I welcome the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, and his officials. We are here to consider the Revised Estimate for the Department, which is approximately £2.877 million. Members have been circulated with a timetable to which I hope we will be able to keep. Is that timetable agreed? Agreed.
Estimates for Public Services, 2000.
Vote 40: Social, Community and Family Affairs (Revised)
I thank the Chairman and members of the committee for allowing us to come to this meeting and agreeing to that schedule.
When we came into office just under three years ago we set an objective of building an inclusive society and since then unemployment has fallen dramatically. Over the last three budgets we invested an additional £1 billion in the area of social, community and family affairs.
The Estimate for the Department will be £5.4 billion, an increase of almost £440 million or 9% on last year's spending. People wonder where such money is spent and some people wrongly perceive that it is all allocated to the unemployed. The largest amount is allocated to old age pensioners, who receive 25% of total expenditure. Widows, widowers and one parent families account for 19%. A further 15% is allocated to payments related to illness, disability and caring. Unemployment, which has been falling rapidly, accounts for 12%, while a further 5% is allocated to positive, pro-active employment supports. Child related payments, such as child benefit, take up 10% of total expenditure, 9% is spent on other supports, including community and family supports and 5% is spent on administration. The net Estimate amounts to £2.877 million, which is divided among various measures. That represents an increase of £180 million or 7% on the provisional outturn for 1999.
There has been much comment recently about the rate of inflation. I understand that today the Minister for Finance announced a revised projection of 4% for annual average inflation for the year, as compared to a budget day forecast of3%.
Last December's social welfare budget package, which was the biggest ever social welfare budget allocation, amounted to more than £428 million on a full year basis. It provided for a £7 a week increase for pensioners over 66 years of age, a special increase of £5.90 a week for invalidity pensioners aged under 65 and an increase of £4 a week for other recipients under 66 years of age. The £7 a week increase for pensioners represented an increase ranging from 7.9% to 8.9%, while the £4 a week increase represented an increase ranging from 5.2% to 5.6%. The predicted annual average rate of inflation for this year will be well below those rates of payment increase.
The Government has made a number of commitments in this general area. Its main commitment is to reach a target of a minimum rate of £100 a week for all social welfare old age pensioners by 2002, that being a revised figure under our review of the action programme. The Commission on Social Welfare's minimum target rates have been exceeded in all cases. We have commenced the process of increasing the QAA to 70% over a three year period. As part of the strategy of aligning implementation dates, the budget increases have so far been brought back by six weeks with another commitment to bring them back a further number of weeks to early April in 2001.
This is the second year that the total expenditure covered by this Estimate relates solely to social assistance expenditure. As members will note from the figures, this arises because PRSI income exceeds projected expenditure. The proportion of expenditure spent on unemployment payments has continued to decline significantly, with unemployment now down by 100,000, or 40%, since the Government took office. The continued downward trend in the number on the live register is further evidence that the Government's economic policies are creating the circumstances necessary to ensure continued growth and long-term prosperity for all our people. The Estimate for 2000 provides for a further reduction of more than 28,000 in the average number on last year's live register. Despite the good record of a reduction of 100,000 in the number on the live register in the past three years, we are not blinded to the difficulties still faced by many who lack the education and skills to compete in today's jobs market. We must ensure that the unemployed receive the skills they need for success in job-seeking and we must also prevent early school leavers from drifting on to the live register.
I indicated to members that I intend to launch a pilot project for early school leavers, which will focus on providing positive alternatives and support to young first time UA applicants with a view to equipping them with the skills, education and confidence necessary to benefit from our current economic success. The target of 20% of unemployment spending that I previously indicated for pro-active employability measures has been achieved and it is in line to increase to 25% this year.
