pension, the assessment of means in respect of capital for widows' pension is more favourable than it is for old age pension in relation to capital.
Why does a person on invalidity at 65 years of age have to change over to pre-retirement when they will change to an old age pension the following year?
I am not sure they have to change.
A person contacted me today asking why he had to fill out forms——
To transfer to pre-retirement?
Yes.
I would not have thought that was obligatory. I can check on it if the Deputy gives me the details.
Will the Minister bring forward a special package for widows next year?
Everything I look at will be in the context of the budget available. I will give no hostages to fortune, but everybody accepts that the position of carers, widows and widowers needs to be looked at. This year's budget gave an increase of almost £11 million in rates of payment, a substantial amount, and an increase of £18 million in the full year.
Amendments Nos. 27 to 35, inclusive, are related and may be taken together, by agreement. Agreed.
I move amendment No. 27:
In page 12, subsection (1), to delete lines 12 to 16 and substitute the following:
'"primary account number', in relation to a public service card or a card issued under section 223B, means a number consisting of-
(a) an issuer number, issued under licence from the International Standards Organisation,
(b) a personal public service number, and
(c) a card number allocated, in the case of a public service card, by the Minister or, in any other case, by the person who issued the card;".
I wish to clarify points made in the media and the House regarding the Data Protection Commissioner and the INOU and to address the concerns that the personal public service number should be confined to those schemes and services covered by the definition of relevant purpose in section 223C. The definition of "transaction" has also been described as too broad.
The reason for this number is to ease access to public services for convenience of the individual. For speed of access to services, the number can be used to retrieve data on computer systems. It helps administration within agencies with matters such as medical records in a hospital and it facilitates the sharing of information across public service organisations. It is also an aid in the control of schemes. When carrying out a transaction with State agencies, a person will be required to quote his or her number. "Transactions", as defined, therefore, cover the interactions people may have with the State.
When it comes to the extension of sharing data among State agencies which is provided for in this Bill, the definition of "transaction" is specifically limited by the purposes by which the data may be shared, i.e., the relevant purpose as provided for in section 223C. These purposes are for determining entitlement to and/or control of the following: social welfare benefit or assistance from my Department, certain income support schemes administered by the health boards, the medical card scheme, the differential rent scheme, the higher education grant scheme and civil legal aid.
It has long been a matter of concern to members of this committee, the Public Accounts Committee and other public representatives that individuals who have recourse to income maintenance from the State must access each service individually and repeatedly give the same information. This incurs additional expense, delay and inconvenience for the individual and is also wasteful of State resources. In his report on means testing in December 1995, the Comptroller and Auditor General stated that to be effective and economic means testing must avoid duplication of tests. His report also found that approximately 600,000 means tests are carried out annually, and the administrative cost is in the region of £15 million. My Department and the health boards account for 48 per cent of these means test assessments. The estimated annual staff cost for my Department is £4.8 million and it is £9.7 million for the health boards. Imagine what that money would do for hospitals.
This report was fully discussed at the Public Accounts Committee meeting of 27 June 1996 and this proposal addresses these issues for the first time. There also appears to be some confusion as to the purpose for which the public service card will be used. Its main purposes are to act as a convenient and permanent reminder to a person of his or her number and to speed up the identification process when accessing public services. For example, currently when a person signs on in a local social welfare office, his or her card is swiped through the card reader. The reader uses the number on the card to retrieve the individual's details, which speeds up this routine transaction and also to access social welfare payments. In the future it is hoped that in a similar fashion a person can use a card to access their own personal files in a secure way. In short, the card will act as a record of the individual's number and speed up access to data or services. It does not hold any specific scheme, claim or means data and is not a data sharing device.
I wish to address the concern expressed that I or future Ministers could extend the list of specified bodies for the purpose of this section or can add information to the public service card or payment card by means of regulation without recourse to the House. I also note that the INOU would prefer that all extensions to these definitions should be brought in by way of primary legislation. I draw Members' attention to section 14(2) which specifically requires me or any future Minister to lay all such regulations before both Houses of the Oireachtas and that they be the subject of a positive motion of each House. By inserting this amendment into the Social Welfare (Consolidation) Bill, 1993, I have made this a legal requirement, thus ensuring full and open debate on any such provision. This should allay any fears people may have on this subject. Furthermore, data may only be shared for the six specific purposes detailed in the Bill. These purposes can only be extended by means of primary legislation.
It is also suggested that the Social Welfare Bill is not the appropriate vehicle for these provisions. There are several reasons responsibility for these proposals rests with my Department. The Department has had responsibility for allocating RSI numbers since 1991. Likewise, the Department is responsible for issuing social services cards. The Department and the health boards carry out approximately 48 per cent of all means assessments, and it has already developed a central means database, taking a lead in this area by presenting the first proposals on the integration of services to Government. We have also been given the responsibility by Government to bring these measures forward to implementation. For this reason, the Social Welfare Bill was seen as the most appropriate vehicle for bringing forward these proposals.
In the development of these proposals, the former Minister of State, Deputy Durkan, and my officials consulted on several occasions with the data commissioner's office, accommodating the concerns raised as far as possible. The commissioner has expressed his appreciation of the fact that his comments on section 223B, the payment card, and section 223C, the sharing of data, were taken on board. Furthermore, it is important to note that the Attorney General has approved this section and specifically stated that it complies with the terms of the 1981 Council of Europe Convention for the Protection of Individuals with regard to the automatic processing of personal data, which is ratified by the Data Protection Act, 1988.
It bears repeating that the highest law officer in the land has said this section is compatible with our data protection obligations. If necessary, I will go into the detail of the section, but for brevity, section 14 provides for changes recommended by the interdepartmental report on the development of an integrated social services system. The aim of ISSS is to ensure delivery of quality service to all citizens.
Section 223 deals with the public service number and section 223(1) deals with the specified body. It also provides for such other persons as may be prescribed. As I said earlier, if any such regulations are brought forward to extend this list they will require approval in draft form by both Houses before being passed. The subsection also defines the words "transaction", "spouse" and "primary account number" for the purposes of the new sections.
I highly recommend that these two sections be accepted by the committee. As I said, the report was on the stocks when I came into office and I was very taken with the proposals made in this regard. I highly recommend that we proceed on this basis.
I have no difficulty with the introduction of such a card in principle as I welcome anything which would cut through the red tape for applicants. However, the Minister must understand that I tabled these amendments because I am concerned about some sections of the Bill.
The Data Protection Commissioner, Mr. Glavey, outlined his concerns about the introduction of the public service card to the committee this morning. He told us this Bill contains the most important data protection issues since this Data Protection Act was passed ten years ago, a very important point.
My greatest difficulty with it is that the Bill makes no provision to inform welfare claimants of the information being recorded on the card, with whom it is being shared and for what purposes. The introduction of the public service card merits a Bill in its own right because proper ground rules for its use must be set. Further debate is needed on the issue. The proposed identity card will only be acceptable to me if there are very strict limits on the type of information which can be stored on it and with whom this information can be exchanged. Claimants must know at all times for what purpose their card is being used. The INOU also expressed its concerns in this regard to us this morning.
