I welcome the Minister and his officials. I propose that we work from now until 4.15 p.m., suspend until 5 p.m. and adjourn at 7 p.m. It is also proposed that we resume at 4 p.m. tomorrow and try to conclude our deliberations on the Bill tomorrow night. Is that agreed?
Social Welfare Bill, 2000: Committee Stage.
Is it not possible to start earlier than 4 p.m. tomorrow? Is there any particular reason for commencing at 4 p.m.?
As far as I am aware, the Minister was the reason. However, if he is in a position to start earlier we will accommodate him.
The Minister stated at one stage that he could not be present any earlier.
Yes, I have to meet the African refugees' needs analysis group at 2.45 p.m. and that is probably the reason I indicated I could not be here.
We could start at 3 p.m.
I have to attend an engagement in Dublin Castle after the meeting so it will probably take an hour all told.
The meeting was due to start at 2.30 p.m. If the Minister can be here earlier he can inform us.
I doubt it very much because the meeting I must attend is due to begin at 2.45 p.m.
What about tomorrow morning?
We would like to avoid holding meetings on Wednesday mornings, if possible. The House is sitting until 10.30 p.m. tomorrow so Members will not be rushing off anywhere.
What time is the match on tonight?
It will not start before 7 p.m. We are in public session so Members should watch what they say.
I call on the Minister to move amendmentNo. 1.
SECTION 1.
I move amendment No. 1:
In page 5, subsection (2), lines 12 and 13, to delete "Parts VII, VIII and section 33” and substitute “Parts VII and VIII”.
This is a technical amendment. Section 1(2) deals with the collective citation and states that Parts VII, VIII and section 33 will not form part of the collective citation. Section 33 deals with the repeal of a provision dealing with continuing offences. The parliamentary draftsman has advised that this repeal should be construed as part of the Social Welfare Acts.
This is a technical amendment and if the draftsman advises it that is fine.
Amendment agreed to.
I move amendment No. 2:
In page 5, subsection (2), line 13, after "one" to insert "and may be cited together as the Social Welfare Acts, 1993 to 2000".
The Labour Party has proposed similar amendments to Social Welfare Bills in the past few years. There is an ongoing problem with social welfare legislation and regulations and we think it would be preferable to add the phrase "may be cited together as the Social Welfare Acts, 1993 to 2000".
When in Government with Fianna Fáil, the Labour Party helped to introduce a Bill in 1993 which consolidated social welfare legislation over the previous decade. A parliamentary question highlighted that there are 44 major benefits and schemes and the Minister should consider the issue of consolidation and, at the very least, try to impose some coherence or order on social welfare legislation by inserting this phrase insection 1.
This amendment is not necessary because section 3(8) of the 1993 consolidation Act deals with this issue. The section states that, "References in any other enactment to the "Social Welfare Acts" means this Act and every enactment which is to be construed together with it as one".
I understand the motivation behind this amendment and sympathise with its spirit. We should not continually try to update legislation but consolidate it when there are changes every year. This can be very confusing, not least for practitioners. Does the Minister have any plans for a consolidation Act in the near future? Will this form part of his brief before he leaves office in the relatively near future? Will he put plans in place to allow for a consolidation Act in the relatively near future? It would satisfy members if we knew that such plans were under way.
One of the disappointing aspects of the current Dáil session is that key legislation is being pushed through in a few days. Whips might be involved but, for example, almost every Deputy would wish to contribute to the debate on the Finance Bill and the Social Welfare Bill because we are dealing with difficult related issues on a daily basis. We all have different ideas but only a few spokespersons had the chance to speak on Second Stage. It is unsatisfactory that two major Bills are being processed on a tight schedule.
When considering the Bill before us one has to refer back to earlier years and it is quite confusing. The Minister, Deputy McCreevy, introduced a consolidation Bill to try to bring things together in one Bill. I support Deputy O'Keeffe's comment that there is an onus on the Department of Social, Community and Family Affairs to do the same and to simplify procedures for the 1.5 million people who depend on the Department for their basic livelihood.
This amendment is not necessary but the Department has plans to start work on consolidation legislation. Government Deputies would also have liked to contribute more to the Finance and Social Welfare Bills as there are so many good aspects to them that we would like to discuss and sing from the rooftops.
The Minister did not mention the other provisions in the Bills.
An Opposition Deputy told me that this year's Social Welfare Bill was pushed through quickly on the basis that it was dealing with so many anomalies which the Opposition did not want to discuss.
The Minister can dream on.
The format for tabling amendments is cumbersome in that one must call for reports to be laid before the Oireachtas because we are not allowed to say what we would do or give the rates we would have introduced, for example, a £10 increase in UA from the first week in May. We are unhappy with the Bill but in accordance with parliamentary procedure one cannot put alternative policies forward because one would be ruled out of order by the Ceann Comhairle. That is why we have to go through this weird legal dance to try to address the points we feel need attention. I am glad to hear that consolidation legislation is on the way as we owe it to everyone to have the simplest possible social welfare system. I commend the Minister on this move and welcome the plans for such legislation.
I thank Deputies for their contributions. I understand the difficulties of being in Opposition but I also understand its luxuries. Deputy Broughan states that he would like to introduce a £10 increase in long-term UA but his party's record in Government was not particularly edifying.
We might get a chance some day.
The committee held a session before the budget at which members put forward their views. I cannot remember whether that was the Deputy's view at the time but it does not matter at this stage.
It was and you were very irate and exasperated, Chairman.
Amendment, by leave, withdrawn.
I move amendment No. 3:
In page 5, between lines 13 and 14, to insert the following subsection:
"(3) The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the rationale for the differing commencement dates of social welfare and tax aspects of the annual budget.".
The purpose of this amendment is to raise the issue of having the same date for the payment of social welfare increases and changes in taxation, namely 6 April. There is an improvement in the Bill in that the changes will now take place on 1 May. However, in light of the funds available I cannot understand why a decision was not made to implement both at the same time this year and bring the payment increases forward to April.
We have discussed the way in which the amendment is framed. It is drafted to require the Minister to bring a report before the Dáil. This approach is forced on us because we cannot provide that the increases in social welfare be brought forward by way of an amendment because it would be ruled out of order, as has happened to a number of my amendments.
The amendment raises the issue of increases in social welfare being paid at the same time as changes take place in taxation. It could be done this year but the Government has taken a calculated decision not to do it, although there is ample money for such a move. I know in advance that the Minister will pat himself on the back and tell us that he is doing a great job. He will talk about improvements but there should be improvements when such a vast amount of money is available to the Exchequer, principally, many would say, as a consequence of the sound economic decisions of the previous Government. The money is there.
Why is the Minister not treating those on social welfare the same as those people who are paying tax? Why, if someone gets a reduction in his tax in April, does someone on social welfare not get the increase at the same time? Who is in greater need? It is not an auction but those on social welfare are in equal need to those whose tax situation is improving.
Leaving aside the justifications the Minister will advance, this should have been done this year. The money is there and the Minister has the opportunity to do it if he can get his more hard-hearted colleagues in Cabinet to agree. It is a simple measure and the Minister should do it.
Deputy O'Keeffe has made a sound argument for tax and welfare changes taking place in the first working week of April. There is no rational argument against the changes taking place at one time. This Government presides over huge gross national product figures. Everyone is pleased that we have started to move the date for the changes to social welfare from July to May. It is welcome but there is still a fundamental inequity in the system between workers and those dependent on social welfare. It is unjust. CORI made that point in its assessment of the budget. Why did it not happen this year?
The Minister told us at Question Time last week that he could have done it this year for an extra £20 million. He could have brought about equity in the year 2000 and made an advance. Instead people on social welfare have to wait until May for the basic increases in benefit and assistance. It is deplorable that we did not decide to end this injustice.
Some basic social welfare benefit increases for children are also paid later in the year. Child benefit increases will not come into effect until 1 September 2000. The Minister told us at Question Time last week that this is because children return to school then. Often, however, the key benefit applies to young children, particularly those under five years of age who are not at school. There is no reason this important aspect of a family's income could not be brought forward to the start of April.
Other key elements of the Bill, such as the new capital assessments, will only come into operation towards the end of the year. For the past two years the Opposition has made a strong case for carer's benefit. We welcome the fact that the Minister has acceded to this and is introducing it, but he says that carers' benefit can only be brought forward with the backing of the Minister for Enterprise, Trade and Employment. It is only when she agrees that people's jobs will not be interfered with that it can be introduced. There is a qualification to the scheme in the Bill. Amendments have been tabled by the Opposition in this regard because carers' benefit and other such schemes are targeted for October 2000. A significant proportion of the Bill is destined for introduction later in the year.
In reply to the first of the Minister for Finance's five budgets this year, we estimated that the whole package was worth £132 million net. The Minister in his speech trumpets the fact that he has introduced a package worth £400 million. That is extremely misleading because the main benefit changes do not take place until May, with the important subsidiary changes only taking place in September and October. Before Christmas I estimated the package to be worth £132 million net, a tiny increase in an economy worth e100 billion this year. The catastrophic decrease in the social welfare spend relative to GDP will be a significant issue in the next election.
The Minister, Deputy McCreevy, brought forward a package worth £46 million for capital acquisitions tax. For less than half this sum, this cruel Government is not prepared to move forward another month to bring about fundamental justice and equity to the social welfare and tax systems.
I listened to the Deputy's comments with interest. When Fianna Fáil was in Opposition, it tackled the then Minister, Deputy De Rossa, on the same issue. The increases were received in July. He was able to give an excuse for that. I pay tribute to the Minister for bringing payments forward to May and for his aim to have the payments in place in conjunction with the tax year on 5 April. I hope that will happen next year.
Rent increases apply from 1 January, eroding people's incomes between January and time they receive the social welfare increases. I hope a stage will be reached in the future when all social welfare increases will be implemented on 5 April, instead of the Department of the Environment and Local Government imposing increases on 1 January and the Department of Finance cutting tax in April. There should be some continuity whereby all increases would be implemented at the same time. In some cases, people's rent might increase by up to £3 or £4 but they will not receive their social welfare increases until May this year. I compliment the Minister on recognising the need to bring payments forward and I look forward to them being brought forward to 5 April as soon as possible.
I recognise that the Minister has brought the payment dates forward. A couple earning £51,000 per year will receive a tax benefit of £50 per week from 5 April whereas a person in receipt of a disability allowance will receive an increase of £4 per week from May. We must realise that some people are receiving little or no benefit from the booming economy. The price of cigarettes increased in December. While we should encourage people not to smoke, the reality is that some social welfare recipients continue to smoke. Rent increases took effect from 1 January. Old age pensioners and others also have to pay for the national car test and bear the costs associated with it. Oil prices have also increased. The Minister had the opportunity to take account of all these issues and could alleviate some of the problems by bringing forward the payment dates.
We all thought that £20 million was a lot of money until the Taoiseach announced that a national stadium would be built at a cost of £230 million to Irish taxpayers. The final figure will probably be closer to £500 million. It is very difficult to tell people in receipt of social welfare, who do not have any other means, that they must wait their turn while funds are available to other people at the drop of a hat.
The issue of payment dates is a hardy annual. However, I received very few queries about them this year, possibly because people recognise that the Minister has brought the date forward by five weeks. Is it the Minister's intention or is it a firm commitment to bring the date forward to 6 April next year?
The Government made an enlightened decision to build a national stadium and I hope the Opposition will not use that decision as fodder, saying that the money should have been spent elsewhere, particularly given the fact that a member of Deputy Crawford's party has agreed to be a trustee on the board of the national stadium.
He may not have to travel the roads of Monaghan.
Fine Gael has agreed to the idea of a national stadium and the Deputy should be careful about the comments he makes.
