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SELECT COMMITTEE ON FAMILY, COMMUNITY AND SOCIAL AFFAIRS debate -
Tuesday, 9 Mar 1999

Vol. 2 No. 1

Social Welfare Bill, 1999: Committee Stage.

SECTION 1.

I move amendment No. 1:

In page 5, subsection (2), line 14, after "one" to insert "and may be cited together as the Social Welfare Acts, 1993 to 1999".

The amendment refers to the Social Welfare Acts. Reference was not made to some of the Acts prior to 1995. We felt it would be preferable to extend the reference to cover the period from 1993 onwards.

This issue is already covered in section 3(8) of the Social Welfare Consolidation Act, 1993. It states that "references in any other enactment to the Social Welfare Acts means this Act and every enactment which is to be construed together with it as one". My advice is that the amendment is unnecessary.

It is strange that the Social Welfare and Taxes Consolidation Acts are the only two Acts in which the years are not specified. I wonder what the reasoning behind that practice is; perhaps it is time we changed it.

There is no change.

Does the Minister accept that the Acts referred to differ to other Acts in the respect mentioned?

Social Welfare Acts are changed quite often. The reference in the 1993 Act was intended to address that.

Amendment, by leave, withdrawn.

I move amendment No. 2:

In page 5, between lines 14 and 15, to insert the following subsection:

"(3) The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the rationale for the differing commencement dates of social welfare and tax aspects of the annual budget.".

This amendment relates to commencement dates. I submitted a series of amendments to which I think this refers. I presume this refers to the different start up dates for the increases in many of the social insurance schemes and child benefit. The basic issue, which I raised last week during Question Time with the Minister for Social, Community and Social Affairs, is that we seem to have a tradition dating from the early 1990s, and certainly from the partnership and Rainbow Governments, of having the same starting date, namely, 6 April, for changes in income, such as increases in benefit under different social insurance schemes.

The purpose of this was to reflect the concept of income adequacy and a basic income and to ensure that all families and the community in general benefited from budgetary changes on the same date. I am not absolutely sure, but I think historically the idea of delaying payments dated to the 1980s when the country was experiencing serious fiscal difficulties. The Government led by Mr. Haughey decided to push much of the social welfare spending as far as possible into the future while, at the same time, letting the most deprived part of the population know that at least these increases were on the way. In the Dáil I made comparisons with the targeting of income rises for senior citizens. The Minister has set a target pension of £100 per week over the duration of the Government. Effectively I am talking about bringing the social welfare and tax systems into synch.

The Minister for Finance, Deputy McCreevy, is talking about moving to a calendar year system given that the budget is now delivered in December. He is looking at a situation where the tax year will effectively begin in January. Therefore, soon after the millennium we will all know the situation in relation to earned income. The basic difficulty is that we are further away from the goal of bringing forward payment of social welfare increases.

The Minister and other Members know that when we talk about changes and increases, some unhappy comments are made about people's benefits and assistance, including the fact that everybody must wait until the autumn before increases in child benefit take effect.

At times there is a flavour of fraud about the way increases in social welfare are presented. The Minister always gives the full year cost of such increases, never the amount being awarded in the current year. This reinforces the case for a much more open, accountable and transparent approach on the part of the Minister.

There are some miserable increases in child benefit in the 1999 budget which amount to crumbs from the table. They are presented by the Minister, at a cost of £40 million, as if they were of some major consequence in the current year. However, in 1999 the increase will not cost £40 million but rather about £13 million or one-third of the figure mentioned by the Minister. It is wrong to attempt to con the public and in particular the 520,000 families in receipt of child benefit. It is even worse to attempt to con the 1.2 million children who are supposed to benefit from these allegedly substantial increases. Furthermore, it is being presented as an increase of £3 per month for the first two children and £4 per month for subsequent children. Again, this is not payable in 1999. Effectively, no increases will come on stream until next September. The result is that for 1999 the child benefit increase will amount to £12 which is equal to £1 per month or 28p per week.

I would argue with the Minister about the reasons there should be far higher payments of child benefit. I think the Minister will even accept that the payment of child benefit is one of the most effective mechanisms available for the provision of child income support and the alleviation of poverty. That is a matter of policy. Fine Gael is very much committed to increasing child benefit by a greater amount. However, that is not the issue being discussed in this amendment.

It is important that we have a far more up-front approach in the presentation of the changes. Payment should coincide at least with the tax year, which would result in the introduction of the increases in April, with the ultimate objective of increases coinciding with the calendar year. Alternatively, there should be a presentation making it clear to people what is involved. I very much object to the approach adopted by the Minister in this regard.

I feel strongly, and will later argue, about the need to further increase child benefit beyond the paltry increases allowed in the budget. In particular, I feel the payments should date, if possible, from the beginning of the calendar year, but at least from the beginning of the tax year. Under no circumstances should they be presented as increases which are apparently applying for the full year but which do not come into operation until the autumn. This is wrong and sets the wrong example to give children in particular.

Minister, were both figures given in the Minister's budget speech?

Both figures were given the Minister for Finance's deliberations on the day of the budget and were included in the social inclusion measures of his Budget Statement. They were also given in my speech, and any documents we issued included the full year cost and the budget year costs; this has always been the case. In the context of the farm assist scheme we gave the cost for 1999 and the full year cost. When we subsequently made a very significant change in order to expedite the payments of farm assist to people from the start of June until 1 April we added another £5 million to the existing budget year cost of £5 million, giving a total of £10 million. We were happy to do that and everything was transparent.

Regarding the crumbs referred to in relation to child benefit, Deputy O'Keeffe has an incredibly short memory. He is shedding crocodile tears in that respect as the Government of which his party was a member only gave £25 million in its last year in Government while we have provided £40 million. The Deputy need not come crying to the committee about the lack of child benefit as his record in that respect is not great.

On the day the budget was announced the figure given was £307 million on a full year basis, with another figure, which I cannot remember off the top of my head, given for the budget year cost. We subsequently made decisions in relation to a number of areas, including farm assist and the bereavement grant, where we made additions. The overall figure for the full year cost of the budget package was over £320 million.

I wish to refer to child benefit as it was raised by Deputy O'Keeffe. Child benefit increases have always been given in September and there has been no change. It was the same when Deputy O'Keeffe's party was in Government. It is given in September as it coincides with children returning to school.

Deputies Broughan and Shortall made a valid point and there has always been a view that payments should be brought back to coincide with the tax year. What has happened over the years, particularly in times of recession, is that in order the maximise the money available in any one year, Governments have tended to push back the increases. However, given that there has been more money in the system in recent years there has been an attempt to pull them back.

Under the Rainbow Coalition payments were made for 29 weeks of the year. Last year, as a result of the changes I made, the increases are being made in 31 weeks of the year. We brought the payments forward by two weeks and that is the same this year. Our record in relation to budget year increases is based on a 31-week year as opposed to a 29-week year which was the best achieved by the Rainbow Coalition.

When faced with a limited amount of money one has to divide money across the various schemes as best one can. This Government unapologetically decided to place great emphasis on old age pensioners and gave them £6 in 1999 and £5 and 1998. We could have given less earlier but my attitude was that it is better to give a higher figure somewhat later than a smaller figure earlier. In effect, old age pensioners will have the £6 increase for 12 months from whenever it is given. That is a higher base from which to work for the succeeding budget. That was the rationale behind looking at the available money and doing the best we could in the circumstances.

The cost of the various 1999 increases, even excluding some of the most recent changes and some to be made in this Bill, comes to almost £206 million on a full-year basis, that is the social welfare payments including the FIS. To bring those increases back by eight weeks to 6 April in the 1999 budget would cost an extra £32 million. The cost is £4 million per week. If one was to do so in an overall package of £300 million, as a ballpark figure, it would leave one short by £32 million. This is a valid rationale.