The social insurance system is a key mechanism for the delivery of social protection. It gives expression to the concept of solidarity between different groups and generations. In essence, part of the wealth created during people's economically active years is used to provide pensions and other entitlements, which are paid to workers when required, for example, when they retire, become incapacitated or unemployed. Social insurance benefits and pensions are paid out of the social insurance fund, which is funded by PRSI contributions from workers, the self-employed and employers. In the event of the fund being in deficit in any year, the Exchequer makes a contribution sufficient to make good any such deficit.
As members will note from the detailed Estimates, income from PRSI contributions in 2000 is projected to exceed social insurance expenditure and, therefore, no Exchequer subvention will be required this year for the SIF. SIF income exceeded its expenditure for the first time in 1997 and the fund has continued to have an annual surplus since then.
The increase in employment has led to an increase in PRSI buoyancy. It is projected that the SIF will have a surplus of £198 million this year. The cumulative surplus at the end of 2000 is projected to be £527 million. Buoyant PRSI income has enabled me to introduce reductions in PRSI contributions this year. For example, all low paid employees earning £226 per week or less are now exempt from making an employee contribution. That benefits an estimated 460,000 employees by up to £5.67 per week and, in addition to that, they benefit from the changes made in the health contribution area. The total amount received by low paid employees under a particular level is £280 a week, amounting to £105 million in one year, which is an extremely significant amount.
The short-term surplus cannot be viewed in isolation from the significant challenges that face the social insurance system in the medium to long-term. The projected increase in the numbers of older persons in society will result in significantly increased social insurance costs in the year ahead. The Government announced last July that it intended to make provision to set aside a significant part of the proceeds of Telecom Éireann along with an ongoing annual sum equivalent to 1% of GNP to meet future social welfare and public service pension expenditure in years to come. The Minister, Deputy McCreevy, will bring forward a Bill in this respect before the summer recess.
In the recent Social Welfare Act I introduced a new benefit, the carer's benefit, and the Cabinet this morning approved the heads of a Bill in relation to carer's leave to ensure this system will be up and running in October. I have also asked my Department to bring forward proposals in relation to pensions for women who take time out of work because of caring responsibilities in the home. In summary, it is my intention to constantly develop the social insurance system to effect social, family and economic change while adopting a prudent approach to the financial challenges which face us in the years ahead.
Deputies will know that over the last number of years the Department has been moving away from income maintenance alone and now provides a range of other supports. The area of community supports has been substantially increased by 38% this year to £42 million. This includes a £5 million allocation for community groups towards the cost of developing out of school hours child care services, an increase of over £2 million on the scheme for the community support for elderly as well as funding for a number of grant schemes for the Combat Poverty Agency and for the NSSB. The Estimate provides for an increase of 55% to over £10 million this year in the allocation towards marriage, child and bereavement counselling, family mediation and community based family resource centres. The administrative costs of the Department will amount to £274 million this year or about 5% of the total allocation, which is in line with previous years.
In conclusion, the social welfare system provides essential support to the social and economic fabric of the country. The effective operation of the supports provided by my Department make a major contribution to the competitiveness of our economy in addition to the social support it provides. This Estimate demonstrates the Government's commitment to creating the conditions where people can contribute to and share in our economic and social development. I commend the Estimate to the committee.
We will deal first with subheads A1 to A8.
I take this opportunity to comment on the Minister's opening statement. It is the Minister's job to present a rosy picture of his administration of this Department and I am the first to accept that there have been improvements in the past couple of years. In fact, there have been improvements every year since the Department was established. The real question, however, is whether those who suffer from social exclusion, the poor, are getting a fair share of the fruits of our prosperity. My contention is that they are not and that is where the difference arises between the Minister and me and my party.
We are in the middle of an unprecedented boom. The growth rate in the last five years has been ahead of growth rates in Europe. Without allocating blame or credit for what happened before, it is clear the economy is powering ahead of its own accord. However, while the economy is working, the Government is not, particularly on this issue. The fruits of that prosperity should be shared. I am not even asking that they be shared equally. However, a decent effort should be made with the moneys now available to tackle the deep poverty that still exists in this country. The gap between the rich and poor is widening and the Government cannot and should not be proud of that.