The question of payment dates has been an issue in recent decades. Previous Governments of all hues pushed back the payment dates in times of recession in an attempt to manage the envelopes of money they had at their disposal. When I took office, the payments in the first year were made in 29 weeks. That was the best the outgoing Government could achieve. In budget year, people received payments for 29 out of 52 weeks. For the past two budgets, payments in the budget year were being made for 31 out of 52 weeks. In this budget, we are increasing the figure to 35 weeks and we will increase it even further next year by bringing payment dates forward to 5 April. I have brought payments forward by a total of six weeks during my tenure in office and will bring them forward to 5 April next year.
I understand that Opposition Members must make political points but it was a Labour Party Minister for Finance who changed the budget date from late February to early December without making any compensatory measures in regard to social welfare recipients. Opposition Members might say he did not have the money at his disposal but, relatively speaking, he had. Nevertheless, he pushed payments back in the full knowledge that that would cause difficulty to social welfare recipients whose increases were announced in December but were not received until late June. We have now brought them forward to May and will bring them forward further to April next year. That is how we intend to proceed. We are bringing the payment dates forward by four weeks this year at a cost of £20 million and will do whatever must be done to bring them forward to April next year.
As I anticipated, the Minister reached into the record books and quoted statistics on what happened in the past. There are two issues which he has not addressed. First, we have never before had such a surplus of funds in the Exchequer so he should not compare the position which obtains in the current year with what happened five, ten or 20 years' ago. Second, and most important, in spite of the wealth and benefits which our Celtic tiger economy has generated, there remains substantial poverty in society. That poverty could in some instances be relieved by bringing forward the payment dates for these increases. I have not received an explanation from the Minister, aside from his self-congratulatory pats on the back, of his actions. I congratulate him on what he has done. However, at the risk of sounding like Oliver Twist, I want more.
I do not see why, when there is poverty in our society and there are funds available, we cannot tackle that poverty more effectively. That is why I tabled this amendment. The Minister has not done enough. The £20 million will become a figure in a line somewhere, a surplus in some fund or other. It will be inconsequential in the context of the surpluses available.
It is an accepted fact that many poorer people are in receipt of social welfare payments and that some of them depend totally on those payments. They look forward to the small increases, even if it is only £4 a week - that means more to a person who is poor than to someone who has it in loose change in their pockets. Everyone has a duty and responsibility to do what they can to relieve poverty. We are not doing enough in this regard. We have the lowest rate of child support in Europe and even the small increase will not take effect until September.
The choice between spending money on building a national stadium or on social welfare is not the issue. The choice is between a larger surplus at the end of the year or marginally less because more is done to relieve poverty. In this regard, the Government has failed. I will record my disapproval of the Government's attitude by asking for a voice vote.
I support Deputy O'Keeffe. If I remember correctly, the Taoiseach, when he was Minister for Finance, suggested the budget should be in November and December and should apply to the following year. Deputy Browne was right that the understanding was that the social welfare system would move in tandem and there would be a calendar year approach. We seem to be copying the British who were taking this approach but now seem to be having a number of budgets each year. The fundamental point remains that, with the thriving economy, the Minister for Social, Community and Family Affairs had an opportunity to end this injustice on 6 April and to bring key benefits and assistance schemes into line with the taxation changes. The major gains made by taxpayers, for example regarding 20% capital tax, are out of line with the manner in which social welfare recipients are still waiting under this Government. I hope a general election will not intervene and that the Minister will be able to achieve his objective of co-ordinating these payments in April. I hope this promise will not come back to haunt him. We urged the Minister and the Minister for Finance to bring the system into line. However, this did not happen and for that reason I will also insist on a voice vote.
I support the amendment. This will be a once-off cost which has a beneficial effect in the following year. The delayed payment was introduced at a time when resources were scarce, which was understandable. It was not agreeable to all but that is its origin. I am tired of hearing comparisons between now and the past. There is no excuse for postponing the proposal in the amendment. We are not comparing like with like.
It is a simple measure to introduce a system whereby people will receive their benefits at an earlier and agreed date. It will be a once-off cost. It would also be beneficial in rationalising the date for the introduction of changes. This would also be an advantage in terms of departmental planning. I do not accept this cannot be done - the resources are there. We have been regularly told that it is was not possible to quantify the full extent of available resources. It is reasonable to ask the Minister to accept this amendment. There is no reason for postponing the proposal. We can all talk about what was available and what was not done by various people in the past. Thatwill not solve the problem. We would be better off to use the resources as they are available to us and deal with the issues as they present themselves.
Deputy Durkan is forgetting he was in the Department only two-and-a-half years ago.
The Deputy has a good memory.
I compliment the Minister on increasing payments in the short time since he took office, over two and a half years ago. Did the Department have any money? It seems not from the way others are crying. I compliment the Minister on the savings he has made and the reduction in the number on the live register. No other Minister or Government took the bull by the horns as this Minister and this Government have.
There was money in the Department when I took office. There was one room filled with computers which intrigued me and which Deputy Durkan might remember. I asked what it was for and I was told they were back-up for a certain cabal which I removed in one of my first decisions. An advisory committee of about five party hacks occupied the office at the behest of my predecessor. I saved the Department about £190,000 per year by that decision. I also dispensed with the programme manager.
The Minister did not mention the £1.7 million spent in 1999 on constituency advisers.
I do not know what the Deputy is referring to.
The cost of constituency offices.
The cost of running my constituency office is high. I make no bones about it because I am an extremely good constituency representative.
Why should the taxpayer cover the cost of it?
I would hazard a guess that I have saved the taxpayer a few quid.
The Minister is spending it in his constituency.
Before I took office, there was a Minister and Minister of State at the Department with many more civil servants taking care of constituency work. Deputy Broughan referred to the possibility of an intervening election. In the highly unlikely event of my party not being in Government after the next election - I think the public hope we will still be in office because it is a guarantee that the four weeks extra——
What about the tribunals?
God help the Deputy if he is relying on tribunals. The number of weeks required to bring it back to 5 April will be given as promised. The surplus is continually referred to and it is true that there is one. However, this Government, unlike some of its predecessors, will not be imprudent with taxpayers' money. Everybody would like to pay as much as possible. We will do that but we must do it in a balanced way and not be imprudent.
Deputy Durkan says we should think of today and not the past. However, we must think of tomorrow. A prudent Government must take into account the fact that it is not long since this economy was in severe difficulty and that it is possible it could turn around again as quickly. We must be conscious of that and be prudent. In the social welfare area we have made immeasurable changes in the past three budgets.
Deputy Broughan castigates me because the level of social welfare spend has dropped. A question that is often asked is, what is the difference between Fianna Fáil and other parties? The difference between Fianna Fáil and Labour in this respect, and no doubt the same applies to Fine Gael, is that it is with a sense of pride that Fianna Fáil comes into Government and operates it in such a way that fewer people are relying on social welfare and more people are in jobs. It is not a badge of disgrace that less is being spent on social welfare. It is a badge of honour. We are redirecting the social welfare resources to those who cannot compete in the economy and, from that point of view, I make no apologies for that.
I wish to record my disapproval of this Government and the Minister's reply.
Amendment put and declared lost.
I move amendment No. 4:
In page 5, between lines 13 and 14, to insert the following subsection:
"(3) The Minister shall not later than 6 months after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the measures required to close the differential between the rates of periodical benefits and rates of periodical social assistance paid to a beneficiary and the rates paid to a qualified adult.".
This amendment relates to a fundamental unsatisfactory aspect of the social welfare system and the failure of the Minister to take decisive action on it. In the case of important basic payments such as unemployment assistance, which is rising to £77.50 in a month or two, the qualified adult allowance will only rise to £47. Effectively, we are still saying to an adult dependant of a recipient of long-term unemployment assistance that she, occasionally he, will have to live on £47 per week, which is approximately 15% of the average industrial wage.
It is a derisory amount of money to offer anybody. The same applies to supplementary welfare increases such as pre-retirement disability allowance which will increase from £43.20 to £47 and blind person's dependant allowance, under 66, which will rise to £47 per week. Non-contributory old age pensions will increase to £51.70, which is a small amount of money on which to expect an adult to live. The Minister has done a little better with regard to contributory pensions, particularly the old age pensions where the amounts reach £60.20 and £64.60.
Nonetheless, the column of figures first presented in the budget and which will become operative under this Bill represent a derisory, if not shameful, amount of money to offer an adult. The CORI responded to the budget. A key element of the work of CORI and that of Fr. Sean Healy's over the years in this area, which is important nationally, has been to ask Governments to move to the 70% dependant allowance ratio. In other words, it asked that every social welfare recipient should be brought up to the 70% band this year. The Minister told the House that he is working towards this over three years, which effectively means he will do it in conjunction with the Programme for Prosperity and Fairness. The fact remains that in three years time it will still be a relatively small amount.
This issue is also related to the concept of individualisation. Many groups such as the Share the Wealth Campaign, Combat Poverty and CORI have pointed out that we need to look at full individualisation of social welfare payments or movement towards that at the earliest possible date. Instead, what we got in the budget was an unexpected and major step towards individualisation of taxation, something which was hardly discussed in public. In the area which was discussed, however, nothing was done. The Minister took a baby step towards introducing 70% allowances over three years.
The Minister has tabled major amendments in relation to other agencies, the use of social welfare numbers and so forth. In general terms we should aim towards a position where we will be able to treat every social welfare recipient and dependant as single individuals and not insult them by saying that one of them can live on £47 per week. That is unfair.
This is also relevant to the child allowances, which my Fine Gael colleagues have highlighted repeatedly in previous discussions, and the fact that they have been retained. However, the key issue is the qualified adult allowance. If one looks at areas of deprivation in this city and throughout the country, particularly the 25 areas referred to in the programme, one will find tens of thousands of women whose income, provided by the Minister, is the princely sum of £47. I ask the Minister to look at this again and to bring forward a reasonable programme on individualisation instead of talking about it at Question Time. In the Bill he has taken a small step towards the target of 70%. I urge him to accept the amendment.
The basic question we must address is, how much is a woman worth? Essentially we are talking about the amount of support we give women who are directly and indirectly dependent on social welfare. For too long we have accepted a far too low amount. Where there is a shortage of money any Minister could plead justification but now we must adopt a different approach.
I accept that the amount of £47 for a qualified adult dependant is too low. In 85% to 90% of cases the qualified adult is a woman. They are the people for whom such allowances are paid. We will hear from the Minister about the progress being made, but is it enough? We need not get into the technical and political argument about individualisation. There were divided views on that in the report. Even if we do not go fully for individualisation, there was clearly a recommendation that the figure should go up to 70% of the personal allowance. CORI, which provided a very detailed analysis of the budget, has rightly focused on that issue. If we agree on 70% as the minimum, why is it not being implemented?
The Minister may argue that two can live as cheaply as one. There may be some savings. However, most people would agree that the miserable rate that has been paid in the past to women who are being given the qualified adult dependant allowance is not acceptable today. That is why I strongly support the amendment. The Minister has an opportunity to rethink the matter. Let him do the decent thing and, out of the surplus moneys available, at least pay 70%.
In an ideal world everybody would wish for individual social welfare payments. Historically, no matter what Government was in office, payments have been made on the basis of a percentage of the full payment where a person did not qualify in their own right. That was because the economies of scale in a household where there were a number of people allowed overall income to be treated in a particular way. That has always been the case.
The Commission on Social Welfare had reported on this before I took office. My predecessor endeavoured to increase payments to the recommended rate of 60% and we achieved that. The working group which was set up to examine the treatment of married, co-habiting and one-parent families under the tax and social welfare code reported only last August. It recommended increasing the rate to 70%. In the Budget Statement in December the Government indicated it would do that over a three-year period. CORI was one of the social partners involved in negotiating the Programme for Prosperity and Fairness and it agreed with the timescale of three years. We are doing what was agreed between the social partners and we had targeted to do that even before the agreement was reached.
