Social Welfare Bill, 1999: Committee Stage (Resumed).
NEW SECTIONS.
I move amendment No. 11:
In page 7, before section 6, to insert the following new section:
"6.-The Minister shall, within 3 months of the passing of this Act, lay before Dáil Éireann a report on the implications of paying all Child Benefit for children over the age of 5 years at the rate of £20 per week.".
The amendment speaks for itself. It is a straightforward request. I presume the Minister will not have any difficulty understanding it. My colleague, Deputy O'Keeffe, will explain it in further detail when he arrives.
This proposal was made public recently. One of the newspapers indicated that cost of paying £20 to children up to the age of five would be £300 million, but that is not the case. It would cost £156 million. Yesterday Deputy O'Keeffe referred to a figure of £146 million. Based on the 1996 census which recorded 250,000 children in that category, we estimate the figure to be £156 million.
This proposal was the subject of a recent parliamentary question. A similar proposal is referred to in the recent report of the Commission on the Family which I published. On the publication of the report on child care by the expert working group, which was set up under the Partnership 2000 agreement, the Government decided to set up a small interdepartmental group to examine that report, the report of the Commission on the Family, a report on this area by the Department of Education and Science and any other submissions over a six month period with a view to returning to Government in June to make final decisions on the issue of child care. That is one aspect of this issue.
The aspect of this issue concerning children up to five years of age has been well documented. It has been acknowledged for a number of years, and this was confirmed in the report of the Commission on the Family, that there is a need to provide some assistance for families with children aged up to five years.
In relation to this proposal in the report I posed the question during Question Time last week: "What happens when the child reaches the age of five?" The family as a unit would lose the additional allowance and, in effect, would have less money. I would hazard a guess that the outgoings of the family would not diminish simply because the child started school - it could be said there is even more expense on a family when children start school. For those reasons the Government is examining the issue broadly to see how it can be addressed. That is one of the reasons we referred it to the interdepartmental working group. As far as my colleagues and I are concerned, we want to address this issue. The whole issue of child care will be extremely costly. I know this is just about child benefit, but we will examine it in the coming months.
I endorse the proposals put forward by my colleague. We have to look to the future in terms of the qualitative development of our social welfare code, and in so doing establish priorities. The purpose of moving the amendment was to highlight those objectives. If the economy continues to progress and the moneys now available continue to increase, we will have funding in the future that was unthought of in the past. We will be able to think in terms of major projects that may involve hundreds of millions of pounds. That raises the question of priorities if we are to have such a qualitative improvement in our social welfare code.
A child care strategy must be put in place quickly not just from a social point of view but from an economic one. Economic pressures demand an improvement and in many ways we achieve the social and economic objectives in dealing with the child care issue. If child benefit is central to the comprehensive solution that is necessary, it should be put in place. The Minister is not totally unsympathetic to the approach we have adopted. I accept he does not have the funds to implement the proposal but, on the other hand, it is our job to suggest it as one of our major priorities for the development of our social affairs code.
The Minister made a valid point on the position of children over the age of five. I am not sure how that can be resolved but perhaps it could involve a tapering down of the allowance. That would cost a little more but if we are to focus additional resources on children of a certain age, there will be a differential between children of that age and those of other ages. If the Minister would be prepared to accept it is a reasonable priority to aim towards, and if it can be accepted in the context of the review of child care arrangements generally, we might not press the issue further.
I accept what the Deputy says.
I support the amendment. It is interesting that in the discussions by various political parties on the question of child care, the general view is that ten to 15 years is the most costly period in a child's life. Perhaps that is the area we should target in terms of a basic allowance of £20 per week, the argument being that the older children would be involved to some extent in part-time work, which is not legal but does happen. The most expensive time for parents is when children are over ten years but we are moving towards the idea of a basic allowance for all children. Providing a proper level of child benefit should be our objective.
The argument here is moving towards the cost of child minding, etc. On a point of clarification, there may be a misprint in the amendment. It is up to the age of five.
For the information of Members, in 1989 the child benefit rates for the first to the fourth child was £15 and for the fifth and remaining children it was £21, whereas in 1999, for the first two children it is £34.50 and for the third and remaining children it is £46. Over the years there has been substantial investment in this area but it is extremely costly because it is the only benefit paid to everyone, irrespective of means, in the social welfare code. For every additional 50p given it costs £5 million. The total cost for this year is in the region of £447 million. The advantage of child benefit is that is given to everyone and it is not a disincentive to people going to work, whereas child dependant allowances were. I accept the Deputy's point that we will leave it for another day.
Amendment, by leave, withdrawn.
Amendment No. 12 is in the name of Deputy Broughan. Amendment No. 15 is an alternative so we will discuss amendments Nos. 12 and 15 together.
I move amendment No. 12:
In page 7, before section 6, to insert the following new section:
"6.-Not later than 6 months from the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas a report on the need to amend and extend the social welfare free schemes as they apply to widows and widowers.".
We had this debate on Committee Stage last year. Deputy Moynihan-Cronin was particularly anxious given the circumstances of so many young widows. We had a sad experience in our own profession recently and a young woman is left with the responsibility of caring for a young family. This issue affects all areas of society. Deputy Moynihan-Cronin feels strongly about this issue which is a lacuna in the system of support. The basic widow's and survivor's pension does not encompass the difficult circumstances where a woman working at home, whose spouse earned £25,000 or £30,000 per year, finds herself struggling to survive with a young family. This case was discussed at length last year by my colleague and I ask the Minister to examine the matter.
I hope the Minister will come up with a positive proposal. I have raised the issue of widows many times in the Dáil over the years and the Minister for Finance explained his attitude on those occasions. We expect widows with young children, especially those on social welfare, to continue doing the work of two people, yet the cost of living is the same as when their partner was alive. An allowance of £70 per week is not enough.
We should make a deliberate effort to give widows a special status. If we give a 5 per cent or 6 per cent increase to everybody else we should give 50 per cent to widows so that they will have some kind of status. They are the one group in the social welfare scheme I would like to see given a definite place in society, as distinct from giving them the normal percentage increase. That is not fair to them because their role is much more difficult. They are trying to raise a family on their own, pay the mortgage and the other household expenses, and the current allowance is inadequate. We provide free travel, electricity, etc. for older people so I ask the Minister to help widows in some way.
The committee the Minister set up should examine this issue. I have experience of this issue because my mother was widowed in her early 40s, with eight children, and experienced much hardship as a result. If a working husband or wife dies, there is a sudden and dramatic change in the income in that home. That problem must be examined either in terms of providing free schemes or by way of a percentage of the normal social welfare payments. We discussed this issue last year and when in Opposition we asked the then Minister for Social Welfare to address it. I ask the Minister to address the problem of the dramatic change in income when a spouse earning a good income dies and the surviving partner has to live on inadequate social welfare payments.
I support the sentiments expressed by the two previous speakers. I compliment the Minister on the progress he has made in social welfare since taking office. The point being made deserves consideration because widows and widowers can face serious problems. I ask the Minister to examine the issue in detail, particularly in terms of people with young families, because there are cases of severe hardship. We all know of such cases and I have no doubt the Minister, who has already shown a compassionate outlook in terms of social welfare, will give serious consideration to it.
Can the Minister give a large increase to widows and widowers, or would he find himself in the Supreme Court because some EU directive stated that divorced or separated people or lone parents were entitled to the same increase?
I acknowledge and empathise with the views expressed by the Deputies. As a matter of record, in this and the previous budget the Minister for Finance made substantial tax changes, particularly last year, to assist widows. Widows over 66 years of age are in receipt of the £5 or £6 increase. I appreciate there are difficulties with regard to people under the age of 66 but in the two budgets in which I had an input we gave increases that were almost twice the rate of inflation.
We estimate that the overall cost of extending the free schemes to widows and widowers would be £25 million, which is substantial. The free schemes were originally designed to assist older people in our society but minor changes were made over the years as a result of representations from the general public. We are examining that whole issue and an evaluation is being done by my Department in conjunction with the Policy Institute in Trinity College Dublin. That will be available later in the year. Following that we will come back to the committee with our views on what could be done. The expense in this area is great because of the numbers involved.
The Minister referred to income tax breaks, etc. which are important and welcome, but I am talking about a group of people who are not in that sector. People of 40 years of age with young families who are dependent on social welfare are a special category. The Minister could deal with this issue if he wanted to. These people lead very difficult lives.
I welcome the fact that the Minister listened to all of us because we all have friends and relations who are in these difficult circumstances. The committee must acknowledge the difficulty of a parent who is left to rear eight children on the support we give them. That is the genesis of these ideas. The two amendments refer to a report but perhaps the Minister would be prepared to come back to the committee and specifically address this problem.
One of the Minister's predecessors, my constituency colleague, the Minister for the Marine and Natural Resources, Deputy Woods, had a close relationship with the National Association of Widows in Ireland and often regaled them with the odd song at their various functions; I do not know if the Minister emulates him in that regard. We would like to see a report coming before the committee.
My relationship with the National Association of Widows in Ireland is excellent, although I do not regale them with a song. I assisted the association in holding a world conference in Dublin Castle which was attended by widows from around the world. I was inundated with compliments on the way the Government, and previous Governments, assisted widows over the years. The association was acutely aware of the fact that, in comparative terms, this State looks after widows well, although they were probably referring to people over the age of 66. Lone parents with children are treated alike, including widows, unmarried mothers and deserted wives.
I can give the committee some figures which might be of assistance. The number of payments of the fuel allowance is 280,000 at an annual cost of £45 million and average weekly cost per recipient of £2.50. The estimate for 1999 is £46.4 million. The number in receipt of free travel is 532,000 at a cost of £32 million. The average weekly cost per recipient is £1.18 per week. Free electricity is given to 214,000 recipients at a cost of £30 million which is £2.72 per week. There are 171,000 recipients of free telephone rental at a cost of £29 million which is £3.24 per week. The figure for free television licence is 218,000 recipients at a cost of £15 million which is £1.35 per week. They are substantial figures.
Widows of between 60 and 65 years of age are in receipt of the free schemes depending on the conditions——
Only if their husbands got them when they were alive.
That is right. That exemption was given to allow widows in that age group to avail of these schemes. It was patently unfair that they were being disenfranchised from them when their husbands died. One could extend it all the way through to the marriage age but that would incur extra costs. When this provision was made it was intended to assist older widows. There are 1,965 in receipt of free travel, 1,586 in receipt of free electricity and 539 in receipt of free telephone.
Widows over 66 years of age who are in receipt of free travel number 73,970; 51,194 receive free electricity and 48,279 receive free telephone. That is the scale of what is involved.
Does the Minister have figures for the number of widows under 40 years of age?
No but perhaps we can get them.
The Minister gave figures for free travel and other schemes for widows in the older age bracket. I am asking about the younger age groups.
I have a table showing the number of recipients which I can circulate. It is contained in the social welfare statistics book.
Are there any figures on widows under 40 years of age? What about younger widows with families?
Apparently, there are nine widows and one widower under 25 years of age on contributory pension and one widow on non-contributory. There are 273 widows between 30 and 34 years of age on contributory pensions. The number for 40 to 44 years of age is 1,200; for 45 to 49 years is 2,300; for 50 to 54 years is 4,100; for 55 to 59 years is 6,100. These figures are for contributory pensions only. The figures for non-contributory pensions are smaller.
Would it possible to extend the schemes to the younger age bracket? The numbers are smaller and these people have young families. As they get older their families are reared and the expense is not as great.
That would not be possible because there would be a clamour from the people in the middle age groups. They would claim they are being discriminated against. It should be done for all or not at all.
What about a woman with five young children who is widowed at 32 years of age? A widow of 52 years of age whose family is old enough to be earning and possibly helping financially could not say it would be unfair. I do not accept the Minister's argument. We must look after those who are in need.
All are entitled to child dependant allowance or child benefit in respect of children of eligible age.
The Minister could frame it in their favour by giving them extra money at a stage when children are expensive, as distinct from when the family is reared and in employment.
One cannot postulate that argument because one does not know the individual circumstances. If one starts cherry picking age groups, there will be a strong lobby for other age groups claiming they are victims of discrimination because they are not getting the same treatment. The reason it was done for the 60 to 65 year old age group was to alleviate a situation at the top end. While there might be some validity in the Deputy's argument, he might be better off bringing the 60 years figure down further if the money was available. Basically, however, one should either do something for everybody or not at all.
My thinking might be wrong but I see no advantage in reducing the figure from 60 years to 55 years. While they could do with more income they do not have the same expenses as somebody of 35 years of age with a young family. However, I will not pursue the argument.
The difficulty is that if either partner dies, the surviving partner is left with dependent children and must live on social welfare and the child dependant allowance. Those people are in an extremely poor position. They were used to a particular lifestyle when their spouse was alive and suddenly they are reduced to surviving on a minimal payment. We do not look after widows very well and we should find a mechanism for improving their lot. Taking account of Deputy Browne's comment, one means of doing that might be to relate the additional benefits to those who have dependent children.
There is another strange aspect to the system. Let us take as an example a couple with dependent children who are living on social welfare. If one partner dies, the surviving partner receives the full social welfare payment for six weeks. If one partner of a couple who are not dependent on social welfare dies, after which the survivor becomes dependent on social welfare, that person qualifies for contributory social welfare but is not given the six weeks payment. That can be a substantial loss. The death grant which the Minister recently announced will be a help in that regard but we should find a mechanism to give additional benefits to widows as distinct from anybody else.
The Minister has been given a flavour of how the members of the committee feel about this matter. However, the State's social welfare system cannot be responsible for everything. It is up to each individual who finds themselves in that situation to protect themselves through an insurance policy or some other mechanism. We cannot expect the social welfare system to do everything. None of us is immortal.
Amendment put and declared lost.
I move amendment No. 13:
In page 7, before section 6, to insert the following new section:
"6.-Not later than 6 months from the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas a report on the classes of cases of social insurance benefit the payment of which includes an investigation of the means of the recipient.".
There was a lengthy discussion on this amendment last year. The Minister might remember addressing the concerns expressed by my colleague, Deputy Moynihan-Cronin, who highlighted the fact that in some respects the means test for benefits payments operates in absurd ways. There is a need for the Department to outline clearly how the means test is operated and the extent to which a person's means must be investigated. I put down the amendment again this year to see if the Minister has anything further to say on the matter.
There has been publicity about changes in the assessment procedure as it will relate to farmers in the future. Perhaps the Minister will briefly outline how it will change. Is he in a position to give us an idea how those assessments will change? We have all come across people who have been assessed as small farmers - their animals are counted and a notional profit calculated - and it is difficult to see how it is worked out. How will things change under the new arrangements?
If that issue is coming up under a later amendment it may be better to leave it for now.
A person is entitled to social insurance benefits as of right through the payment of PRSI contributions to the social insurance fund and is not subject to a means test as in the case of social assistance schemes. Entitlement to various benefits is based on the claimant satisfying the appropriate contribution conditions for each individual scheme.
In the case of short-term benefits, such as disability allowance and unemployment benefit, the requirements are that the claimant must have contributed to the SIF through payments of PRSI contributions for a minimum period of weeks, for example 39 weeks, and have had a recent attachment to the labour force by having a specific number of contributions registered in a recent income tax year.
In the case of long-term benefits, such as OAP and retirement pensions, the conditions are more stringent in that a person is required to have contributed to the fund for at least five years and have a minimum number of contributions.
Increases in the rates of weekly social insurance benefits are paid in respect of qualified adults and qualified child dependants. If a person is married or living with someone as husband and wife and is wholly or mainly supported by that person, he or she is regarded as a qualified adult and an increase in the payment may be claimed for him or her. If a person is divorced and claiming a benefit and is supporting a former spouse, a qualified adult allowance may also be payable. If the person is separated from his or her spouse, a claim for an increase may be made if that person is contributing a certain amount towards maintenance - currently £41.20 - and he or she is not living with someone else as husband and wife. The cut off point for that is £60.
If the spouse partner is receiving any of the following payments; disablement benefit, death pension, orphan's pension or domiciliary care allowance, then he or she may considered as a qualified adult. A QAA is not payable if a person's gross income from employment or self-employment is over £60 per week. A tapered QAA is paid for some payments, for example, disability benefit, OIB, UB or UA, DA and PRETA where the earnings do not exceed £90. The limit is being increased from October to £105 per week.
There are differences in the treatment because of changes made over the years to assist people back into work; that is why the tapering of the £60 had been brought into place and in some other instances not.
Has the Minister thought anymore about pro rata pensions and the pre-1953 credit situation which was discussed? People feel that they are excluded from calculating their pro rata COA pensions for credits prior to 1953.
In my budget speech I indicated that I have instituted a review of the pre-1953 situation. The Chairman has lobbied me strongly on this and I agreed to look at it. We all see cases where people cannot get the benefit of credit pre-1953. Logistically this is a difficult cohort to follow because none of the cases is on computer. I have undertaken that we will follow this up. I accept that they are a diminishing group.
Does the Minister have a time frame for this?