I propose in amendment No. 28 the deletion of the line "such other persons as may be prescribed" from subsection (1), which is perceived as being very open. I intend to press my amendments. I am very concerned that people's privacy is being invaded. If the subsection is passed as it stands we will set a precedent for the introduction of other public service cards for clients of other services.
I am amazed these proposals have aroused such little public debate. If I might criticise our friends in the fourth estate, the media seem to be more interested in looking for gossip rather than taking on this serious issue.
I understand fully the point made by the Minister. All parties have been associated with the interdepartmental report in this and the two previous Governments. The issue has not been sprung on us overnight.
I want a better and more efficient delivery of services to social welfare recipients. They are entitled to the benefits of the electronic age, such as collecting their money through ATMs. The Exchequer and the taxpayer are also entitled to the benefit of proper controls to ensure the services go to those to whom they are properly directly. Those who abuse the system leave less for those who need it. I fully support the proposal in so far as it will assist in the provision of controls.
Having said that, I share some of the concerns expressed by my Labour Party colleague. None of us wants to have an Orwellian system in which Big Brother is watching us all. It would have been better to deal with this issue on a stand alone basis. Any further primary legislation on the matter should be on a stand alone basis. I do not favour rule by regulation in this unknown area. I understand the Minister's point that regulations must be laid before the House and would require a positive motion, which is better than the usual procedure of just noting them in the Library. However, it means nothing in practical terms because it will be nodded through on the Order of Business without debate. Unfortunately, that is what happens in such situations.
Will the Minister reassure us that this powerful new medium will not be abused? I am also concerned about individuals being left in weak and defenceless as a result of a mistake being made in the use or abuse of their card. Is that fully covered?
Reference has been made to the wide ranging nature of the definitions. As was mentioned earlier, the Minister has power to extend the list of specified bodies by regulation. That puts a major power in the hands of the Minister, despite the fact he will have to refer it to the Dáil. Attention has been drawn to the definitions of "transaction" and "public funds" by the Data Protection Commissioner and the INOU, which is a further worry.
Will the Minister clarify the inclusion of the registrar general, who seems a little out of place in juxtaposition to the health boards, FÁS and local authorities? Incidentally, is there a typographical error - should it be "Oifig an Ard-Chláraitheora" rather than "Oifig and Ard-Chlaraitheora? Unless my Irish has got very rusty, I think it should be "Oifig an Ard-Chlaraitheora".
I am anxious to be supportive and to see this new system in operation. However, I share some of the concerns expressed about the possible development of a "Big Brother" system which could be abused.
Does the Minister see any validity in the recommendation made to the committee today that the words "public funds" should be deleted to tighten up the section? The Data Protection Commissioner suggested the issues might be addressed in the short term by the substitution of the words "a benefit, service, payment allowance or grant mentioned at (a) to (g) in section 223C(1)" for the words "public funds" in the definition of a "transaction". He thinks the use of the words "public funds" opens up the whole thing to all kinds of payments, etc. Deputy O'Keeffe queried the words "Oifig an Árd-Chláraitheora". What is the Minister's direct response to that? Deputy O'Keeffe said, in his very articulate manner, that he would be happy with these changes.
We have only 50 minutes to discuss a major change in our law on how we deal with citizens in terms of the services they are entitled to and the amount of information which the State may have and exchange between particular agencies about individual members of the public. As the Minister pointed out, these proposed changes were already in motion when he came into the Department. That is not to say that the proposals as they have emerged would have necessarily been the same if another Minister was in situ.
I think this is a good idea but how it is implemented is important. A significant proportion of our population, for a variety of reasons, has to depend on income from the State. The State provides social welfare payments, medical care, medical cards, rent allowances, etc. Such people have virtually no privacy because they have to tell the corporation or the local authority everything about themselves. The must say who is living in their house, what is their income, who is coming and going, what is the income of their sons, daughters or husbands, etc. Social welfare recipients have to do exactly the same thing. They have no privacy, even though this information may be collected in private offices. There must be controls in place if we are to help the citizens but we must be extremely careful about it. For that reason I have tabled an amendment asking for a report within 12 months of the commencement of this scheme in whatever form it is passed.
Having listened to the Data Protection Commissioner and the INOU, who share the same views on this, it would be far better if the Minister deleted this section on public service data and brought it back to us as a separate Bill. It is not essential to treat this section like the rest and pass it within a certain timeframe. To delete it and bring it back will not result in it being voted on here. It will simply mean that the Minister and Government are accepting that privacy is a serious issue. Technology is developing at such a rate that nobody knows what will be the implications of what we do today.
I am also concerned about television cameras being set up around our towns and cities. There seems to be no control over who operates them. If we pass this now there will be a public outcry that there was no opportunity to have a public debate on it. The INOU, the Data Protection Commissioner and I support the principle but there are aspects that have to be taken into account in how it is going to implemented.
The Minister spoke about regulations being made by positive motion. It is a recognition by the Minister that the normal way of dealing with regulation is by way of a negative motion. This process means regulations are tabled and if they are not rejected within 21 days they automatically become law. The positive motion means that, in theory at least, they are tabled in the Dáil and debated in public session. However, the practice has developed that positive motions are brought forward on the Order of Business and approved without debate. This is because of the number of positive motions and the amount of legislation the House has to deal with. I do not know how we can guarantee a debate on the positive motion as regards this Bill. I do not know who will be in office when those regulations are introduced. I do not know what commitments can be put in here and complied with. I do not know enough about the implications of what is in the Bill to be able agree to it.
I acknowledge that the fingerprints of quite a number of previous Ministers and Governments are on this issue. I am criticised for bringing forward this Bill. Sometimes we forget what we said in Opposition. I remind Deputy O'Keeffe of what he said on 4 February. He told me that if I got on with the job he would give me his full support. He said that this matter had been hanging around for years. He asked: "Does the Minister understand the frustrations felt by people who want a better and more streamlined service? Will the legislative jungle be cleared so that a new system can be brought into operation? If so, I will support the section in the Social Welfare Bill which deal with this issue". That is what I am trying to do in this Bill. I have more quotes from different parties. I am surprised the Labour Party, as we saw in the weekend papers, now have difficulties with the Bill. In interviews during their time in Government they were fully supportive of this concept.
I accept what has been said and it is for that reason we took on board a lot of what the Data Protection Commissioner said in his report. We had meetings with the INOU in relation to this when we were putting it in the Bill and, as a result of those meetings, their general fears were allayed. The Data Protection Commissioner acknowledged that we have accepted some of his proposals. This is not a wide ranging section. I acknowledge Deputy De Rossa's views on the report but this scheme will be introduced on an incremental basis and it will be a number of years before it is up and running. It is for those reasons we restricted it to positive approval of the Houses of the Oireachtas.