The broader issue of individualisation was discussed at the partnership talks. There are moves to set up working groups to look at that issue. We are not, in effect, taking baby steps as Deputy Broughan said. The steps have been agreed with the social partners and the Government is going along with that view. With every other Member of the House, I hope that ultimately there will be individualisation of payments. One of the reasons for individualising payments relates to the issue of entitlement to pensions for women who have taken time out from work to stay at home. They should have a payment in their own right when they reach pension age. From that point of view we are taking major steps, but we are moving slowly because that is what all the interested authorities in this area believe we should do.
I do not know whether the steps the Minister is taking are great or small, but the time has come to take bold steps in this area. When I was Minister of State at the Department I felt, and have felt since, that the time had come to address a number of anomalies and traps that have developed over the years. What is referred to in this amendment is one of them. I can understand how the problem arose. For the best reasons, every Finance Bill and Social Welfare Bill incorporates amendments to what previously existed, and sometimes a consolidation Bill is brought in. Invariably a number of gaps appear in the system and people are clearly discriminated against. Depending on their circumstances it can be horrendous for the people who are thus affected.
A classic example is that of a man on pre-retirement allowance whose wife, being a couple of years older, qualifies for old age pension. The usual situation is reversed and he gets the qualified dependant's allowance and is deeply offended because he feels it is an attempt by the system to take away from him something he has worked hard for over a number of years, although he may be only two or three years away from qualifying himself. A series of anomalies have arisen from the ongoing evolution of social welfare law. It is not the fault of Ministers. Some people refer to it as the bandage or Elastoplast syndrome because improvements are made on an annual basis until the original is no longer visible.
The Minister does not need a report in order to do something about the anomaly in question. He can just decide to do it, knowing justice is on his side when he addresses anomalies that have developed over the years. It is easy to identify them and that should be a primary objective, given the present climate. I am not making a political point, although I am not above doing that, but never before in the history of the State were such resources available. Those are not my words but the Minister's. Lest anybody start taking bows on the basis of the magnitude of the Social Welfare Bill, it was probably the most delayed legislation to come to the Houses of Parliament in my time in public life given that it appeared as a tiny blip after the budget, then developed into something larger and suddenly became a much bigger Bill than was originally intended. It has even been suggested that next year's Social Welfare Bill will be an addendum to this Bill.
I do not object to people dreaming, but we should be realistic. The Bill is in its present form as a result of a violent public reaction to the budget. It is no credit to anybody, other than the public, women in particular, who reacted in such violent fashion when they saw what was proposed in the budget and anticipated what would be in the Social Welfare Bill. Before anybody starts to praise themselves, that is where the inspiration came from, from the public and from the Opposition in the House.
If the Minister had moved towards 70% this year, as many interest groups felt he would, he would already have been at £54.25 for long-term assistance and £60 for non-contributory old age pensions. He had scope to do something this year, given the resources at his disposal, but he did not do so.
At the RDS on Saturday the Minister told one of the focus groups in which the Fianna Fáil organisation puts its trust that his short-term aim was to introduce a pension of £150 a week. He knows that a reasonable payment might be £100 or £105 for dependent allowances, yet he has not reached half that figure. There is a huge gap between the late night rhetoric at the Fianna Fáil Ard-Fheis and the cold hard reality in this room today.
It was a good night.
The caring Minister suddenly becomes a harsh and relentless administrator who refuses to budge on this issue.
The Minister was thinking about the end of our next term in Government. The Commission on Social Welfare mentioned 60% and the Minister mentioned 70%. Deputy Jim O'Keeffe made the point that two can live cheaper than one. Has any independent body suggested what the figure should be?
I referred earlier to the working group which reported in August. Deputy Broughan said there was little public discussion about individualisation. However, it was fully discussed in that document for anyone who cared to read it. I published it last August but the media was not interested in it then. It examined the treatment of married, co-habiting and one parent families under the tax and social welfare codes. That proposed, on foot of research on equivalent scales undertaken by the ESRI for the group, that the qualified adult allowance should be increased to 70% of the personal rate.
Yesterday both CORI and the INOU, to which the Deputy constantly refers, exhorted their members to support the Programme for Prosperity and Fairness. All these issues are in the programme. Nothing was changed in this area as a result of the public's misunderstanding of individualisation.
There was no misunderstanding.
The Deputy should look at the polls.
It is a new dimension if the Minister is relying on polls to do the work of Government.
The Deputy thought the Government would fall as a result of that issue.
Polls only indicate the temperature at a particular time. The Minister should ask the five men he criticised earlier to go into a little office and give him back up because he will need it if he relies on polls.
I would not be so bold as to use some of my cronies.
Amendment put and declared lost.
Amendments Nos. 5 and 8 are related and both may be discussed together by agreement.
I move amendment No. 5:
In page 5, between lines 13 and 14, to insert the following subsection:
"(3) The Minister shall prepare and lay before both Houses of the Oireachtas a statement on the increase in the Consumer Price Index for the period of 1 January 2000 to 31 December 2000, within seven days of the publication of the relevant figures by the Central Statistics Office, and the statement shall compare the increase in the rates specified in Schedule A and Schedule B over the rates specified in the Social Welfare Act, 1999, in percentage terms with the increase in the Consumer Price Index for the said period.".
A similar amendment was tabled a number of years ago by one of the Minister's colleagues when my party was in Government. It relates to the importance of looking at increases in social welfare or low pay rates in the context of inflation. Many people are disappointed with the social welfare changes because they feel the increases have been overtaken by rising inflation. The Minister had just said the range of social welfare increases was between 5.2% and 5.7% when a report was published by the Central Statistics Office which stated that inflation was running at 4.6%. It is unfair to the recipients of social welfare benefits and assistance to change social welfare rates without reference to rising inflation.
Since those figures were published we have heard reassuring noises from the Minister for Finance and the Taoiseach, who said at the recent Fianna Fáil Ard-Fheis that he would be happy if inflation was at 2.5%. The chief economist for Davy Stockbrokers shocked a few people the week before last when he talked about a possible 7% increase in services this year. We are seeing significant inflation whether it is at the petrol pumps, Superquinn or Tesco. We have yet to take into account inflating house prices.
Inflation is beginning to play a significant role in the economy. Many people believe this is the downside of joining the euro. It seems to suit the German economy where my sister party is in power with the Green Party. However, it does not suit our economy and it seems to cast a pall over this Bill in that the Minister is not giving any increases to the 1.5 million people who depend on him for their basic income.
I appreciate the efforts made by our colleagues in the trade union movement and in the fourth pillar in negotiating the Programme for Prosperity and Fairness. Some of the best negotiators in the labour movement are in my party in the Dáil and they were not involved in the recent negotiations.
We will all be there.
That is one of the downsides of the current programme. As unionised workers are now assessing in detail the information sent to them by SIPTU and other trade unions, the Minister could face increases in basic pay of 5% or 5.5% and in tax relief of up to 30%. People on social welfare seem to be getting the rough end of the stick. This brings us neatly to amendment No. 8. We have been talking about this for years. The Minister mentioned one of the reports. I found the report on tax and social welfare very confusing in that it did not seem to give any firm guidelines to politicians and administrators. It consisted of many questions which we already knew.
I read in the PPF that a working group on this area is being proposed. However, there is a sense of urgency about this, which is why the Minister's party tabled this amendment a number of years ago when the Rainbow Coalition of my party, Fine Gael and the then Democratic Left were in power. They clearly saw the need to link social welfare increases to inflation.
We have had lengthy discussions on this and the committee met all the groups who put forward pre-budget submissions. As the Labour spokesperson I, with my colleagues, Deputies Shortall and Sean Ryan, met many of the same groups, such as Share the Wealth, the widows' association and the carers' association. Almost everybody wanted to link social welfare increases to some good benchmark.
It was suggested that it should be 50% of median income, which would have made the basic rate of £85.50 per week this year, instead of £77. Therefore, the current rate is well behind that benchmark suggested by INOU and Share the Wealth. References were also made to average household income and the average industrial wage, which seems to be close to £400 per week. Our colleagues are discussing this in another room at present. Young people are earning that kind of income, yet under the Bill people will earn less than a quarter of that benchmark.
The Minister has a responsibility to bring this before the Dáil at an early date, rather than just having various Departments talk to each other and then report to him, and to put this firmly into the legislative process. The Minister's next legislation is the pensions Bill, to which we are all looking forward.
The issue of benchmarking and giving people a decent increase higher than inflation is critical. It is particularly critical this year because the whole basis of the budget in relation to social welfare, particularly the Social Welfare Bill, seems to have evaporated. We seem to be left in a situation where the hundreds of thousands of families primarily dependent on social welfare payments may get no real increase this year. That is a terrible reflection on the performance of the Government. If we are to stay with the euro project, there is a double urgency on the Minister to bring this forward as soon as possible this year. The Opposition spokespersons are ready and waiting. I know the Chairman would be delighted to facilitate the Minister in this regard.
I asked the Minister three times at the last Question Time session in the House what he thinks the benchmark should be for basic social welfare payments. However, we have no benchmark at present and the social welfare budget is a shambles because of the serious level of inflation. This will touch us at every turn. The housing situation is frightening. I know another Minister, Deputy Dempsey, is responsible for that but it is turning into a very serious issue. I would like the Minister to seriously consider both these amendments.
It is quite clear that inflation is the enemy of the poor. There are people in this country who will gain if the inflation rate continues to escalate. Those people own property, large commercial undertakings or equity shares. Their position is improved by inflation. However, it is clear that the position of the poor is disimproved by inflation.
The Minister may say he was operating on the basis of figures given to him by the Department of Finance but that does not stand up. Some of the inflation is imported but some of it is a direct consequence of the Government's actions. I know the Government has no control over the increasing cost of oil or the value of the US dollar against the euro. I absolve it entirely from responsibility for any inflationary inputs from those quarters. However, I cannot absolve it from responsibility for the inputs for which it is directly responsible. I was amazed by the major contribution of cigarette prices to inflation.
Did the Deputy not know that?
No, I did not. I gave up smoking a long time ago.
Perhaps I was more aware of it because P. J. Carrolls is located in my home town.
Yes, it is on the Minister's doorstep. As someone who, like St. Paul when he reached Damascus, is now very anti-smoking, I applauded the increased taxation on cigarettes initially on the basis it would keep some poor unfortunates out of hospitals and coffins if they gave up smoking as a consequence. However, apparently it added 0.5% to the CPI. The Minister might ask whether, as an anti-smoker, I agree with that. However, the Government could have done both. It should be made more difficult for people to smoke cigarettes. If the price had to be increased, an equivalent amount could have been taken from other areas. That would be beneficial to the health of the nation and the CPI. I must point the finger at the Government in that regard. Many people who rely on social welfare payments smoke and were directly affected by those increases.
The biggest contributor to inflation is property. The Government has been largely helpless in this area. Many of the steps taken by the Government in relation to property have caused price increases, particularly for rented property. That is hitting the poor. A property owner's position is improved if property prices increase. Anyone who keeps in touch with property prices will know how much students and others are paying in rent, which has increased about 100% over the past four or five years. I must again point the finger directly at the Government in relation to its inability to control the domestic contributors to inflation.
I support Deputy Broughan's amendment. What good is £4 per week to somebody if it will be eaten up by inflation before they get it? To return to my favourite refrain - I suppose the Minister is tired of me talking about children - what good is an extra £2 per week in child benefit, which everybody accepts is the main way of tackling child poverty, when it will be wiped out by inflation by the time they get it in September or October?
The Government has put the economic gains of the country at risk by its inability to cope with the inflationary aspects of the economy. It has put an additional burden on the poor as a direct consequence of that failure. For that reason, there is an even greater onus on the Government to be aware of the damage it is causing and the extra burden it is imposing on the poor as a consequence of that approach. That is why I support Deputy Broughan on these amendments and, in particular, the first amendment which should bring home to the Government how little it is doing. Funds that are destined for the poor are being eaten up by inflation before they reach them.