Amendment, by leave, withdrawn.
Section 6 agreed to.
NEW SECTION.
I move amendment No. 14:
In page 7, before section 7, to insert the following new section:
"7.-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 amendment raises the issue of family income supplement and its extension to the self-employed. I want a reasoned response from the Minister why he has not acceded to the requests to have family income supplement available for the self-employed. This has particular relevance for the farming community, although there are sections in the Bill dealing specifically with farmers. The ICM was in touch today and it is still anxious to push this issue.
I look at it in the broader context of the self-employed. We should encourage self-employment but at the same time we should be cogniscent of the position of those who are self-employed with families, whose return from self-employment may be modest. At the moment there are 13,500 people in receipt of family income supplement. It should be higher, even in the context of the present regulations because the uptake is only 38 per cent. If people are really in need of it, however, they would find out about it, although further efforts should be made to improve communication about it.
I looked at the situation in Northern Ireland. There it is slightly different but, as the Minister will appreciate from the report I filed with this committee, there is a system there which is equivalent to family income supplement which applies to the self-employed. If it is available in Northern Ireland, why is it not available here? Is there a doctrinnaire objection? Is it a question of cost? Are the figures produced by the self-employed not trusted? I am trying to get to the heart of this.
Why has the Minister not taken a logical step? Does he not agree that we should be encouraging people to set themselves up in self-employment or continue in it? We should be cogniscent of the difficulties for families when the returns from self-employment are modest. Is there any logical reason we should not extend the system to include the self-employed? These are economic and social objectives which we all share and which should dictate that this system should include the self-employed.
In recent months there was a debate on the family income supplement in relation to the minimum wage. I understand the negotiations on the Bill with the social partners are at an advanced stage and it will be before the House this year and will come into operation on schedule on 1 April 2000. Many people feel that a decent target minimum wage of, perhaps, £5 per hour is the road we should take in supporting low income families. This issue was carefully researched by ICTU. I support this as someone involved for many years in small business centres.
There is a critical period for someone coming from unemployment into employment under the area based allowances, the partnership areas or the back-to-work scheme. A person starting out on his own is used to a small cushion provided by unemployment assistance for a few years. However, this cushion is removed after three or four years, perhaps at a critical time when one might be moving to bigger premises or taking on an additional employee. I understand the reason for this amendment.
Self-employment schemes have had some success. They have changed the lives of many people and made them more pro-active. Even in deprived areas, it is interesting how many people have ambitions to be their own boss based on some market niche they have identified. We have tabled proposals for developing the scheme and the Minister might give this some attention, whether through FIS or in terms of an income support mechanism. Deputy O'Keeffe might also consider this measure for small entrepreneurs, those in start-up situations or at a critical point in the evolution of their small businesses when a small cushion might help them survive.
Sitting suspended at 2.53 p.m. and resumed at 2.56 p.m.
I support this amendment. However, FIS should not be handled by the Department of Social, Community and Family Affairs but by the Department of Finance and the Revenue Commissioners. There should be a trigger mechanism whereby when one's income returns are made and that fall below the required limits as set out by FIS, this mechanism would come into play and one would receive a repayment. That would be more streamlined, efficient and fair. Under such an arrangement the Revenue Commissioners would not differentiate between the PAYE sector and the self-employed.
By refusing to pay FIS to the self-employed we are stating that we do not believe the figures being given to the Revenue Commissioners. We are saying that, even though the Revenue Commissioners, one arm of the State, are prepared to accept their figures, the Department of Social, Community and Family Affairs is not and it will not pay out. We cannot continue with such lack of confidence in another arm of the State. There is an unanswerable case for the self-employed receiving the same entitlements as the PAYE sector. We cannot defend the fact that they do not receive equal treatment.
The self-employed, such as those in small businesses, experience difficulties at different times of the year and there is a need to look at this issue in the context of FIS. The Minister introduced the farm assist scheme which I welcome. Could this scheme not be changed to the self-employed assist whereby all self-employed people on low incomes would be entitled to such payments and not just the farming community? How much would this cost? Has the Minister considered this at any stage?
We hear about hundreds of families who do not claim FIS and the Minister budgets for this every year. What are the yearly savings due to non-claimants and could this money be transferred to the self-employed?
There are two issue involved in this area. A minimum wage would save the Department a lot of money since some employers are not paying sufficient wages because of the FIS. This scheme is called "family income" and I find it difficult to understand how one can distinguish between £110 earned by a small farmer or that earned by a small shopkeeper or factory worker. Why should a person who earns £110 and works in a plant or factory obtain a supplement when other people earning the same amount do not? I accept that there are costs involved but, as stated earlier, if a minimum wage was introduced it could provide a counterbalance. It is difficult to explain to a person earning £110 per week that their neighbour, who earns the same amount but who works in a factory, is entitled to a supplementary payment of £60 because he cannot survive on £110. It is particularly difficult to explain to self-employed people that they are not entitled to family income supplement.
I will not repeat the arguments that have been made against this proposal, not only by me but by previous Ministers from various parties. FIS was introduced in 1984 and the possibility of extending it to the self-employed has arisen on many occasions.
There are a number of factors which must be considered in respect of the practical difficulties associated with extending the scheme to the self-employed. I would guess that those difficulties have been exacerbated by the recent introduction of self-assessment for tax purposes. Arrangements have already been put in place to provide income support for self-employed people on low incomes.
Deputy Jim O'Keeffe referred to assisting people entering self-employment. My predecessor, Deputy Woods, introduced the back to work allowance scheme which was expanded into the area allowance scheme. I took steps to expand it further by allowing people entering self-employment to claim this benefit for a fourth year. Therefore, excellent assistance is available for those wishing to enter self-employment.
The cost of introducing such a measure would be prohibitive. We have provided figures in respect of the costs involved in extending FIS to all self-employed people, including farmers. These figures were updated recently because many improvements were made, particularly the improvement to put the entitlement on the net income basis - and we estimate it would cost between £70 million and £80 million to extend the scheme.
Reference was made to the farm assist scheme. FIS is aimed at families whereas the farm assist scheme caters for families and single farmers. When they began lobbying for this, the farmers referred to farm families. However, following representations I received in respect of low income single farmers or farmers living alone, we formed the view that the scheme should not be limited to families and it was, therefore, extended. That is the difference between the farm assist scheme and FIS.
I got the impression that Members believe that self-employed people are treated in a similar way to PAYE workers within the tax system. That is not the case and everyone knows why. If we take it that £70 million to £80 million would be the overall cost involved in extending FIS, and given that the farm assist scheme is in place, obviously that £15 million would reduce the overall spend. I was glad to introduce the farm assist scheme because I acknowledge the difficulties faced by low income farmers. It should be noted that we also introduced the fishing assist scheme recently.
It is important to state that this issue was considered previously. The circumstances now are no different than heretofore. This matter was raised in the negotiations on Partnership 2000 but it was not followed through on . I am surprised by Deputy O'Keeffe's statement that the ICMSA is seeking the extension of FIS because I had believed that organisation was satisfied with the farm assist scheme. The reaction from the farming organisations to the farm assist scheme was uncharacteristically positive. Since its introduction was announced we have improved the scheme, particularly by moving the payment date back from June to April. However, the farmers continue to come back for more. They remind me of Oliver Twist on occasion but, behind the scenes, I believe they think it is an excellent scheme.
As far as I am concerned, FIS cannot be reconsidered in terms of extending it to the self-employed.
I am not happy with the Minister's response. It appears that, in relation to this issue, figures are being thrown around like snuff at a wake or confetti at a wedding. In response to Parliamentary Question No. 33 tabled on 4 February last year, it was stated that the extension of FIS to the self-employed, assuming there would be a 100 per cent take-up, would cost £30 million in a full year. Even in respect of the employed, the take-up rate is——
On what year did I state the figure was based?
4 February 1998, questionNo. 33.
I am not referring to the reply. Did I not state that the figure was based on the statistics for 1994?
The reply states "It is estimated that the extension of FIS to self-employed people with children could cost in the region of £30 million in a full year. This cost assumes a 100 per cent take-up".
In subsequent replies, I indicated that that was based on the figures for 1994 which were out of date.
I based my consideration of this matter on the figure of £30 million because frequent reference was made to it. If there was a 100 per cent take-up, the figure of £30 million would be correct. However, the net cost to the Exchequer would only be between £10 million to £12 million if the take-up was similar to that in the employed sector - 38 per cent. The latter is an increased take-up from a much lower base.
On 4 March the Minister stated that if FIS was to be extended to all other self-employed, excluding farmers, it is estimated that the cost involved would amount to £47 million, assuming again that there was a substantial take-up.
That figure was exclusive of farmers.
That is true. The Department is assuming that they will be satisfied with the farm assist scheme. Today, a week after his reply of 4 March, the Minister is now stating that the cost involved would be £70 million to £80 million. In my opinion a more detailed assessment of the prospective take-up and the cost involved is required. I do not want the Minister to throw figures at me to frighten me off from the point of view of the cost involved. I do not intend to drop this issue but I also do not want to impose a burden on the Exchequer. If the costs involved are too high, we will have to reconsider the position. However, I would like a more detailed costing to be done.
I take the Minister's point in respect of the back to work scheme. However, at my clinics and elsewhere I have met people who, following a number of years in self-employment, began to amass family and other responsibilities. The costs they incurred increased and, because their back to work allowance had been discontinued, they began to struggle to maintain themselves in self-employment as a result of the additional costs involved with having a family. We must encourage these people, some of whom operate in the services sector. I really think we have to reach out to them. There is a sector which is being neglected. I would like to indicate my concern by pressing this issue to a voice vote.
On the back-to-work allowance scheme, can the Department justify the entitlement of four years benefits to the self-employed at 100 per cent compared to three years benefits to the PAYE sector at 75 per cent? I find it difficult to explain the difference.
The reason there is a preference for self-employment is that in most cases, for the first few years when someone starts a business they would not get a viable wage. They, in effect, do not make any profit and are lucky to keep their head above water. If, after a couple of years, their business is successful, they will no longer be entitled to claim benefit.
In relation to the points raised by Deputy O'Keeffe, the figure of £47 million was based on subtracting £30 million which was the figure estimated for paying FIS to farmers. The estimate of £70 to £80 million is a guestimate because the data available when dealing with farmers and the self-employed is very scant on the ground. The Revenue Commissioners can offer very little assistance as to their actual position. In many cases the estimates are conservative, but once a scheme is introduced, more people will come forward to avail of it. It is for all those reasons that, over the years, previous Governments and the Government under Partnership 2000 did not push the issue of FIS for the self-employed and farmers.
Amendment put and declared lost.
Amendment No. 15 not moved.
SECTION 7.
I move amendment No. 16:
In page 7, between lines 38 and 39, 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 position of persons in receipt of family income supplement where for a temporary period any such person ceases to be in employment for at least 38 hours per fortnight.".
We welcome the legislation as it applies to Comhairle and because it establishes an information service on a widespread basis. I tabled this amendment because of the confusion among volunteers who work in centres for the unemployed and legal aid centres over the entitlement of persons in receipt of the family income supplement whose circumstance change and they cease to be employed for the required 38 hours per fortnight. They interpret the existing legislation as meaning that a person's entitlement to FIS ceases if, even for a short time they do not fulfil the 38 hours requirement. The legislation seems to state that the payment should continue for 52 weeks, regardless of changes in circumstances, apart of course from an increase following the arrival of an extra child and where a person claims another social welfare payment, such as unemployment benefit and unemployment assistance. There is a feeling that the Department is interpreting FIS in a very restrictive way which would have the effect of taking many people out of the scheme who might have qualified. One of the reasons we welcome the establishment of Comhairle's information services is that it provides information on people's entitlement, including low paid workers, who up to recently were not aware that they qualified for such entitlement, in other words, is the Department misinterpreting current legislation as some of our social welfare advisers believe?
It is true that I am bringing forward the Comhairle legislation as expeditiously as I can. Part of the conditions of FIS is that it is given for a 52 week period provided people continue to satisfy certain conditions. The income limit is based on the 52 week period. From that point of view, it kicks in and kicks out every year, not during the year. One of the qualifying conditions for the scheme is that the claimant must be an employee in remunerative employment for 38 hours or more every fortnight, which is likely to last for at least three months. Where a claimant does not continue to be engaged in employment for a minimum period of 38 hours every fortnight, he/she is no longer entitled to the scheme. I can get the regulations for the Deputy if he wishes.
Is the Minister saying that people, irrespective of whether they went on shorter working hours or were reduced to part-time work, would continue to get FIS?
Changes which reflect the claimant's entitlement to FIS and which will result in withdrawal of FIS payments are reduction in the hours below 38 per fortnight, claimant ceases work, claimant changes to casual employment or seasonal work, claimant leaves existing employment for community employment, claimant becomes self-employed, claimant is in receipt of disability benefit for more than six weeks, claimant makes a claim for unemployment benefit, retirement pension, unemployment assistance PRETA, claimant stops work because of a trade dispute or claimant leaves the State, claimant is detained in prison or legal custody. The only change which entitles the claimant to apply for an increase in rate during the 52 week period is where an additional child is born. These are set down in regulations.
Is the Minister saying that takes precedence over the social welfare code in the Acts? For instance, where there are industrial disputes or if there is a downturn in a company like Cadburys, where people would occasionally go below the required number of working hours, should they be left with their entitlements under FIS?
If they do not qualify under FIS, most likely they would qualify for some other payments. We would be happy to look at particular cases that the Deputy might like to bring to our attention. Most likely, the workers do not meet the criteria set out in the regulations because they are not working the required number of hours to qualify. These regulations have been in place for some time.
I would appreciate a report.
Amendment, by leave, withdrawn.
Section 7 agreed to.
Sections 8 and 9 agreed to.
NEW SECTIONS.
Amendments Nos. 18 and 21 are related to amendment No. 17 and amendment No. 20 is an alternative to amendment No. 18 and all may be taken together. Is that agreed? Agreed.
I move amendment No. 17:
In page 8, before section 10, but in Part III, to insert the following new section:
"10-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 treatment of carers in the social insurance system.".
We had a lengthy debate on this issue on Second Stage. The Minister introduced certain improvements for carers and said he wanted to end the situation whereby carers were taken for granted by our community. We have all met the Carers Association and other bodies, including CrossÍcare, that are doing such valuable work often in very difficult circumstances and, as somebody said, often up to 168 hours per week. In our profession we are used to being on duty seven days per week, but carers must work seven days and nights per week.
Obviously, some of the tax changes which the Minister and the Minister for Finance brought forward and the measures in Part III are welcome. All Members of the House welcome the expansion of the facilities, the number of extra people being brought in and the extension of definitions in relation to those working from another household. Amendment No. 19 is related as it seeks to allow the Oireachtas prescribe the conditions and circumstances of a carer from another household. The fact that half of all carers operate from another household was a valid reason for the Minister to move on some of the measures.
The Minister's immediate predecessor, Deputy De Rossa, gave serious consideration to the implementation of a carer's benefit. Great difficulties can arise when a person has to give up work to look after an older relative or a spouse, and we have all come across conditions, such as multiple sclerosis and severe disability following a stroke. This is something the Minister did not consider in this legislation and which he should have investigated.
The Carers Association told us these measures will increase the number on the allowance by approximately 3,300, but it is still fewer than 15,000 or, as it estimates, fewer than one in four full-time carers. That is a huge challenge which faces the community. Deputy Shortall and, along with other colleagues, want the Minister to investigate bringing in a straightforward carer's benefit based on social insurance records which would enable the person who has had to care for the disabled relative for many years to live a reasonable life.
Allied to this matter is the strong feeling that the extra costs of caring are still not met and are sometimes completely missed by the health support and the social welfare systems. There was a strong demand from the Carers Association for a basic £45 allowance for all carers towards costs for the special medical and treatment needs of those for whom they care. While welcoming what has been done, I would like the Minister to look at a carer's benefit.
Amendment No. 18 echoes another amendment in terms of the respite allowance. If one has had the experience of being a carer, and many of us would, respite is a core element of being able to live a moderately normal life given the fact one has such onerous duties. A £1,000 respite allowance is a reasonable proposition as, indeed, is the increase in the disregard to £200. I notice the carer's group was particularly anxious that this would be the basic disregard. In fact, it was looking for net income for married couples so that a carer could qualify for the carer's allowance in their own right.
I commend the Minister on the extent to which he has tried to develop the responses of the community towards this forgotten sector. He has a key responsibility in ensuring that we do not take carers for granted and do whatever is necessary to enable them to live reasonable lives given that they have such huge responsibilities. The key point is that in terms of a cost benefit analysis they serve the community and, in fact, save us hundreds of millions of pounds.
I am in the happy position that I can endorse everything my colleague, Deputy Broughan, said. I suspect that if the Minister had a full purse to distribute, his heart would be with us in the case made for carers.