I acknowledge that we should bring back the payments over a period of time to coincide with the tax year. The difficulty will be that if a future Government decides to bring back tax changes from 5 April to 1 January this will entail extra Exchequer funding requirements if social welfare payments are also to be brought back to 1 January. However, this is an issue on which a future Government will have to decide.

There is no harm in saying that the previous Government made provision to pay the relevant increases for only 29 weeks in its budget year whereas we have made provision for the substantially greater increases we have given in our two budgets for 31 weeks in 1998 and 1999.

Given the state of the economy, there will never be a better time to do this. The sum mentioned by the Minister is relatively small and this would be worth doing in order the treat the whole community the same. I appreciate the opportunity to discuss the matter.

Amendment, by leave, withdrawn.
Section 1 agreed to.
NEW SECTION.

I move amendment No. 3:

In page 5, before section 2, to insert the following new section:

"2.-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.".

This amendment refers to elements of the Social Welfare Acts which Deputy Moynihan-Cronin raised with the Minister on several occasions, given that significant legislation has been passed in recent years. The Deputy particularly mentioned aspects concerning the impact of the divorce legislation on the social welfare codes. Last year the Deputy raised the fact that the Social Welfare (No. 2) Act, 1995, did not seem to have been implemented. She felt that not all the provisions of that Act as they relate to divorce had been brought into effect.

An extensive amount of legislation was introduced in the 1990s concerning working conditions and equality. There seems to be an outstanding concern that these provisions have not been enacted by the Department. This amendment seeks to insert that any provisions of the Act which are not yet in force be implemented immediately, or, at least, asks the Minister to indicate his firm intention to do so.

This amendment is unnecessary. I have already provided information which would normally be provided by way of a reply to a parliamentary question. In June 1998 I replied comprehensively to Deputy Frances Fitzgerald. That reply is somewhat out of date and I undertake that we could update that answer if the Deputy tabled such a question. Some of the elements raised in Deputy Fitzgerald's question have still not been put into force whereas others have. If Deputy Broughan withdraws this amendment I will give an undertaking to give this information if he tables a parliamentary question or if a request comes from the committee.

Amendment, by leave, withdrawn.
Sections 2 and 3 agreed to.
NEW SECTIONS.

I move amendment No. 4:

In page 6, before section 4, but in Part II, to insert the following new section:

"4.-The Minister shall lay before both Houses of the Oireachtas a report outlining up-to-date figures for the expected current Budget surplus in 1999 and contrast these with up-to-date figures for the additional monies payable from the Exchequer in 1999 arising from measures in the Bill over and above the pre-budget estimate for the Department.".

I want the raise the issue of the extent to which we are prepared to deal with disadvantage, poverty and social exclusion. Money is needed to deal with the problems of the disadvantaged in our society. I anticipate that the Minister will have a fine script ready telling us about the increases given. The Minister can go back to 1925 if he wishes to show that the amounts given this year are probably greater than those given then, in 1935 or in 1965.

They are greater than in 1997.

That is not the issue. I wish to raise the serious point, but not on a political basis, about whether we are prepared to make a serious effort to spread the benefits of economic success to the less well off in society. I accept that the wealth in society today is greater than ever before. However, it is not distributed evenly. In many instances, the spread of wealth is getting wider, the rich are getting richer and the poor are not keeping pace.

The figures for this year are clear and there is no point comparing them to other years. This year it is estimated that there will be a current budget surplus of in excess of £2.3 billion. There has never been anything like that in the history of the State. Even with the Exchequer contributions towards the capital budget, there will be an Exchequer surplus of upwards of £1 billion. It is against this background that we must consider what is being made available through the social welfare budget.

I do not raise this issue as a criticism of the Government but as a general effort to ensure from now on that, if large amounts of money are available in the Exchequer, greater consideration will be given to dealing with the problems of poverty. These problems may include 36,000 people on hospital waiting lists, many of whom are in agony, who cannot be treated or other issues in the realm of social affairs.

In that context we must examine the extra amounts provided for this area in the current year. One can juggle the figures, but the Government's figures in the summary of adjustments to 1999 net current expenditure show a net sum for increases in 1999. The pre-budget estimate for 1999 was £2.754 billion for the Department. The revised estimate as a result of the budget is £2.832 billion. This involves an adjustment or an increase of £77,930,000.

The Minister can argue that some of the increases arise from additional payments to the social insurance fund. One can argue against that by saying that any money in the social insurance fund was contributed by workers. Essentially their fund is in surplus and any additional amounts in terms of employment benefit, disability benefit and other benefits only involves people drawing down what was paid in by workers. I do not wish to get into that level of discussion but I tabled the amendment to try to lift the debate to a higher plane. If there are huge surpluses and the Exchequer has plenty of money, are we prepared to pay a reasonable proportion into the social affairs budget so that the less well off in society can benefit to a reasonable degree?

With regard to child benefit and the extent of child poverty, it is estimated that 28 per cent of children live in poverty according to the latest Combat Poverty report. I said the figure was one third but the Minister corrected me. Will we make reasonable payments to the child benefit system to cope with that? There must be a correlation between the Exchequer surplus and the amount paid to deal with those problems. This is why the arguments in relation to the past have no relevance to today's position. There was no Exchequer surplus in the past. Up to a couple of years ago, there was no current budget surplus. As a consequence of the improvement in the economy, the Exchequer is stuffed with money.

We should make a percentage of the surplus available to deal with social exclusion and the problems of the less well off in society. At a social level, trouble will be stored up for the future unless an approach along those lines is adopted. I tabled the amendment to raise the issue and not to criticise the Government. I accept that the Minister can quote figures and say that they are better than last year or the previous year. However, that is not the basis of the amendment. I want to start a reasoned discussion on how the Exchequer surplus is distributed and how a reasonable proportion should be used to tackle the problems of disadvantage in society.

In the Partnership 2000 negotiations it was agreed by the social partners and the then Government that an extra £525 million would be spent on social welfare and social exclusion issues. It was agreed this money would be a top up. Last year that sum was exceeded in the social exclusion measures introduced by the Government. This was in addition to the social exclusion measures taken by the Rainbow Coalition Government. We reached the target a year before the end of the Partnership 2000 agreement. The Government could have sat back and said it had achieved the commitment in Partnership 2000 in relation to social inclusion. However, it went further and added many more millions to the £525 million allocated to this area.

Deputy O'Keeffe referred to the surplus. However, his comments are surprising because his party usually claims that it is the only party of fiscal rectitude. That is not the case. The Government was faced with a situation, as it was in 1987——

The Minister should not forget 1977.

——where remedial action was necessary to ensure that the national debt did not go completely out of kilter. This has been achieved in the intervening years by successive Governments. In the short-term the finances will be in a reasonably healthy state. However, I regard myself as a passing bird and anyone who thinks differently when they are a Minister does not do justice to the position.

The policy makers in my Department and the Department of Finance are looking at the age time bomb In a relatively short time, perhaps 50 years, Ireland will face the problems faced by America, Germany, Japan and other major countries with an ageing population and a contracting workforce. We must plan for that eventuality. At present, there are approximately 400,000 old age pensioners. In 50 years, the number will be over 1 million and there will be fewer people in 2056 to care and pay for that number of pensioners. The ratio between worker and dependant will improve for the next few years, but will then dramatically worsen to the extent where, instead of being 5:1, it will be about 2:1. We must look at this long-term and that is why the Government cannot spend any surplus it might have at present in whatever way it likes. We must make provision but that is only one aspect.

I do not have to remind Deputies that every lobby group in every sector in society feels it has a claim on that surplus. Politicians would like to be flaithiúlach and all things to all men, but we cannot. Deputy O'Keeffe said we should not compare this year with last year or the year before. It is important we do because he relates a story which is not akin to the facts.