I think it was Deputy O'Keeffe who mentioned regulations being passed on the nod. I recall as Opposition Whip for the two and a half years before we took office that on occasion I asked for and was granted a debate on regulations before the House. I recall one famous occasion where the former Deputy, Máire Geoghegan-Quinn, requested a debate on regulations dealing with the VHI and psychiatric care. It can be done and I expect that, irrespective of what Government is in office, it would allow a debate on this issue.
Some people stated the measure should not be in this legislation, yet when the previous Government made a decision to promote and progress it, it gave the job to the then Minister of State at the then Department of Social Welfare, Deputy Durkan. Once someone claims child benefit, the child receives an RSI number. I was in Athlone regional office, keyed into the computer and saw details on my two daughters, aged seven and nine, such as their RSI numbers, their date of birth, etc. The information already exists. It is ludicrous that, if someone applies to the community welfare officer for a supplementary welfare allowance, they must give certain information which by law they must give again if they apply for a medical card. This card will streamline that process and it will also have a benefit as regards control. I make no apology for that.
For all those reasons, this is a good measure and it will endeavour to streamline the process to a stage where there will be common means testing. As regards the point made by the Data Protection Commissioner concerning public funds, he is trying to restrict the use of the card to means testing, something I do not believe is preferable. There are many other interactions between citizen and State when information must be given and this could be readily available on such a card, but in a restricted way. The information would be minimal and it would only be extended with the approval of the House.
I think the Data Protection Commissioner was worried that the process would be extended to payments, such as those to farmers or for higher education, which are covered under a grants heading.
That is what the Deputy is worried about.
I am not worried about it. The commissioner made the point that they are all public funds.
It is specified in the Bill what sharing of information is permitted. There are instances where such information does not relate to public funds. The INOU asked why the card should only be for social welfare recipients; it is at the moment. There are 1.6 million social services cards in the system but they relate to people in receipt of social welfare. This measure extends the use of the card to other people who are not necessarily social welfare recipients but who come into contact with State agencies for other purposes. I view this as being very positive but I accept there are fears.
Deputy Jim O'Keeffe stated the measure did not engender much media comment. It did. The first day it was announced, the Evening Herald had a big article in the vein of Big Brother is watching you, which is nonsense. It might not have purposely done so but it had the effect of raising a lobby against a measure designed to assist people and to control the spending of taxpayers’ money in a manner of which we would all approve.
My point about introducing this measure in a separate Bill was not that it should not be introduced by the Minister for Social, Community and Family Affairs. The Social Welfare Bill deals primarily with schemes, increases in rates and modifying the system in terms of delivery of payments. It is a completely different matter to introduce a new legislative framework for providing an identifier, such as a number and a card, for a range of services.
I do not question the underlying principle that a method must be found for people who must avail of the services of a range of agencies almost on a weekly basis to avoid having to constantly fill in forms which seek the same information. However, there may be citizens who might prefer to be able to choose to give information to an agency. There may be people who may choose not to go to a local authority for accommodation because they might not want the authority nosing into their family affairs. Under this system, the local authority will presumably have access to such information regardless of whether a claimant avails of its services. The card will presumably give access to a centralised bank of information.
Only if there is a need for such information relating to the person.
There will be a central bank of information which the health boards, the local authorities, FÁS, etc., can draw on to assess the means and entitlements of a claimant. Only one number or card is necessary to access that information. As the Data Protection Commissioner stated earlier, that is the one single key. We are trying in this legislation is to restrict the use of that key. The commissioner's argument is that it is better to have a number of keys. In other words, if one wishes to avail of local authority services, one has a local authority card. It may grant access to the bank of information, but the claimant has brought it voluntarily to the authority. There are many issues involved in this area which we will not be able to tease out. I am unhappy we are not giving it the attention it deserves.
As regards common means testing, is the Minister stating that, in time and however long it may take, there will be the same means test for differential rents, medical cards, nursing home subventions, unemployment assistance, etc., or is it the information required to assess claims for such supports that will be standardised? There may be different criteria but the tax and social welfare information required will be part of this bank of information which can be drawn on by the health board to assess eligibility for a medical card. However, all that information is not necessary to assess eligibility for a medical card or a subvention for a place in a nursing home.
Certain issues have not been adequately teased out, such as how this will work and what information will be on the cards and in the central database which must be available if this is to work.
Anything that can improve delivery to the people concerned must be welcomed and I have been looking for that since I became a Member because it is illogical for an individual to be assessed by a community welfare officer for one allowance one day and then go through the same procedure the following day for another. A family could be put through 16 different means tests.
However, we must listen to people who raise legitimate anxieties. Many people are still worried about the data service because computerised systems are subject to faults and interference and the information could be accessible to too many people. I appreciate the Minister's assurance that it is linked to a certain number of areas, but it should have been dealt with in separate legislation.
I reiterate I do not have a difficulty with the card. My amendments genuinely attempt to tighten the legislation to allay fears about which people have contacted me. Everything is all right until something goes wrong. There should be more debate on the subject and, as previous speakers said, until such debate takes place other concerns will not come to the fore.
There will be statements on forms to inform people that the data may be shared with other organisations. A central means database has been developed in my Department capable of recording all means data collected as part of means investigations. The cost of development was estimated at £120,000 and the Comptroller and Auditor General stated the full value of this expenditure would only be derived when the system is capable of being used by all agencies engaged in means assessment. However, before the system may be used as a central repository for all means tests assessment across the public service, the termination of basic means for all schemes will need to be comparable in that the factors used and the method of assessment will have to be streamlined. However, there will be variations and while the same ingredients may be required in regard to different means tests, the criteria will be different but not all ingredients will be used by everybody. The legislation contains the relevant purposes. Section 223C(2) states:
A specified body holding information may share that information. . . . ., where the specified body seeking the information provides the personal public service number of the person who is the subject of the transaction and satisfies the data controller of the specified body holding the information that the information requested is relevant to the transaction for the said purpose between the person and the specified body seeking such information.
It must be for the exact purpose for which it was intended. It would be preferable to have a common means test but one must have flexibility in the system. I accept Deputy Moynihan-Cronin's concerns but the legislation states people will be guilty of an offence if they misuse the card or number and I have already introduced an amendment to ensure there is no scope for the use of the card by private sector organisations or individuals as an identity card. There will be pressure to use it as an identity card but that is not the purpose for which it is intended.
The Minister stated £9.5 million was paid for assessments by health boards. How much will be saved and could the money be used to help people? For example, health boards send two highly paid officials to assess whether an old person can walk and then decide how many hours home care they get. It costs more to carry out such an assessment than to provide the service.
The Minister said there would be a statement on the forms to the effect that this information will be shared with other State agencies for the purpose of means testing other benefits. Will the person filling out the form have the option to say he or she does not want the information shared? If one takes out a subscription to a magazine, one is always asked if one does not mind if one's personal details are provided to other companies. If one wishes to avoid junk mail, one says no. This is a more serious issue where the rights of citizens to choose how they allow themselves to be processed by the system are involved so that if they want apply to the health board for a medical card, they can provide the information which is required rather than having it transferred to the health board by the Department of Social, Community and Family Affairs or the local authority. We have not addressed the basic issue of how personal information is used and whether people have a choice as to how it is used.