I am glad the discussion we had last year in relation to a respite allowance has resonance in the current decisions, although it did not go as far as we sought last year when we spoke about a £1,000 allowance for all carers. The establishment of the respite care grant is a first stage and a reasonable response and I find myself in the rare position of complementing the Minister on that. It is progress and is more than an extra £4 per week. In addition, it is a recognition of the need for respite care for carers. From that point of view, I am happy progress has been made there.
Looking at the situation in the UK and the national strategy for carers there, one of the central tenets of that strategy is that helping carers is one of the best ways to help the people for whom they care. It is a strategy which we can all endorse. How far should we go? There are couple of issues from the point of view of cost. I appreciate that expenditure of £45 million in 1998 will increase by another £18 million in a full year and not in 1999. The numbers involved have gone up from 11,500 to almost 15,000, and that is an advance. However, I would bear in mind that there are another 30,000 at least - nobody is quite sure how many - who are not getting a carer's allowance. I appreciate that of the estimated total number of 49,000 - apart from the number in receipt of carer's allowance - there may be others in receipt of some other social welfare allowance who are precluded accordingly from a carer's allowance. They might be better off on another allowance.
There is probably a vast number of carers who are getting nothing or almost nothing. We must give consideration to them on social and economic grounds. That is why I felt the respite care grant was the obvious route to take. One could say that if one does not have a blank cheque, one must take means into account. Maybe that is not an unfair way of doing it, but the respite care grant would be the route to use if one wanted to give a recognition payment and an acknowledgement to carers who get nothing.
I do not care how well-off carers are, they all need some respite and some recognition from the State, and even a relatively small respite grant would give them that. That is the basis for the Fine Gael proposal to extend the respite care grant, even at its relatively modest starting point, to those presently excluded by the means test. As I understand it, it will only be payable those who qualify for the carer's grant, on which I would place a lot of importance.
The other plank of our approach is to get more carers into the scheme. That is why the income disregard is relevant. I appreciate there is a slight change here, the implications of which I confess I do not fully understand. The implications are that the existing regard as applied to a spouse's income is to be applied to a couple's joint income. I am not certain of the implications of that proposal, but I do not see it as being of more than peripheral relevance. We are at one with the Labour Party in proposing that income disregard should be increased fairly substantially up to £200 per week. That seems to make a lot of sense. I am interested in the Minister's response on the cost of these proposals. How much would it cost to increase the income disregard to £200 per week, and how many more carers would one get in if that measure was introduced? How much would it cost if the respite care grants were made available to all carers instead of just those in receipt of the carer's allowance?
I do not want to harrow ground that has been ploughed. If someone is caring for a person 24 hours per day and for seven days a week, he or she should be able to get a break of a week or two in the year. I am not sure how far the respite care allowance of £200 per annum would go if the person being cared for went to a nursing home. Experience would indicate that one would get very little for that amount. Maybe this should be increased substantially.
It is estimated by the Carers' Association that only approximately 25 per cent of those who give care are getting some form of carer's allowance from the Department. That means their income and the £150 disregard puts them outside the limit. That £150 disregard as currently implemented means that if a person has a joint income of £300 per week or less they will not qualify for a carer's allowance. This amendment, putting the income disregard to £200 per week, will lift that income threshold to approximately £350 per week and will not include a great number of additional people in it. Let us face facts - today £350 per week is not an awful lot of money; it is quite a low income threshold. It is interesting in the light of earlier discussions about FIS that the Department will acknowledge and take into account income for self-employed people in consideration of carer's allowance but will not for FIS purposes. That is an interesting anomaly.
I welcome the changes the Minister has made in the carer's allowance, and I understand the benefits of the change in the disregard rules. The £150 disregard was brought in two years ago, when the disregard was upped from £50 to £100 then to £150. In the last two years there has been no change, and I urge the Minister to look at the matter again.
I know someone who is caring for her sister who is dying of cancer. She applied for a carer's allowance, but because her husband is earning overtime she is ruled out. If the State had to look after this patient it would be at an enormous cost, and both patient and carer want to continue as they are. However, this woman had to give up a part time job, and the present provisions do not allow for such situations. The Minister should allow for some degree of latitude in such cases. I know of another case where a boy must get 24 hour care, and while there are many services during the day, his parents must provide those services at night. This means that one of them is up all night. Again, if he had to go into full time care it would be at great cost.
I know it is difficult for the Minister to make exceptions, but some means to do so must be found. I am returning to my old hobby horse of those who are receiving carer's allowance and who are from a self-employed background. The present difficulties in the agricultural sector must be taken into account when the means test is applied. I know this change will help the daughter of a couple I deal with who is getting £9 per week for looking after her parents at home. She would be at work elsewhere otherwise. She has a few suckler cows that are costed by the Department as bringing in enormous income. The disregard for a single person would benefit her, but I beg the Minister, as I have done on previous occasions, that people's actual income should be taken into account and not a historical figure.
Yesterday I spoke to a senior person in the appeals section, and after a long fight I had a small farmer's social welfare payment increased from £50 to £112. It is unfair that that had to go an appeals system in a year like this; it had to be defended by someone from a farming organisation, otherwise it would not have happened. I cannot overemphasise this point in relation to the carer's allowance and the farm assist scheme - realistic income that farmers or other self-employed people are getting should be taken into account. I know the Minister refuses to accept the accounts done for the Revenue for FIS purposes, but he accepts them on the cost factor. The Department officials do not accept them on income and come up with some hypothetical figure that the family farm income is based on, such as £500 per animal, when anyone attending a mart knows differently. Some of the Minister's officers need to spend some time where farmers get their incomes, and then they would have a better idea of what is happening.
I support previous speakers and the amendment. This area requires ongoing review. A number of positive changes have been made over the past few years in relation to the carer's allowance and carers. For example, a carer who leaves his or her job to care for someone will be credited with social insurance contributions, which is good. However, there are many issues with regard to carers and care recipients, where the State has saved a considerable amount of money due to the big sacrifices made by others. Such people have given up their jobs and remained out of the workforce for a long time. They may return to the workforce at a very disadvantageous time in their lives, when their promotion or remuneration prospects are seriously reduced.
The Minister should re-examine this. The guidelines have been considerably improved over the past couple of years. The proposals in the amendment should be looked at seriously, together with a series of other measures, the objective of which should be to try to ensure that, first, the State continues to enjoy the assistance it gets from carers; second, that it continues to encourage the involvement of relatives or friends in caring for someone and, third, it encourages the involvement of other family members in the care of those with serious disabilities by making a small financial recognition of their efforts.
There used to be a theory that it was the responsibility of families to look after those who required care, which it is. However, lifestyles have changed and in some households everybody works. In order to ensure those requiring care get the same degree of attention as in the past, almost every aspect of the carer's allowance must be adjusted.
A number of issues have been raised. Eleven changes have been made in this area in the last budget and since then. On budget night RTE picked up on the £200 respite payment, probably because it was the easiest for them to understand. The fact is that it was probably the least costly of the amendments made on that occasion. The costliest amendment was the one relating to domiciliary care, which cost £9 million.
There are 11,500 existing carers and we estimate an additional 3,300 will qualify for this allowance. It will cost £18 million in a full year, which represents a 40 per cent increase on the existing expenditure, which is quite substantial. The recent review estimated that 49,000 people were in need of full time care and attention. We estimate that almost 15,000 carers will qualify for this allowance. Based on the applications for the carer's allowance, 2,000 people are in receipt of another social welfare payment which is worth more to them than the carer's allowance.
It is estimated that the complete abolition of the means test, which has been repeatedly called for, would cost £200 million in a full year. I used to give a figure of £160 million in that regard, but the figure has risen due to the increases we made in the last budget. The only non means tested payment is, as I said earlier, child benefit. Some lobby groups——
Is that an extra £200 million?
No, it is £200 million in total. Some lobby groups say the means test is not the key issue - they would rather have the available moneys targeted at those most in need. That is one of the reasons the review group made the suggestion, which was accepted by all the lobby groups, that a needs assessment must be put in place on an individual basis, not only for the carer but also for the care recipient.
The cost of increasing the weekly income disregard from £150 to £200 for a couple on joint income would be in the region of £6 million. We feel that would bring another 750 carers within the scope of the scheme. The cost of extending the respite payment of £200 to all full time carers would be £8 million. I probably should not say this, but the original suggestion made to me was that we should have an annual payment of £100. However, I felt that was too little and I increased it in our first budget to £200.
That would cost £49 million.
It is all very well to make such suggestions but the available money must be balanced. We could do with much more money but the reality is that anyone in my position has to work with a limited amount of money. We are all in favour of the cases of OAPs, the disabled, widows, farmers, those on family income supplement, the self-employed and others to whom reference was made. However, we must use the available money to meet the needs. I indicated in my first budget that, because the review was coming to a conclusion, I would endeavour to do something in this budget, which is what we did.
Another general point, which is not always taken into account, is that the Government decided, largely at my prompting, to co-ordinate our approach to the issue of carers. As a result, the Government issued on budget day a separate document which indicated what we were doing for carers across a number of Departments - I allocated an extra £18 million in a full year to the carer's allowance in my Department, additional resources were allocated to respite care by my colleague, the Minister for Health and Children, Deputy Cowen, and the disabled person's grant was increased by the Minister of State, Deputy Molloy.
The most significant tax change was the extension of the £8,500 tax allowance for carer's spouses to extended members of the family. We moved somewhat in that regard away from the promise of a £2,000 tax allowance in our programme for Government because we felt the £8,500 tax allowance was better. That takes into account the points made by Deputy Durkan about extended families and that most couples work. It is quite significant to give people who have to mind elderly parents a tax allowance of £8,500. When my brothers and sisters and I had to mind my now deceased mother we did not receive any tax allowance or State assistance. From that point of view, all of those amendments, taken together, suggest that an incredibly generous package for carers was put in place this year.
The carer's benefit, to which Deputy Broughan referred, is to facilitate carers in employment to take leave from work to care for somebody. The review looked at the possibility of financing it through the PRSI system. We estimate that the proposal will cost about £42 million. As I indicated on Second Stage and stated when we issued the carer's review report, we regarded this as something which needed full examination, and I invited the views of the social partners in this regard. I discussed the issues of the ageing population and caring for the elderly with Mr. Peter Cassells of ICTU. The Government and future Governments need to come to some view with the social partners as to how we proceed on that basis to care for an elderly population.
There is a further PRSI benefit arrangement for care recipients. This is something which we feel would be of great benefit whereby people in employment could pay into the benefit scheme in the anticipation that they will require care in future years. We have set up a separate consultancy project in that respect. I hope that will be progressed later this year.
Those two issues and the needs assessment issue are the only other issues which have been mentioned in the carer's review and must be addressed. I accept that they are the two largest issues but they are not ones on which I could make quick decisions.
It is important to place on record that we made 11 changes. One of the reasons the relaxation of the residency rules was included is that it was pushed strongly by Members of all sides of the House. While the guidelines will be issued in due course, I would not be honest if I did not say that there is a view within officialdom that this type of relaxation could be open to abuse. I am involved in discussions on the guidelines in that respect.
There are other issues. For example, carers of children receiving the domiciliary care allowance can now be eligible to the carer's allowance. The estimate for that is £9 million. The conditions for full-time care and attention are further relaxed to allow carers to take up paid employment for up to ten hours per week. The free telephone rental scheme is extended to all carers in receipt of the carer's allowance. There is also the income disregard of which Deputy Crawford has personal experience.
One issue which has not been announced but which I indicated to the Carer's Association and others is that we are now allowing carers, who no longer qualify because somebody dies, to go back into employment and self-employment by giving them the benefit of the back to work allowance and the area allowance without the requisite qualification period on the dole. This takes care of an issue raised by Deputy Durkan. The fact that they had been on carer's allowance will immediately qualify them, subject to the other conditions, for the back to work allowance scheme. That is another improvement I made subsequent to the budget changes.
This Government has fulfilled a commitment in part to the issue of carers, but I am not saying that we have finished because it is an area which needs constant attention. At the end of the day, we must juggle all the balls in the air and try to look after everybody.
When did the income disregard change from £100 to £150? What will be the criteria in relation to this £200 respite care allowance? Will it be paid to people or do they apply for it?
It will be paid automatically to anybody in receipt of the carer's allowance.
Will that also be the case even for those who receive the reduced rate of carer's allowance?
I must check that. I think it will be paid to everybody.
Did the Minister give the figures on Deputy O'Keeffe's suggested £1,000 allowance based on the 49,000 in need of full-time care?
Yes. I said it would cost £49 million.
Surely he should have used the figure of 15,000, which relates to the carers who will qualify for this allowance. If he was to give £1,000 to everybody, it would cost £15 million.
Yes, but the Deputy did not ask that question. The amendment refers to £1,000 "payable to all carers including those who are presently excluded".
We heard before about not asking the right question.
No. He was asking about Deputy Broughan's amendment.
My amendment relates to the new allowance. The figure of £1,000 was contained in my amendment last year.
I want to check further the issue of increasing the income disregard to £200 per week. The Minister stated that this would bring only 750 extra carers into the scheme. In the past I got figures from the Carer's Association which would suggest that more would qualify. Perhaps the Minister might look into that further.
I can communicate subsequently with the Deputy. All qualifying carers will get the £200 no matter how much they receive.
About £1.1 million. I will find out the exact figure.
I appreciate the changes to the carer's allowance. A woman on social welfare who was looking after her mother rang me to know whether she should change to the carer's allowance and she was advised not to do so, but when her mother died she found she was not eligible for the benefits. Can anything be done about such a case?
It often happens that somebody is better off. I gave a figure earlier based only on the number of people——
She was actually advised not to change to the carer's allowance.
In my constituency office I have come across many such cases where it is more beneficial for a person to remain on the existing social welfare payment because they get more.
This person would have benefited. I was referring to the short-term.
The figure of £1.1 million I gave Deputy McGrath related to my memory of the original proposal of a £100 payment. It is, in fact, £2.2 million.
Amendment put and declared lost.
I move amendment No. 18:
In page 8, before section 10, but in Part III, to insert the following new section:
"10.-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."
Amendment put and declared lost.
SECTION 10.
I move amendment No. 19:
In page 8, paragraph (b), lines 39 and 40, after "prescribed" to insert "by Act of the Oireachtas".
Amendment put and declared lost.
Section 10 agreed to.
Section 11 agreed to.
SECTION 12.
Amendment No. 20 not moved.
I move amendment No. 21:
In page 10, between lines 21 and 22, to insert the following:
"(1C) Regulations prescribing an income disregard of less than £200 per week for the purposes of subsection (1B) shall be approved in draft by each House of the Oireachtas before being made.".
Amendment put and declared lost.
Section 12 agreed to.
Sections 13 and 14 agreed to.
SECTION 15.
Amendment Nos. 23, 24, 25, 51 and 52 are related to amendment No. 22 and all may be taken together. Is that agreed? Agreed.
I move amendment No. 22:
In page 11, line 21, to delete "farm assist" and substitute "farm income assist".
The Irish Farmer's Association wish to see the name of the farm assist scheme change from "farm assist" to "farm income assist". It feels that the name "farm income assist" reflects the situation more accurately. I do not have strong views on this but if the main farm organisation holds a strong view, it is reasonable to give consideration to that proposal. I do not claim authorship of this proposal but it seems to be reasonable.
Has the IFA given the Deputy a reason?
The IFA said the title "farm income assist" would be more appropriate to encompass the objective of the scheme and it would reflect the situation. It is not a big deal, but if a small change suits the farming sector we should go along with it unless there are reasons not to. The Minister should check this out between now and Report Stage and make the necessary changes, if he feels they are appropriate. I appreciate there will be a number of consequential changes in the Bill if he adopts it. Will he get his officials to talk to the IFA? Mr. Gerry Gunning is the relevant person in the IFA.
The second proposal is slightly more important. It involves the extension of the terms of the farm assist scheme to include farmers on disability allowance. This was also put to me by the IFA. It felt that farmers in receipt of disability allowance, which is currently means tested, should be allowed to transfer to the farm assist scheme if it is more advantageous to them. There is a further catch in that if an individual is in receipt of disability allowance, he or she has a certain entitlement to free schemes and this could be of particular relevance to people living in rural areas. There is no point in allowing them to transfer to the farm assist scheme if it means they lose entitlements under free schemes.
This suggestion is particularly relevant where a farmer would be better off under the farm assist scheme as opposed to being on disability allowance, particularly taking into account the disregards for income assessment. The IFA suggests that the means test for farmers on disability allowance should include the disregard which will apply under the farm assist scheme. I appreciate that approach might cause difficulties in that one cannot have a disability scheme for farmers and the balance for non-farmers. I do not know how best to frame this proposal. I tabled this amendment on the basis that the Minister will consider the possibility of extending entitlement to the farm assist scheme to include those currently involved in farming and in receipt of disability allowance. If the Minister were attracted by the idea, it would need to be shaped better.
The third issue is forest premia. There are disregards in relation to REPS and the proposal is that there should be a similar disregard for forest premia. This is of particular importance when one takes forestry policy into account and the fact that we are trying to encourage more farmers to get involved in forestry. Much private afforestation has been done by people not directly in farming. I should declare an interest as I am involved in it myself, but I am in favour of more afforestation, particularly by farmers.