I support the amendment. The Minister must put down a benchmark that gives some idea to the long-term unemployed on what basis their social welfare is granted. Yesterday, I received a phone call from an irate person on a very low income. The parent of this person is in a home for the elderly and the costs involved have risen from £230 to £286 per week, an increase of 24.5%. While I know that is the concern of another Minister, there was no increase in the budget in subvention levels and the old age pension only rose by £7 per week. Therefore, that family will have to meet a differential of almost £50 per week. This will mean an increase in the cost of living for that family, regardless of whether it is classified as inflation. The major Exchequer surplus did not happen by accident. Many people who are now on social welfare are the ones who worked hardest. Their families often had to leave home to find jobs elsewhere.
We are very good at quoting historical figures, but few people want to remember that as recently as 1987, 40,000 people had to leave these shores. Many of their fathers and mothers are now on old age pensions. Thankfully, many of their children have now returned and can help to look after their parents. Unlike any of his predecessors, the Minister has an opportunity to recognise those on old age pensions, disability or invalidity benefit and give them reasonable increases at a time when inflation is running rampant. One only has to look at an old house in a country village that a few years ago could not be given away. Now, however, such a building is making £45,000 or £50,000 from speculators who want to demolish the house and develop the site. There is no way the elderly can cope with that.
This morning I learned of an elderly person who has been waiting ten years for a toilet to be provided. The toilet was installed two years ago but there is still no septic tank. We will be judged on how we care for the elderly.
My speaking note illustrates the difficulties in this area. Deputy Broughan said that my party had tabled a similar amendment when it was in opposition. He did not add that his party, when in Government, voted down the same amendment. The consumer price index is published on a monthly basis by the Central Statistics Office. The CPI report is based around four weeks after the date to which it refers. The report sets out in a clear and concise fashion the rate of inflation for the month in question and the inflation rate. Given that the CPI is readily available to Deputies and to the public through a high quality publication from the State body responsible for the production of statistics, I see no reason that I should issue a separate statement on the matter.
The recently published monthly CSO report on the consumer price index highlights that over the whole of 1999, prices increased on average by 1.6%. I can well recall the Opposition spokesperson, who at that stage was Deputy De Rossa, making public statements early in 1999 to the effect that inflation last year would be 6%. It turned out, however, to be 1.6%.
Deputy O'Keeffe referred to the fact that the Department of Finance's figures do not stand up. Last year the budget was framed on the basis of a 2% inflation rate while, as I said, it was 1.6%. In effect, it was to the advantage of social welfare recipients in that they got an even greater increase than was anticipated when the budget was framed, so they won.
We are talking about 2000.
We can come to that. I am making the point that instead of a 2% inflation rate, as was estimated by the Department of Finance last year, it was 1.6% over the period, despite what Deputy De Rossa said. Social welfare rates were increased by 4% and 8.3% from the beginning of June 1999. This means these increases were well ahead of the average annual inflation rate for the year and represented real increases of between 2.4% and 6.6% at the highest scale. Among the significant features of the Bill was a £7 increase for pensioners, which was brought forward by four weeks. The £7 increase represents increases ranging from 7.9% to 8.9%, while the £4 rise represents an increase ranging from 5.2% to 5.6%.
In his budget speech, the Minister for Finance indicated that taking account of various measures which he was introducing in the budget, the annual inflation rate for 2000 is expected to be 3%. Therefore, this year's increases are well ahead of expected inflation, representing real increases ranging from 2.1% to 5.7%.
In addition, we have given special increases in the QAAs which were referred to previously. We said we would bring them up to 70% over three budgets. The increases range between 7.7% and 17.2% representing real increases of between 4.6% and 13.8%.
Deputy Broughan referred to the issue of benchmarking and asked what my benchmark is. The benchmark for old age pensioners was set by my party before we came to office - it is set at £100 by the year 2002. This year we are already at £96. In effect, we will achieve the figure previously referred to and, indeed, we are not even satisfied with that. In the review of our programme, we have indicated that we will accelerate that, as well as achieving a £100 figure for non-contributory old age pensioners by 2002.
As regards all the other payments, the benchmark which I adhere to is the one agreed under the Programme for Prosperity and Fairness, which is that we will work towards making substantial progress towards £100 over the period of that agreement. Those are the benchmarks as far as I am concerned.
As regards the various working groups the Deputy referred to, that is the way things are done. That is the way it has been agreed in the programme. A working group with an independent chairperson - not with anyone from my Department - will examine the issues of developing a benchmark for adequacy of adult and child social welfare payments, including the implications of adopting a specific approach to the ongoing uprating or indexation of payments. As Deputies are aware, the programme still has to be ratified. It is intended that once it is ratified we will consult with the social partners on the composition of this working group, including the appointment of the independent chairperson. While the formal terms of reference of this working group have not yet been agreed, the issues to be covered by the group are set out in the programme. These include relative income poverty as well as long-term economic, budgetary, PRSI, distributive and incentive issues. These are highly complex issues which need careful study. The benchmark we have set politically are the two figures I indicated earlier. It would, therefore, be inappropriate for me to prepare a separate report on this topic before the deliberations of the working group.
On the question of the indexation of the budgets, Deputy Broughan referred to an inflation rate of 4.6%. The January figure was 4%. It is expected that the rate may increase slightly in the coming months but that overall it will taper out at 3%. The Department of Finance is usually regarded as reasonably conservative——
What about Frankfurt?
The Deputy is falling into the same trap as Deputy De Rossa did last year when he forecast a rate of between 6% and 7%. It turned out to be 1.6%, even less than the rate anticipated by the Department of Finance. Ultimately, it is about money in people's pockets. Just five years ago the increase in the CPI was 2.5% while the budget increase was 2.5%, which meant there was no real increase in benefits. In 1996, only four years ago, the real increase amounted to 1.4% while in 1997 it ranged from between 2.5% and 3.2%. Last year it ranged from 2.7% to 5.5%, by far the highest. The previous year it ranged from 2% to 3.9%. This year it is expected that it will range from between 2.3% and 4.8%. Even if there is a slippage on the figure of 3% there still will be a real increase for people.
A dramatic outturn in the rate of inflation at the end of the year will be taken into account in the budget for the following year, as has always been the case. Over a long period, however, people have generally done better than the forecasts indicated. Our record in Government speaks for itself and I am proud to stand over it. Increases in social welfare payments have been well ahead of the expected rate of inflation on each of the occasions increases have been implemented and I have no doubt it will be the same this year.
I caution members of the committee not to talk up inflation. We considered Deputy De Rossa to have been irresponsible to make statements about the rate of inflation at the beginning of last year when nobody had proper information on which to base a forecast, especially an Opposition Deputy who would not have had the necessary figures to make a judgment. By contrast, the Department of Finance has such figures and the inflation rate for last year was lower than it had forecast.
There is an indication of slippage at present.
The Minister's benchmarks are not benchmarks. A benchmark must relate to another figure.
They are political benchmarks.
The seniors' parliament, the senior people's group within the ICTU, sought an increase of 34%, rising to 40%, of the average industrial wage. That is a benchmark and it is well above £100 per week. The group probably met the Minister in the same way it met us. It means he has not achieved the benchmark, even in relation to senior citizens.
On 6 October last year the Minister said there were fundamental problems with methodological issues which had to be dealt with. He said there was no readily available index of average household incomes as there is, for example, on inflation and average industrial earnings. It is his responsibility to ensure that the CSO or whoever establishes such an index so that we will have fundamental benchmarks against which social welfare payments can be measured. It is not good enough to stipulate a figure without reference to what the rest of the population is earning. I recently met a 21 year-old steel fixer who is earning more than £400 per week. If his wages were to be used as a benchmark it would mean that these increases would be less than a quarter. In that contextthey amount to a very poor reward for many people.
I do not wish to question the Minister's reliance on the figures and projections, but I recall that not too long ago there was a dispute between the Department of Finance and the NTMA on the question of projections. On Second Stage I raised the issue of the value of increases proposed in October, November and December but which are only now coming before the public. The big difference between 1995-96 and now is that inflation was falling then.
The Minister should not admonish us for raising the matter of inflation. The Government has a serious responsibility to address the indicators as they appear. The fundamentals of the economy are the responsibility of the Government and the Opposition. It is wrong to suggest to the Opposition that the mention of inflation could exacerbate matters. It is a problem and it needs to be addressed.
Amendment put and declared lost.
Section 1, as amended, agreed to.
Sitting suspended at 4.15 p.m. and resumed at 5.10 p.m.
NEW SECTION.
I move amendment No. 6:
In page 5, before section 2, to insert the following new section:
"2.-Not less frequently than every 3 months commencing on the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas areport on any provisions of the Social Wel-fare Acts which are not yet in force, and the plans, if any, for bringing such provisions into force.".
This is a short amendment like the one my colleague, Deputy Moynihan-Cronin, tabled to the Minister's first Social Welfare Bill. It relates to her deep concerns about the fact that so much of the Social Welfare Bill is implemented by regulation. She felt that there was a need for a basic report on how the Acts are bring implemented. We discussed consolidation in regard to an earlier amendment. It is particularly relevant to measures which the Minister has not yet brought into force.
Implementation of the provisions of all sections of the Social Welfare Act, 1999, has been commenced. There are a number of provisions of earlier Social Welfare Acts, which I can outline, in respect of which commencement orders have not been made. First, the actuarial reviews of section 17 of the Social Welfare Act, 1997, will be commenced later this year. Second, regarding a new sickness allowance scheme in Part IV of the Social Welfare Act, 1997, the overall purpose of this allowance scheme will be reviewed this year as part of the review of the income maintenance for people with illness and disability. All those who would have qualified for sickness allowance are currently being catered for through other payments such as the supplementary welfare allowance, in other words, they would not be losing out. Third, section 26(1)(b) of the Social Welfare Act, 1997, relates to regulatory powers to prescribe the provisions relating to benefit and privilege in the context of means assessment. The relevant regulations will be introduced this year.
Fourth, section 10(4) of the Social Welfare Act (No. 2), 1995, provides for regulatory powers under which a divorced person may receive a qualified adult allowance in respect of more than one person. Fifth, section 22 of the Social Welfare Act, 1995, provides regulatory powers designed to standardise the arrangements applying to various social welfare schemes in relation to an absence from the State. It is planned to introduce the relevant regulations later this year. Lastly, section 20 of the Social Welfare Act, 1994, provides for the integration of occupational injuries benefit and unemployment supplements payable under the benefits scheme with disability benefit. The overall role of the occupational benefit scheme will be included in the review of the sickness and disabilities schemes taking place this year. Decisions on the implementation of thissection will be taken in the light of the findings of this review.
Are these the only provisions involved?
Yes. The Department is well up to date.
Amendment, by leave, withdrawn.
Sections 2 and 3 agreed to.
NEW SECTIONS.
I move amendment No. 7:
In page 6, before section 4, but in Part II, to insert the following new section:
"4.-The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the social welfare situation of persons resident in Ireland who are in receipt of pensions under the social security legislation of any other jurisdiction.".
This amendment relates to the ongoing concerns of my colleague, Deputy Seán Ryan, the Labour Party spokesperson on senior citizens and families where people are retired. I am not sure to what extent the Minister met the concerns voiced last year about people who have a pension from Britain, such as a British Rail pension, who do not seem to qualify for the living alone allowance or the over 80 allowance although, obviously, they would qualify for all the free schemes. What is the current position regarding that concern?
During Question Time recently I inquired about the people to whom I refer, who returned home after ten or 15 years and who are in receipt of a British Rail pension. These people discovered that the relative strength of sterling against the punt impacted severely on the assessment of their means. The current major divergence in the currency market will not last forever but it may obtain for some time and, as a result, the people to whom I refer are receiving more money from England which has increased their purchasing power. However, they are suffering in relation to the assessment of their means for qualification for a number of the schemes. One of my colleagues tabled an appropriate question in the Dáil and I am not sure of the reply he received from the Minister. Those are our two major concerns in relation specifically to British pensions.