The budget package I introduced last year with the assistance and consent of the Government was the largest in the history of the State. It was almost £103 million or 49 per cent more than the full year costs of the last Rainbow Coalition budget only two years previously. The full year cost of the package announced in December is about £320 million as opposed to £214 million in the last Rainbow Coalition budget. The 1999 year cost of these improvements is over £78 million or 69 per cent more than the equivalent budget year cost in the Rainbow Government's last budget. These figures represent a substantial improvement and give a lie to any stories Deputy O'Keeffe and others would like to peddle.

This does not take account of the fact that, since budget day, we have made a number of amendments. I mentioned the extra £5 million for the farm assist scheme. I did not mention the fishing assist scheme nor the substantially improved bereavement grant which has been accepted and welcomed by all. There is also the over 56 issue to which the Deputy has often referred. We made additional amendments to that scheme since it was announced.

Deputy O'Keeffe mentioned the breakdown of the cost of measures I introduced between the social insurance fund costs and the Exchequer costs. Of the total 1999 costs of £192 million, approximately £97 million or over 50 per cent is fully Exchequer funded, with a balance of £95 million being funded from PRSI contribution income. I said at Question Time that the breakdown between the social insurance fund costs and the Exchequer costs is irrelevant to those dependent on social welfare. What is of primary concern is that a substantial package has been put in place.

I remind Deputies that the non-contributory old age pension, for example, was only increased by £6.50 in three Rainbow Government budgets. We increased it by nearly twice that, £11, in two budgets alone. That is the case for the vast majority of social welfare payments made in the budget. Deputy O'Keeffe may wish to enter into a debate on the overall situation. The Government has put in place an extremely well endowed social inclusion package, not only in my area but also in education, health and other areas, and will continue to do that.

The Minister is turning into something of a historian in that he looks to the past on a regular basis. Lot's wife did not look back as often and she paid a solidifying price for doing so.

I will take my chances.

I do not suggest the Minister should follow in her footsteps, but if he keeps looking back, he could well end up in such a situation. I would not wish that on him.

I have many of the Deputy's records when he was in the Department.

I also had access to records in the Department and they made interesting reading, so the Minister cannot proceed along that road.

The Minister's repeated statement that this is the greatest budget and that there is much more in it compared with previous ones is not a valid comparison. The circumstances have changed utterly over the past four years. The money available to the Minister in these circumstances is vastly different and increasing at a dramatic rate. I do not wish to imply, nor is it the intention of the amendment to do so, that all money available should be paid out to all and sundry. However, the amount payable to certain categories of social welfare recipients will not leave them in the lap of luxury. None of the increases in the long list of categories of social welfare is of the order that one could say a family will be well catered for for the next 12 months. The Minister should not become too self-confident.

He also referred to the policy makers in his Department. We thought the Minister was the policy maker; I am upset to hear he is not. In future, we will have to take our case elsewhere if someone else is making policy. I have the utmost confidence in the Minister——

I thank the Deputy.

——and I am sure my colleagues think similarly. We hope that confidence is well placed. In the event of the Minister having to defer to others, that matter will have to be left to another time.

I am not sure the demographic projections for 2056 - it used to be 2035 - the Minister mentioned are accurate or soundly based, or that the research takes into account economic changes taking place in the country at present and the likely impact on the structure of the population. That is not a conclusion I have reached recently; I have believed it for a long time. The structure of the country's population will change dramatically over the next ten to 15 years with the opposite results predicted by the Minister. In planning for the future, we need to have regard to the fact that the population age profile will change. All the changes which are likely to occur should be taken into account and balanced against each other. It does not necessarily follow that the same peaks, valleys and troughs will appear in the population profile here as happened in countries such as Germany.

I praised the Minister in the Dáil for the good he has done. The bad will live on after him, but the good should be recognised. The Minister will be remembered by not being small minded, selective and comparing like with unlike. My colleagues are right. The economy was never in better shape. When he says that he gave more this year than last, the question is whether what he gave compares favourably with the increases Ministers in the 1980s gave when one considers the resources then available and the cutbacks at the time.

One does not have to go back to the 1980s. All one must do is look at 1994, when inflation was at 2.5 per cent and Deputy Browne's Government gave old age pensioners a 2.5 per cent increase. They gave them no real increase whereas we increased the old age pension by nearly 6 per cent in real terms.

The Minister will gain far more by stopping that kind of nonsense. He picked 1987. What about 1977 when the Minister's party destroyed the economy? That is recognised by everyone.

The Minister can shake his head but he should not forget that around 1987 and 1989 we tightened our belts because we were told to do so. Does the Minister remember that? There is a great deal of history to which he can return.

The Minister did a reasonable job with the Bill. Maybe he could have given more, but he will gain nothing by saying he is doing far more than anybody else because the economy was never in better shape. Next year he will be in a position to do more. He should not talk about other years.

I am delighted Deputy Browne has confidence in me still being Minister next year.

I would not take long odds on that.

It is interesting that the Minister felt it necessary to intervene again on that point. He must be feeling shaky.

It is important that we try to get to the root of the matter. There is no point talking about history. The Minister raised the historical past and he looked 50 years into the future also. We can all rake over old coals, we can look at the quadrupling of the national debt from £3.6 billion to £12 billion from the time I came into politics in 1977 up to 1982 and we can look at the famous speech of the then Taoiseach, Charles Haughey, about fiscal rectitude which does not seem to have been followed either in the personal or the official sense afterwards, but that is not relevant to the current debate. Neither is it totally relevant to the future although a certain amount of prudence for the future is important.

I agree that we should build up the social insurance fund and take steps in that regard. However, to talk about the need to make preparations for 2056 does not put any bread on a child's table today. That child will be an old age pensioner at that stage, if he or she lives that long.

There is a middle ground. What is usually relevant here is the fact that, for the first time, there is an enormous surplus. The figure quoted by the Minister for Finance, Deputy McCreevy, is £2.3 billion. I bet that figure will be nearer £2.5 billion.

I hope the Deputy is right.

I hope so too, but the difference would be £200 million. Even that would go a long way towards providing extra benefits for those in need. It would allow for the total implementation of the Fine Gael proposal to increase child benefit to £20 per week for children up to the age of five, which would cost about £146 million.

Would that be the same as the stay at home wives provision some years ago - the £9.50 or £9.60?

I do not understand the relevance of that. The figure I am talking about was achieved after discussions with the Department, which was helpful in laying out the cost involved. I merely quote it as an example of the kind of thing which can be done. We can do things now in the context of the money available which could not have been done before.

There should be a qualitative change in the approach in the future and it should emanate from the committee. The approach we should be adopting should take into account the kind of money in the Exchequer and how best some small proportion of it could be spent to deal with the social problems in society. If we do not do it, I predict we will inherit the wind. One hundred years ago a small number of people held huge wealth and totally ignored the problems of the underclass in society, which numbered about 80 or 90 per cent of society. That led to huge social problems. It led to people listening to people like Marx, Lenin and the music of foolishness.

I knew he would cause trouble.

We must ensure fair play and we are not doing so if we ignore to a large extent real problems of disadvantage and poverty in society while we have such enormous resources to deal with them.

On the doubt cast by Deputy Durkan in relation to 2056, I tabled an amendment to the Bill last year to provide an actuarial review every five years because we want to keep an eye on the projections. We can only go on the present projections. At present, it is estimated that there will be over 1 million people over 65 or of retirement age.

The social welfare increases are the largest to date but that is taking into account the corresponding reduction in the number of people who are in receipt of social welfare/unemployment benefits. Across the system there is a reduction in the amounts involved in most of the major schemes as a result of the excellent economic situation in which we find ourselves.