Those who are so engaged can get a forest premium. I am thinking of smaller farmers with marginal land which would be suitable for afforestation. I would hate to see them penalised under the farm assist scheme. Will the Minister consider the possibility of disregarding the forest premium up to £2,000 similar to REPS? That is the approximate premium for 20 to 25 acres. We are not talking about money for jam for big farmers. It should also be borne in mind that our forestry targets are not being achieved and anything that can be done to encourage greater self-sufficiency in the forestry area should be done. The amendment reflects another policy objective.
The last issue is not directly related to these amendments. It was raised with me by the ICMSA but it was too late for me to table an amendment on it. The ICMSA was particularly interested in extending the family income supplement to farmers but felt that if the Minister did not go along with that idea, it was anxious to improve the farm assist scheme with regard to providing additional help to farmers with children. The terms of the Bill would be improved by increasing the disregards for children from £100 to £200 for the first and second children and to £300 for third and subsequent children.
These views were expressed by the main farming organisations and I want the Minister to consider them.
I support the amendments and hope the Minister will be magnanimous and accept them. Perhaps the Minister might explain the changes and how farm assist is different from assessment under the old regime for farmers dole. My understanding is that it is a way of assessing income and that the same type of assessment would be used for disability allowance. It should automatically filter through to other assessments.
I support the points made by Deputy Jim O'Keeffe because the leading farming organisations have lobbied for this. I ask the Minister to consider the proposal to change the name to "farm income assist" as it would encompass the objective of the scheme. Under the general means testing of farmers for old age non-contributory pensions, it is proposed that the disregards which apply under the farm assist scheme should apply in this case. Deputy Jim O'Keeffe mentioned the means test for disability allowance. I ask the Minister to consider the points raised.
I support amendment No. 22 which seeks to change the name from "farm assist" to "farm income assist". I would have preferred if family income supplement had been included. The Minister is able to sell this idea to the IFA, therefore the least he can do is accept the change in name so that it can be sold to other taxpayers. This is not just assistance but farm income assist.
The same type of assessment for farm assist should not be used for disability allowance. Farm difficulties need to be taken into account. It is impossible to understand why people's allowances are being reduced or scrapped rather than increased when farm assessments are carried out.
Amendment No. 23 refers to farmers in receipt of disability allowance being allowed to transfer to farm assist if it is more beneficial to them. However, a person in receipt of disability allowance may be entitled to the free schemes. Free schemes are not available to the recipients of farm assist, although they are entitled to the secondary benefits. This has not been publicly acknowledged although it was an issue at the discussions. In the event of a person transferring from disability allowance to farm assist, they would not be allowed to retain their entitlement to free schemes.
The main conditions for entitlement to farm assist are that a person must be engaged in farming as defined in the new section 191L must be aged between 16 and 66 and satisfy a means test. Persons receiving disability allowance are not prevented by the legislation from claiming farm assist. It is open to them to apply for it if it is more beneficial to them.
As regards amendment No. 25, which is the disregard proposal for forest premia, the farm forest premium scheme is designed to provide an income for farmers who plant forests during the period it takes for the forest to mature. Payments under this scheme, therefore, would equate to any other form of income the farmer may have - for example, income from ordinary farming activities, headage payments, etc. It is appropriate, therefore, that such income should be treated for means in the same way.
The forest premium scheme and the REP scheme are not directly comparable. REPS payments compensate farmers for the material required and work involved in complying with agri-environmental plans. The disregards of income for REPS in the means test provide low income farmers with the financial incentive to participate in REPS and thereby benefit the environment by the improvement of the sustainability of agriculture through the preservation and enhancement of the rural environment.
Participation in the forest premium scheme is voluntary and is designed to provide an income for farmers who plant forestry in the period it takes for the forest to mature. Payments under this scheme, therefore, would equate to any other form of income the farmer may have - for example, income from ordinary farm activities, headage payments, etc.
I have seen the correspondence from the IFA on this issue, but I am not in a position to accede to its requests. Neither am I in a position to accede to the request on farm assist. Farmers wanted the family income supplement, which they did not get. We subsequently entered into detailed discussions. I met both major farming organisations more often than I met organisations associated with my role as Minister. We had detailed and fruitful discussions which ultimately led to the implementation of farm assist, which was announced in the budget and welcomed by all farmers. They got virtually everything for which they asked, but now they want more. They are like Oliver Twist.
The name of the scheme was devised by me. Since it was mentioned in the budget, all the application forms and explanatory memoranda have been printed because the farming organisations pleaded with me to have them ready in time for the passing of this Bill. It was also the Government's view that we should print these forms as quickly as possible. I was encouraged to print them before the Bill passed in the House which meant I could not second guess the view of the Oireachtas. Deputies can rest assured that once the Bill is passed, the explanatory memoranda and application forms will be ready. I cannot agree to change the name nor would I be able to change it the following year if I was given the opportunity.
As regards assessment, the means test includes the following improvements: child related income disregard of £100 in respect of each of the first two children and £200 in respect of subsequent children and the treatment of 80 per cent of both farm and off-farm income from self-employment. It was a source of discussion as to whether only farm income should be treated at 80 per cent but the Government decided off-farm income should be included as well in recognition of the fact we were purposely going out of our way to assist farmers. It was pointed out that if we considered all income for farm assist it would favour a family which was not heavily engaged in farming and had only a farm income of 10 per cent and an income of 90 per cent from a bed and breakfast establishment. The Government decided to assess the self-employed income of both a farmer and his or her spouse at the 80 per cent rate rather than the 100 per cent rate as for unemployment assistance.
The capital assessment will be that which applies for long-term social assistance payments, such as old age pension - the ubiquitous disregard of £2,000 - that is, 7.5 per cent on the first £20,000 and 15 per cent on the remainder. The details relating to the means assessment of qualified adults are set out in the Social Welfare Consolidated Payments Provisions (Amendment) Regulations, 1996, introduced by my predecessor. The mechanism for the means test is exactly as for existing schemes. The form in question, which lists details of farm income, etc., was agreed with the farming organisations after detailed discussions a number of years ago after the passing of those regulations. The farming organisations are aware of the assessment.
Many of my colleagues have come to me with cases where matters are bad. However, when I obtain the file, I find in many cases that the Deputies are not being told the truth about the farmer's income or assets. All cases are subject to the appeals system and should undergo it. By and large an effort is made as much as possible to treat income as at present day. That is my experience regarding cases brought to my attention. For those reasons, I cannot accede to the request.
I understand those in receipt of small farmer's assistance will now be transferred to farm assist. Will that be done automatically without further assessment? Will it be done on the basis of the current file? If a person assessed two or three years ago is in receipt of small farmer's assistance payment, will the existing figures be automatically accepted and will the person receive the increase?
That is more or less the case, except where people have not had a recent assessment, and this has been agreed with the farming organisations. There have not been recent assessments of most cases of smallholder's dole.
This has been largely to the assistance of farmers.
How recent is recent? Will it suffice if a farmer has been assessed in the past few years? Will the Minister give practical advice to people in this area?
Each case will be determined on its merits. The view is that an assessment made in the past two to three years would be regarded as recent. My predecessor, Deputy De Rossa, made the most recent assessment changes to improve the situation. However, as a consequence, old age pensioners were being reassessed on a reasonably regular basis because the Department used it as an opportunity to reassess people based on the new improved assessment rates. Unfortunately, the downside was older people in particular were being told they no longer qualified because they disclosed more means than the Department realised they had. There is a downside in assessing people toooften.
That is my concern and the reason I raised the question. I know problems arose with pensioners, who unfortunately have a habit of denying themselves as much as possible because of their sense of insecurity. They feel they must put money aside for funeral expenses and other matters and that affects their assessment of means.
Will the 80 per cent rate apply if either the farmer or his or her spouse has a small off-farm PAYE income? Will it be assessed in full?
Only half is taken into account.
Will it be 50 per cent of the entire income?
Will those applying for the first time under the farm assist scheme be assessed on the previous year's income or their current income? Farmers are normally assessed on their previous year's income and matters have changed drastically over the past 12 months. I hope they are assessed on their current income.
In so far as it is possible, that will be the case. I came across a classic case of a person who claimed he was being assessed by the Department based on his income of two years previously. When I obtained the file, it was based on accounts sent in by the person for the current year. Social welfare inspectors are fully aware of the situation. It is not as if they live in ivory towers.
I agree with the point about assessing on the previous year's means. Assessments have not been made on accounts from the three or six months previous to the current crisis. Many farmers affected only experienced a crisis when the severe fodder shortage began last October. I cannot accept that social welfare inspectors are taking into account the situation and the losses incurred. They say 5 per cent is the maximum loss a farmer can have. I am glad to hear Deputy Johnny Brady supporting the case that the actual situation needs to be taken into account. I live in an area which has been more badly hit by weather conditions than most areas and has not yet received any financial assistance. I know that is not the Minister's fault, but I want the situation to be taken into account. Pig farmers have lost money; suckler cow farmers have found it impossible to sell cattle. The prices they have received are ridiculous, yet the levels for assessing means are unacceptable. I have made that point strongly to social welfare officials but it is difficult to get it across to them.
I have nothing further to say other than that social welfare inspectors are bound to take into account all the evidence available to them from individuals and generally. They are fully aware, having received directions from my Department, that they must take into account the current situation for assessment of means.
What is the position regarding wear and tear and depreciation allowances? Will these and interest allowances, which are normal business expenses, be taken into account? My past experience is that it is difficult to obtain a reasonable allowance under those headings. Will those normal business allowances be provided for in the new scheme?
It will be exactly the same as the scheme for smallholders. Depreciation will be taken into account.
It is a factor which has caused problems in the past in that a reasonable allowance has not been given for depreciation and normal wear and tear.
There may be some confusion in that the manner in which depreciation is taken into account is not on the same basis as taxation.
That is my concern. Given that the Government is attempting to synchronise the tax and social welfare codes, the allowances should be available under the tax code. I am not sure that the allowances available under the tax code are exceptionally generous. I ask the Minister to reconsider it because it can be a serious matter. There is no point suggesting that a farmer has an income which is not his true income. For example, he may have to replace a tractor in a couple of years. He must be in a position to avail of the usual allowances. At a practical level, this aspect caused problems under the old scheme.
Will application forms be available as soon as the Bill is passed?
Yes. On Deputy O'Keeffe's point, I cannot give hostages to fortune in relation to changes to the way in which income is treated. If I made exceptions for farmers, it would cause difficulties elsewhere. Particular allowances are available to farmers under the taxation system. Ultimately, this gives credence to the view regarding the level of income tax paid by farmers.
Amendment put and declared lost.
I move amendment No. 23:
In page 11, between lines 36 and 37, to insert the following:
"(3) The Minister will consider the possibility of extending entitlement to the allowance on the same terms to those presently involved in farming who are currently in receipt of disability allowance.".
Amendment put and declared lost.
Section 15 agreed to.
SECTION 16.
I move amendment No. 24:
In page 16, line 9, to delete "paragraph (6)," and substitute "paragraph (5),".
Section 16 provides for amendments to the Third Schedule of the principal Act on foot of the new farm assist scheme. This is a technical amendment to those provisions to provide that paragraph (k) should read "subject to paragraph (5)" instead of "subject to paragraph (6)".
Amendment agreed to.
I move amendment No. 25:
In page 16, between lines 33 and 34, to insert the following:
"(iii) the Forest Premia,".
Amendment put and declared lost.
Section 16, as amended, agreed to.
Sections 17 and 18 agreed to.
SECTION 19.
Amendment No. 26 is out of order because it would entail a charge on the Revenue. This is the only amendment ruled out of order.
May I refer briefly to the amendment?
No, because it is out of order. The Deputy may make his point in the discussion on the section.
Amendment No. 26 not moved.
Amendments Nos. 27 and 28 are related while amendment No. 52a is consequential. All may be discussed together.
I move amendment No. 27:
In page 20, to delete lines 27 and 28.
Section 19 deals with the death grant which is being enhanced in the bereavement grant. As I stated earlier, this grant was considered. Certain commitments were made in the Fianna Fáil Party's policy document prior to the election in May 1997 in relation to families in the new millennium. Part of the discussions in this regard was that I would take the route of the bereavement grant because, in my experience, the death grant had become an outdated payment.
A constituent of mine visited me about his young child aged three. I was helping the family with their health difficulties and he qualified for the death grant from my Department. He received a letter stating that they would receive £20. I only realised then that for a child of a certain age, one could only get £20 rather than £100 from my Department. In fairness to the Department of Finance when I contacted it, it immediately agreed to increase all death grant payments to £100. I subsequently considered this area and the Government was in a position to allocate a further £10 million in a full year. This year approximately £9.5 million will be put into the scheme.
The key features of the scheme are that it will be renamed the bereavement grant and there will be a standard payment of £500 in all cases. The PRSI categories eligible for it will include the self-employed and civil and public servants. This is a large extension. PRSI contributions have been relaxed to make it much easier to qualify. Persons in receipt of a contributory pension will be automatically eligible. The amount payable under the funeral grant provided under the occupational injuries benefit scheme will be increased from £320 to £500. The changes will take effect as a result of an amendment rather than from 7 April which was the first date discussed.
The changes will take effect from 2 February, which was the date on which the Government made the decision. In the intervening period, I attended a number of funerals where I was conscious that the bereaved people would not be in receipt of the new grant because the person involved died before 7 April. The Government agreed to back date the payment at a cost of £1.7 million in 1999, which is significant.
I intend to move three amendments in this regard. Amendment No. 27 relates to the definition of spouse contained in section 19. I acknowledge the amendment tabled by Deputy Broughan and Deputy Shortall who brought this matter to our attention. They are in effect responsible for the amendment. At present a death grant is payable on the death of an insured person or the husband or wife of an insured person if the contribution conditions are satisfied. This is reflected in the definition of spouse in the new section dealing with the bereavement grant. However, this definition does not include partners who are not qualified adults for the purposes of the Social Welfare Acts. To address this I have decided to extend the bereavement grant so that it is paid automatically to a spouse or partner on the death of a pensioner and also on the death of a spouse or partner of an insured person if the contribution conditions are satisfied.
The social welfare code does not make a distinction between a spouse and a partner. We would not wish to make the bereavement grant different from other payments in that respect. Amendment No. 52(a) provides for this by applying the definition of spouse which is contained in section 3(12) of the Social Welfare (Consolidation) act, 1993 to the bereavement grant.
Amendment No. 28 proposes a further easement in the contribution conditions with the introduction of an additional contribution condition qualifying a person for a bereavement grant where they have at least 26 weeks PRSI contributions paid since entry into employment and a yearly average of 26 PRSI credited or paid contributions since 1979. The purpose of this amendment is to allow for administrative simplicity in claims decisions as all PRSI records since 1979 are held on computer.
I thank the Minister for accepting amendment No. 27. We welcome the new bereavement grant and the fact that it is back dated to February. In accordance with the social welfare code as a whole, the grant will apply to cohabiting couples.
We have always had adventurous young people who travel and work abroad. There have been cases of young people dying suddenly while abroad. I recall a recent case of two young Irish men who died in tragic circumstances while travelling in India. I had hoped the grant would apply in the case of the death of a young person in third level education who was not a resident of the State.
I compliment the Minister on introducing the bereavement grant and backdating it to 2 February. Did the Minister say the grant is paid automatically on the death of a person or is it necessary to apply for it?
Do self-employed people who are paying PRSI qualify?
It is necessary to apply for the grant. In some cases, for example in the case of an old age pensioner, the grant might be paid automatically.
I congratulate the Minister on introducing the bereavement grant. It is one of the most welcome of all benefits introduced in this year's budget. That the grant is back dated to February is very much appreciated.
I too, compliment the Minister. The news that the grant is to be backdated to 2 February has been very well received. It will benefit the right people and is a step in the right direction. The old £100 death grant was outdated and a grant of £500 will be a great help to many people.
I welcome the grant and particularly the fact that it will apply to self-employed people who pay PRSI. I had hoped the Minister would be equally generous to those in dire need who are still living. However, I welcome the thrust of this measure.
This provision is welcome and has been needed for many years. When the budget and the Social Welfare Bill are being debated many issues crowd the agenda. I compliment the Minister on introducing this measure.
Is amendment No. 26 in order?
You may speak on the section.
I congratulate the Minister on introducing this measure. He will be remembered for this when he is forgotten for other things. A grant of £100 is an insult to a bereaved person. The Minister has brought some sanity to the situation.
The measure is very welcome. It often happened that people who had paid PRSI contributions received a grant of £100 while others who had not paid contributions received up to £500 from the community welfare officer. That was a huge anomaly.
The Minister mentioned that payment might sometimes be automatic. I have not ever heard of a social welfare payment being made automatically.
The entitlement to the grant will be automatic. All social welfare payments must be applied for.