This information can be used for assessing higher education grants. We should have a uniform system of assessment. The income used for assessing higher education grant eligibility is different to that which operates for revenue purposes. For example, a taxi drivers leasing a car cannot take the lease value out of their income. Will this lead to difficulties with storing this information on a card? How effective will it be? We have spoken with the Data Protection Commissioner about misinformation. Such information which may come from Revenue may be placed on the card. Will this rule out certain people and take quite a while to correct?
It is too early to say how much the savings will be. I anticipate that there will be savings but it will depend on what flows from this as regards moving towards a common means test. I do not think it will be practical for people to be able to opt out. This would defeat the purpose for which the card was intended which is the greater harmonisation of information. The information we are dealing with, as laid down in the legislation, is very basic; it is not someone's life history. It is information which people would have to supply to any organisation with which they would come in contact. People will have an opportunity to opt out in that they do not have to accept the transaction. It boils down to the transaction they hope to benefit from when they make the initial claim.
We must take everything into account - the fact that we have included severe restrictions and the views of the Data Protection Commissioner. We are still in the initial stage of setting up this system. It will take some time to set it up in my Department and to make computer systems in other agencies compatible with it. If someone applied, for example, for a higher education grant, they would have their RSI number or their personal public service number and their card and certain information would be accessed which would be relevant to that transaction. Any decision to look at the database in my Department would be subject to the controls in the legislation and the data controller in the Department being satisfied as per the section I read out earlier.
Deputy O'Keeffe drew our attention to a typographical error in page 12, line 31. The word "and" should be "an". Does the committee agree to that correction? Agreed.
I move amendment No. 28:
In page 12, subsection (1), to delete line 30.
I wish to record my opposition to the defeat of this amendment.
I move amendment No. 29:
In page 13, subsection (1), to delete lines 45 to 52 and substitute the following:
"223A.-(1) The Minister may issue a card (in this Act referred to as a 'public service card') to a person in such a format as the Minister deems fit, with-
(a) the person's name, personal public service number, primary account number and date of issue inscribed, and
(b) the person's date of birth, gender, primary account number, expiry date of card and card service code electronically encoded,
thereon and with such other information either inscribed or electronically encoded on the card as may be prescribed.".
I move amendment No. 1 to amendment No. 29:
In the last line of subsection (1), after "prescribed" to insert "by Act of the Oireachtas".
I move amendment No. 30:
In page 14, subsection (1), to delete lines 9 to 12 and substitute the following:
"(4) A person who uses or attempts to use a public service card or seeks to have a public service card produced to him or her, other than-
(a) the person who is the holder of the card or a person appointed to act on behalf of the cardholder,
(b) a specified body, for the purposes of a transaction, or
(c) a person who has a transaction with a specified body where the personal public service number on the card is relevant to the transaction between that person and the specified body,
shall be guilty of an offence.".
I move amendment No. 31:
In page 14, subsection (1), to delete lines 37 to 46, and in page 15, to delete lines 1 to 13 and substitute the following:
"'relevant purpose' means-
(a) for the purposes of determining entitlement to or control of-
(i) benefit,
(ii) a service provided by or under section 45, 58, 59 and 61 of the Health Act, 1970 or regulations made thereunder,
(iii) a payment under section 44 (3) of the Health Act, 1947,
(iv) an allowance under the Blind Persons Act, 1920,
(v) a grant awarded in accordance with regulations made under section 2 (as amended by section 3 of the Local Authorities (Higher Education Grants) Act, 1992) of the Local Authorities (Higher Education Grants) Act, 1968, or
(vi) legal aid awarded under the Civil Legal Aid Act, 1995,
or
(b) for the purposes of-
(i) making an assessment in accordance with section 9 of the Housing Act, 1988,
(ii) a letting in accordance with section 11 of the Housing Act, 1988,
(iii) the determining of rent or other payment in accordance with section 58 of the Housing Act, 1966,
or the control thereof.".
I move amendment No. 32:
In page 15, line 14, after "may" to insert "with the consent of the person concerned".
I move amendment No. 33:
In page 15, to delete lines 29 to 34 and substitute the following:
"(4) The safeguards contained in the Data Protection Act, 1988, shall apply without modification to the information to which this section relates.".
I move amendmentNo. 34:
In page 15, before section 15, to insert the following new section:
"15.-Not later than one year after the coming into operation of this Part, the Minister shall request the Office of the Data Commissioner to prepare a report on the operation of this Part, particularly in regard to any implications for the privacy of citizens, and the report shall be laid before each House of the Oireachtas not later than seven days following its receipt by the Minister.".
I move amendment No. 35:
In page 15, after line 47, to insert the following subsection:
"(2) This section shall not be interpreted so as to empower the Minister to extend the provisions of this Part otherwise than by means of primary legislation.".
I move amendment No. 36:
In page 16, before section 16, but in Part V, to insert the following new section:
"16.-The Minister shall, having regard to the constitutional importance of the family, review and prepare a report on the practices and procedures operated by his Department concerning specifically-
(a) the number of young people leaving the family home to enable them to qualify for unemployment assistance, and
(b) the injustice against single income families in relation to PRSI disregard.".
The family is held in a very special position in Ireland and is, in fact, protected within the Constitution. The Constitution does not define a "family" but the concept is nonetheless protected. Yet, within many of our rules and regulations, particularly in the area of social welfare, the family is discriminated against in many ways. For example, some young people, from the age of 18 years upwards, might be entitled to unemployment assistance. However, if they live with their parents they are means tested on the basis of their parents' income. If any Members' children were unemployed, they would not be entitled to unemployment assistance because of their parents' income. However, if they were to leave the family home and move into a flat, they would be entitled to the full rate of unemployment assistance as well as rent allowance. This would incur a huge cost on the State as it would cost upwards of £100 per week to support one person. When such young people leave home they become very vulnerable and risk becoming involved in other problems which could incur an additional cost on the State. A minimum payment should be made to all unemployed young people if they stay at home, irrespective of the family income. Young people should be encouraged to stay at home with their parents rather than move out of the home which is what is happening under the current system.
On the injustice against single families in relation to PRSI disregard, a single income family has a PRSI disregard of £100 per week whereas a double income family has a PRSI disregard of £200 per week. It seems ludicrous that a single income family should pay more PRSI than a double income family with the same number of children. I urge the Minister to review the current practices in his Department and make them family-proof in order that the State does not become actively engaged in discriminating against families.