Deputy O'Keeffe referred to the fact that 28 per cent of children live in poverty. That is based on 1994 figures which are out of date. I am not saying there is no poverty in that sector, which is something about which we must be aware but in the past year and a half, for instance, 50,000 people have come off the dole queue and 96,000 jobs were created in the past year. That is one of the reasons there is less poverty. I make no bones about saying that the best way out of poverty is to give a person a job and that is what this Government has endeavoured to do since it came into office.

Amendment put and declared lost.

Amendment No. 5; amendment No. 10 is an alternative. We will discuss amendments Nos. 5 and 10 together. Is that agreed? Agreed.

I move amendment No. 5:

In page 6, before section 4, but in Part II, to insert the following new section:

"4.-The Minister shall prepare a report on the measures required to close the differential within the rates of weekly benefits and social assistance paid to a beneficiary and the rates paid to an adult dependant and to lay such a report before the Houses of the Oireachtas not later than 3 months from the enactment of the Act.".

The adult dependant allowance is normally paid in respect of a wife, although that is not always the case. There should be a reasonable correlation between the increases allowed to the main beneficiary and in respect of the adult dependant. In the recent past the gap between the amount paid to the beneficiary and the amount paid in respect of the adult dependant seems to be widening. That is wrong. The adult dependant is very often a woman. If difficulties arise in a household and a division occurs, the woman only receives the adult dependant's allowance. A case could be made, from a social point of view, for a greater equalisation of the amounts paid to the beneficiary and to the qualified adult, or adult dependant. That was my thinking when I tabled this amendment. I am sure that Deputy Broughan and I are of a similar mind on this matter.

This matter relates closely to the Fine Gael amendment regarding the budget surplus. The fundamental issue is one of equalisation. Adult dependants, who are generally women, are awarded approximately £43 per week. Every citizen should have basic income. In the CORI review of the budget of 1999, Fr. Seán Healy and his colleagues make some unanswerable criticisms of the budget, although the Minister stated in the Dáil last week that some of this critique has been retracted. The CORI review makes the point, based on an ESRI study, that in the years before 1997, social welfare rates rose by 16 per cent while the average income of all households rose by 22 per cent. There is a growing divergence between the incomes of those dependent on social welfare and the rest of the population.

The Minister may have perused the Economist review of 1999. It is interesting to see how outside commentators view the performance of our country. I found it astonishing to read that Ireland is responsible for almost 1 per cent of world trade and that we are the 25th or 26th richest country in the world, per capita. We are about the 45th richest country in the world in absolute terms. In this context the argument that the income of social welfare recipients relative to GDP is falling, is unanswerable. If the Economist figures are correct, less than 10 per cent of our true GDP goes to more than one third of our population. According to the CORI figures, the proportion we spend on social welfare is declining. There is a case to answer here. We could look at ways to use some of our massive budget surplus to provide a basic income to all citizens. Child benefit could be the means to ensure a basic income for children but ways must be found to provide a basic income for women too. Before the last election, all parties had extensive consultations with economists, CORI and other groups on the subject of basic income and income inadequacy. The Minister made commitments on that subject.

I welcome the Minister's provisions for senior citizens. Many senior citizens wanted to have their incomes and all social welfare payments tagged to average industrial earnings rather than to inflation rates. We must examine the problem of low income to which these amendmentsrefer.

It is difficult to justify a situation where a person aged 65 is entitled to £43 per week as an addendum to his or her partner but, on reaching 66, is entitled to a full pension. No one expects the Minister to rectify that anomaly in a single year. However, we should examine this question closely and sincerely.

Many references have been made to our economic buoyancy. However, farmers who are waiting for farm assist and for other payments that have been delayed over the last six or nine months find it hard to believe that the economy is buoyant. We must ensure that our social welfare system can deal with situations as they arise. While our economy is very healthy, it is difficult to reconcile the Taoiseach's acknowledgment of difficulty last October with a delay until next June before any payment is made.

The decline in the proportion of spending on social welfare in overall Government spending is easily explained. The buoyant economy provides people on social welfare with the opportunity to enter the workforce. Due to our booming economy, the proportion of Government expenditure spent of social welfare is contracting. The number of people dependent on social welfare is declining because 50,000 have left the unemployed register and are no longer a charge on the Exchequer. In fact, those 50,000 people who have gone off the register in the past year and a half are now working and are contributing to the tax take. For example, we spend less on old age pensioners than any other EU country because we have the smallest proportion of old people in our society. Countries such as Italy have a much higher elderly population, which is why they have to spend more than we do. However, on an individual basis, our treatment of old age pensioners is much better than any other EU member.

In regard to the point raised by Deputy Broughan, which was based on the ESRI's recent statement that people in receipt of social welfare have fallen behind because of the increasing pace of our economy, the social welfare increases in the two budgets for which we have been responsible have either equalled or, in many cases - particularly old age pensions - far exceeded wage increases. I do not say that in a political way.

In regard to the qualified adult allowance, to which the amendment refers, it is important Deputies are aware it is not a single payment paid directly to the qualified adult. In the vast majority of cases, it is part of a composite rate payable to the couple. Deputy O'Keeffe gave the impression that this was a separate payment in many cases; in fact, it is separate in only a tiny proportion of cases.

The Commission on Social Welfare did not set a specific minimum rate for adult dependants. It did, however, recommend that the appropriate rate for a couple should be 1.6 times the basic personal rate. Following the increased rates provided for in this Bill, all social welfare payments for couples will be about 1.6 times the commission's minimum target rate for a single person. During the deliberations on last year's Bill, my predecessor, Deputy de Rossa, was very particular about the fact that in some cases, as a result of changes in our first budget, there had been a slight slippage in that 1.6 target. As a result of the changes I made in this budget and Bill, all the rates are now above the 1.6 limit. In addition, all QAA rates will be at least 60 per cent of the commission's minimum recommended rate for a single person of £43.10. The level of payment is, therefore, in line with the recommendations of the commission and reflects the economies of scale which are considered to exist where two people are living together.

This is the traditional way couples have been provided for under the social welfare system, not just in Ireland but in many other countries. In recent decades there have been many changes in the social and economic structure of our society. The social welfare system has sought to respond to these changes, with the introduction of new benefits and allowances to cater for the different needs and contingencies which have arisen. I accept that the traditional method of catering for adult dependants has been called into question. This was considered by a number of research bodies.

An interdepartmental group chaired by my Department is currently examining the treatment of different types of households under the tax and social welfare systems. This group is, among other matters, charged with identifying and costing ways of ensuring consistent and equitable treatment of different types of households, including married, cohabiting and one parent households, under both systems. The establishment of this group also marked the first stage in meeting the commitment in the NAP strategy to examine individualisation of social welfare payments. This group is to complete its work in the next couple of months. We must await its report to see what measures it is proposing before we can take any further action.

A colleague asked me to raise with the Minister the issue that, in certain circumstances, the adult dependant of a contributory pensioner gets nothing. The means of the contributory pensioner are irrelevant from the point of view of getting the contributory pension, once they have paid the necessary contributions. However, the same rule does not apply to means for the adult dependant allowance. In some instances, a man can get a contributory pension but his spouse can get nothing - he is not debarred on the basis of means but she is. That seems unfair. Will the Minister look into that?

That is the £60 per week rule. That rule also existed for people claiming unemployment benefit. In the past couple of years the £60 limit has been extended to £90 for the unemployed but has remained at £60 for old age pensioners. I accept that rule has always existed but why is there discrimination between different benefits?

I thank the Chairman for his support.

That issue is being looked at by the interdepartmental group. Deputy Noel Ahern has raised this issue with me umpteen times in regard to old age pensioners. The reason for the different levels of £60 and £90 - which has been increased to £105 - is that it encourages people back to work, particularly spouses of working age. The reason it was not extended to old age pensioners is that they would not be returning to the workplace.

This fairly innovative proposal was brought forward a couple of years ago and has been built upon. The view when it was first introduced was that the figure should be £60. However, that meant that a person earning £61 would immediately lose out, so the tapering scale of £60 to £90 was put in place. I increased that in this year's budget to £105.