Deputy Durkan mentioned that things are often forgotten about at budget time. This measure was not in the Budget Statement. The initiative was brought forward by officials within the Department to whom I must give credit. They were aware of my views. I had the experience, in my constituency office, of speaking to a father who showed me a letter enclosing a grant of £20 following the death of his three year old child. I have indicated my intention to examine the wider question of bereavement. This needs to be done.
Amendment agreed to.
I move amendment No. 28:
In page 21, between lines 7 and 8, to insert the following:
"(iii) has a yearly average of 26 qualifying contributions, voluntary contributions or credited contributions since his or her entry into insurance or the beginning of the contribution year commencing on the 6th day of April, 1979, (whichever is the later) and ending at the end of the last complete contribution year before the beginning of the benefit year in which the relevant date occurs, or".
Amendment agreed to.
Question proposed: "That section 19, as amended, stand part of the Bill.".
Deputy Broughan raises a valid point. I do not understand how his amendment No. 26 was ruled out of order on the basis that it would place a cost on the Exchequer. The Minister's amendment would also cost the Exchequer money.
The Minister could surely have anticipated the wisdom of Deputy Broughan's amendment. Circumstances can arise where families are bereaved when a death occurs overseas. The difficulty lies in the definition of who is ordinarily resident in the State on a particular date. This definition can have very harsh consequences for an individual or a family in certain circumstances. The Minister might look again at the question to see if as many as possible of these difficult circumstances are covered by the provision and consider the possibility of an amendment at a later stage.
The question of a person's ordinary residence in the State or outside is a thread which runs through the social welfare code in relation to the receipt of most social welfare payments. To tamper with it would cause anomalies and give rise to calls to have other issues looked at in this regard. It is not unreasonable to include the condition that a child be ordinarily resident in the State in order to qualify. It is not unreasonable to make it a condition that the child would be ordinarily resident in the home. I would have thought few cases would be involved. Unfortunately I cannot make any changes.
Question put and agreed to.
Section 20 agreed to.
NEW SECTION.
I move amendment No. 29:
In page 22, before section 21, to insert the following new section:
"21.-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 their entitlement to such payments from April, 1998, and he shall place this report on the table of Dáil Éireann within 2 months of the passing of this Act."
This is to tie up loose ends in the campaign for pro rata pensions. Pensions for the self-employed came on stream in April last year and the purpose of this amendment is to make pro rata pensions payable from the same date. It is only proper and correct that the new pension should also come on stream in April 1998 for the self-employed who were aged over 56 years in April 1988.
I may be wrong but I always took the view that these pensions should have been on a genuine pro rata basis. Although the campaign was successful in that the Minister eventually agreed to introduce such a system, it would have been better to pay nine tenths of the total pension to someone who had made payments for nine years, with reducing proportions for people who had paid for a shorter time. Perhaps the Minister could address that point. My main interest is the commencement date.
A constituent of mine, Mr. Deane from Bandon, has written to the Minister because he feels strongly about the fact that those aged over 63 years but under 66 years on 6 April 1998, who would have been compulsory contributors for a number of years, are not eligible for a payment. He claims, rightly, that they are in a worse position than those who would have benefited from the recent decision, because they did not receive a refund of contributions paid in respect of the widow's or widower's pension. Presumably that money remained in the Social Insurance Fund.
Mr. Deane feels it is a logical consequence of the recent decision that those persons who have paid at least 78 weekly contributions should receive, on being widowed, a pro rata pension at 50 per cent of the normal rate. Only a small number of people will be covered by this. Perhaps the Minister could look at this before Report Stage. Mr. Deane is the only person to raise it with me but he is entitled to do so.
I know what the Deputy is referring to and perhaps I could reply to the point on Report Stage. As to back dating the pension to April 1998, I could be political and say it is a pity that Deputy O'Keeffe did not move an amendment to the Social Welfare Bill applicable to that period, when his party in Government.
I was not in Government last year.
When we were in Opposition, we indicated we would progressively ease the contribution payments for those people who were over 56 in 1988. That was contrary to many views expressed to us at the time. What we have done has gone further than our commitment and I am pleased to be able to do it. I accept that some people will still be left out but this is a balanced and fair response to the many representations we received over the years, both in and out of Government. The cost of extending the payment retrospectively to April 1988 would be in the region of £15.5 million.
The Government made this decision in advance of the budget. There are logistical difficulties in putting this scheme in place but we have done it in such a way that the vast majority of people concerned - some 9,000 pensioners and 2,000 adult dependants, approximately 11,000 people in total - will benefit, which will cost £19 million in a full year. I commend the scheme and cannot accept the amendment.
There is no doubt what the Minister has done will be helpful to many people. The self-employed waged a campaign for many years to have this done and you are the Minister who delivered. However, is it possible that a person who paid contributions for a few years in the 1950s and then became self-employed would not qualify for this scheme because he paid contributions for the first time in 1988? You have solved one problem for self-employed people and they are grateful but I have more time for people who have paid their contributions. The more years a person has paid, the more he should benefit. If a person such as I mentioned does not qualify, it lends greater urgency to the case of people who paid in the 1940s, mentioned by Deputy Broughan. I urge that the Department speed up their consideration of those cases. Many of the people involved are dead. The Department need not look for people who feel they have an entitlement; let them make the approach. The scheme is marvellous for some but it raises questions about people who fall on the wrong side of the line.
I support the Chairman's remarks because I know of a person in such a position. I compliment the Minister on taking the initiative to introduce a pro rata pension for the self employed. At early meetings of this committee, after the last general election, Members, including myself, fought for this. There was so much opposition to it that I never thought it would be put in place. The Minister’s predecessor vigorously opposed this measure. Many people will qualify under this scheme. The people who have come to me are not worried about the date on which it commences, but are very glad and thankful to the Minister for introducing it.
I wish to make one point in support of the chairman.
I have called Deputy Durkan, then Deputy O'Keeffe may contribute.
I wanted to point out that it is not true or fair to say that the former Minister was vehemently opposed to it. That former Minister and the previous Administration brought the question of pro rata pensions forward to the extent that everybody except those with less than an average of ten contributions——
Will the Deputy give way?
I well recall a programme on RTE in which Deputy De Rossa and the Minister, Deputy Ned O'Keeffe, participated.
I was also on the programme. That was the time the Minister, Deputy Ned O'Keeffe, made the announcement.
You can well recall the surprise which greeted it. Deputy O'Keeffe had been in telephone contact with me 20 minutes before the programme began and I was delighted to be able to tell him to go ahead and refer to it. I well recall listening to the programme and seeing the surprise - I think Deputy De Rossa nearly fell off his chair. He could not believe it. He said the Department of Social, Community and Family Affairs would not agree to this proposal.
I must respond to what the Minister has said. I was on that programme and nobody was more surprised than I to hear Deputy Ned O'Keeffe make the announcement. All around the studio I could hear the gasps of sheer admiration that Deputy O'Keeffe, the Minister of State in another Department, was actually eroding the function and power of the Minister for Social, Community and Family Affairs. That erosion was very welcome at the time. It was probably a Freudian slip.
In case anybody has a false impression, previously there was a huge movement forward in the context of pro rata pensions, lauded by everybody, namely, when the average of 20 was changed. If a person did not have more than an average of 20 contributions per annum from 1953 or the time the person first entered insurable employment they did not qualify. It was an untenable position and still is. The term pro rata in the context of pensions means pro rata in accordance with the contributions made by the contributor. Until such time as we reach a situation where a person who has made contributions, be they contributions on the basis of self-employment, PAYE or an amalgam of both, gets a pension in accordance with their contributions, we will not have acheived what is legally desirable. Before the previous changes were made there was a campaign to take legal action against the Minister and to prove the point I am making.
I applaud the changes which have been made. The previous Administration agreed that these would be the next stage of progress, that the change had to come. I am not making a political point. The only sector the Minister has left out is the PAYE sector and the people with mixed contributions referred to by the chairman. At some stage in the future the meaning of pro rata must be taken on board. The Minister must give a pension which is commensurate in some way to the contributions made.
There will be winners and losers.
There will be winners and losers, but the measure can be crafted in such a way that the number of losers is minimal. I think the original Act dated from 1960 and referred to the 1953 Act. There was a particular reason for referring to the 1953 Act as it gave a starting date and a certain average. The next stage must be to ensure that people who have either mixed, PAYE or self-employed contributions get an equal proportion of payment. That is all that is required.
I want to make a final point in support of the chairman. Looking at the section again, the point made by the chairman is hugely valid. It would be outrageous if somebody who paid some PAYE contributions for a few years before becoming self-employed and who had more than five years' contributions after 1988, was excluded as a consequence of his or her self-employment. I ask the Minister to examine this matter before Report Stage. Deleting from section 21 the line "and was not previously an employed contributor under this Act or the National Health Insurance Acts, 1911 to 1952, prior to becoming so insured" would avoid one of the dangers highlighted by the chairman. Is there a possibility that previous PAYE contributions could be added to the self-employed contributions to make up the five or more years' contributions? This is another aspect of the matter which should be examined.
I do not wish to hold up proceedings, but I ask the Minister and his officials to further examine these points between now and Report Stage to see if we could improve the section, without too much cost, but avoiding serious injustice to a small number of people.
I refer the Deputy to the new subsection (16) inserted in section 21. It allows a person who became self-employed for the first time since April 1988, and was previously an employed contributor but fails to qualify for a pension on the basis that the yearly average condition is five years from the time of becoming a self-employed contributor, to qualify for the 50 per cent pension. The combination of the two will also count for qualification.
Is the period five or six years?
It is five years since becoming self-employed on the mixed basis.
The chairman is still right.
The person is not being discriminated against. He cannot add the contributions, but the person who worked for two or three years in the 1950s will not lose out.
There is a danger in the way the section is drafted——
Perhaps on Report Stage we will clarify the issue.
There is a real danger that the chairman's appalling vista could apply to a small number of people.
I do not think there is any appalling vista.
I would be happy if this other long-term review which is taking place in the Department will look at such cases, including the pre 1953 cases. There are many other potential minefields. We will find that as more is given to one group, people will compare what others are getting.
Amendment, by leave, withdrawn.
SECTION 21.
I move amendment No. 30:
In page 23, line 1, after "84(1)" to insert "(c)".
Amendment agreed to.
Section 21, as amended, agreed to.
We will adjourn until 6. 30 p.m. Members got notice of a meeting of the Joint Committee on Family, Community and Social Affairs at 6.15 p.m. on a brief one item agenda. That meeting should only take a couple of moments.
Sitting suspended at 5.10 p.m. and resumed at 6.30 p.m.
SECTION 22.
I move amendment No. 31:
In page 23, paragraph (c), to delete lines 49 and 50, and in page 24 to delete lines 1 to 7 and substitute the following:
" '(8) in the case of a fisherman, the gross income derived from any form of self-employment less-
(a) any expenses necessarily incurred in carrying on any form of self-employment, and
(b) where the fisherman has a qualified child, who normally resides with him or her, an amount of-
(i) £100 per annum in respect of each of the first two qualified children, and -
(ii) £200 per annum in respect of each subsequent qualified child,
calculated at the rate of 80 per cent.',"
This amendment mirrors exactly the provisions concerning assessment of income in the section concerning farm assist. It was not included but there was an unwritten understanding it would be the same. This emphasises it by allowing a similar arrangement for fishing assist as for farm assist.
Amendment agreed to.
The Deputies who tabled amendment No. 32 are not present so it falls.
Amendment No. 32 not moved.
Question proposed: "That section 22, as amended, stand part of the Bill".
As the Minister represents fishing communities - as do some of the other Deputies present - I know he will be aware there is still a feeling in the fishing community that in the 30 years since joining the EU, in comparison with agriculture the fishing industry has generally been treated in a seriously disadvantaged way. If one compares the macro-economic and social policy of the State and all Governments over that period it is difficult not to feel the relevance of their point, given our ownership of a huge fishing resource. This is particularly the case for inshore people who struggle from week to week. I am thinking of the Howth community in my constituency in particular. During the past couple of winters there was no provision for people other than to go to the community welfare centre in Kilbarrack to try to get some funding to tide them over.
It seems to me that there is a case. I know the Minister has come up with fishing assist but there is still a discrepancy. The farming sector is s a much larger and more vocal political community. Recently the Minister's colleague and my constituency colleague, the Minister for the Marine and Natural Resources, Deputy Woods, made projections of the size and potential of this industry. A time could come when it will turn out to be one of our chief economic assets.
For the benefit of Fine Gael Deputies who have just arrived, the amendment fell and we are now speaking on the section. However the general point being made in the amendment by Deputies O'Keeffe, McGrath and John Browne on the fishing industry merits serious consideration. I am sure the Minister has had the same experience in his coastal constituency.
There was an amendment in the name the Minister. Has it been moved?
Yes, we have passed that and we are now discussing the section.
While in ordinary circumstances the proposal I made on producing a report would frankly be a device to get around Standing Orders and allow us to discuss specific improvements to the social welfare legislation, in this instance it was meant seriously. As the Chairman is aware, there is a long stretch of coastline in my constituency and thus I have a lot to do with fishermen. They are very unhappy about many aspects of the social welfare code. According to them the code is far too rigid to take account of fishermen's difficulties. These difficulties might be difficult for those of us on dry land to fully understand.
There are different categories of fishermen. There are owners and some of them are doing very well. There are small boat owners who do quite badly at times. There are share fishermen who fall into an anomalous category between being employed and being self-employed. There are crewmen who are clearly employees. Following the McLoughlin and Griffith cases in 1996 and 1992, decisions were taken in relation to share fishermen which leave them in limbo, as they see it. There is an optional social insurance scheme which they find unsatisfactory. According to fishermen, the uptake on the scheme has been very low mainly because many social welfare officials know little about the scheme because fishermen are peripheral to their main function. They also say the benefits under the scheme are insufficient and take no account of the difficulties they suffer.
They want social welfare legislation to take into account the particular difficulties which affect fishermen. They are in a unique situation. They work unsociable hours under difficult and hazardous conditions. The weather has a huge effect. The weather can do anything from keeping them in port and preventing them from getting a decent catch to, in some unfortunate incidences, causing loss of life. In recent times there have been very adverse weather conditions, resulting in many fishing families suffering considerable financial hardship.
Approximately 60,000 people are dependent on fishing. Many of them are on shore, but are dependent on those who fish in deep waters. They seek a change in the system to take account of their circumstances. My purpose in putting down an amendment seeking the production of a report following consultation with the fishing industry was to get the Minister to agree to the establishment of a consultative process that would allow an input from the fishermen, including representatives of the share fishermen and the crewmen, and that the inflexible social welfare system would be looked at to see if their special circumstances could be taken into account. They do not believe the farm assist scheme is the answer to their difficulties.
The Minister had serious discussions with the farm organisations in establishing the farm assist scheme. Perhaps he has discussed the position of fishermen with his colleague, the Minister for the Marine and Natural Resources. Their concerns are much broader than that provided for under the farm assist scheme or the fishermen's assist scheme. I urge the Minister to begin a consultative process to address these matters.
Consultations have been ongoing over many years. When I brought forward my fishermen's assist proposals in consultation with my colleague, the Minister for the Marine and Natural Resources, one of the reasons it could not be fully equated with the farm assist scheme was because it is much more difficult to agree on a definition of a fisherman.
Efforts have been made to resolve the issue of share fishermen. In 1997 my Department reviewed their arrangements in the light of representations and consultations with fishermen and their families and revised arrangements were announced by my predecessor. A fact sheet was issued in 1997 which outlined the PRSI position in detail and the factors that would have to be taken into account, but unfortunately, because of the difficulties in designating a person as employed or self employed, whether it is a contract of service or a contract for service, each case is decided on its merits. It is not a matter of deciding for all because matters are determined by the circumstances of each case.
The optional scheme referred to has been poorly taken up. Following recent discussions established by my colleague, the Minister for Agriculture and Food, I met representatives of the Irish south and west fishermen's' organisations when we discussed the issue in detail. We agreed that the organisations would select a number of test cases which would be determined within my Department and if the results were unfavourable to the fishermen they would appeal the cases to the appeals officer and his determinations could help to clarify matters.
I cannot go further than that. While I am willing to consult, the matter is a legal minefield. The court cases referred to by Deputy O'Keeffe have, unfortunately, accentuated the difficulties. Efforts were made previously to resolve matters, but to no avail. I met the organisation on 2 February and a course of action was agreed.
The reaction of the Minster to what is a reasonable request is less than satisfactory. The Minister referred to difficulties. The situation is fraught with difficulties and there are legal complexities. However, the answer is not to ignore these factors, which is what he is doing.
I am not ignoring them. The organisation said there were delays in the appeals office. I undertook to ensure appeals would be heard as expeditiously as possible and I understand the two appeals in question will be heard later this month in Cork. At that stage we might have a better picture as to the determination of matters. All of these cases are dealt with on their merits, but at least these specific cases might give us an indication on how to proceed. I am unable, therefore, to accept the amendment.
The Minister's intervention is sufficient to cause me not to call a vote at this point. I will be satisfied with a voice vote and will raise the matter again on Report Stage.