A number of retired people in my constituency in west Cork have encountered this problem. As Deputy Broughan stated, it mainly affects those on British pensions, whether these are British state or occupational pensions. I recently tabled a question on this issue in respect of the living alone allowance and I was informed that it does not apply in that situation even though other schemes apply.
If we encourage people, particularly citizens of other EU countries, to retire to Ireland, we should be prepared to treat them in the same way as we treat Irish citizens. If the level of pension they are paid is not greater than the pension payable here, I suggest there is a strong case for paying the top-up which applies, namely, the living alone allowance and the over 80 allowance. Without being in any way chauvinistic, many of these people have Irish connections or are Irish citizens who emigrated long ago and consequently retired to this country and they would not necessarily have Irish insurance records. Therefore, they would be solely dependent on payments from the countries, for example, the UK, to which they emigrated.
I would like the Minister to consider whether we should be more generous to these people if they retire to this country. There seems to be at least a prima facie case for payment to them of the living alone allowance and the over 80 allowance, where applicable. On that basis, the Minister should investigate what appears to be an anomaly.
The living alone allowance is an integral part of the Irish pension system and is designed to cover a specific contingency. As such, it has no applicability vis-à-vis pension payments made under the social security regimes of other EU member states or countries with which Ireland has bilateral agreements. This is fully in accordance with EU regulations which allow all member states to decide which benefits are granted and under what conditions. In effect, therefore, we are obliged to comply with EU regulations in respect of this matter and that governs which benefits are payable.
Deputy Broughan referred to a person in receipt of a British pension and the vagaries of the currency situation. There is no ongoing review of old age pensions. A review was carried out in the past year but the previous one took place in 1993. Reviews are not carried out frequently. People would be at an advantage at this stage in view of the strength of sterling against the punt. We were not sure what the amendment was designed to achieve but we thought that the question of the living alone allowance might refer to it.
I will withdraw the amendment.
Before Deputy Broughan does so, I ask the Minister to investigate this issue further. When I first read the amendment, I empathised immediately with the point it raises. I accept that we must comply with EU regulations but I am more concerned with the question of fairness. If the level of income of a person on a UK pension is not greater than that which applies in Ireland and if they choose to retire here, perhaps for family reasons, should they not be considered for additional payments such as the living alone allowance? I accept one must comply with the law although that is not the point. A considerable number of UK pensioners are living in Ireland.
I presume they would qualify for a non-contributory pension if they were getting less than that rate.
Yes, but if they were at the same level as the Irish pension, they would not qualify for the additional living alone allowance. I witnessed a specific case of someone who retired here and has been living near Kilcrohane for the past 20 years. That person is living alone, has no excessive means and is totally dependent on the UK pension. I ask the Minister to investigate the possibility of paying these top-up allowances, possibly subject to an income limit.
One of the changes I made this year was to allow free schemes to people over 75 years, irrespective of income and household composition.
Will they get the living alone allowance?
No. We will look at it again to get more information. However, our pension scheme is particular to this country and is not linked to other pension regimes.
There will be a convergence of social welfare treatment in the 15 states of the EU. Gordon Brown seems to be following our example regarding free schemes.
He is five years behind us.
Yes, but their child benefit is nearly twice the amount of ours. They are 25 years ahead of us in other ways.
I was a member of the British-Irish Interparliamentary Body for a number of years and we engaged consultants to carry out a comparison between North and South. It was obvious that, by and large, from a social welfare perspective, people in the Republic were better off. Regarding a convergence of member states, since I became Minister, the issue of harmonisation of social welfare systems has been high on the agenda. There is agreement on convergence of objectives regarding what social welfare can deliver. This is being discussed on an ongoing basis.
Amendment, by leave, withdrawn.
I move amendment No. 8:
In page 6, before section 4, but in Part II, to insert the following new section:
"4.-The Minister shall not later than 6 months after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on a system of benchmarking or indexation of all social insurance benefits and social assistance payments to give security of income to all citizens.".
Amendment put and declared lost.
SECTION 4.
Amendment No. 9 is out of order as it would involve a potential charge on the Revenue.
Amendment No. 9 not moved.
Question proposed: "That section 4 stand part of the Bill."
I am not contesting the decision that I cannot debate amendment No. 9 but I wish to make a point on the section. My amendment No. 9 proposed that the increases be brought forward to 6 April. It seems ridiculous that the Opposition cannot table an amendment to a Social Welfare Bill if it involves a potential charge on the Revenue. We should look at the rationale of this ruling. It does not seem to make a great deal of sense. Why should the Opposition not table such amendments? It is not a personal ruling of the Chair and is one I have come across before. The rule should be looked at separately from Committee Stage of this Bill; it has probably existed for donkeys years, since the foundation of the State, and the reason for it is probably lost in the mists of time. On the section, there was a case to be made for paying the increases in benefit at the same time as the introduction of the tax changes. I oppose this section because it does not provide for the increases to be brought into effect in early April.
I support Deputy O'Keeffe, particularly regarding the fact that we have to engage in the convoluted wording of amendments. There are similar problems with the Finance Bill as one can decrease but not increase taxation or vice versa. My party should have the option of tabling such amendments, particularly having gone through this for two years in succession. If we are to reform the operation of committees and the Dáil, we should have the support of the Department and the Minister in trying to draw up a pre-budget social welfare programme which would contain some of the key ideas of the Bill by agreement. Other parliaments follow this approach and their governments take responsibility for it. The current system means that we fall between two stools. The amendment process would be simpler if we could amend the Bill and vote on it.
At the session we had before the budget there was not a huge attendance. We are aware of how the system works. Reform will be the direction in years to come.
Like the previous speakers, I am concerned about amendments being ruled out of order. The system precludes debate on Committee Stage and is antiquated. There must be a mechanism to allow debate. It is ridiculous that we must table amendments which read "that the Minister shall, as soon as may be possible after the passing of this Act, prepare a report on. . . ." just to have the opportunity to debate the issues involved. The chairman is practical and perhaps he will look at how we can do this in the future and are not constrained and unable to debate many of the real issues which people discuss. Social welfare recipients complain about how taxpayers get their benefits from 6 April while they must wait until September or October for their increases. Benefits accruing to urban renewal areas and so on can be introduced on the day of the budget. It is ridiculous that there is no explanation why these increases cannot be brought forward. The Minister is doing this gradually and the sooner it happens, the better. When the budget is announced in Britain, social welfare increases are implemented soon afterwards without new books being issued etc. The issue of new books wasused as an excuse previously, but it does not stand up.
I ruled the amendment out of order but we had a full debate earlier on the same issue when considering amendment No. 3.
Question put and declared carried.
SECTION 5.
Amendment No. 10 is out of order as it would involve a potential charge on the Revenue. I accept the point made, but this is the ruling I must make. The fundamental argument will have to be made in other places.
Amendment No. 10 not moved.
Question proposed: "That section 5 stand part of the Bill."
I must accept the Chairman's ruling that I am not permitted to debate my amendment to have the increases brought forward to and payable from 6 April. I understand from the tone of the Minister's comments that there will be a campaign of misinformation that I am opposed to the increases. This is typical of, and what one expects from Fianna Fáil. I am used to it and we deal with it in our own way. It is rare for the Minister to show his spots so openly which he will do by saying that the Opposition opposes these increases, something he knows is poppycock. Our objection to section 5 is that the increases in social assistance payments will not apply until weeks after the tax improvements come into operation. I want the increases applying from 6 April. I tabled an amendment to that effect but it has been ruled out of order under the ridiculous rule that we cannot table amendments which involve a potential charge on the Revenue. Surely it is not expected that we would table amendments which would relieve the Exchequer. That would cause surprise.
These payments should apply from 6 April. By not so doing, the Government continues to penalise the poorest people at a time when ample funds exist to make these payments from 6 April. The Government refuses to do this and for that reason, I oppose the section. That is the basis of my opposition, apart from the inadequacy of the payments. These payments should be made from 6 April. The Minister has the opportunity between now and Report Stage to convince his Cabinet colleagues that this mean and Scrooge-like approach should be changed and, for that reason, I grant him the opportunity by highlighting the issue and opposing the section.
Deputy O'Keeffe found it necessary to explain his reason for voting against the section. He and his party are voting against the largest increases for some time for social welfare recipients and, no matter what way he explains it, he is voting against them. He wants them payable from 6 April. He had plenty of opportunity to make them payable from that date during his period in Government and he did little to that effect. This Government in its first three years in office has brought them forward by six weeks and will finish the job next year by bringing them forward to 6 April.
The Minister is looking back at history and pointing out that other parties could have made changes when they were in Government. We should complete the history lesson. The Minister accused Deputy O'Keeffe of voting against increases in social welfare. Three years ago, when the Minister was in Opposition, he voted against Second Stage of the Social Welfare Bill, 1997.
That is because the real increase people received was practically nothing.
He also voted against the Social Welfare Bill in 1996. Those Bills contained huge increases in child benefit.
No, only in 1995.
And in 1996.
The previous Government only gave £1 in 1997.
There were substantial increases in 1995 and 1996, so it would be easy to say that the Minister voted against it at the time.
No wonder we voted against it.
The Minister is all blather. It would have been easy to say then that he was voting against those child benefit increases at the time. It is easy to isolate certain provisions of the Bill and say that because a person votes against them, they are voting against the Bill. That is ridiculous and especially so coming from a Minister who did it himself in the past. There is a word to describe a person who does that, which we will not use today. The Minister should not use that argument.
We are in Opposition and we oppose certain sections, as is our duty, to highlight the inadequacies of the Bill. One of these is the date for increases in social welfare payments which should be the same as that for tax benefits. All benefits should come on stream at the same time. Why should changes for people in tax designated areas or benefits which accrue through corporation taxes come on stream on the day of the budget while the increases in social welfare, which are announced the same day, do not come into effect for six, seven and, in some cases, 12 months? That is unreasonable and it is not treating people fairly.
Is the section agreed?
No, it is not agreed because the payments should be brought forward to April. I wish to make that clear. It is also not agreed because the increases are inadequate.
Question put and declared carried.
SECTION 6.
I move amendment No. 11:
In page 6, between lines 38 and 39, to insert the following subsection:
"(1) Not less than 3 months after the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas a report on the extent of child poverty in the country and on the feasibility, in the context of surplus funds in the Exchequer, of increasing child benefit to £25 per week for children under 5 years and by 25 per cent for children over 5 years.".
I have a number of serious complaints about the Government's approach to social welfare. One of the principal ones is the miserly approach of the Government to child poverty. There is a substantial amount of child poverty and it is largely ignored by the Government. It has been suggested to me that the level of child poverty in Ireland is one of the highest in Europe and that the level of child support here is one of the lowest in Europe. If that is so, how can we justify increases which will not take effect until late in the year, in September, and which are confined to a few pounds per week? I do not accept that approach is adequate given the amount of money available.
Why is the extra payment for children not being made until September? Does the Minister accept the international and national view that one of the best means by which child poverty can be effectively tackled is through the payment of child benefit? Does he accept there are substantial levels of child poverty in Ireland?
In those circumstances why is the Minister not providing adequate funds to deal with child poverty from the huge amount of resources available? Fine Gael proposed that child benefit should be increased to £25 per week for children under five years of age. When I first raised this proposal with the Minister, one of his concerns was the step down position when a child goes over five years of age, but that can be catered for. I would like £25 per week to be paid for every child but I accept this would strain resources. The solution is to increase child benefit for children over five years of age by 25% while increasing benefit for those under the age of five to £25 per week. This proposal is attractive for two reasons. First, it would direct money towards dealing with child poverty in a manner recommended by all the experts. Second, it is economically smart as it helps an economy which needs workers who cannot afford to go out to work. I urge the Minister to accept this amendment.