Is there no tapering for the adult dependant of a contributory pensioner?

That has always been the case for OAPs.

There is a total cut off at £60.

Yes, if they have means.

That seems unfair.

It is being looked at by the working group. I can say off the top of my head, although I will have to check it, that there is some justification for ensuring that households with substantial means are not getting a full payment.

They have paid for 40 years.

They are getting their contributory pension on that basis. The qualified adult allowance, as the adult dependant allowance is now called, is another issue. That is how it is looked at in the system.

I will not push this to a vote, Chairman, unless you are anxious for me to so do.

Amendment, by leave, withdrawn.

I move amendment No. 6:

In page 6, before section 4, but in Part II, to insert the following new section:

"4.-The Minister will consider the possibility of assessing applicants for non-contributory social assistance payments with actual income from capital as opposed to fictitious and artificial income.".

In many ways, I am continuing a campaign on the means assessment for those who have some capital. I am not interested in the 2 per cent or 3 per cent of people who have capital far in excess of £20,000. I am interested in the smaller person whom we should be encouraging to put a few pound aside. There are quite a few people with between £8,000 and £15,000. It is scandalous that they should assessed with a rate of interest bearing no relationship to what they get. I understand that the old assessment, which it only goes back a few years, was a timeless arrangement for the Government at 7.5 per cent and 15 per cent - it was 7.5 per cent up to £20,000 and 15 per cent over that. Clearly with the drop in interest rates it is totally out of date.

I do not want the Minister to tell me stories of people with £3 million receiving benefit or assistance. If necessary there should be a cut off point higher up, but he should deal with the legitimate complaint of a person losing disability or unemployment assistance or the non-contributory pension. In particular I am thinking of pensioners. They have followed the advice we as politicians have given them to save for their old age. They have saved in banks or credit unions for a rainy day and look at what has happened. If these people are honest - and we encourage people to be honest in completing their applications - they may lose £10 or £15 per week in their pensions because they saved for a rainy day. That is the kind of person with whom I am concerned.

I will keep up the campaign to urge the Minister to change the present ludicrous system. I accept that he did not introduce it. I have no interest in the person with hundreds of thousands of pounds being treated better. I am talking about the ordinary person who has put a few pounds aside for a rainy day. Let us encourage that. We should encourage it from the point of view of people having security, particularly for their old age, and also from the point of view of encouraging people to declare their means honestly and to keep their money in a bank, post office, credit union or building society rather than at home where it may be a temptation for burglars. I am impressed by stories from rural Ireland in that regard. Some people are thought to have money stashed away in their houses and are considered legitimate targets by thugs from the cities who rob them.

I feel strongly that the Minister must change this quickly. It is possible to introduce a system which will achieve the objectives I have set out and avoid the outrageous consequence of people with large sums of money being able to access means-tested payments, as highlighted by the Minister when I raised this in the past. I rest my case for the moment. It is part of a continuing campaign against an outrageous injustice. I intend to continue this campaign until it is changed.

I raised the point previously that a disabled person who has come through a 15 month illness in order to receive disability benefit had to immediately apply for means-tested social welfare. The person has a car on hire purchase worth more than his money in the bank, yet the car was not taken into account and the money in the bank was. Having a few pounds saved cost the person £9.05. Rating that investment at 7.5 per cent when it only earns approximately 1.5 per cent is not logical. I rest my case on that. There is a need for change in a case such as that where money has clearly been borrowed for a legitimate purpose and the person has tried to save money. He borrowed the money for the car when he had a good wage and it made sense and he now finds himself in grave difficulty.

For those attending the committee who have not been part of recent discussions on this and for those from the outside considering this committee's deliberations, it is important for me to emphasise again that I have asked and encouraged Deputy O'Keefe who is leading a campaign in this respect to talk to my officials. I wrote to him today and gave him the names of two people who would explain to him exactly why my predecessor Proinsias De Rossa - aided and abetted by Deputy Durkan - established this system and why, to this day, the system is not out of date, even given that interest rates have come down. I know Deputy O'Keefe has pedalled this to some of his colleagues, one of whom wrote a very unhelpful article in a provincial newspaper - there are probably more around the country which I have not seen - trying to frighten old people by referring to the figures of 7.5 per cent and 15 per cent, which I emphasise were not picked by me. They were picked by my predecessor.

Quoting those figures does not let people know that there are built-in disregards in the system which mean that - and this was stated by Deputy De Rossa at the time - the vast majority of people coming under this system are at an effective rate of only 3 per cent, not 7.5 or 15 per cent.

As I stated before, to get to the effective assessment rate, account must be taken of the significant capital disregard provided of £2,000. In addition, other aspects of the means-test when they interact with the assessment formula operate to further reduce the effective assessment rates. For instance, in the case of old age and widows pensioners, the first £6 of weekly assessable means do not affect entitlement to payment. In the case of a couple, means are taken to be half of the joint net means. These result in a couple being able to have double the amount of means a single pensioner can have. That was the reason why this system, complicated as it is, was put in place by my predecessor.

In effect, a married couple can have capital up to £12,320 and still qualify for the maximum pension. Furthermore, a single pensioner can have up to £38,348 in capital - that will be £40,428 from June - and qualify for the minimum rate of pension. A married couple can have up to £76,000 - or £80,000 from June - before losing entitlement to pension. The vast majority of old age pensioners within our system have no capital or insufficient means to even be assessed for means-test purposes. We estimate that only a small minority would have capital in excess of £20,000. In effect, a couple with capital of £20,000 would be assessed with means of only £600, giving an effective rate of only 3 per cent as I stated earlier.

I will repeat figures which have been checked since Deputy O'Keeffe raised this matter last week in a debate during questions. He referred to an interest rate of 0.2 per cent on deposits. If we were to reduce the assessment rates of 7.5 and 15 per cent to a combined 2.2 per cent and retain the £2,000 disregard, it would have the following effects on the amounts of capital pensioners may have and still qualify for a pension. A single old age pensioner would be able to receive a maximum pension while holding capital of £158,000. A married couple would be able to receive a maximum pension while holding capital of £316,000. If the disregard is not retained the figures are even more stark.

We have made a comparison with provisions in the UK and the note I have reads:

The capital assessment provisions, which are currently in operation in this country, compare very favourably with those in operation in the UK. For instance, under the income support scheme the equivalent means tested payment for pensioners in the UK, capital of up to £3,000 is ignored. Income support is reduced on a sliding scale where a pensioner has capital of between £3,000 and £8,000, while entitlement ceases completely where the pensioner has capital in excess of only £8,000. [The figure is £12,000 in this country.] Under Irish arrangements a single old age pensioner can qualify for up to £6,100 and still qualify for the maximum pension, over twice the equivalent amount under the UK system. A married old age non-contributory pensioner couple can have over four times the equivalent UK amount, that is £12,320, and still qualify for the maximum payment. Indeed, the amount of capital which the Irish pensioner couple can have and still qualify for the maximum pension is substantially in excess of the level at which payment could be withdrawn completely under the UK system.

Furthermore, a single old age non-contributory pensioner can have capital of up to £38,345 and still qualify for a reduced rate pension, nearly five times the maximum amount of capital allowed under the UK system. This maximum level of capital will increase to £40,428 following the implementation of the Budget increases in June. A pensioner couple can have capital of up to £76,000 or £80,856 from June and still qualify for a reduced rate, nearly ten times the maximum amount of capital allowed in the UK system. Under the income support scheme, the payment is reduced by £1 for each amount of capital of £250 in excess of the £3,000, subject to the payment being totally withdrawn where the capital is in excess of £8,000. Under the Irish system, for amounts of capital up to £20,000, payment is reduced by £2 for each amount of capital of £1,387 in the case of a single pensioner and by £2 for each amount of capital of £2,773 in the case of a pensioner couple.