When one looks at the specific provisions of this Estimate, one finds we are disputing what the inflation rate will be this year. The inflation rate will gobble up any increases obtained by people who are surviving on social welfare. We should not be in this area of contention but, unfortunately, we are. Even though I am glad the Minister, Deputy McCreevy, has admitted he was wrong about the inflation rate in the Budget Statement, his new estimate is also wrong. The inflation rate will be higher than the figure he projects. He was out by one third in his budget estimate and he admits that. The figure will probably be out by two thirds or higher by the end of the year.
That is not an academic point as far as people who are surviving on social welfare are concerned. It means that the relatively modest increases they have received will be eaten up by inflation. In real terms they will be no better off than they were last year. That is why the point about inflation must be emphasised. Inflation is the enemy of the poor and it is not an academic point to point out that the modest increases will be gobbled up by inflation.
There are two matters I wish to deal with which are close to my heart. One is the issue of carers. I am glad the carer's benefit has been introduced but it will not solve a basic problem for carers. I cannot understand why the Government, with so much money in the Exchequer, has not seen fit to improve the means test for carers to allow more carers to benefit from the scheme. Effectively, the vast majority of people who are care for the elderly and disabled cannot qualify. Furthermore, I cannot understand the Government's continued exclusion of the poorest people who provide care, those on social welfare, from the scheme on the basis of a mantra that it is not normal to give two social welfare payments to the same person. There is a solution to that problem. It is wrong that the effect of the Government's approach is to exclude the poorest of those providing care from the scheme.
The other matter of concern to me is children. Everybody accepts that one of the main ways of tackling poverty is to increase child benefit. The increases in the Estimate are derisory.
Overall, one can say there are improvements but these improvements are either eaten up by inflation or are inadequate, in the context of the moneys available, to have a realistic impact of the level of poverty in this country. That approach will be changed by the next Government. There will be a more generous approach in trying to get to and tackle the root causes of poverty.
I have one question under these subheads relating to loyalty bonus payments to staff in the Department. I understand the reason for seeking a means of making premium payments to people in the IT area given the huge demand for those skills. However, will the Minister outline the situation in the IT section? How many people are there in that area, how many have been lost and what is involved in the loyalty bonus? I am anxious to know how serious the problem is and what the Minister is doing about it.
I will make a few brief comments before dealing with the subheads. We are approaching the end of the Government's first three years in office. While the Minister can claim he has introduced some new initiatives, such as the carer's benefit, most commentators would see the Department as going through a "marking time" phase. The gains made in previous decades under previous Administrations have not been developed in an innovative or original way, although the Minister and the Government have the greatest amount of resources possible that could be used for the benefit of the large proportion of the population which is entirely dependent on these Estimates. In a sense, this is the most important Department because up to one third of our people are totally dependent on it for their income.
The Minister has led Fr. Seán Healy and the other advocates of basic income on a merry dance over the past three years. They are still dancing around the pitch and there is no chance under this Government of beginning a real discussion about basic income. However, £5.4 billion from the national budget of up to £80 billion is the total income of a third of our people who are totally dependent on social welfare. Proportionally, the amount has fallen drastically as a percentage of Government spending and national income. Far from achieving social inclusion, there is a growing chasm in society where one third is well able to look after itself, another third is struggling to keep the economy moving and the final third, which comprises the most vulnerable people for which the Department is responsible, has been badly let down over the past three years by the Minister and the Government.
The inflation rate this year is only the latest in a series of disasters regarding the income of those people. Economists have predicted an inflation rate of up to 10%. Who could believe the Minister for Finance, Deputy McCreevy, on any issue following his recent announcements and decisions? The current inflation rate is over 5% and the wholesale rate in many key services is up to 10%. Therefore, there is an inflation rate of 10% in many key areas but the Minister for Social, Community and Family Affairs is giving an average increase of 5.5% this year. The poorest people will become poorer this year. This is what the Minister has achieved. Regarding contributory pensions, the Minister has not introduced a sufficiently high increase to allow those pensioners to keep pace with the cost of living.