Amendment No. 14 is related to this amendment so we will discuss amendments Nos. 11 and 14 together.
The Labour Party is sympathetic to Deputy O'Keeffe's proposal. As a country we have failed to come to grips with the major problem of child support and the necessity to develop significant child supports. This failure has particularly affected the poorest sector of society but it also involves issues concerning working women and encouraging women in particular to return to the workforce.
During Question Time the Minister repeated the assertion that the quickest way out of poverty is for people to get a job, yet he has failed to come up with any comprehensive plan. Provisions announced in the budget were pretty derisory. I am sympathetic to the rates suggested by Deputy O'Keeffe. Deputy Shortall issued a pre-budget paper entitled, A Better Deal for Children and Families, which called for a basic increase of £10 per month for first and second children, but the Minister failed to reach even this modest target.
We also called for an additional parental payment of £20 per week for children under the age of five and £10 per week for six to 14 year olds. These proposals offered significant financial supports to families and particularly to children living in poverty and suggested a fundamental change in the amount of money available. The proposals would cost a significant amount of money but the Government should be rising to this kind of challenge if we are serious about addressing this issue.
The Labour Party combined this with another proposal for a network of child care task forces, with £30 million available to ensure access to pre-school and child care facilities. We also called for reform of the tax and welfare systems to create incentives and to minimise disincentives for two-parent families, and for £20 million to be spent on family support and child protection services. Deputy Shortall called for the creation of a post of Minister for children, with a two-yearly statutory strategy for child care, and the development of flexible work options which we had hoped would happen under the current agreement.
Our basic demand was for fundamental change to the child benefit system to give the maximum support to deprived, low income families and the maximum scope to integrate such families as fully as possible into the workforce so they would enjoy the best possible lifestyle. This is the essence of amendment No. 14 and the Minister should return to this issue.
Before Christmas we met some of the groups the Minister had met. At that time hopes were high that we would see a fundamental child support and child care package this year. Unfortunately, the Minister and the Minister for Finance, Deputy McCreevy, dashed those hopes almost as soon as they had raised them. The programme we are discussing today is not much different from last year's programme and we are still waiting for a major child benefit and child support programme. Unfortunately, it looks as if the Government is not going to produce such a package and we will have to try to provide for it in the run up to the next election. I hope it will be enacted, but the current position is very disappointing.
I support these amendments which amount to much the same thing. There is significant child poverty and many people in receipt of social welfare payments are in dire straits when it comes to additional or extraordinary payments which have to be made. We will deal later with the position of widows rearing children. The child benefit such people receive is a Godsend in terms of clearing debts accumulated during the previous month and has been identified as a means of getting money to people who will spend it on their children.
When the committee last discussed this issue about 58% of those in receipt of child benefit identified it as their only form of income in their own name. I do not know if that has changed recently and new figures may be available. The figure has been reducing slowly but it is staggering that child benefit is the only source of income for so many people. I was amazed by the statistics and I would appreciate if the Minister gave us up-to-date figures.
The second issue is that of higher payments for third and subsequent children. The Minister should stop branding children as the third, fourth, fifth and sixth child. On Second Stage I referred to the fact that I was the youngest in my family, but there was no payment at that time because I was the last child.
We changed that. The Deputy should have voted for Fianna Fáil.
If my father knew that Fianna Fáil had changed it he probably would not have accepted the payment. In this day and age it is ridiculous to brand children as the third and fourth child so they get additional payments and so on. There should be an across the board payment because families are not as large as in the past and not many have three or more children. The size of families has changed dramatically over the years. When I first started teaching 30 years ago the average family size of children in my class was 7.8 children. This included one family with 15 children, another with 13 children and two families with 12 children. Child benefit is a very important payment and should be paid at a standard rate for everybody other than twins or triplets. The division between third and fourth children should be disregarded and the actual amounts should be brought up to a much higher level, as is indicated in the amendments being considered by the committee.
I support the amendments. There is much poverty in families at this time. I was fortunate enough to visit Finland before Christmas and I saw the care they give children, which is fantastic compared to Ireland, with the care of roughly 70% of children being paid by the state. We must examine ways and means of helping families rather than using individualisation in the tax code to force women into the workplace. This is anti-family and we must move to support families in terms of child care etc. and encourage people to return to work in that way. As a result of Government decisions crèches and such places have been closed and those still operating are in a position to charge more. The increase in the budget in terms of services for children is derisory and must be re-examined. Tax breaks and so on are being given to those who can afford to build crèches etc., but the Government's commitment to children and families has proved less than adequate. For that reason I support the amendments.
This is a classic case where the Minister should throw himself at the mercy of the committee and beg for forgiveness. The biggest single group in society, the poor, expected to get something from the Social Welfare Bill at a time when we were told the budget would be the greatest thing not only since the foundation of the State but from the beginning of time. Perhaps the unfortunate Minister was hard pressed, experienced an aberration, or was practising some of those baby steps which Deputy Broughan spoke of earlier. Maybe he failed to take the proper steps at the right time, or maybe at Cabinet he was kicked under the table by somebody taking longer steps. I am sorry for the Minister in this regard. He has provided a miserable £2 per week for the first qualified child. How did he come up with this figure and who thought of it in the first place? It is an absolute disgrace. How does this square with the rate of inflation, mentioned earlier by the Minister? I think the answer is, very poorly.
The Minister made comparisons with 1995, 1996 and 1997. In that era the reverse was the anticipated outcome in terms of surpluses at year's end. In the current year there was obviously a search to find people to give money to, but we should look at what has happened the poor unfortunate children. I am sure this must be a big embarrassment for the Government and I fear for the Minister given the company he finds himself in at Cabinet because obviously somebody was kicking him under the table and forced him into conceding to an increase of £2 per week for the unfortunate children. It has been universally recognised that supporting income for families is best done by way of child benefit. It circumnavigates all other taxation issues etc. and goes directly to the source in a clear way.
I have listened very patiently to the debate. I know the Minister tries his best in many ways and I compliment him on some of the positive measures he has taken, but this is the last straw. Far from bragging about the Social Welfare Bill in all its honour and glory, the Minister should apologise to the committee, the House and the mothers of the children to whom such a paltry sum is being offered.
Deputy McGrath accused me of not referring to the different rates. I did refer to them, and if the Deputy had remained in the Chamber he would have known this. Historically there have been two different rates. Research proves that larger families are more at risk of poverty and that is why higher increases are given for larger families. In 1990 the first payment was given to the first and fourth child, then the fifth child, and over the years it has been reduced to the first and second child. The third child receives the lower payment.
Deputy Durkan's statement is a bit much to accept. I would not so much mind the other Deputies who were never a Minister in the Department, but Deputy Durkan was and he is now giving out to me, which is a bit much. Perhaps he did not have much influence when he was in the Department.
Careful, there are more sections to be debated.
Perhaps the cabal - the then Minister, Deputy De Rossa, and his programme manager and special advisers - did not let Deputy Durkan have a look in. I am the envy of my Cabinet colleagues in terms of the number of initiatives I have taken in the area of social welfare.
Deputy Durkan was in the Department no later than 1997 and now he is talking about child poverty and how great child benefit is in terms of reaching all children. In 1997, just three years ago, the previous Government provided an increase of just £1.
In the two previous years there were very substantial increases.
I will come to that. The Deputy has a bad memory. The previous year the increase was £2.
And the previous year?
The previous year the increase was £7. The Minister decided to sacrifice old age pensioners and all other recipients because at that time he gave a 2.5% increase in social welfare payments when inflation was 2.5%. In his first year he decided he would be a great fellow and give all the children a lot of money. He did not get much thanks for it because the following year he completely reversed the policy.
The Minister will not get much thanks for this.
Over the three years that Deputy Durkan was a Minister in the Department he gave between 20% and 25% less in child benefit than we have given over the past three years.
What was the percentage increase over the three years 1995, 1996 and 1997?
I do not know the percentage.
It would be easy to get it - it would not be too hard to work out the percentage.
On the comment by Deputy Broughan that the Government has not invested in child care, a £106 million increase in child benefit has been provided for this year. That represents an increase of 25% on the overall budget which is now in the region of £575 million. Not only that, the Minister for Finance announced a £46.6 million package in regard to child care facilities——
Three and a half pence per day.
——which will continue in successive years as laid down in the national development programme. Deputy Broughan stated that his party will have to address this issue in the run-up to the next election. Such comments are the luxury of the Opposition. Deputy Durkan provided a £1 increase in child benefit at a time when child poverty was far more acute than it is now. ESRI figures reveal that the percentage of children experiencing consistent poverty fell from 32% to 18% in 1994 and from 17% to 15% in 1997. It has decreased quite dramatically since then, but we will await the ESRI figures on that. The ESRI stated that the reduction in child poverty is largely attributable to falling unemployment levels. The number of people on the live register has decreased by one-third or 90,000 since this Government took office. People have, in effect, been released from a dependency on social welfare payments and are now earning their own money, in addition to receiving significant child benefit increases.
I accept that an argument could be made for paying increased levels of child benefit to families which have children under five years of age. If a family with a number of small children is in quite difficult circumstances, there will be a sharp reduction in household income in such a family over successive years. The children will not go away and I do not believe for a moment that children become less costly when they start attending school. That has not been my experience. Various groups have lobbied for increased payments in these circumstances over the years but I have some difficulty with the logic of their argument. As far as I am concerned, children are far more costly at 12 years of age than they are up to five years of age. Perhaps we should consider providing increased payments to that age group.
Or even to 18 year-olds.
Yes, that is my point. Fine Gael has been all over the place on this issue recently. In his Árd Fheis speech last year, Deputy John Bruton referred to the party's proposal to provide a special payment of an additional £20 in respect of children under five years of age. Three months' later, Deputy Noonan announced the party's taxation policy amid great fanfare and reiterated Deputy Bruton's earlier commitment to provide a £25 increase to children under five years of age. Either Deputy Noonan was not listening to Deputy Bruton at the Árd Fheis or Deputy Noonan did not receive the consent of the Fine Gael front bench to increase the figure by £5. An increase of £5 would result in a total additional expenditure of £60 million. When I and others bluntly pointed out that as children got older, families would be left without considerable sums of money, particularly in a steps of stairs situation, Fine Gael then revised its policy for a third time with a proposal to provide a reduced payment between the ages of five and 12 years.
Deputy Michael D. Higgins stated on "Questions and Answers" that he was all in favour of taxing child benefit although I am not sure whether he was articulating Labour Party policy. I would like to hear the views of the Opposition parties on that. That proposal has been floating around for a long time but no political party has had the strength to implement it.
Is the Minister tempted to do that?
It might prove useful to outline the costings of some of the proposals before us. Deputy Broughan's proposal in amendment No. 14 for a parental payment of £20 per week for children under five years of age and £10 per week for children between the ages of six and 14 years would cost £532 million in a full year and £425 million if it were taxed. It is estimated that some 254,000 children are under five years of age and that 514,000 children are between the ages of six and 14 years.
The proposal put forward by Deputies O'Keeffe and McGrath for a £2.25 increase per week for children under five years of age, of which there are approximately 250,000, would cost £150 million at 2000 rates. The additional cost of a 25% increase in monthly child benefit rates for children over five years of age - 797,600 children - would cost £107 million bringing the total cost of the proposal to £257 million at 2000 rates.
We have delivered the highest child benefit package in the history of the State, allied to the commitments contained in the Programme for Prosperity and Fairness to progress towards £100 for larger families. Those proposals are our benchmarks. The Opposition parties can engage in Dutch politics and make these proposals but they did damn all about this issue when they were in Government in comparison to what this Government has done.
Did the Minister calculate the percentage increases in child benefit in the three budgets, 1995-97, and compare them with those in the three budgets, 1998-2000?
The figures between 1995 and 1997 were £10 and £14 respectively - I do not have the percentages. Between 1998 and 2000, the figures were £12.50 and £17.