I read that into the record so that Members can check the figures.

The outrageous headlines have been peddled in this instance and, in effect, they sow the seeds of uncertainty in the minds of old age pensioners. I accept that the figures of 7.5 per cent and 15 per cent may look stark to people who do not understand how the system operates by taking into account the disregards built into the system.

While I believe this is a good system, we will look at it to see if we can achieve the same results while making it look better. However, any change in the 7.5 per cent and 15 per cent figures, without changing the disregards will skew the system and result in people with large capital receiving a maximum pension which, in effect, will dissipate the amount of State funds available under the social welfare system.

The past is not relevant. The situation in the past was different because interest rates were running at up to 20 per cent.

The situation is no different now in effect. The change in interest rates has not changed what was put in place a number of years ago.

First, as I understand it, when the 7.5 per cent figure was put in place it was a reduction on a higher previous figure. My recollection is that the figure of 10 per cent was reduced to 7.5 per cent. This took place at a time when interest rates were double or treble what they are at present. However, the situation has changed radically. Second, although I concede that because of disregards etc. the effective rate is somewhat lower than 7.5 per cent - even taking the Minister's rate of 3 per cent - this is still over ten times the interest the person gets. This is manifestly unjust.

Third, I want to emphasise that I am not interested in people with hundreds of thousands of pounds. I am satisfied that a system can be established to ensure that people with large amounts of money in the bank cannot claim benefits. However, I do not believe this is happening because people with large sums of money would not deposit it in the bank at a 1 per cent rate of interest. I do not think the type of people the Minister talks about exist - they are a figment of his imagination. I accept when establishing a system that the Minister must make provision to cover the remotest chance of some such person receiving a non-contributory pension. I emphasise that I am interested in people with sums of less than £20,000.

The Minister indicated that if he is not opening the door, he is at least opening the window. I am not interested in the optics, as it were. It is wrong that one's assistance should be reduced by £10, £15 or £20 a week, be it in an non-contributory pension or otherwise, on the basis of means which they are not receiving. The Minister said that he is open to change and interested in improving the optics. I want change, but more than improving the optics, I want that wrong to be put right.

The Minister said that he has written to me on this issue. I suggest that if the policymakers come to the committee, we could possibly have a fruitful discussion on how an alternative proposal might be put in place to deal with the injustice in the system without opening the door to people with millions of pounds to receive non-contributory pensions. Such a system can be put in place, and if the Minister does not want to suggest such a system now, perhaps the committee could make proposals if he were to make some of his officials available to discuss the issue with us. I suggest that as a sporting response to the Minister's comments.

I will not apologise for returning to the case of people on invalidity and disability pensions. These people find themselves in great difficulty through no fault of their own and their case should be considered.

If a pensioner qualifies for an old age pension and his wife works part-time, how much can she earn per week if he is to qualify for the full rate of non-contributory old age pension? How much capital can single and married people have in the bank before they qualify for the full rate of non-contributory pension?

A married couple can have £12,320 in the bank and still receive the maximum pension.

I offered to Deputy O'Keeffe during questions that I would make my officials available to talk to him personally or allow the matter to be discussed at the Committee on Family, Community and Social Affairs. I have no problem allowing officials to attend.

If we were to tamper with this provision in the way he suggests and not deal with disregards, people who have little or no capital would be affected. These figures were put in place so that, progressively, people with larger amounts of income would be affected. If we were to bring everything down to a base bank rate and do away with disregards we would disenfranchise many old age pensioners and other social welfare recipients. At the same time it would allow people at the upper end of the scale to get an element of pension.

I accept what the Deputy said about some of the figures I quoted, for example, £3 million for a married couple, but that is how they work out. I have not closed my mind on the matter. I fully understand the assessment situation but I ask members to seek the views of the officials before making public statements. I will make amendments if they have to be made. I would not like to take money from social welfare recipients that was unwarranted.

The suggestion to bring it to the committee is good.

On that basis I am prepared to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments Nos. 7 and 33 are related and we will deal with them together.

I move amendment No. 7:

In page 6, before section 4, but in Part II, to insert the following new section:

"4.-The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the situation of women who were formerly in receipt of deserted wives benefit and were under 40 years of age on the date of its abolition.".

This amendment refers to an inquiry initiated by my colleague, the late Deputy Pat Upton. The Taoiseach referred to the inquiry in his tribute to the late Deputy as the kind of mundane issue that most Members would pursue but Deputy Upton pursued this issue all the way to the Minister and engendered a response which is the substance of the Minister's amendment No. 33. It refers to people who qualified for deserted wives' benefit, who did not have a child that qualified under the provisions and who were still under 40 years of age on the date of its abolition. Has the Minister decided to eliminate this anomaly from recent legislation?

This is not an anomalous issue. This scheme was devised when Deputy De Rossa was the Minister for Social Welfare. It was created in order to ensure the system was not abused.

The late Deputy Upton tabled a parliamentary question in relation to a constituent. I read the reply a number of weeks ago and my officials and I decided that we could incorporate an amendment in the Social Welfare Bill. I proposed an amendment a few days prior to Pat Upton's death and the day after he died it was dealt with by the Cabinet. The Government accepted it on the day the Deputy's funeral took place. My amendment will address the situation which was brought to my attention by Pat Upton.

In the case of women whose entitlement would be interrupted because they no longer had a qualifying child residing with them, transitional provisions provided for the restoration of the benefit at age 40 confined to women who were within two years of attaining 40 years at that time. I considered the confining measure to be harsh. It is difficult to defend this position in the light of the long established principle of preserving existing entitlements where changes in provisions have an adverse effect on beneficiaries. All women who were in payment at the time this scheme was abolished would have a legitimate expectation of regaining entitlement to the benefit at the age of 40 in the event it ceased before that date on qualified child grounds. Therefore, I propose to remove the restoration of DWB at age 40 to former recipients who lost entitlement on qualified child grounds while under age 40. Deputy Broughan should withdraw amendment No. 7 and my amendment should be accepted. I wrote to the widow of the late Pat Upton to let her know that this amendment was being proposed today.

I thank the Minister for his assistance. Can he tell me what is proposed in amendment No. 33?

Women who were caught by the two year saver will not lose out. This amendment deals with women who had children at an early age and are in receipt of DWB. Only a small proportion of women are in receipt of DWB but Deputy Upton was able to come up with one.

Amendment, by leave, withdrawn.

I move amendment No. 8:

In page 6, before section 4, but in Part II, to insert the following new section:

"4.-The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the social welfare situation of persons resident in Ireland who are in receipt of pensions under the social security legislation of any other jurisdiction.".

This amendment, in effect, asks the Minister to see what he can do for people who are in receipt of pensions from the social security system of another jurisdiction or another EU country. Several Deputies have referred to the situation whereby British pensioners cannot claim social welfare entitlements such as the living alone or over 80 allowance. Will the Minister examine this situation? This is an increasing problem because some of the people who emigrated to the UK in the 1950s and 1960s have retired here. Unfortunately, they now feel disadvantaged by the tight operation of our system compared to what they could have enjoyed under the British system had they remained there.

I support this amendment. This issue has arisen often in my constituency. The drop in the value of the punt with regard to sterling and the euro has resulted in some people not being eligible to an Irish pension or any benefits because their income from their UK pension is over the qualifying threshold.

I also support this amendment and ask the Minister to adopt a sympathetic approach to it. Often those people in receipt of British pensions feel hard done by. Ireland has a more generous pension regime compared to the UK but because of currency fluctuations some people feel they will lose out. When the Minister considers it, he might also talk to his colleague, the Minister for Health and Children. If people are in receipt of a British pension and also receive a small pension from his Department they may not qualify for a medical card. If they only receive a British pension, they will automatically receive a medical card but they are means tested fully if they receive even a small pension from this State. I am aware that a different Department is involved.