Question put and declared carried.
NEW SECTION.
I move amendment No. 33:
In page 24, before section 23, to insert the following new section:
23.-Section 18 of the Act of 1996 is hereby amended by the substitution for subsection (4) of the following subsections:
'(4) Notwithstanding the provision of this Part, where, a woman, has ceased or ceases to be entitled to benefit under Chapter 18 of Part II of the Principal Act by virtue of no longer having at least one qualified child residing with her, she shall, on reaching the age of 40 years, where but for this Part she would be entitled to the said benefit, again become and continue to be entitled to the said benefit, for the duration of her continuous entitlements thereto, in accordance with the provisions of the Principal Act and the regulations made thereunder.
(5) In the case of a person to whom subsection (2), (3) or (4) applies who is disqualified for receipt of a relevant payment by virtue of section 211(1)(a) or (14) of the Principal Act, where but for that disqualification she would be entitled to the said relevant payment, she shall again become entitled to the said relevant payment at the expiration of the disqualification in any case where the period of disqualification does not exceed 12 months.'.".
Amendment agreed to.
Section 23 deleted.
Sections 24 and 25 agreed to.
NEW SECTION.
Amendments Nos. 35 and 37 are related to amendment No. 34 and all may be taken together. Is that agreed? Agreed.
I move amendment No. 34:
In page 25, before section 26, but in Part VI, to insert the following new section:
26.-Where a decision is made on an appeal under Part VII of the Principal Act, as amended, the decision shall state the reasons for the decision.".
These amendments are based on amendments we proposed to the Social Welfare Bill, 1998. They deal with the treatment of consumers of the social welfare system and require that when a person's application is refused he or she is told there is a right of appeal. Until recently many people were not aware of their rights in this regard. Amendment No. 35 requires that the reasons for turning down a request for an oral hearing be indicated. I know this is related to the initiative of establishing the Comhairle organisation and the NSSB ensuring we have a widespread information network around the country.
With regard to Comhairle - the Minister is probably preparing the heads of the Bill at present - how does he see it in relation to a nationwide network of information? In my constituency, for example, which was represented for a long time by the Minister for Social Welfare, there is a very good system in the centre of the constituency for disseminating social affairs advice. Unfortunately, there is no such system in the greater Coolock area, which is probably the most deprived section of my constituency. The NSSB wanted to establish an information organisation in that area. How will locations be selected and how will the Minister create a network of information?
I have long been involved in the Northside Centre for the Unemployed. It is located in a trade union centre and I can verify that we have an informal set up. Various other unemployed and small business centres employ specialists to disseminate independent social welfare advice. I table these amendments just as my party's spokesperson, Deputy Moynihan-Cronin, did in the past and I ask the Minister to accept them.
With regard to amendment No. 37, it is standard practice at present for my Department to notify every person who receives an unfavourable decision from a deciding officer of their right to appeal. In order to copperfasten that I will bring forward regulations in the near future which will provide that where a deciding officer makes an unfavourable decision the person named will be notified of the reasons for their decision. In the case of a decision on durability the decision and the reasons for it will be notified to all parties who are subject to the decision. The notification will also inform people of their right to appeal.
Regulations will be brought forward to take care of that situation. At present it is in practice but we will bring forward regulations to copperfasten it. With regard to the appeals office, there is an entitlement to be notified as to the right of appeal and also the reasons for the decision.
With regard to amendment No. 35, it is normal practice to have an oral hearing where it is requested by the appellant. The SWAOs operating guidelines which are available to the public indicate that an oral hearing is held whenever it is requested to enable the appellant to present his or her case adequately. The only circumstance where a request would be turned down would be on the basis that agreed facts suggested it would be a waste of resources and there was no prospect of success.
Amendment No. 34 asks that an appeal decision shall state the reasons for the decision. This is already part of the legislation where the decision of an appeals officer is not in favour that the reasons should be given. The Deputy's amendment would go a step further and suggests that reasons should be given when favourable and unfavourable decisions are given. I do not think that is necessary.
Amendment, by leave, withdrawn.
Amendment No. 35 not moved.
I move amendment No. 36:
In page 25, before section 26, but in Part VI, to insert the following new section:
"26.-Section 221(1) of the Principal Act (as amended by the Act of 1998) is hereby amended by the insertion after 'persons' where it firstly occurs of 'not being providers of social welfare information, advice and assistance'."
What does the Minister propose to do with regard to this amendment?
Section 221 of the Consolidation Act gives power to the Minister to require information for the control of schemes and investigation of entitlement to social welfare. At present under these provisions third level educational institutions are required to provide details of students attending courses. This information is checked against the live register to ensure that students are not fraudulently claiming unemployment payments. Some third level institutions were unwilling to provide such details to my Department and the opportunity was taken in last year's Bill to insert a penalty provision for non-compliance with such a request. Regulations made under this subsection have been in place for some time.
Last year I brought forward amending regulations requiring certain private colleges or schools to give information. It is not my intention to use the powers under this section to require categories or groups such as information providers to provide information.
I thank the Minister for adopting a flexible approach.
Amendment, by leave, withdrawn.
Amendment No. 37 not moved.
SECTION 26.
Amendments Nos. 38, 40, 41 and 42 are related and may be discussed together.
I move amendment No. 38:
In page 25, subsection (1)(a), to delete lines 19 to 44 and in page 26, to delete lines 1 to 25.
The Minister is invested with two different powers under the Bill. The first one is mentioned from page 25 up to line 25 on page 26. The second more controversial power is referred to from line 26 on page 26 onwards. These are separate powers and it is inappropriate to take them together. I do not object to the first power but I object to the second one. Deputy Broughan objected to both powers and he has tabled separate amendments on both.
We are taking them together for the purpose of discussion. The amendments will be dealt with separately.
Amendment No. 38 relates to the deletion of lines 19 to 44 and lines 1 to 25 on page 26. Many people expressed concern at the extremely wide powers which allow a social welfare officer who requires information for the purpose of the Act to examine anyone on any premises. For example, trade unions are concerned about employees. A year ago I brought the issue of trade union recognition and the lack of support from major political parties to the attention of the Government. I hope they will move on the issue and accept my proposal. Obviously the trade union movement would support the belief that every worker should have the right of representation and, therefore, in a situation where fundamental rights could be circumscribed they might wish to have a trade union official present as well as their own solicitor or representative. They might wish at least to have a trade union official present, whatever about their solicitor. That was one of the concerns raised.
There is also the question of signing a declaration of truth. Section 26(1)(d) states "to examine, either alone or in the presence of any other person,. . . an insured person, and to require every such person to be so examined and to sign a declaration of the truth of the matters in respect of which he or she is so examined,. . . ". Our legal advice is that this would infringe seriously on fundamental civil liberties and an employee should have the right to seek advice before signing such a document.
The Minister and Deputy O'Keeffe, who come from a legal background, will appreciate what is meant by a declaration of truth. Will it approximate to what takes place in a Garda station when a suspect is being examined and to copies of any notes made in relation to that person who, perhaps, through no fault of his or her own, was involved in a business or enterprise that fundamentally broke the laws of the State and resulted in that person being left seriously exposed?
The Labour Party is opposed to social welfare fraud. Deputy Foley who is present was a distinguished former chairman of the Committee of Public Accounts. During the 27th Dáil we discussed the issue of social welfare fraud which was raised by the Comptroller and Auditor General and his staff each year. While it is serious, when viewed in global terms and compared with other frauds that have emerged recently, it does not seem to merit the same urgent attention, although it is ironic that very often we are better at detecting that kind of fraud. According to figures the Department supplied to the Comptroller and Auditor General, such fraud amounted to approximately 0.5 per cent of the Department's budget of £5 billion. With regard to taxation fraud and other associated frauds, heads of banks have come before committees and told us there was a culture of corruption in which they were caught.
While we are opposed to people obtaining State benefits to which they are not entitled while working in the black economy, we need to maintain a sense of perspective. Concerns were raised about subsection (1)(a), particularly by members of the trade union movement who contacted me about their role and the way the trade movement has laid down as a prerequisite to any successor to P2000 that collective and individual bargaining on disciplinary matters and so on will have to be recognised. Perhaps the Minister has inadvertently, like a bull in a china shop, stumbled into an area where many people, particularly employees who may have been led astray by unscrupulous employers, consider they could be placed in the position of signing away some of their fundamental rights. In that regard, many questions arise about the meaning of a declaration of truth and how it could be used in subsequent criminal prosecutions in which an employee could be involved. These are serious issues.
Recently there were arguments about whether officials of the National Irish Bank implemented a policy, which seemed to be illegal, by selling illegal products and, perhaps, they considered they were driven to do so by unscrupulous employers. Even that group of articulate employees found this a complex area. In light of that, will the Minister reconsider tightening up these provisions.
On Second Stage, the Minister gave figures in relation to every pound of social welfare money that is diverted from the needy. We discussed today where an extra £2 million could be spent providing for one group and £5 million or £6 million could be spent providing for another - I refer to carers, the widows and others. Workers in the black economy are putting their hands in the pockets of the most vulnerable groups in our society. We must stamp out that, but we must also maintain the fundamental freedoms of the legal system.
The first subsection to which this amendment relates is dangerous and the second one to which it relates is outrageous. I oppose anything that encourages or makes it easy for people to commit fraud of any description. One must be careful about how one addresses this problem. If our attempts to stamp out fraud infringe the rights of individuals who have no axe to grind and are not involved, we are entering dangerous territory. I would be concerned about the degree of enforcement that is likely to take place.
I have some knowledge of social welfare law. I also have some knowledge of the means used to determine whether fraud is taking place. Some of those means are acceptable, but some of them are not. This gives rise to the question as to whether people are treated equally in terms of interrogation, for want of a better description, and Deputy Broughan also referred to this. The Minister, who is a legal practitioner, knows what I am talking about. For example, a relatively innocent person, through no fault of his or her own, may incriminate himself, herself or others, while a person, who is disposed towards fraud and well versed in procedures, will find it easy to drive a coach and four through the system regardless. That relates to the first subsection to which amendment covers. I caution that great care be taken, otherwise this section will pose serious problems for the Department.
I, and I am sure other Members of the House, was aware of certain activities that were taking place before they were reported in the newspapers. I knew there was no law to back them up. I also knew that proposals similar to those under discussion here had been enacted for some time. I was conscious of the fact that there was no law to back them up. Legislation which provides for surreptitious methods to deal with these activities is not acceptable. The Minister will find countless sections in various acts that will support the suggestion, but I warn against it.
With regard to the second subsection to which this amendment relates, the involvement of the Garda in this context is wrong. It will lead to serious problems. The Garda depend on the co-operation of law abiding citizens in the pursuit of crime, but after some time less of that co-operation will be forthcoming. On Second Stage the Minister indicated that the Garda Síochána put forward the notion. I know what my response would have been. I hope the Minister is aware of the possible consequences of legislation of this nature. Nobody would suggest that fraud should be easy and everybody would support the introduction of means to detect and eliminate it.
However, the measures used to eliminate fraud should not be so oppressive as to impinge unnecessarily on the rights or civil liberties of the individual. If one takes that road, there is the matter of reaction to it and increasing the penalties at a later stage which is also dangerous. What the Minister does about that is his own business but I advise him to be careful.
Section 26 is the most controversial in the Bill. How does the Minister justify issuing a seven page explanatory memorandum containing six misleading lines on this section? The explanatory memorandum states:
Section 26 extends the powers of social welfare inspectors to enable them, inter alia, to remove, or secure for later inspection, documents or records from an employer's premises during the course of an investigation and to require an employer to provide reasonable explanations of any facts in relation to the contents of any such documents produced for examination by an inspector.
Anybody who reads that paragraph and who believes, as I do, that unscrupulous employers should be subject to inspection and cross examination, will approve of section 26. However, the paragraph deliberately or otherwise, ignores the controversial aspects of the section.
I have no objection to unscrupulous employers having their premises raided and their records inspected or to them being cross examined about those records. However, the Bill goes further. It is not just the employer who can be cross examined but anybody whom the inspector "has reasonable cause to believe to be or to have been an insured person". That includes the employees, which is not mentioned in the explanatory memorandum.
May I intervene to clarify? I do not wish to prolong the discussion but that provision is already contained in section 212(3)(c) of the Social Welfare (Consolidation) Act, 1993. It is not a new power; it already exists.
What is the new power in the section?
There are two new powers - power to remove and secure documents for later inspection and the power to require an employer to make himself or some other competent person available to answer questions that an inspector might have.
I am surprised at Deputy Broughan finding fault with me for trying to ensure that employers bring forward their records. This will help us to eliminate employer fraud. In the initial reaction to this legislation the Labour Party welcomed the provision extending powers to social welfare inspectors to enter premises and examine employers' records.
I was referring to the examination of employees.
That was already in the legislation.
It still presents difficulties because it states "in the presence of any other person".
It has been in the legislation since 1953 and was included in the 1993 Act.
I approve of the power to examine the records of unscrupulous employers. Regardless of whether the provision is new, I have a degree of sympathy for the point raised by Deputy Broughan regarding the power to require employees not just to be examined but also to sign a declaration of the truth of the matters in respect of which he or she is being examined. I did not table an amendment but I sympathise with the point made by Deputy Broughan.
My principal concern about this section is the checkpoints. Does the Minister accept that these are new powers?
What powers are already there?
Section 212 provides for a general power. When this was being examined, the Attorney General suggested the inclusion of a more specific power.
What is the difference between the existing provision and thissection?
This is more specific and detailed. There was a general power——
A general power to do what?
Was it a general power to do what was considered necessary?
There is no power in legislation at present to stop vehicles at random.
The Department believed it was entitled to participate in these multi-agency checkpoints under the general power. However, when we were preparing the legislation we decided to include the specific power.
Part of the problem is that there was no clarification about or reference to the checkpoints in the explanatory memorandum.
In retrospect, it probably would have been better to include it in the explanatory memorandum. However, the memorandum is not the text of the Bill.
The Bill shows what was proposed. There was no effort on our part to cloud what was in the Bill.
I would have expected an issue, particularly the most controversial in the Bill, to at least have been mentioned in the explanatory memorandum. I accept that the Bill is the relevant document.
The official who discussed this matter on the radio was quite up front about it and the fact that these had been taking place. I heard Deputy O'Keeffe tell the Dáil that I sent out an official to deal with this on the radio. I did not send out an official. I was abroad when the interview took place and the official did the piece of his own volition. I did not know he had done it until afterwards. I am a supporter of the strategic management initiative and believe my officials should be permitted to give their views on all issues.
I have not noticed them coming out as the bearers of good tidings.
They certainly have done so. My press officer is regularly on the afternoon programme to bring the public good news.
Giving the existing news.
I am talking about the announcement of new good tidings. However, that is not the issue before the Committee.
This provision is not in the explanatory memorandum but it is in the Bill. The second and more serious issue that arises is with regard to the results of checkpoints to date. An unbiased observer would ask why it is necessary to specify these powers if they already exist. There either is or is not power to have checkpoints. If the power to have them exists, I see no reason for new powers. If the power does not exist, checkpoints which have already been set up are illegal.
Now that we are focusing on this aspect of the section, a number of thoughts occur to me. The power expressed in the section could give rise to random checkpoints which would affect many people unless they are focused on particular vehicles, or there are suspicions about vehicles. I see no justification for social welfare officers being involved in random checkpoints. It is a bridge too far and it has not been sufficiently thought out by the Minister. It is a power which is not acceptable to people. People want fraud to be stopped but they do not want their vehicle to be stopped and examined in this random fashion by social welfare officers.
The power, as expressed in the Bill, is unnecessary. In so far as the Minister feels that he needs additional powers, any such powers should be finely focused and have a degree of protection for civil liberties. A garda does not have the absolute right to breathalyse someone unless he suspects they have drink taken. We should be building similar safeguards in powers of this kind. There should be at least a suspicion that the vehicle was involved in an act which is against the law.
The random checkpoint which will be possible under this provision is not acceptable. There is no point in the Minister reassuring me that these powers will be used with due discretion. If the powers are there the Minister cannot guarantee how they will be exercised. People will use them in the way they feel is best. On that basis I strongly object to the framing of these powers and do not accept them on the basis the Minister has presented them.
The Minister has been compared to President Ceaucescu of Romania setting up a Securitate. We know what happened to him.
This is a serious committee.
What sort of regime was that? Was it a ruthless regime?
It was not a Trotskyite regime, it was a Stalinist regime. Either way, he and his wife ended up badly.
Does Revenue have exactly the same power? Deputy Higgins rightly raised the prospect that, inevitably, if social welfare inspectors were preparing to stop cars or vans at random, they would most likely go to certain working class areas in which there is high social welfare dependency. That would be a logical rationale. They would not go to exclusive areas on the South side, but they would visit the chairperson's or my constituency.
We gave extensive powers to the Criminal Assets Bureau and now the Garda and Revenue co-operate closely resulting in famous gentlemen, who are well known to the tabloid press, being characterised with huge tax demands and appearing before the courts. The CAB is tackling them.