That is a difference of approximately 27%.
On the taxation of child benefit, I make it absolutely clear that in 1988, when Deputy Woods was Minister for Social Welfare, and Fianna Fáil proposed to tax child benefit for those earning more than £30,000, I totally opposed it. An effort has not been made to resurrect the proposal since then. At the time, Deputy Woods drew back from the proposal because of the storm it created. It strikes me as somewhat sinister that the current Minister, coming from the same stable as Deputy Woods, should even raise the possibility of taxing child benefit.
It was recommended by NESC, with which the Opposition parties were involved, no later than two months ago.
That might be an explanation but I do not accept it as an excuse. Deputy Woods proposed it, we opposed it and he retreated.
Recently we were abused for ignoring NESC.
Rightly so, in some cases.
I make it clear to the Minister that whether he is raising the issue of taxation of child benefit in a light hearted or serious fashion, I opposed it before when his colleague tried to introduce it and I will continue to oppose it until the end.
I raised the issue because Deputy Michael D. Higgins said he was in favour of it on "Questions and Answers".
I do not watch "Questions and Answers".
The last party to raise the issue was Fianna Fáil. I opposed it then and I still oppose it.
When I raised the proposal of paying £25 per week, the figure Deputy Bruton originally mentioned——
It was not. The press office tried to re-jig the record.
The policy proposed by Deputy Bruton and approved by the front bench, was for a payment of £25 per week. The Minister objected; he said it could not be done because of the step down effect after the age of five. I looked at it again because I thought Deputy Ahern had a case. On that basis the way to avoid the step down was to increase the other figures by 25%. That should be done anyway.
What is the Minister's reaction now? He says there is still a danger of a step down so he will not put the extra money into child benefit at all. To avoid the step down, he keeps everyone down. Everyone accepts that, if funds are available, this is the right approach to dealing with child poverty and the lack of child care facilities in the State. All independent people support this approach. The Government has the money. Why does it not do this? Raising problems about the step down effect is not an excuse. This could be done this year. The amounts involved are not enormous. A significant impact could be made with £250 million. That is why I do not accept the Minister's argument.
The Minister is stressed out. The job is getting to him. It is beginning to show that there is not a Minister for State. He should have a look at the spare rooms and try to get some help. He certainly needs it. The sum total of his contribution to the first child in the household is 3p per day.
What was it before 1997?
That is extraordinary. The Minister is getting upset and I understand why. I am sure even his Cabinet colleagues are beginning to say they could have done more. It is as if he is in Croke Park and going for a goal. Everyone told the Minister he could score but he kicked the ball over the stand. People marvelled that he could kick the ball so far but it had no impact on the score board. The Minister had it all there for the taking, and everyone would have applauded him for being so generous.
How does the Deputy work out a figure of 3p per day from £8 per month?
By taking into account the inflationary costs. The Minister has projected inflation to remain at a certain level for the rest of the year. I disagree. This is a poor performance. Mothers will have a bone to pick with the Minister as a result of this missed opportunity.
Amendment No. 11 is one way of dealing with child care, particularly for children from less well off backgrounds. I would not be in favour of taxing child benefit under any circumstances.
Parental payment is different.
We call it a benefit but the Minister dismisses it because of its cost. Much of section 29 will revolve around the changes in PRSI rates. There will be a surplus in the social insurance fund in the coming years. Parental payment is one way to grant parents with young children access to a major benefit through the social insurance fund, even if it does cost £532 million. I take the point about the under fives.
This is Exchequer money, not a social insurance fund.
I realise that, but we should look at the whole concept of social insurance. It would be one area where people could access a parental payment after working for some years then leaving the work force. That is the way to produce funding. It might impinge on the concept of basic income but the Minister has run away from that area in the past three years. The work force is not satisfied with the current programme for social partnership.
It is strange that the INOU and CORI say it is a great programme.
People I meet do not think 5.5% is too great when there is inflation of 4%.
That is the estimate for the entire year.
We will wait and see about that. There are, however, people who feel that the rewards gained by those in the economy who live off capital——
Do I detect delight in the Deputy's voice at the prospect of people voting against the agreement?
No, I believe in partnership. I am director of Northside Partnership, a local element of the partnership process. It will be a major setback for the Government if there is another agreement or if this agreement fails.
Would it not be a failure by those who vote against the agreement?
The question of the awards people on low incomes are being given is a similar issue. The Minister has had to rescue the Minister for Finance who was in difficulty and I congratulate him for doing so.
The Minister should get a medal for that.
Exactly.
He did not have to climb a tree to do it.
The committee must address this issue but the Minister also bears a responsibility. He has allowed three years to go by and the issue has not been dealt with. He has kicked to touch on the issue. He could gain a place on our successful national rugby team.
I am not interested in rugby. I follow a more proletarian game.
We have a famous rugby club in my constituency. It is situated near the chairman's residence.
Among the well-to-do.
It is a distinguished fourth division rugby club.
The amendment seeks another approach. Research has shown that increasing child benefit is an effective solution to the problem of child poverty. An increase of £2 per week is extremely miserly. The Minister met representatives of the National Women's Council and of the various agencies which are promoting a comprehensive approach to child care but there was considerable disappointment on budget day. The allocation of £5 million to after-school projects is welcome but it is very little and comes very late. In one of the most deprived parishes in the country, in my own constituency, local women's groups are attempting to set up a child care programme but they are getting derisory support.
The Minister must examine this question and bring proposals to the committee. I would be happy to accept the amendment as a means to do that. The Minister has raised people's hopes and so far, he has not realised them. He likes to say he has helped senior citizens and I commend him for that but he has done very little for children. I would award him an F plus or E minus for his performance with regard to child benefit.
The Minister was not anxious to place the percentage increase in child benefit on the record. Between 1995 and 1997 child benefit increased by 50%. The increase since 1997, when the Minister was appointed, to the present has been approximately 42%. Despite his bluster about the increases he has brought about, the percentage increase was greater in the period which the Minister decries and when Deputy Durkan was Minister of State at his Department.
What source are you quoting, Deputy?
I am quoting from the Minister's figures. There was a £10 increase in the three years of the previous Government which brought the benefit from £20 to £30. Since then there has been an increase from £30 to £42 which is an increase of £12 on £30, or approximately 42%. Perhaps you can draw some other conclusion from the figures, sir.
I merely wondered if you had a source, Deputy.
The Minister had the figures, but he did want to translate them into percentages. Have you the figure, sir, for the number of people in receipt of child benefit and for whom it is the only source of income in their own name? The figure is readily available in the Department. It was approximately 58%.
No. I was bemused when the Deputy referred to that figure. I do not have the figure but I will try to get it. It may come from an ESRI study. No one could claim that child benefit repays a family for child care costs. That is why successive groups had difficulty in agreeing on the best approach. In the Programme for Prosperity and Fairness, the Government has promised to raise the highest level of child benefit to £100 over two years and nine months. This will mean a huge investment over the next three budgets because child benefit is the costliest social welfare payment of all. Deputy De Rossa made a strategic mistake in his first year as Minister. We would all like to see as much money as possible going into child benefit but he did this to the detriment of every other area of the social welfare code. He skewed his available resources in favour of child benefit. I took a more balanced approach in my budgets. Any Member who is in my position in the future will understand that a number of demands must be balanced within the available resources. A Minister may be commended for what he does in one area and condemned for what he does in another. This year's increase in child benefit was £106 million, the largest in the history of the State. I accept that it is only £2 per week for the first two children but £106 million is a considerable increase on an existing child benefit budget of under £500. The child benefit budget increased by approximately 25% in one fell swoop.
The Minister's response does not improve with repetition. Deputy De Rossa can speak for himself. However, his strategy was the proper one at the time.
The strategy was changed dramatically the next year.
It was not. We gave a substantial increase in child benefit. The problems faced by families were addressed at that time and there was a substantial increase in child benefit.
Two pounds per week.
I will not go back on that argument because I do not want to get away from the real issue. In relation to child benefit at that time, what the Minister said is true. The rate of payment here did not ever address the issue of the cost of rearing a family but the problem is that on this occasion the Minister was in a position to do what governments in other jurisdictions have been doing for years, with particular reference——
It cannot be done in one fell swoop, Deputy.
——to our nearest neighbour on whom we are currently ahead in most other social welfare payments. The Minister had an opportunity on this occasion to recognise the family, which is recognised everywhere. I accept what the Minister said about the minuscule impact we can make on the actual cost of running a family - we all meet our constituents on a daily or weekly basis who bring that to our attention - but there was a unique opportunity to do something this year. The Social Welfare Bill is unique in that it failed to address that particularly sensitive issue.
On the suggestion that various other people thought about taxing child benefit, my party can stand over its total opposition to any such proposal. If the economists or whoever want to raise such an issue, we will deal with it and have dealt with it in the past. It is disingenuous of the Minister, by way of an apology for the Social Welfare Bill, to suggest that the increases five years ago were not sufficient to meet his or others' expectations. They were never sufficient to meet the expectations or the needs of the people at whom they were directed. The Minister was in a position to address this issue but he failed to do so.
Amendment put and declared lost.
Amendment No. 12 is out of order as it would involve a potential charge on the Exchequer.
Amendment No. 12 not moved.
I move amendment No. 13:
In page 7, between lines 7 and 8, to insert the following subsection:
"(2) The Minister shall as soon as may be after the passing of the Act prepare and lay before both Houses of the Oireachtas a report on bringing child benefit for multiple births of 2 children in line with the multiple births of 3 or more children.".
This issue has come to the attention of many Deputies, particularly those in the Dublin area. It relates also to some of the discussion we had earlier about the first, second, third and fourth child. I was in the house of one of my constituents this morning in which there were three young babies from different parts of the family gathered and I marvelled at the amount of care and attention needed to deal with these children. The same requirements are necessary to rear two young children as to rear three and perhaps the benefit should be similar. I understand the Minister met the main campaign group before the budget, the twins group?
I do not think I met the group this year.
That group is headed by a formidable committee from the west side of Dublin. It believes this is an issue the Minister might examine again.
I support the amendment. Whereas the rate of payment for triplets appears to be quite generous, the reality of looking after three children is that it is an enormous task. There is a family in my own area where the father works and the mother is a full-time carer in the home looking after triplets. Reluctantly, they got a home help which lasted for just a few months. Now that the home help has gone——
They were lucky. I do not think they would get that in my constituency.
They are well represented in my area. We managed to get a home help for a period but, unfortunately, that help was discontinued. The additional difficulties associated with looking after triplets are enormous. It involves bringing in the wider family just to give the parents a break. The increases in child benefit the Minister talks about might be a way of alleviating some of those difficulties. Triplets are a particular problem but it must be almost as difficult to rear twins. The group representing multiple birth families is adamant that the rates for twins should be increased. That is something the Minister should examine again. It is easy for those of us who are not closely involved with bringing up small children to dismiss the representations that group makes but it places an enormous strain on families and much additional cost. Increasing the child benefit would be one way of directly benefiting those children. I ask the Minister to consider giving a special hike to twins and triplets. We are talking about relatively small numbers. I do not know the number of sets of twins in the country.
Twelve and a half thousand.
That is a relatively small number. If they were to get £1,000 apiece, that is £12.5 million; £100 apiece would be only £125,000. Surely it is possible to give them additional payments. What would be the cost of bringing them into line with the benefit paid to triplets?
It would cost £5.5 million to double child benefit payments in respect of twins.
That is to double the payments. They currently get one and a half times, is that correct?
Yes.
So it would be an additional £5 million. Thank you, Chairman. I will do my sums and then come back to you.