I endorse what my colleague so ably put. I wish to raise a point brought to my attention by Deputy Naughten, who has a special interest in the younger generation. His point relates to this amendment and involves the debate on homelessness and how people are forced into it. Social welfare rent allowances are not available to those aged under 18 years. The National Youth Council said that such allowances should be available in certain circumstances, particularly if they are linked to participation in approved education and training programmes. Deputy Naughten said there should be family support, which might involve the payment of rent allowance, for young people aged under and over 18 years. He feels that many young people sleeping rough are an appallingly young age - a recent survey showed that about 10 per cent of them are aged under 16 years - and that notice should be taken of the problem.
I do not expect the Minister to have an immediate answer to this. However, it is our duty to see what is happening under our noses and I see young people sleeping rough on the streets of this city. Will the Minister indicate whether he will look into the matter?
I do not oppose the amendment but I do not agree with everything said in support of it. It is wrong to see the disregard for PRSI between a single income and double income family as unfair. Two people pay PRSI and thus accumulate benefits. It is not the same as tax, but an insurance for contingencies. I am pleased the Minister has increased the disregard to £100. I wish he would increase the tax allowances so that those earning £100 per week would not pay tax or PRSI.
The problem of people leaving home is not as much of a problem as claimed. Homelessness is a more complex issue and involves more than social welfare. Will the Minister tell the committee how the study between the Department of Social Welfare and the Department of the Environment and Local Government regarding housing benefit is progressing? There was a proposal to bring together the different supports provided - for example, supplementary welfare allowance through rent and mortgage support and differential rent. We need to look at the issue of housing benefit and remove it from the area of SWA.
One of the principal arguments for the abolition or relaxation of the benefit and privilege rule for young unemployed people is that it encourages them to leave the family home to qualify for higher UA payments or rent supplements. The evidence available is limited but it does not suggest this is happening to a significant degree.
A report published by the ESRI in 1993, entitled Pathways to Adulthood in Ireland - Causes and Consequences of Success and Failure in Transitions among Irish Youth - while not directly addressing this issue, presented evidence which did not lend great support to the argument outlined above. The report looked, over a period, at the rate at which young people moved out of the family home. If found that leaving home is a complex issue with many different facets, including the pattern of participation in full-time education and the nature of employment sought. Most interestingly, the research found that unemployed people were the slowest group to move out of the family home. While these results must be interpreted in light of the complex factors which prevail in the decision to move out, they do not lend support to the view that unemployed young people are more likely to leave the family home because of the qualification conditions for UA.
More recently, a report in 1995 which reviewed the role of supplementary welfare allowance in relation to housing, considered how the benefit and privilege position might be contributing to young people leaving the family home and claiming rent supplement. While the group found the possible effect of the benefit and privilege rule might be one of the range of factors which have contributed to the growth in rent and mortgage supplements since 1989, it was not able to establish the relative importance of any individual factor. However, it concluded that the key factors in the growth of numbers of young people claiming rent and mortgage supplements included the increased availability of information relating to welfare entitlements and the increased public expectation regarding welfare support levels.
I accept what speakers said because there is anecdotal evidence but the reports suggest that to the extent it does happen, the benefit and privilege rule is only one of a myriad reasons. I am inclined to agree with Deputy De Rossa that we need to examine the overall problem of homelessness, which is a much greater task than we can do in a Social Welfare Bill. The Deputy asked about the interdepartmental group which is looking into rent supplement and housing subsidies; the group still has not produced a report but I have asked that it be brought forward as quickly as possible so we can see where we are going in this area.
As to the liability for PRSI, Deputy De Rossa rightly pointed out that it is based on individual employments, has never been based on the family, marital or personal status and is not compatible with the position pertaining to income tax. The Deputy said that a married couple who are both earning and paying PRSI are building up separate individual entitlements to social insurance benefits, which is correct.
What the Minister said has strengthened my case that young people may stay at home if a small amount of money is available to them. They would have the independence and dignity of having unemployment assistance paid to them. I suggest there should be a minimum payment of £25 to £30. As the Minister said, there is no evidence to suggest people move out for that reason, they are probably leaving home anyway, so might we not tip the balance with this payment? If this carrot is available to a small number of people to encourage them to stay at home, we would save the Department money in the long term and it would be worthwhile in terms of giving them the option.
I do not agree, because this issue is much broader than the benefit or payment. People leave home for myriad reasons, not just entitlement or to follow a payment. There may be circumstances where people leave home to receive a payment but by and large the benefit and privilege entitlement relates mainly to single males who are still living with their parents and do not move out of home because of particular circumstances in the family unit.
I move amendment No. 37:
In page 16, before section 16, but in Part V, to insert the following new section:
"16.-The Minister shall prepare a report to clarify the position in relation to persons who became self-employed in 1997 at the 75% rate on the Back to Work Allowance Scheme and in respect of whom arrangements were to be made to facilitate their transfer to the 100% Area Enterprise Allowance Scheme for an additional year, and he shall lay this report before Dáil Éireann within one month of the passing of this Act.".
A most unusual thing happened recently. I received what appeared to be a circular issued by the social welfare services office to a person who was becoming self-employed last year. The letter informed the person of the decision made in the budget that everyone starting a business as of 1 January 1998 will qualify for area allowance of 100 per cent of their social welfare payment plus three further years at 75 per cent, 50 per cent and 25 per cent, where the person has been unemployed for 12 months. That is exceptional because it meant the area enterprise allowance scheme was being extended for four years throughout the country. The back to work allowance scheme is only a three year scheme. The letter also stated:
It has also been decided to extend this [the 100 per cent, four year scheme] to all those who commenced self-employment in 1997 at the 75 per cent rate on the back to work allowance. Arrangements will be made shortly to have these claims switched to 100 per cent for an additional year.
This was like a Christmas present from the social welfare services office. However, the person who received the letter said the office seemed to be balking and reneging on the letter. I tabled a question on the issue to see what was happening and I received a rather odd reply from the Minister, which seemed to suggest the issue had not been decided but was under consideration.
I feel an explanation is due. If a move is made to announce the extension of a scheme to individuals and it then seems the final decision to do this had not been taken for some reason, perhaps because of machinations in the Department of Finance, the Minister should explain the matter to those involved, about 1,500 people from the non-partnership areas. They will have been misled gravely if it is the Minister intends to renege on this commitment.
I was surprised when the Deputy tabled this amendment because I did not know what he was talking about. He has explained his position. As with all schemes, when they are changed a degree of administrative change is required. The decision made and announced in the budget with regard to the 100 per cent stands. On the basis of the letter the Deputy's constituent received, the Deputy can give him the good news that it is as it was.
I have no problem with that. The problem is with the second half of the extension of the scheme where people were notified. About 1,500 people went on the back to work scheme last year. I am only aware of this one case but as it is a circular letter I assume they were all notified that the scheme will be extended to all those who commenced self-employment in 1997 at the 75 per cent rate of the back to work allowance. They were called in to discuss the appropriate arrangements. Has there been a cock-up? Is the letter valid? Has the Minister decided to extend it?