They still qualify.

I find that they do not get them automatically and they are rigorously means tested, yet the British Government pays the Exchequer £60 million annually to look after people who receive British pensions. They inevitably get medical cards here.

The changes introduced recently in the budget in relation to the guidelines will assist people aged 70 and over.

Perhaps so, but will the Minister raise it with his colleague?

That will benefit the medical card cases but not the other issues.

I support the amendment. It should be emphasised that years ago pensions were generally 15 to 20 per cent higher so that if a difficulty arose there was a certain amount of latitude and the exchange rate difference also favoured UK pensioners in Ireland. That does not necessarily apply currently.

Swings and roundabouts.

I accept that but we cannot say that we are poverty stricken. Many of those we are talking about left Ireland in the 1950s when there no jobs and often they live in poor circumstances. It may not be any harm to look at this matter again to assess the total number of pensioners in Ireland and how the regime affects them in terms of their overall incomes.

Deputy Broughan said that the difficulty was caused by the restrictive social welfare system here whereas Deputy McGrath's point was the most relevant. Historically, the social welfare system for old age pensioners was more generous here than in the UK and wherever I discuss social welfare around the world, people are amazed at the level of assistance given by us to our old age pensioners.

I meant that the system was restrictive for British pensioners.

When one takes into account the benefit of the freeze, an extra £10 per week is added on average if an individual is entitled to the pension. Our old age pension is being increased substantially but when the freeze is added it is even better.

The new regulations allow periods of insurance in any EU member states to be combined so that a person may qualify for a pension. The bilateral agreements with a number of non-EU states - Austria, Canada, Australia, the US, New Zealand, Quebec and Switzerland - are designed to protect the pension entitlements of Irish people who go to work in these countries and workers from those countries who work in Ireland. They allow periods of Irish social insurance and, where provided for, periods of residence and contributions which are completed in a second country to be taken into account so that a worker may have his or her entitlement to pension determined.

At present, 21,000 people receive a contributory old age pension or retirement pension in addition to their own social security pension. Foreign nationals resident in Ireland may also claim old age, widow and widower's non-contributory pensions and carer's allowance provided they satisfy the means test. Any income from their own social security pension is taken into account as means, except in the case of carer's allowance where a disregard applies. An amount up to the maximum rate of old age contributory pension received by way of a foreign invalidity type benefit is disregarded.

A number of foreign pensioners have complained over the years that they should be eligible for the treatment benefits under social insurance as persons last insured under Irish legislation before reaching pension age. Treatment benefits are dealt with unusually in this country in that while they are benefits in kind and, thus, similar to other health services they are provided by both the health boards as part of health services and by private practitioners to insured persons who satisfy contribution conditions under social insurance.

Entitlement to dental and optical benefits under treatment benefit schemes is conditional on having sufficient PRSI contributions paid or credited to qualify. Under EU regulations which provide for the protection of the social security rights of migrant workers account can be taken of periods of insurance completed in other member states to satisfy these contribution conditions provided that the person was last insured under Irish legislation before the date of claim.

The EU regulations provide that normally the legislation of one member state is applicable at any one time, that is the legislation of the country of employment or last employment. Irish legislation would, therefore, not be applicable to EU regulations in the case of pensioners who were last insured under the legislation of another member state. There is, accordingly, no legal basis in such cases to take account of their periods of insurance completed in other states for the purpose of claims for treatment benefits.

Under EU regulations pensioners resident in Ireland who are in receipt of a pension from one or other member states are entitled to the full range of health services free of charge, the cost of which is financed by the competent state, that is the state to which legislation the pensioner has been subject for the longest period or the state of last insurance. The provision of such services is arranged through the issue of medical cards to persons concerned, irrespective of their level of income. The health services provided include dental and optical benefits under the appropriate health board schemes.

In relation to entitlement to free schemes, the free travel scheme is available to all people living in Ireland aged 66 and over and to all carers receiving carer's allowance. It is also available to certain people with disabilities under 66 years who receive certain welfare payments, including corresponding long-term illness payments from countries within the EU and those covered by the bilateral agreements. The free electricity allowance and telephone rental schemes are available to people usually aged 66 and over who are in receipt of a welfare payment or other low income pensioners who are not in receipt of a social welfare type payment but whose weekly income is not greater than the maximum personal rate of old age contributory pension plus any increases for dependants plus £30. They are also available to certain people with disabilities under that age who are in receipt of certain disability type pensions.

Persons aged 66 or over and receiving a foreign social security pension from an EU member state or a country covered by a bilateral agreement and persons under 66 receiving long-term illness payments from such countries are also eligible for such schemes and the free fuel scheme. In addition, widows and widowers between the ages of 60 and 65 whose late spouses have been in receipt of free schemes retain that entitlement.

People are entitled to participate in these schemes and it is not the case that they are excluded. However, some lose out and EU legislation could be blamed. Much of it is determined on that basis.

Clearly, there is an onus on the Minister. I am not sure how the EU Social Affairs Council operates but I presume there is a forum for the 15 Ministers. The Minister has made a case based on our system, going back over the achievements of all parties over the past 40 years and leaders of different Governments emphasised the role of senior citizens. Our system provides extra benefits to the over 80s unlike the UK system. The Minister mentioned the benefit-in-kind, as he termed it. There is, however, a considerable anomaly in this confederation of 15 member states, if that is what it is supposed be. Clearly, there are widely varying systems of social insurance and social welfare. Does the anomaly, about which a number of constituents asked me in recent weeks, still exist whereby if a person has a social insurance record in the UK, they cannot access benefit when they return to Ireland unless they get a single stamp?

This amendment was suggested to our spokesperson on senior citizens, Deputy Sean Ryan, by the Senior Citizen's National Parliament, which evolved from the retired trade Unionists group which was fairly active particularly during the 27th Dáil and attended many of the committees. I remember bringing them into the finance committee. Unusually at the time we had a backbenchers committee composed of Deputies from all the parties trying to pursue certain fundamental inequalities for senior citizens. This is an issue about which they are still upset.

In the European context, there must be similar cases to that of ourselves and the UK, the way our two economies are still so intermixed and the fact there still is a relatively common labour market, as was the case in the 1950s and 1960s. Those men and women made a huge contribution to the British economy over 20 or 30 years, and perhaps to our economy over a number of years. There is an issue of justice here which we should address and one for which we might find support from the Benelux countries, Germany, Italy, Austria, France and so on. These are countries where the economies have operated together and where senior citizens are perhaps disadvantaged if they retire, as they are entitled to do, to a native country to live for the remainder of their lives. I will press this amendment to a voice vote.

If we wanted to and had the money to do something, we could not do something for the UK only but would have to do so for all EU countries. The issue the Deputy raised about requiring one stamp is one we all come across and always find difficult, particularly in yesteryear when jobs were not available and people could not get into the system to get the one required stamp. This is, however, as a result of an EU directive which, more or less, says that in order to qualify there must be some connection with the social insurance system when a person is transferring from one state to another. Our one stamp requirement, while it may seem illogical to the man or woman on the street, is the minimum requirement for attachment to a social insurance scheme. In other words, if a person gets the one stamp, they immediately qualify for all the entitlements, so it is on that basis it exists. We obviously cannot change that because of the EU directive.

It is an area we need to examine. I know there are significant differences. It is always interesting to look at the amount of social insurance other countries pay. On Second Stage I referred to statistics which show us as having the lowest tax-social welfare proportion of income of the 15 member states despite the fact the British are talking about a 10 per cent rate. Some of those countries seem to have huge social insurance stakes and takes from the economy. If we are serious about having a single labour market, which the European Union was ultimately supposed to be about, then we certainly should look at this issue.