It was my assumption before the CAB was established that the Garda had these powers already and that similar powers existed for this Department under section 212 of the 1993 Act. Would the evasion on the revenue side be tackled with the same determination and lack of consideration for basic rights as on the social welfare side? If we had put the social welfare inspectors into the Revenue, would we now be investigating major tax fraud in this State, billions of pounds in unpaid taxes and the scandal of off-shore accounts involving senior business people? We must keep this in perspective. If we are to go this route, there should be a level playing field for everyone.
I discussed this with Deputy Broughan in other fora. We talked about teams of subcontractors in the building industry coming from A to B and B to A. You could go out to the Airport Road at certain times on a Thursday and Friday and find known minibuses filling up with people.
In the beef tribunal it was alleged that in various beef factories people were coming from another jurisdiction. I received allegations a year ago against the Goodman organisation. People were being bussed in who were on social welfare in other jurisdictions. Have we not already got the power to stop that?
It arises in so many areas - forestry, beef, construction and so on.
I agree with Deputy Broughan. There is already sufficient legislation. Legislation can be introduced which erodes the civil liberties of the individual to the extent that the individual is impeded from going about his work.
I disagree with Deputy Broughan on the basis that regardless of whether a person comes from a wealthy or poor background, they have equal civil liberties. It makes no difference if they drive a van or a Mercedes, their rights are sacrosanct. It concerns me that we would establish the right to erode the civil liberties of the individual to achieve a particular objective. The objective will then justify the means. If that should happen, and it could, there will be a serious problem. I am deeply suspicious of legislation of this nature. I said the same thing about the CAB.
I am advised that the powers in subsection (3), which allow my inspectors to enter premises, examine documents and take copies, are being introduced because there have been occasions where my inspectors have gone to premises and there has been no co-operation. These powers are similar to the inspection powers of the Revenue Commissioners. This is right and proper and one constantly hears, sometimes from District Court judges, that they come across prosecutions taken against employees but not employers. That is not the case and quite a lot of employers have been taken to court. It takes two to tango. In many cases employers do not co-operate in producing documents. They are told to come back and when they do so the documents are destroyed or whatever. This is the reason we are inserting these powers.
Nineteen checkpoints have been set up since 1998 - five in Dublin, two in Kildare, one in Wicklow, one in Monaghan, two in Cavan, four in Louth and four in Meath. I invite any Deputies, particularly those from the south of the country, to stand on the Dublin-Belfast or Dublin-Derry road, particularly early in the morning, to see what is going on. We cannot have it every way. We are all against fraud but my constituency colleague knows what is going on, not only from across the Border but right around the State. There is constant fraud involving the social welfare system. I will take whatever steps are necessary to deal with that problem. These powers are necessary as the results from the checkpoints have been significant.
From a PR point of view the existence of these checkpoints might have been better handled and they will always be regarded as social welfare checkpoints. However, they are multi-agency checkpoints.
Will there be an official from the Revenue Commissioners with them?
Yes. There have also been officials from Customs and Excise. An article in the Evening Herald of 24 April 1998 stated that Ireland’s first cheat checkpoints manned by a crack team of garda and Government officials have revealed a litany of law breaking. It continued that, at every level, the law is being blatantly flouted and that in four hours the checkpoints came across a huge amount of wrongdoing.
On 8 May my local newspaper included an article referring to the crackdown by gardaí and other State agencies. It stated that a five-day operation by gardaí from the Louth-Meath division traffic corps, joined by officials from the Departments of Social, Community and Family Affairs, Public Enterprise, transport section, Customs and Excise and the Revenue Commissioners took place on the N1 from Dundalk to Drogheda and that a litany of wrongdoing was uncovered. The article quotes a garda as saying that the Irish Road Haulage Association has welcomed these checkpoints as illegal drivers give road haulage a bad name and that all agencies are happy with the operation. On 9 May 1998 the newspaper listed the checkpoints being manned.
Of a total staff of 4,200 in the Department, 600 are constantly working to uncover fraud. People cannot have it both ways. I am not in favour of excessive powers and these are not such powers. I have seen them in operation. I came across them when there were no social welfare inspectors involved. No law abiding person has anything to fear. We are stopped constantly by gardaí investigating road tax offences and motor insurance. We are also stopped by Customs and Excise officials investigating smuggling and fraud involving diesel. This is one additional arm of investigation.
In a typical operation vehicles are stopped by gardaí checking for road traffic offences, vehicle defects and so on; Customs and Excise check for illegal fuels and smuggling; Department of Public Enterprise officials check for tachograph and licensing offences; Department of the Environment and Local Government officials check for illegal road weights and Social, Community and Family Affairs officials check that employers are fulfilling their legal obligations, such as maintaining records, paying PRSI and notifying the Department of the commencement of employment of new employees. This is one of the biggest difficulties we have in that some employees are claiming social welfare payments while working. These are reasonable powers. The fact that the checkpoints are multi-agency means that they cannot happen that often. An assurance is given that they will not be set up beside housing estates. They are established on the main arteries.
The live register figures for this month and for the weeks since this has been publicised have dropped fairly dramatically. The feeling in the Department is that this is because people fear being caught. In the Department and on a personal basis, I have heard anecdotal evidence of people who have been ripping off the system, leaving the live register because they are afraid of being caught at these checkpoints.
Of 13 people from the North checked on a building site in Dublin, nine were claiming in the North and working in the South and four gave wrong addresses. We assume that they were claiming in the North or, at least, ripping off the system. One cannot have it every way. One cannot say that there is fraud in big business while at the same time infer that we should be weaker in our response.
As far as the Government and I are concerned, fraud is fraud at every level. Deputies are constantly asking us to increase payments to widows, carers, those with disabilities and pensioners. Every pound taken off the social welfare system is a pound lost to those people.
At the end of the year is there any way that you can quantify the savings and state that they have been ring-fenced and spent on the good suggestions made today?
It is easy to quantify the figures.
How many people were stopped?
How many cars does that involve?
There could be three, four or five people in each vehicle, so up to 6,000 people could have been stopped.
At Lissenhall on 18 February 1998, 97 vehicles were checked and nine live UA/UB claims were uncovered involving a saving of £31,000. The fraud rate was 9.3 per cent. A proportion of those involved were from the North and were reported to the social security agency in the North.
On 8 April in Lissenhall, 112 vehicles were checked and three live UA/UB claims and one UA claim pending were uncovered. The savings totalled £15,000 and the fraud rate was 3 per cent. The savings figure is not picked out of the air. There is an agreed procedure concerning the figures. There has been a huge fallout from this checkpoint in terms of LPA reviews - UA cases referred for people genuinely seeking work.
In the north-east, checkpoints were set up over four days in early April at a number of locations - Lissenhall, Drogheda, Fairyhouse and Dromad, which is just on the Border. Three hundred vehicles were checked and 25 fraudulent claims were discovered which resulted in savings of 66 per cent. The fraud rate involved is 8.3 per cent. The operation had a high profile locally and was reported in national and local papers.
In Newtownmountkennedy on 14 May, 75 vehicles were checked and two live UA claims were uncovered resulting in savings of £8,568. The fraud rate here was 3 per cent. Again, there was further fallout involving GSW - genuinely seeking work reviews - cases referred to the social security agency in Northern Ireland. This checkpoint was running for just over two hours which is two hours less than normal.
In the north-east, on five dates at various locations - Kells, Enfield, Drogheda and Ashbourne - in August 1998, 400 vehicles were checked and 35 fraudulent claims were discovered. This resulted in savings of £85,000 and revealed a fraud rate of 8.7 per cent. In the north-east there were checkpoints at New Inns and Castleblayney which are on the Border, in September 1997. There are no statistics available for this exercise. In the north-east, on the Cavan to Dublin and Dundalk to Dublin roads, over two days in 1998, 600 vehicles were checked and 26 fraudulent claims were discovered resulting in savings of £78,000 and revealing a fraud rate of 4.3 per cent.
To illustrate that this problem is not confined to Border areas, in an operation in Kill on 7 October, 51 vehicles were checked and three live UA/UB claims and one live PRETA claim were uncovered resulting in savings of £28,000 and revealing a fraud rate of 8 per cent. There was further fallout in terms of schemes reviews and employer inspections.
At Lissenhall, 144 vehicles were checked and seven live UA/UB, two live DB, one live INVT claims were uncovered. This resulted in savings of £34,000 and revealed a fraud rate of 7 per cent. Twenty two cases were also referred to the social security agency. In two cases there were live claims in Northern Ireland.
Overall, 1,846 vehicles were checked and 118 fraudulent claims were discovered which resulted in savings of £360,000 and revealed a fraud rate of 6.5 per cent. Members will agree that there are fair pickings to be had.
How many cases, particularly those involving employers, were referred to the DPP?
That matter is under consideration.
Those statistics are extraordinary and I do not know how satisfied the Minister is with them. Out of the 600 vehicles stopped at one checkpoint, 26 fraudulent or suspected fraudulent cases of one kind or another were uncovered. I estimate that there could have been 1,200 to 1,400 people, perhaps more, stopped during that operation. Those 26 fraudulent claims could have been uncovered without the forces of law and order having to come into contact with that number of people.
I am surprised by the Deputy because, as a former Minister of State at my Department, he is aware that the criminal law in relation to this is extremely complex and cases are difficult to prove. That is one of the reasons there were few prosecutions during his term of office.
I am not claiming credit. However, prosecutions have increased, particularly those relating to employers.
The Minister is well aware of and has tried to capitalise on the allegation that prosecutions levels were low and only small numbers of people came off the live register when I was in office. That is complete rubbish and it has been disproved successfully on many occasions since. The numbers on the live register have been gradually and consistently descending, without interruption with one exception, for the past four years.
I am concerned by the Minister's justification for the checkpoints because when I see ordinary people who are going about their work stopped in a queue of cars——
There is no queue of cars at any of the checkpoints which are situated on wide stretches of road where cars can be pulled in. There is no stopping of cars, in effect, other than their being stopped by the Garda.
I saw the checkpoints, they are located in the middle of the traffic flow.
The drivers of cars that are stopped are requested to pull in out of the traffic.
The point is that they have the tyres, etc. on their cars checked and now we are to check the health and social security status among other things. There is little that can be offered to these people by way of compensation other than offering to fill the cavities in their teeth. This process is disgraceful and I cannot understand how the Minister can justify it. The degree to which it impacts on law abiding citizens going about their business will be such that it will alienate the general public.
Society would not operate properly if the forces of law and order did not make an effort to ensure that the law is maintained.
That is a crazy justification.
The same applies to speeding offences, etc. There must be some controls in place.
We know that. However, as a member of the legal profession, the Minister must, on countless occasions, have had to say the same things we are saying to him now.
As a member of the legal profession, I have no problem with this. People who are not defrauding the system or ripping it off have nothing to hide whereas there are others who do. The Deputy referred to the 26 out of 600. The anecdotal evidence is that, because of the publicity engendered by this, many other people——
As a legal practitioner, I am sure the Minister would not defend anyone in those circumstances.
Time is running short, a number of Members are indicating and there is a need for brevity. Whether we are discussing drink driving, parking in Dublin, etc., you either talk about it or take action. I will now take brief comments from Deputies Brady, Browne and O'Keeffe.
I was about to say that, at this stage, the matter has been discussed in great detail.
I accept that. I will allow brief questions and I ask Members not to make lengthy contributions.
The Minister referred to savings. Does he have figures relating to the loss of income tax, PRSI contributions, etc.?
I am surprised Deputy Durkan stated that this is wrong. Is it wrong to put in place checkpoints to apprehend drunk drivers or those who drive without insurance and tax or with bald tyres on their cars?
The Chairman will have gathered that we on this side are opposed to the subsection.
How stands the amendment?
Given that we can vote on the section, I call for a voice vote.
I am surprised at the Labour Party defending employers.
Amendment put and declared lost.
Amendments Nos. 39 and 43 to 45, inclusive, are related and may be discussed together by agreement.
I move amendment No. 39:
In page 26, subsection (1), between lines 25 and 26, to insert the following:
"(b) the substitution in subsection (6)(b) for 'document' of 'record',".
This is a drafting amendment to replace the word "document" in section 212(6)(b).
Amendment No. 43 deletes the word "being" in the new subsection which states that while a vehicle may be used in the course of a person's employment, it may be stopped if it is suspected that it is being used as such while a person is en route to and from work. The parliamentary draftsman felt this amendment was necessary to enable checkpoints to operate as effectively as intended at appropriate times. Amendment No. 44 requires that social welfare inspectors shall produce their certificate of appointment if so requested.
With regard to amendment No. 45, the section as currently drafted provides that an inspector may require a person in a vehicle to show the inspector any documents he or she has relating to employment or self-employment. The amendment confirms that this only relates to documents which the person has with him in the vehicle.
Amendment agreed to.
I move amendment No. 40:
In page 26, subsection (1), to delete lines 26 to 46.
Amendment put.
The Select Committee divided: Tá, 7; Níl, 8.
Tá
- Broughan, Tommy.
- Browne, John (Carlow-Kilkenny).
- Crawford, Seymour.
- Durkan, Bernard.
- McCormack, Padraic.
- McGrath, Paul.
- O’Keeffe, Jim.
Níl
- Ahern, Dermot.
- Ahern, Noel.
- Brady, John.
- Brennan, Matt.
- Browne, John (Wexford).
- Foley, Denis.
- Moynihan, Micahel.
- Wade, Eddie.
I move amendment No. 43:
In page 26, subsection (1)(b), line 39, to delete "being".
Amendment agreed to.
I move amendment No. 44:
In page 26, subsection (1)(b) line 41, before "question" to insert "on production of his or her certificate of appointment, if so requested,".
Amendment agreed to.
I move amendment No. 45:
In page 26, subsection (1)(b), line 46, after "of" to insert "in the vehicle".
Amendment agreed to.
Question proposed: "That section 26, as amended, stand part of the Bill."
Question put.
The Select Committee divided: Tá, 8; Níl 7.
Tá
- Ahern, Dermot.
- Ahern, Noel.
- Brady, John.
- Brennan Matt.
- Browne, John (Wexford).
- Foley, Denis.
- Moynihan, Michael.
- Wade, Eddie.
Níl
- Broughan, Tommy.
- Browne, John (Carlow-Kilkenny).
- Crawford, Seymour.
- Durkan, Bernard.
- McCormack, Padraic
- McGrath, Paul.
- O’Keeffe, Jim.
Question declared carried.
Section 27 agreed to.
SECTION 28.
I move amendment No. 46:
In page 28, subsection (2), lines 32 and 33, to delete "(within the meaning of the Criminal Assets Bureau Act, 1996)".
Amendment agreed to.
Section 28, as amended, agreed to.
SECTION 29.
I move amendment No. 47:
In page 28, subsection (1), line 39, after "days" to insert "or such longer period as the court may by order allow an application to it in that behalf".
This refers to the cut off period for certain court appeals. It is aimed at cases specifically taken by the Criminal Assets Bureau in major criminal fraud. There is a feeling as regards social welfare that it is perhaps a bad practice to have such a rigid time limit. There are strong reasons to allow an appeal extend beyond a rigid deadline. Perhaps it should be extended to 28 days. This amendment gives a certain amount of discretion to the court and is of a technical nature.
There was no time limit for these claims so we decided to include the normal limit of 21 days. To do what Deputy Broughan asked would allow that to be extended willy-nilly. This relates to SWA and because that is an immediate type payment, 21 days is the appropriate time. I suggest to the Deputy that if somebody is disallowed SWA and in need of it, he will very quickly appeal the decision.
Amendment, by leave, withdrawn.
Section 29 agreed to.
NEW SECTION.
Amendment No. 53 is consequential on amendment No. 48 and both may be taken together. Is that agreed? Agreed.
I move amendment No. 48:
In page 29, before section 30, to insert the following new section:
30.-(1) The Principal Act is hereby amended by-
(a) the substitution in section 247(2) for "This section' of 'Subject to subsection (2A), this section',
(b) the insertion in section 247 after subsection (2) of the following subsection:
'(2A) In the case of a deciding officer who is a bureau officer this section also applies to every question arising under Chapter 11 of Part III.',
(c) the insertion in section 248 after subsection (1) of the following subsection:
'(1A) A deciding officer who is a bureau officer may at any time make a decision revising a determination of an officer of a health board, including an officer of a health board designated under section 267(1), to entitlement to supplementary welfare allowance if it appears to the deciding officer that the determination ought to be revised having regard to the facts as they are established to the satisfaction of the deciding officer and the application of this Act to those facts and the provisions of this Part as to appeals shall apply to the revised decision in the same manner as they apply to an original decision of a deciding officer.',
(d) the insertion in section 248 after subsection (2) of the following subsection:
'(2A) Subsection (1A) shall not apply to a determination relating to a matter which is on appeal under section 257A or 267(1), as the case may require, unless the revised decision would be in favour of the claimant.', and
(e) the substitution for section 175(1) (inserted by section 36 of the Act of 1996) of the following section:
'175.-(1) Subject to the general direction and control of the Minister, each health board shall, in respect of its functional area, be responsible for the administration of functions performable under this Chapter and the functions relating to supplementary welfare allowance other than-
(a) functions relating to claims for supplementary welfare allowance decided by a deciding officer, and
(b) making such categories of payment as may be prescribed in such circumstances and conditions as may be prescribed.'.