I said that the scheme as announced in the budget and as per the letter is proceeding. I had the privilege of being able to tell five people in my constituency who were on the 75 per cent rate that they would be in receipt of the 100 per cent rate for 12 months and would then go back to the 75 per cent rate, exactly as had been announced in the budget.
In a written reply to Question No. 258 on 24 February 1998 the Minister indicated:
The issue referred to in the Deputy's question concerns people outside partnership areas who were already on the 75 per cent rate of support when the extension came into effect, and in particular, whether they should now qualify for payment of the 100 per cent rate. The issue is whether this is justified, since the people concerned have already taken up self-employment without requiring this high level of support. This issue is under consideration at present.
Do I take that the people to whom I, the amendment, the parliamentary question and the letter refer——
As I said to the Deputy, within a week of the budget I had the privilege of telling five people in my constituency who were on this scheme, self-employed and in receipt of the 75 per cent rate that they would get the 100 per cent. That has not changed.
Why was it indicated in reply to the parliamentary question that the matter was under consideration?
The issue of its administration was under review. However, the situation is as per the letter and the announcement in the budget. The Deputy should welcome it.
I very much welcome it. The individual who contacted me was told it was not going ahead despite having received the letter. The reply to my parliamentary question seems to be misleading in that the Minister indicated the matter was still under consideration, quoted a cost and seemed to imply that no final decision had been taken.
The Deputy may take whatever implication he wishes from the reply. The fact is that these people will be entitled to a 100 per cent allowance, a rate they did not receive before the budget. The people to whom I spoke in my constituency are thankful for the change.
Does it apply to people outside partnership areas as well as those inside them?
Yes.
Does it cover everybody?
Yes - everyone who is self-employed.
I am delighted. Why was my constituent told that the scheme was not proceeding and, more importantly, why did the reply to my parliamentary question not clarify the issue?
There are 1,500 people involved. All those who commenced self-employment in 1997 with the support of the back to work allowance at the 75 per cent rate will get 100 per cent.
Good. Why did the reply to the parliamentary question——
That reply referred more to the administrative structures that were being put in place in putting the 100 per cent rate in place. There were some administrative difficulties in that people who were on 75 per cent had to go to 100 per cent. That is why there may have been confusion in the office which dealt with the Deputy's constituency. However, the letter speaks for itself.
I am happy the substantive issue has been resolved. However, I ask the Minister to re-examine the written reply to Question No. 258 of 24 February 1998 because, in the light of what the Minister has just said, the reply should not have been issued in that form. It was clearly misleading and prompted me to table this amendment. If what the Minister has told us is the final position it should have been clarified in the written reply. There has been trouble in the past with replies to parliamentary questions not giving the full facts. One such case led to a tribunal which went on for 250 days. The reply to my parliamentary question was not full and proper.
I move amendment No. 38:
In page 16, before section 16, but in Part V, to insert the following new section:
"16.-The Minister shall prepare a report on the position of self-employed people who became insured for the first time when social insurance was extended to the self-employed in April, 1988, and who were then 56 years or over, including their eligibility for a pro-rata rate of old age contributory pension and he shall place this report on the table of Dáil Éireann within 2 months of the passing of this Act.".
It is not good enough that those who were forced to make contributions to the social insurance scheme should be told by the Government that they will not get a pension and, to add insult to injury, to have paid back without interest or compensation only a portion of their contributions. This is a limited problem in that it only concerns those over the age of 56 and under the age of 66 when the scheme was introduced who were forced to make contributions. Given that the Government of the day forced them to make contributions there is an onus on the Government to ensure they get a return from the fund into which they were forced to make payments.
By coincidence I was Opposition spokesman when that Bill was going through the House. I raised the issue at the time and tabled amendments. The problem will arise on and after 6 April 1998 when the ten year limit expires. I know of one person who will be caught by 13 days and another who will be caught by 18 days. No doubt someone will be caught by having the same birthday as myself, 13 March. I intend continuing this campaign until justice is done. I am not pleading the case on the basis of need - in some instances there is no need - but on the basis of justice. People who were forced to pay into a pension fund should be entitled to a pension. I do not claim they are entitled to a full pension but they are entitled to a pro rata pension. Those who paid nine years’ contribution, should get nine-tenths pension and those who paid two years’ pension should get two-tenths pension. That seems fair and I am not trying to press the issue beyond that.
Regarding cost, I was appalled at what seemed to me to be an effort to mislead when I raised this matter in the Dáil, when the hoary old figure of £756 million was raised as the overall cost of paying pensions to people in this category. That is rubbish; it could not cost £756 million. I challenge anyone to prove it would cost that figure which should be wiped from the record because it is not correct. To reach a correct figure we should look at how much it would cost the Government annually to make these payments. If we take the Department's figure of 20,000 people, most of whom will be entitled to a non-contributory pension rather than a pro rata pension, I am advised from research that the maximum involved would be in the region of £4,500 pension equivalent. I believe the gross cost to be in the region of £18.75 million per year. In fact, in net terms and because of the buoyancy involved, it would cost much less because some of these people would be in the taxable bracket, perhaps even in the high taxable bracket, and such payments would be taxable. I believe the gross figure would be less than £20 million. We are talking about farmers and small shopkeepers and an economy that encourages self-employment as being part of the answer to the difficulties of unemployment. The message should go out that self-employed people will get their entitlements from Government. On that basis I will press the amendment. In Opposition some of the Minister’s colleagues had similar views to mine and in Government they seem to hold these same views. I do not intend to breach any confidence in this regard, but most people feel there is a case for this amendment. I do not demand that this be introduced today or tomorrow, an introduction date from 6 April will be sufficient because there can be no payment until that date under the scheme. I want to give due notice to the Minister that I will keep pressing this issue until it is resolved.
In his short term in office, I am sure the Minister had many thorny problems to resolve and has taken the various decisions that needed to be taken, but I think this is one of the most difficult issues he will face due to the overwhelming support for a group of people who were treated unfairly. In the region of 20,000 people are involved, but when it comes down to the nitty-gritty of who will be entitled to pensions, the figure will be quite small. Many people feel very aggrieved that they were forced to contribute to a pension scheme knowing they would not get anything in return. I will read a letter I received from somebody with whom I had ongoing correspondence in the past number of years in relation to this matter:
I was born in March 1931. I was 57 in April 1988 and, therefore, I am caught in this anomaly in relation to pensions. I have not claimed any refund (53 per cent of £8,026 to April 1997 plus interest). I have continued to pay full contributions to date and will have acceded ten years' contributions in April of this year. I am still working full-time at full salary and making full PAYE payments monthly. I have increased both employment in and exports from my business and see no reason why I cannot continue to expand. However, I will have to call a halt sometime and would deem it unjust if what is available to the vast majority was not available to me because of an arbitrary chosen date by the bureaucratic administration. I am advised that a constitutional challenge to the restriction would seem likely to succeed.
I think that wraps up the thoughts of many people in relation to this matter. They were forced into a scheme in 1998 which required ten years' contributions and they can only get a limited refund of the money paid. I think they are entitled to a pro rata pension for their contributions and I ask the Minister to look at this issue. This matter will not go away and if not resolved now could cause difficulties in future.