Far be it from me to disregard representations. In fact I complied with the representations made by the parents of Twins Ireland organisation. This issue was referred to in my party's election manifesto in which we promised to provide a 50% increase in child benefit in respect of twins. I did that in my first social welfare budget. I complied with the pre-election commitment we gave on this issue. I have a letter from one of the people in the organisation calling on me, in conjunction with the Minister for Finance, Deputy McCreevy, to honour the firm commitment given to myself from Minister Michael Woods, on behalf of the Fianna Fáil Party, in June that year - the letter was written in October 1997 - to give a 50% increase in the monthly payments for twins on Budget Day, 3 December, and that is what we did. We complied with our commitment in that respect. Obviously I have other commitments in the social welfare area which have yet to be fulfilled and they are my first priority. I will come back to this issue when the other commitments have been fulfilled because I can see it is a question of equity. We made a commitment on which we were asked to deliver and we delivered. I can do no more at this stage in view of other pre-election and partnership commitments. There will be a huge extra social welfare package next year if we are to comply with the commitments made in the programme. Those commitments will have to be delivered on before dealing with the many others.
Amendment, by leave, withdrawn.
I move amendment No. 14:
In page 7, between lines 7 and 8, to insert the following subsection:
"(2) The Minister shall, not later than 3 months after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the effects of introducing a Parental Payment of £20 per week for under 5's and £10 for 6 and 14 year olds."
Amendment put and declared lost.
Section 6 agreed to.
We now come to amendment No. 15 in the name of Deputy McGrath. It seeks to insert a new section. Amendment No. 16 is related. We will take Amendments No. 15 and 16 together.
NEW SECTION.
I move amendment No. 15:
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 family income supplement to the families of persons who are self-employed.".
This amendment refers to the extension of family income supplement to the self-employed. This argument has been ongoing for quite some time. There has been a recommendation from an all-party committee before this House for about three years, recommending that the self-employed should have the same entitlement to family income supplement as anybody else. There is no logical reason for not extending that entitlement to them. Various people, including on the Minister's side of the House, have spoken out clearly in the House and in committees in relation to it. I particularly recall the Minister of State at the Department of Justice, Equality and Law Reform, Deputy Mary Wallace, stating vehemently that the self-employed should be treated in the same way as anybody else in relation to family income supplement. I cannot understand why it does not happen.
In his capacity as an accountant in the past I am sure the Minister looked after and worked for many self-employed people and helped them to prepare their accounts. In doing so he would have sent the accounts to the Revenue Commissioners who would have accepted the figures as submitted. However, when those figures are sent to the Minister at the Department of Social, Community and Family Affairs, he will have nothing to do with them and will not pay family income supplement. What it boils down to is that the Department of Social, Community and Family Affairs does not trust the Revenue Commissioners and the Department of Finance to do their job. What he is really saying is that the self-employed operate a system of self-assessment. There are checks and balances which the Government should improve on if they are not adequate. If the Government suspects that something is wrong with those checks and balances and does not do anything about it, it is not doing its duty. If it is doing its duty and accepts that the Revenue Commissioners accept the figures they receive from these people, there is no excuse for excluding them from qualifying for family income supplement. I would go further and say that when self-employed people make returns, the Revenue Commissioners should automatically assess their entitlement to a family income supplement. Self-employed people cannot go to their employers to get application forms filled out in relation to FIS. Nonetheless the payment is worthwhile and there is no reason it cannot be extended to the self-employed. That is why we want the Minister to lay this report before the House. It would be interesting, if he were to survey his colleagues within his parliamentary party, to see what support he would get for such a proposal.
I accept a considerable amount of the argument that has been made. My concern in amendment No. 16 was for people who had gone through the back-to-work self-employment scheme. When we examined that a few years ago and produced a brief report on it, a particular concern was that the total removal of supports after the fourth year was sometimes a serious shock to people who had managed to establish a small business and get it going. It is always an enormous achievement for somebody who is effectively unemployed to start a business and maintain it over a number of years. Like other people on this committee, I have had the experience of working with people in that situation and trying to support them through local enterprise centres and so on. One can always see the difficulties and the great sense of achievement and pride when somebody who came from the ranks of the unemployed finally gets a business up and running. It is something I would ask the Minister to look at.
Looking at supports might perhaps be a way of starting the process. Many people prefer the autonomy of being self-employed. They like to work for themselves and to have that sense of freedom. Very often, however, the earnings are very low and they find it difficult to support a family. The Minister should look at the situation of people who have made huge efforts to provide useful work for themselves and perhaps for others. He might look at it in terms of a back-to-work scheme and consider offering support by way of entitlement to a family income supplement for at least a year to give new small businesses a chance to get established. It is often a heroic effort for people to do this. I know they receive supports in the community, from low rents for the space where they carry on their business to all kinds of other supports, although we certainly do not provide them on the north side of Dublin. Nonetheless there could be a case that the Minister should look at.
Could the Minister let us know what it would cost? There are many people in rural Ireland, small shopkeepers, for example, who do very little business. People who have gone into business in recent years could do with some help. When we looked for this for farmers more than a year ago the previous Minister, who is a member of this committee, vigorously opposed it. It is not just this Government. The previous Government was of the same frame of mind. I would like to know what it would cost.
As someone who had a keen interest in this area for some time before I entered the House, I want the Minister to examine it seriously. Deputy Brady referred to small shopkeepers. It is not only shopkeepers in rural areas who are suffering but those in small towns adjacent to major shopping centres. I am thinking of towns such as Ballybay, Clones and Castleblayney from which people simply travel to the bigger towns to do their main shopping. Many of the rural shopkeepers are getting on in years and if they were to receive some financial support to allow them to end their pre-pension days with dignity, that would represent a major improvement. If shopkeepers go out of business in Monaghan town, they at least have the opportunity to let their premises. That is not possible in a rural area. Other self-employed people, aside from shopkeepers, also find it difficult to compete especially in Border areas where competitors can come in from across the Border and employ people who are in receipt of social welfare. I say that without any fear of contradiction. I acknowledge that some tightening-up has been done in this area south of the Border but many people in Border areas are coming into small towns and undermining business there.
The Minister cited figures recently in regard to the decrease in the number of people on the live register. The farm assist scheme was of huge benefit to the country generally in so far as it resulted in the removal of 7,500 people from the live register. However, it did not benefit small farmers. At least 1,100 people stopped receiving any assistance——
The live register never included small holders so the farm assist scheme did not result in any reduction of the numbers on the live register.
Is the Minister denying that 1,100 people stopped receiving any assistance and that less people are currently availing of payments under the farm assist scheme than availed of——
No, there are more.
There are very few extra. I asked two simple questions through a parliamentary question recently to which I received very convoluted answers. Perhaps the Minister will provide me with straightforward answers at some stage in the future. My calculations led me to believe that very few additional people are receiving assistance under the farm assist scheme and that those who are receiving assistance will receive only £2 more than those who participated in the previous scheme. The Minister for Agriculture, Food and Rural Development stated that, unfortunately, the farm assist scheme did not work.
The Minister is a great supporter of the scheme.
He admitted that it did not work. Farmers know it has not worked. I urge the Minister to reconsider the scheme as it applies to small farmers and consider moving them over to family income supplement. It does not matter whether a person works on a farm or in a low paid factory job, he or she should be entitled to the same income at the end of the day. A former Fianna Fáil Deputy, Charles Haughey, when he was speaking about the production of accounts said that the production of accounts did not necessary mean a person had to have exact figures. Most farmers and self-employed people are liable to investigation or audit and strong fines can be imposed if the accounts are not properly done. I suggest that the Minister would reconsider this situation before we lose many self-employed people in rural Ireland.
On a point of clarification, there are 2,127 more people in receipt of payment under the farm assist scheme over and above the figure for small holders dole. A total of 7,117 people are in receipt of payment under the farm assist scheme.
Were all of those people previously in receipt of farmers' dole?
No, that figure was in the region of 6,000. I can obtain the exact figures for the Deputy. The numbers in receipt of small holders' dole have decreased over the years, primarily because off-farm income has increased due to diversification into tourism and so on.
The family income supplement payment was introduced in 1984 by a Labour Minister——
Strongly supported by Fine Gael.
——with the specific purpose of providing an incentive to low paid employees with families to take up and remain in full-time employment. The payment was never intended as an income support measure for the general population. The possibility of extending this scheme to self-employed people must have regard to a number of factors; the practical difficulties associated with the extension of such a scheme to the self-employed; the arrangements already in place for the provision of income support to self-employed people on low income through the unemployment assistance scheme - I understand that in the region of 2,000 self-employed people are in receipt of UA; and the costs involved. The cost of extending the payment to self-employed people, excluding farmers, would be £47 million. It would cost in the region of £80 million if it were to include farmers. Those figures are calculated on the basis of a full take-up.
In the context of the further development of the family income supplement scheme, the Programme for Prosperity and Fairness includes the commitment that consideration would be given to the payment of FIS through the taxation system rather than the social welfare system. In the interim, any further considerations in regard to the extension of FIS to the self-employed would have to take account of the factors to which I referred and the substantial costs involved.
In regard to self-employed people who move on from the back to work allowance scheme, it is important to recall that in addition to the weekly allowance provided under the scheme, a range of additional supports is available to self-employed people. Supports are provided through a training and technical assistance fund to self-employed scheme participants in such areas as book-keeping, marketing and the purchase of essential equipment. Arrangements are also in place, in co-operation with the First Step organisation, whereby access is provided to interest-free loans together with the provision of ongoing advice from qualified investors. Separate arrangements have been made with the credit unions to guarantee loans to scheme participants.
My Department has commissioned an independent analysis of a number of aspects of the back to work allowance scheme including the sustainability of the self-employed employment enterprises created under the scheme. I understand that a draft of this analysis will be forthcoming in the near future. The range of supports available under the scheme will be assessed in the light of the outcome of this analysis. In regard to the specific question of providing FIS payments to self-employed people who pass out of the back to work allowance scheme, we would have to take account of the general position of those engaged in self-employment. I have already set out the issues involved in this regard.
I am not happy with the Minister's response. We need to examine the matter carefully. The Minister did not confirm if it is true that he will not accept the figures from Revenue. Even though one arm of Government accepts the figures from the self-employed as being their income, the Department of Social, Community and Family Affairs does not, and therefore it will not pay FIS. An injustice is being done to the self-employed on low incomes. The amount of money involved is not enormous. I ask the Minister to look at the equivalent family income supplement schemes in Northern Ireland and Britain which are available to the self-employed. If they can operate it like this, I do not see why we cannot. I am most dissatisfied with the Minister's response.
As the Minister said, a positive tax credit system is one way to bring all sectors together. Is there a time frame on this? Deputy McGrath referred to our colleagues in the UK who have a positive tax credit system regarding family income. It is unsatisfactory, particularly regarding graduates returning to work, that one could be on a low income yet not entitled to this payment. Would it be possible to introduce a positive tax credit system in the 2001 budget?
It has taken at least three years in the UK and it is still not properly in place. It is being looked at in the context of the partnership agreement, if it is ratified. It may be the answer to the difficulties in this area. Given the system of lodging accounts and the delay in assessing income, it may be difficult to administer in the case of the self-employed. The declaration of income from a paid employee is more immediate and easily calculable. If the payment is to be extended to all low income earners, it should be done through the taxation system. It will be looked at in the context of the partnership agreement.
If such a scheme was introduced, the updating of tax forms would quickly take place. Farmers and the self-employed have to fill out C2s and other such forms for reactor grants and so on and these can be dealt with quickly.
Many of these people would be on very low incomes and might not be able to afford——
They could afford them if they were certain they would receive benefit. In the case of a small farmer with two cows and six bullocks who is assessed as having an income of £3,000, direct taxation assessment would be fairer than assessment by social welfare officers.
Amendment put and declared lost.
Amendment No. 16 not moved.
Amendment No. 17 is out of order as it would involve a potential charge on the Revenue.
Amendment No. 17 not moved.
Section 7 agreed to.
The Select Committee adjourned at 7.5 p.m. until 4 p.m. on Wednesday, 8 March 2000.