(2) Each provision of the Principal Act mentioned in column (1) of Schedule F to this Act is hereby amended in the manner specified in column (2) of that Schedule opposite the mention of that provision in column (1).
(3) This section shall come into operation on such day as the Minister may appoint by order.".
Entitlement to social welfare payments of persons who may be engaged in criminal activity under the Criminal Assets Bureau Act can be investigated and decided on by officers of my Department, who are also bureau officer. This provides anonymity for the officer who makes such a decision. In the event of an appeal against such a disallowance, the chief appeals officer can direct the appellant to submit his or her appeal to the Circuit Court where he or she considers that the ordinary appeals process is not adequate to deal with it. The process, in turn, affords protection to appeals officers. It is then open to the appellant to apply for SWA from his community welfare officer while his appeal is bring processed.
I have been concerned - this has been expressed in a number of quarters - that the same anonymity protection is afforded to health board staff who deal with these claims. My officials met with health board management, staff representatives and people from the Criminal Assets Bureau to address this issue. Following these discussions, I propose that SWA for persons whose affairs are being investigated by the Criminal Assets Bureau may be dealt with by officers of the Minister, the deciding officer and investigators who are already assigned to the Criminal Assets Bureau to deal with other social welfare claims.
It is envisaged that the entitlement to SWA will continue to be decided at local level by the community welfare officer. However, in the event that a disallowance becomes appropriate, the bureau officers may request the claim and assume responsibility for making the appropriate decision. In this way, the identity of the officer who makes the adverse decision will be protected. Whether or not a person who is the subject of investigation the Criminal Assets Bureau is receiving an ongoing SWA basic payment, he will continue to be entitled to the exceptional needs payment at any time through his community welfare officer.
Section 31(1)(b) inserts a new subsection (2A) in section 247 of the Act. That section deals with the appointment of deciding officers. The new subsection will enable a bureau officer appointed under the Criminal Assets Bureau Act to decide entitlement, and the rest speak for themselves. This amendment was agreed with various people.
Amendment agreed to.
SECTION 30.
I move amendment No. 49:
In page 29, lines 2 to 8, to delete paragraph (a).
We seek the deletion of paragraph (a) in relation to the disregard for the one parent family payment. It seems to be a change of practice to state the amount on a weekly basis. It was previously stated that the one parent family payment would not be payable to a qualified parent whose gross earnings exceeded £12,000 in the last tax year or in such subsequent period as a deciding or an appeals officer might consider appropriate. This meant that a person on OPFP who got work for a short period and was paid in excess of £230.76 per week had the chance of it being averaged out over a year, enabling that person to retain the payment. The Bill, as it stands, states that in any week where earnings exceed £230.76 OPFP is not payable. That is a change from the previous position and, as such, does not seem to be a technical amendment.
The One Parent Exchange and Network is quite concerned about the change. While it was presented as a technical amendment designed to express the earnings disregard in weekly rather than annual terms, it could be far more serious. It was presented as a technical amendment designed to present the earnings disregard as a weekly rather than annual term. This could be far more serious, and I strongly support the point made by Deputy Broughan. If this is merely a technical amendment I have no problem with it, but there is the difficulty that a person on a one parent family payment, whose earnings exceeded the limit for even a short period over a week or two, could under the change find themselves totally excluded or with a reduced payment. That does not seem very fair. It is up to the Minister to justify the change, but I do not want any unfairness visited upon people.
This is not a cutback in any way; it is a technical amendment and puts in legislation what has been in practice since this change was made by my predecessor. In practice, since the inception of this earnings disregard assessment, it has been apportioned on a weekly basis, so this amendment is designed to express the earnings disregard applying to one parent family payment schemes in weekly terms rather than in annual terms, as is the case at present. The existing legislation governing the assessment of means provides that earnings up to £6,000 per annum are disregarded in assessing means, and 50 per cent of any remaining earnings up to £12,000 are also disregarded. Many lone parents receiving payments under this scheme move in and out of employment in the course of a year, and their situation has to be reviewed on a regular basis. This is what has been happening, and the amendment is designed to facilitate administration by my Department by operating on the basis of the equivalent weekly disregards rather than the annual disregard. I can guarantee that this has been the situation and that there has been no change.
I felt at one stage that I should not insert this amendment, as it might unfairly raise difficulties with lone parents, but I was strongly advised that the situation needed to be put on a legislative basis, as the Department had been operating since the inception of the scheme on the basis of the weekly disregard. I can safely say this is not a cutback in any way.
It is surely more restrictive.
Is one allowed to carry one's annual disregard, if the Minister is talking of people working during the summer, for example?
That is the very point. If someone has had two months of good work during the summer, for example, and is then likely not to work for the rest of the year, will they be assessed as having a weekly income in excess of the statutory figure? Their annual income would still be very modest.
No, because it is based on a weekly equivalent and because they go in and out of the system they avail of a proportion of the £6,000. Obviously, anyone working for the full year gets the full benefit, but it is proportional over the period they are working. That has been the situation, and this will not change it. We are simply putting the practice since the scheme began into legislation.
When was the scheme introduced?
Would there not be flexibility if this was not inserted?
No, because they did this on a weekly basis.
Amendment, by leave, withdrawn.
Question proposed: "That section 30 stand part of the Bill."
On the basis of the Minister's guarantees and assurances, we will agree.
Question put and agreed to.
Sections 31 to 33, inclusive, agreed to.
SECTION 34
I move amendment No. 50:
In page 32, to delete lines 9 to 48, and in page 33, to delete lines 1 to 6 and substitute the following:
"(2) The trustees of a scheme may reduce the amount of a benefit to which a person is in receipt under the scheme-
(a) (i) where the benefit has been determined without taking into account a pension payable to the person and where the rules of the scheme permit the subsequent reduction of the benefit by taking into account such pension at or after the date at which the pension commences to be payable to the person, or
(ii) where such benefit has been determined taking into account a pension payable to the person where such pension is less than the full personal rate of old age (contributory) pension then payable and where the rules of the scheme permit the subsequent reduction of the benefit by taking into account the full personal rate of old age (contributory) pension or retirement pension at or after the date at which that full rate of old age (contributory) pension or retirement pension commences to be payable to the person,
(b) where the rules of the scheme permit-
(i) the conversion into a capital sum of part of the benefit,
(ii) a pension payable to a dependant in return for a surrender of part of the benefit,
(iii) forfeiture of or the exercise of a lien on the benefit not prohibited by section 36 of this Act,
(iv) a reduction of the benefit as a consequence of dependency ceasing,
(v) a reduction or cessation of the benefit prior to normal pensionable age where the member had retired prior to that age on account of ill-health and subsequently recovers, or
(vi) a reduction by the benefit as a consequence of the exercise of an option by the member,
or
(c) where the reduction is required to comply with other provisions of this Act.
(3) In subsection (2)-
'old age (contributory) pension' means old age (contributory) pension under Part II of the Social Welfare (Consolidation) Act, 1993;
'pension' means-
(a) disablement pension,
(b) death benefit under sections 60, 61 or 62,
(c) old age (contributory) pension,
(d) retirement pension,
(e) invalidity pension,
(f) widow's (contributory) pension, or
(g) widower's (contributory) pension,
under Part II of the Social Welfare (Consolidation) Act, 1993;
'retirement pension' means retirement pension under Part II of the Social Welfare (Consolidation) Act, 1993.".
This is in relation to the integration issue. As I said on Second Stage, I will be prohibiting the whole issue of integration. The effect of the amendment is to prohibit occupational pensions and payments from being reduced in any one year from the level obtaining in the previous year While there is little if any evidence that any pension scheme's rules allow for such a reduction, this prohibition obviously outlaws it if it does exist and will prevent it happening in future. This was recommended by the NPPI report. The effect of the amendment is to prohibit occupational pensions and payments from being reduced in any one year from the level obtaining in the previous year
I do not have any difficulty with this amendment, which seems on the face of it to be sensible.
The issue of integration or the amendment?
The amendment. However, the Finance Bill is being dealt with at present and pension provisions of perhaps a more major nature being dealt with by the Minister for Finance. I detect a piecemeal approach. The Government should issue a comprehensive statement about where they feel the pension sector is going and what its proposals are. I do not seek that statement now, but there seems to be a piecemeal approach to this area. I have had concerns expressed to me on the Minister for Finance's proposals, with some opposing them, while others, on a salaried basis, complaining that they would be unable to access the flexible provisions being introduced for the self-employed.
We must be doing it right.
What is needed is for the Government to give a comprehensive picture of where pensions are going. However, subject to that I am prepared to agree to this amendment.
Let us not get into the Finance Bill, which is to be dealt with in the House.
Where could pensions be reduced?
We think there are schemes where, as social welfare goes up, the level of occupational pensions does not go up as fast as perhaps it should. This has come more to the fore with the fairly dramatic increase in old age pensions recently. As far as I am concerned, if I am scrimping and saving to pay old age pensioners and carers and then find that some schemes are not giving pensioners the full benefits of increases that they should be getting on top of social welfare I will outlaw it.
It affects employees of Comhlucht Siúcre Éireann——
That is not one we are aware of. This may be a different issue.
They lose one way, though the principle holds in the clawback of rent allowances. When people on social welfare receive increases, they are clawed back from rent allowances. It is different but the same principle.
I am still worried that the Minister is allowing the Minister for Finance to take the lead role on the pensions issue, when it seems to me that it lies ultimately with the Department of Social, Community and Family Affairs. There has been general disappointment that we have had the NPPI report for almost ten months, and we were expecting a detailed response to it from the Minister. He has mentioned what he has done regarding actuarial projections. However, that is difficult to predict. This country is like Norway, where seniors are asked to work longer and see work as part of a good life. This is a huge territory which is of great interest to our constituents. Perhaps we might ask the Minister to bring forward a comprehensive response to this. We have all dealt with such cases. I dealt with the Irish Press group, where there were sad cases of apparently very strange shenanigans with the number two pension fund, which the chairman probably also dealt with for his constituents. The Minister should develop an integrated approach to this, particularly in regard to PRSA and other innovative ideas which are being developed. The Department of Finance is also involved in the tax relief aspects, but it is primarily a matter for the Department of Social, Community and Family Affairs.
This issue is not really the subject of this amendment. However, I am following exactly, as is the Government, the issues in relation to NIPI, PRSAs and the other innovative suggestions, including integration, which were contained in the NIPI report. We hope to implement that in a pensions Bill towards the end of this year. This committee will obviously make the decision in that regard.
The Minister for Finance has the power over the taxation element of pensions, which is why the changes were made. However, those changes were made at the behest of the Government, not the Minister, Deputy McCreevy. Similarly, I have responsibility for the overall policy in respect to occupational pensions.
The purpose of this small amendment is to take care of what are called a bridging occupational pension, which is an additional occupational pension paid from the scheme between early retirement to the date on which the person reaches normal pension age and qualifies for either a retirement or old age pension.
I would have liked to go a little further in regard to integration, but I accepted the advice of the Pensions Board not to go the whole way. I have asked the Pensions Board to report to me prior to the pensions Bill on the whole issue of integration, particularly the issue of indexation of occupational pensions. Many of the increases in occupational pensions are at the behest of the trustees and may not even match the rate of inflation.
Amendment agreed to.
Section 34, as amended, agreed to.
Schedules A to C, inclusive, agreed to.
SCHEDULE D.
I move amendment No. 51:
In page 39, between lines 20 and 21, to insert the following row:
"
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Section 205 (2) (c) (as amended by section 32 of the Act of 1997).
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The insertion after ’carer’s allowance’ of ’, farm assist’.
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"
Amendment agreed to.
I move amendment No. 52:
In page 39, between lines 24 and 25, to insert the following row:
"
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Section 209 (6)
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The insertion after paragraph (d) of ’(e) farm assist.’.
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"
Amendment agreed to.
Schedule D, as amended, agreed to.
SCHEDULE E.
I move amendment No. 52a:
In page 40, after line 14, to insert the following row:
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Section 3(12) (as amended by section 22 of the Act of 1996).
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The insertion after ’99 (3)’ of ’114’.
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".
Amendment agreed to.
Schedule E, as amended, agreed to.
NEW SCHEDULE.
I move amendment No. 53:
In page 40, after line 14, to insert the following new schedule:
"SCHEDULE F
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Provision of Principal Act Amended(1)
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Nature of Amendment(2)
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Section 2(1).
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The deletion in the definition of ’social welfare inspector’ of ’(other than Chapter 11)’.
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The insertion after the definition ’benefit year’ of the following definition: ’
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“bureau officer” means an officer of the Minister appointed as a bureau officer under section 8(1)(a)(iii) of the Criminal Assets Bureau Act, 1996;’.
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Section 175(2).
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The substitution for ’Every’ of ’Subject to subsection (1), every’.
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Section 176.
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The substitution for ’health board may, subject to regulations made by the Minister under section 188, determine’ of ’health board or deciding officer may, subject to regulations made by the Minister under section 188, determine or decide’.
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Section 180(1)
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The substitution in subsection (1) for ’may determine’ of ’may determine or decide’.
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The substitution in subsections (1), (2) and (3) for ’health board’ of ’health board or deciding officer’ in each place where it occurs.
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Section 181.
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The substitution for ’health board may, in any case where it’ of ’health board or deciding officer may, in any case where the health board or deciding officer’.
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The substitution for ’determine’ of ’determine or decide’.
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Section 182.
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The substitution in subsection (1) for ’in determining’ of ’in determining or deciding’
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The substitution in subsection (1) for ’health board’ of ’health board or the deciding officer’.
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The substitution in subsection (1) for ’to it’ of ’to the health board or deciding officer’.
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The substitution in subsection (2) for ’health board may, if it is’ of ’health board or deciding officer may, if the health board or deciding officer is’.
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The substitution in subsection (2) for ’determine’ of ’determine or decide’.
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Section 183(a) (as amended by section 15 of the Act of 1996), 184(a) and 184A (inserted by section 21 of the Act of 1995).
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The substitution for ’health board’ of ’health board or deciding officer’ in each place where it occurs.
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Section 249 (as amended by section 32 of the Act of 1996).
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The substitution in section 249(a) and 249(b) for ’original decision’ of ’original decision or determination’ in each place where it occurs.
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Section 266 (as amended by section 30 of the Act of 1996).
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The substitution for ’section 267’ of ’section 247, 267’.
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Section 277(2) (as amended by section 7 of the Act of 1996).
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The substitution in paragraph (a) for ’(other than supplementary welfare allowance)’ for ’(other than supplementary welfare allowance determined by a health board)’.
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Section 278 (as amended by section 7 of the Act of 1996).
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The substitution in paragraph (b) for ’(other than supplementary welfare allowance under Part III)’ of ’(other than supplementary welfare allowance determined by a health board under Part III)’.
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The substitution in paragraph (c) for ’any supplementary welfare allowance’ of ’any supplementary welfare allowance determined by a health board’.
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The insertion in section 278 after paragraph (c) of the following paragraph:
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’(d) any supplementary welfare allowance paid in pursuance of the original determination shall be repayable to the Minister to the extent to which it would not have been payable if the revised decision made in accordance with section 248(1A) had been given in the first instance and such person and any other person to whom the supplementary welfare allowance was paid on behalf of such person, or the personal representative of such person, shall be liable to pay on demand by the Minister the sum so repayable.’.
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Section 279 (as amended by section 7 of the Act of 1996).
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The substitution in subparagraph (ii) for ’allowance’ of ’allowance determined by a health board’.
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The substitution in subparagraph (iii) for ’allowance’ of ’allowance determined by the health board’.
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Section 279A (inserted by section 31 of the Act of 1997).
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The substitution in paragraph (b) for ’allowance’ of ’allowance determined by a health board’.
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The substitution in paragraph (c) for ’allowance’ of ’allowance determined by the health board’.
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Section 279B (inserted by section 20 of the Act of 1998).
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The substitution in paragraph (b) for ’allowance’ of ’allowance determined by a health board’.
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The substitution in paragraph (c) for ’allowance’ of ’allowance determined by the health board’.
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Section 282 (as amended by section 7 of the Act of 1996).
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The substitution for ’(other than supplementary welfare allowance)’ of ’(other than supplementary welfare allowance determined by a health board)’.
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The substitution of ’allowance an officer of a health board’ for ’allowance determined by a health board an officer of the health board’.
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Section 284.
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The substitution in the definition of ’competent authority’ for ’recipient;’ of ’recipient, or the Minister where such allowance was granted by a deciding officer;’.
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Amendment agreed to.
Schedule F agreed to.
Title agreed to.