Perhaps the Minister would give an explanation as to why different Ministers and Governments over the years have refused to change this situation. We have all argued from time to time about the unfairness of injustice involved. I wrote to the Minister concerning someone who is one week short of the ten year limit and many such cases arise on a weekly basis. The Minister should say if he intends to introduce this system in the next year or two, particularly the pro rata payments, because people are very aggrieved that they are receiving only a percentage of what they have paid. This is not the Minister’s fault. Deputy O’Keeffe probably stopped lobbying during the three years his party were in Government. Perhaps the Minister would look at the matter and give some indication of what he intends to do in this area in future.
I support this amendment asking the Minister to prepare a report in the matter. The reason many people feel aggrieved is that they cannot get the pro rata payment. They understand they cannot get a full pension but they cannot understand why they cannot get a portion of it. They will not even get a full refund, just a portion of the refund. Therefore, they cannot understand why they cannot get a portion of the pension into which they have paid.
We have all come across sad cases of people who will be only weeks or days short of the ten year limit. I appeal to the Minister to look at this issue which I know is not easy to solve. I am sure Deputy O'Keeffe had the same problem when Deputy De Rossa who opposed the proposal was Minister. When this issue was raised before Deputy De Rossa said at a committee meeting that he was not in favour of it. I know the Minister will look at it carefully as every Deputy has problems in this area.
Apart from the issues of justice and equity, I am substantially in agreement with what has been said and have raised it with the Minster and his two predecessors. We are likely to find a situation in the near future similar to the equality payments where some future Government is forced to come up with a substantial amount of arrears payments. In view of the circumstances it would be sensible for the Minister to consider in the shortest possible timescale making provision for these people. He should be complimented on the scheme he introduced in November for people whose average payments were less than £20 per annum who did get pro rata pensions. That was a move in the right direction in terms of justice and equity. It inevitable the people involved will get the money in the future. It would be as well to address it earlier rather than later.
I know the Chairman is supposed to be neutral in these matters but, for the purpose of balance, this is an issue which breaks down on urban versus rural rather than party lines. While I accept there are genuine cases, there are many other anomalies in relation to people who might have worked in the 1950s and no account is taken of their stamp payments before 1953. I came across one person who was a PAYE worker from 1953 until 1955 and then became self-employed and he is being penalised because he was once a PAYE employee. He does not even have the luxury of getting the refund others have because he was once a PAYE employee. He does not want a refund, he wants a pension. That is one anomaly among many serious ones. If they are being treated, the Minister should treat them all together. If one group is made happy it will cause dissatisfaction elsewhere.
The issue referred to by the Chairman has recently been taken care of. I came across that inequitous situation. In relation to one of the people to whom Deputy McGrath referred, a person's liability for PRSI stops at 66. They have to pay PRSI levies if they work after that but their PRSI payment for pensions cease when they reach 66. The refund would be only in relation to the old age contributory pension element so the reason only a portion is refunded is because they retain the benefit for widow's contributory pension which they would get after three years.
It is a hoary old issue and one which was not of my making. With the best will in the world, self employed people were brought into the system and some question why a timeframe of ten years was specified. This has been examined over the years by various independent groups who feel there has to be a line drawn somewhere between pension contributions. There has to be a level set and if we begin to reduce that from ten to nine years, we will get all the cases who were a week short of nine years. This figure of ten years for qualification has been a feature of the scheme since 1961 and has been examined by many groups set up by previous Governments to see whether that level should be reduced. At no stage has any group which examined this reduced the figure. The last Government looked at this but the best they could do was make provisions for the refund of the pension element. That is as much as they did, probably for the same reasons.
I accept that the figures Deputy O'Keeffe mentioned, £750 million, would frighten anyone away from this issue. Because of that I have asked my Department to look at the figures again. The latest figures indicate it would be in the order of £50 million per annum with a capitalised cost, over the full period of payment, of £475 million. That is based on a figure of 20,000. I am not sure 20,000 would be the height of it. An issue like this may open floodgates of which we are now unaware. It may well be that many self employed, who do not need the money, would automatically be entitled to a State pension. I am not saying that is the reason we are not doing it, I am just making the point that the 20,000 figure could be exceeded. It could be less as well. I accept the arguments by Deputy O'Keeffe that some of these people would be entitled to a non-contributory pension. If that is the case they are probably getting a non-contributory pension at the moment.
It is the biggest issue to come before me. I like to think that I would be the first Minister for Social, Community and Family Affairs to be able to say, on leaving office, that I achieved this. I have asked my Department to look at this, that is one reason we brought in the pro rata pension, and I expect my Department will have some views for me as to how this could be changed and alleviated in the near future. No matter what we do it will cost pounds, shillings and pence and if anything is suggested that is reasonable in the circumstances, I would have to look at it in the context of the next budget. I am sure people like Deputy O’Keeffe would not condemn me, if I am Minister in December, if I have not given other areas as much money as he might think fair in the event of my bringing forward some proposals.
We will be very generous to the Minister.
I ask Deputy Browne to be brief as everyone has spoken on the issue and there has been a good thrashing out of the points.
I accept that but I was on the Adjournment in the House. There was no choice for the contributors. There must be a legal obligation to them and if someone challenges the Government that will arise.
I am pleased the Minister has agreed to look at this. Those who have paid for one day less than ten years should have an entitlement. Widows deserve some sort of recognition, even on a sliding scale basis.
The Minister said an in-house report is being prepared on this matter. This amendment asks that the Minister shall prepare a report on the position of the self-employed and place the report on the table of Dáil Éireann within two months. We are merely asking that such a report be prepared instead of an in-house report to which Deputies will not have access. In view of the wording of this amendment and what Fianna Fáil Members have said, the Minister should accept the amendment.
I am reluctant to put such a commitment into legislation. I will be coming before this committee on many occasions during this year and Members may question me on the in-house report. I am reluctant to concede the principle of including in legislation an obligation to bring in a report. No matter what solution is arrived at, extra money will be required and I may be unable to take any action except in the context of the budget.
I hate to put our Fianna Fáil colleagues who have spoken so eloquently in favour of my amendment to the test but I wish to press the amendment. My seeking a report is merely a device to get the amendment in order; I seek the introduction of the scheme.
Amendments Nos. 39, 40 and 41 are related and may be discussed together. Is that agreed? Agreed.
I move amendment No. 39:
In page 16, before section 16, to insert the following new section:
"16.-Where a decision is made under the Social Welfare Acts in respect of which an appeal lies under Part VII of the Principal Act, as amended, the person to whom the decision is addressed shall be informed of the right of appeal at the time the decision is communicated to him or her.".
All sides agree the area of appeals requires attention. When a person is refused a payment, the practice is that the person is informed that he or she is entitled to appeal. However, it is important to enshrine that aspect in the legislation.