The point raised by Deputy Broughan is a good one. That issue could form the basis of future reviews in the context of bilateral arrangements, particularly given that a person who has contributions in one jurisdiction and transfers to another because they may be ill, for example, and wish to be near relatives, is in the invidious position of having to work and register to acquire a stamp to qualify in that country. That is where the anomaly arises and it often happens with people who are seriously ill and it creates problems for them and their families. The cost factor would not be huge. After all, those who qualify for assistance or means tested payments do not have a problem and they transfer over and sign on.

To make a general point in relation to the attitude of our EU partners on any effort to converge our social security systems, there is an extreme reluctance on the part of other European countries, and probably ourselves, because one has to take the good with the bad. There has been little or no discussion at EU level in that regard. There are some disadvantages for people who have been resident in England returning home. As a result of a number of bilaterals agreements we have put in place over the years, there are very good arrangements for our elderly people to come home. Some people might say the weather would put them off.

Amendment put and declared lost.
NEW SECTION.

I move amendment No. 9:

In page 6, before section 4, but in Part II, to insert the following new section:

"4.-The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the level of uptake of the grant towards personal security alarms for the elderly and the extent to which this relates to the level of reimbursement available.".

This is an amendment the Labour Party was asked to consider by representatives of the Senior Citizen's National Parliament. It believes the basic grant towards a personal security alarm has been effectively cut by about 30 per cent. Given the current climate, people believe this grant should not have been interfered with and should have been granted at a rate of perhaps even 100 per cent - that should have been a target. This is an area in which the Chairman is interested because he has made many contributions on it at the local authority of which we are both members.

In the Dublin region, we have had great problems in some areas with vulnerable senior citizens living in local authority complexes suffering serious crime. Thankfully, since Operation Dóchas and given some of the moves Assistant Commissioner McHugh has made, we have seen major developments in trying to tackle this problem. There are, however, vulnerable people and, in particular, people who live alone are seriously at risk. Given that this case has been made to us, I ask the Minister to take this amendment on board.

I support this amendment. For elderly people, the psychological benefit of having a personal security alarm is nearly as important as its physical use. A few weeks ago I was contacted about an elderly widow. I then wrote to the Community Alert official and asked if he would visit her and explain about a personal alarm. When I called she told me she should have got it last week; a councillor had given it to her. I contacted the council and it confirmed it does not distribute them, nor does the health board. The grant is available but I do not know how people can get it. At this stage the elderly want alarms. Given that the scheme is available, it is important that it be used. I have in mind the personal alarm worn around the neck, rather than the main alarm for which relatives can claim income tax relief.

I support the amendment. Telephone numbers can be put on some of the more sophisticated alarms. In the event of a problem, telephone A will be called. If A is not answered, telephone B is called. Recently I came across a person who wanted the third telephone number when neither her son nor her neighbour was available, to be at the local Garda station. However, the Garda would not agree to its number being on the security system. It is a pity that cannot be done. Perhaps a communal answering service can be provided. This person, who is German, would like to be able to contact the Garda in the event of her son or neighbour not being available. Even at the higher level the Garda would not agree.

This scheme has caught on hugely.

Yes. I want nail the lie that I have made any amendments to the detriment of the scheme. When I assumed office, £2 million was provided in the Estimates of the previous Government under the multi-annual budgeting system for 1997, 1998 and 1999. Towards the end of 1997 the grant applications amounted to £7 million. An application from one organisation amounted £1 million. Having examined the position I got Government approval for an extra £3 million, bringing the total to £5 million in 1997. In 1998, faced with a similar situation, I got Government approval for a further £3 million. Some people, including Deputy Broughan, suggest everyone should get a 100 per cent grant. There is no scheme which guarantees people will get a 100 per cent grant. Some people say there should be a guarantee of 90 per cent, but that cannot be. I came across a case in my constituency where a group applied for £X, and this year applied for many multiples of that figure. The group knocked on doors and asked if people wanted alarms. Needless say, it did not get any rejections.

The Minister was in the area.

The scheme cannot work like that. It has always been the case that grants under the scheme would cover from 50 per cent to 90 per cent of the once-off cost of the purchase and/or installation of the necessary security equipment. While the maximum grant available is 90 per cent of the total cost, it is not possible to guarantee that this level of funding, in respect of all applications received, will be given. The initial estimate was £2 million. Since its introduction the scheme has cost £12 million up to the end of 1997 and has assisted 36,000 people. It is estimated that as a result of the extra £5 million provided in 1998 a further 20,000 will have availed of the scheme, bringing the total to about 56,000. If any member wants further details on how the voluntary organisations have distributed the funding, it is available in the Oireachtas Library. Details of the grants paid to the groups under the 1998 scheme are being compiled and will be available in the Oireachtas Library shortly. I am anxious to ensure the scheme addresses the security needs of the most vulnerable in society and provides this assistance in the most efficient and effective way.

My Department has, in consultation with the Departments of Finance and Health and Children, commissioned an independent review of the scheme which will consider how it is meeting its objectives and whether it is doing so in the most efficient and effective way possible.

The final report of the consultants will be available shortly and the future operation of the scheme will be determined in the light of the outcome of this review. It is correct that this review should be carried out given that the scheme was put together in a matter of weeks following the 1996 budget. The then Minister for Finance allowed tax relief on security alarms and equipment for old age pensioners. It was pointed out that only a small proportion of old age pensioners could avail of the tax relief given that they do not pay tax. The consultants' report will point out a number of interesting issues. While one would wish to provide alarms to all 107,000 people living alone, that would be extremely expensive. I support the scheme which has worked well but it is valid to examine whether it is achieving its objectives.

Does it have to be administered through community groups? Can an individual apply?

The view is that it has to be done through a community group. This is taxpayers' money and a substantial amount is provided to a myriad of groups throughout the country. The Comptroller and Auditor General might have a view on the dispensing of this money through voluntary groups - I say this with respect to all concerned - and the checking procedures. I am not saying anything disparaging against the groups but at the end of the day we are subject to the control of the Comptroller and Auditor General. Given that the funds are distributed by voluntary groups and given the number of staff delegated in this area and the enormity of the task of checking, it is not possible for the Department to monitor the scheme.

Will the Minister allow the scheme to operate on an individual basis, given that in some rural areas there are no voluntary groups?

I am subject to financial restrictions and the way in which the scheme operates. It was set up on the basis of using some of the tried and tested community groups. Others have sprung up and have responded to the desire in local communities. The review has shown up some interesting issues. There are a number of different ways in which the scheme could be delivered but I do not want to second guess the conclusions of the independent consultants. Following the review we will have to decide whether it should remain with my Department and, if so, how best to administer it.

I accept what the Minister has said about how the scheme evolved. The then Minister for Finance, Deputy Quinn, allowed tax relief on the scheme. This was against a background of some awful murders and attacks on vulnerable senior citizens, especially in rural areas but also in some deprived local authority city areas. The Minister said it will have to be decided to which Department the scheme will ultimately belong. The Chairman and I used to argue on the local authority that security was an issue in which the local authority should have a fundamental role along with the Department of Justice, Equality and Law Reform. I am pleased the Minister got approval for the extra funds. There is the problem that some groups expect to receive 90 per cent of costs. The voluntary group which went around the Minister's constituency carried out its remit in terms of trying to ensure the security of the elderly. I wish to put the issue to a voice vote.

On the last point, I accept the group did its duty. However, it raises the question of the lack of ground rules. Given that finance is finite no one can be given a blank cheque. The consultants' report indicates that the people in receipt of these aids do not look on them as something which will secure them from crime, but as an assurance against loneliness, heart attacks and so on. Thus, it may have to come under a different Department. Older people living alone regard these aids as a means of getting help in times of illness.

Amendment put and declared lost.
Section 4 agreed to.
SECTION 5.
Amendment No. 10 not moved.
Section 5 agreed to.
The Select Committee adjourned at 7.15 p.m.
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