Regarding amendment No. 40, many people seek an oral hearing because they feel they will be in a better position if they put their case face to face to social welfare officers rather than in writing. I understand the majority of people who apply for oral hearings are not accorded one. If that is the case, the applicant should be told why they have not been given an oral hearing.
If people are unsuccessful in their applications for payment, amendment No. 41 seeks to ensure they will be told the reason for the refusal of an oral hearing. Many people are confused by the system and apply for an oral hearing. There are huge delays in appeals and people contact their local social welfare office and Deputies to ask why they have not been granted an oral hearing. When a decision is made on their case, people do not receive an explanation as to why they did not get an oral hearing. The Minister will understand the case I am making in the three amendments. From the number of representations he receives, I am sure he understands there is a huge problem with appeals; perhaps the section in the Department requires more staff. I ask the Minister to consider accepting the amendments because people seeking appeals are in dire straits in terms of waiting for decisions.
With respect to the Deputy, amendment No. 39 is unnecessary because it is standard practice in the Department to notify people of an unfavourable decision. In the context of the Freedom of Information Act, it is already the case that customers should receive complete information about decisions affecting them.
The point made in amendment No. 40 is covered by regulation. Therefore, it is standard practice and there is no point including it in the legislation. There are circumstances where an oral hearing might not be granted when requested. This involves a judgment of the appeals officer that there is little prospect of success. We are aware from other areas that unnecessary appeals clog up the system. If the amendment was included it would cause difficulty from an administrative point of view. Therefore, I ask the Deputy not to press the amendments. They would create more onerous administration for the Department which most people accept is customer friendly. In the main, people do not have queries about the operation of the system.
I take the Minister's point with regard to amendment No. 39. However, regarding amendment No. 40, the point is covered by regulation but it does not happen. Applicants are not told why they have not been granted an oral hearing. Constituents ask me to write to the Department seeking the reason. If people have a difficulty with the Department with regard to a claim, does the Minister agree it would be better to discuss the matter face to face and to listen to their case? This would put an end to the matter there and then. If a decision is made in the Department without people having had an opportunity to make an oral submission to social welfare officers, they feel they may not have said something which might have helped their case. How many people apply for oral hearings and are successful?
Where a decision of an appeals officer is not in favour of the appellant, he or she must append to the decision a note of the reasons. This is then sent to the appellant. The Deputy may be referring to ordinary decisions and not appeals, although the amendment refers to appeals. If the Deputy is aware of any cases where people did not get the reason for unfavourable appeal decisions, she should bring them to the Department's attention. I will try to get the figures requested by the Deputy before the end of the meeting.
I move amendment No. 41:
In page 16, before section 16, to insert the following new section:
"16.-Where a request is made on an appeal under Part VII of the Principal Act, as amended, for an oral hearing, and the request is refused, reasons shall be given for the refusal.".
I am interested to know the number of requests for oral hearing which are granted. My experience is that a small number of oral hearings are granted in terms of the number of requests. Recently, there seems to have been a great clog up in dealing with appeals in the Department of Social, Community and Family Affairs. For instance, I know of one case which has been running from about April last which still has not been dealt with in the appeals unit. That is far too long. It involves FIS, so the Minister can imagine the disadvantages to the family. Maybe the Minister can give us figures in that regard. I support Deputy Moynihan-Cronin's amendments.
I am told that 51 per cent of cases go to oral hearing.
Is that 51 per cent of requests?
No, 51 per cent of all cases.
I could not see that being the way.
I am reading from the report on the social welfare appeals office. On the remaining cases which are pursued by appellants, 7,312 disposed of in 1996 were determined by appeals officers, 3,751 of which - 51 per cent - followed an oral hearing.
That is the remaining cases.
The remaining cases of appeals not pursued by appellants.
I will get better figures for the committee. I am just reading from a section of a report. There may be something which precedes it.
What is the average time an applicant must wait before a decision is made on whether he or she gets an oral hearing?
It is 18 weeks, that is, from the social welfare appeals office.
I move amendment No. 42:
In page 16, line 28, to delete "level" and substitute "financial condition".
I move amendment No. 43:
In page 16, line 30, after "of" to insert "any".
I move amendment No. 44:
In page 16, line 46, to delete "(an allowance," and substitute "an allowance, (".
I move amendment No. 45:
In page 22, line 35, after "persons" to insert "not being providers of social welfare information, advice and assistance".
This is a matter which the INOU has brought to my attention. They brought it up when they were before the committee this morning. It has implications for people who give information to welfare recipients, particularly to people employed in the local employment services. These services work on the basis that they are confidential, with the people presenting themselves voluntarily for the information. The fear is that if the information could be passed on, the service might not be used by those who would benefit most from it. For example, those who may have operated as they should not have previously may tell the people in the local employment services of their past history. These people often progress to back-to-work allowances or FIS and regularise their situation. The fear is that if the people to whom they speak, who work in the local employment services, could be made to pass on the information, it may not be as effective as it should be. That is my reason for tabling this amendment.
I have an additional worry about this matter, which may relate more to the section than the amendment. The Minister appears to be entitled to prescribe people who must give him information. What sort of protection exists from that point of view? Can he prescribe somebody's solicitor, doctor or confessor? I am worried that the Minister's potential power in this section seems to be all embracing. He does not need to return to the Oireachtas; he could merely make regulations. Could we end up with a situation where the Minister could be prescribing that the Pope would give information about people? Joking apart, it could be a serious matter. I do not want to make a serious issue of it at this hour but, if the Minister is not happy we might come back to it on Report Stage. The Minister should not have absolute power to prescribe by regulation anybody who must give him information about somebody's social welfare entitlements. It is a very dangerous power.
To whom is it addressed?
This is designed to assist the Department. There is a situation, which is well accepted, where third level institutions are requested to give details of full-time students which the Department can then check against the live register. However, some third level institutions have been unwilling to give such details and we are inserting this into the Bill to facilitate that.
There are regulations in this regard which will continue without amendment on enactment of the Bill. It is not intended to extend the scope. I will look at this between now and Report Stage to raise these issues with my officials, particularly the queries Deputy O'Keeffe raised.
As the Minister said, we will return to the matter on Report Stage, I will withdraw the amendment.
What is the purpose of section 24?
Where an allowance is paid to a person, any other person, who is liable to maintain that person and any child in respect of whom an increase in the allowance is being paid, is liable to contribute to the Department such amount as is determined to be appropriate towards the assistance. Where the liable relative fails to meet his or her obligations, the Department may apply to the District Court for an order directing him or her to make the required contribution. To date, when a court was satisfied that the liable relative was in a position to contribute towards the benefit or assistance but failed to do so, it had the power to fix the amount of contribution to be made and order the liable relative to make such payment as it deemed appropriate. Subsection (5) provides that the District Court shall, where required, decide the manner in which contributions should be paid.
In effect, it is giving the power to the court to settle the amount of the contribution rather than having the power within the Department.
And the manner in which it is to be paid.
That seems to be fair. I accept that.