My criticism of these Estimates and the Minister is that there is a total lack of vision. This is particularly obvious this year in relation to the social insurance fund where, for the first time, a significant portion of the rising surplus of £6 billion or £7 billion has come from PRSI payments. One would imagine that the Minister would have imaginative ideas regarding benefits and other developments for the most vulnerable people in society, but, with the exception of the carers benefit, he has done nothing. There has been a total lack of vision over the past three years. There is a sense that the Department is marking time, waiting for the next Administration and whoever is lucky enough to be the next Minister.
I am disappointed with the Minister in so many areas; the previous speaker referred to several of them. For example, the Minister has not grasped the nettle on the important issue of child benefit and child care in a responsible or reasonable way over the past three years. Most people were extremely disappointed with his decisions in the last budget.
The carers benefit is welcome but those of us who attended the carers alliance conference in Drumcondra recently were struck by the fact that there is an army of carers, made up mainly of females, in society. We know there are at least 50,000 carers but the Minister will only give 15,000 of them any type of subsistence payment from the State. This is outrageous and disgraceful. The Government has failed lamentably in this area.
The Minister has repeatedly clapped himself on the back at Question Time in relation to seniors. However, a recent report showed that many senior citizens, particularly in the 25 disadvantaged areas throughout the country, find that they are increasingly falling behind. There were stories in The Irish Times about couples in my area on the north side who felt that they could not go out socially in the evening because they barely had enough to survive. Even by the Minister’s yardstick, the amount of £100 has failed to help in this area. If there was a general election in four weeks, it would be obvious that the Minister has not even delivered on the main promise he gave three years ago.
The Estimates process is disappointing. When will the Dáil act in some respect like a modern European parliament? Every other EU parliament and most of the parliaments in the 12 applicant countries, with the possible exception of Turkey and one of the emerging states in Eastern Europe, are discussing their budget for 2001. This is logical, but it is half way through 2000 and we are discussing the Estimates for 2000. Why is this the case? If this was the Dutch Parliament, the two main Opposition parties would have had civilservants advising them over the past few months. We would be sitting here with our suggested budget for 2001 and asking the Minister what he felt he could help to deliver. I understand this model is also used in France, Germany and most other countries.
In common with the Chairman, I have participated in discussions on Estimates over the past eight years since I became a Member of the House. When will the Dáil discuss the Estimates in a meaningful way which would allow the Opposition to have some input? For example, the possible introduction of a cost of caring allowance could be discussed where civil servants could tell us how much it would cost. Another item which could be discussed is a possible increase in the disregards for carers or the abolition of means testing in this area and the costs involved. This is how a real parliament works. This matter is in the hands of the Chairman and the Government for its remaining time in office but perhaps we could move towards a modern modus operandi.
Regarding subheads A1 to A8, I applaud the Minister for providing figures in relation to the money saved through anti-fraud measures under subhead A2, which mentions the cost of travel and subsistence for investigation staff. This is welcome because people who steal social welfare funds are stealing from the rest of the community. On subhead A8 and postal and telecommunication services, what are Minister's views in relation to the local office and the role of An Post in the future in dispensing social welfare benefits? Does the Minister have a figure for the amount of social welfare payments transferred directly to bank accounts? Is that happening? Some of us were told recently that some people have their money credited directly to their accounts. Is this the case? What happens in that regard? Is the Minister beginning to privatise the disbursement of social welfare payments?
A sum of £7.5 million has been provided for information technology consultancy in 2000. I presume this relates to the IT project. What is the situation in that regard? I congratulate the civil servants on the fact that there were no hiccups and payments to people proceeded smoothly.
Subhead A2 refers to a reduction in EU travel. This is surprising because I presume the same amount of meetings will take place. I do not advocate the criticism of Ministers who travel abroad representing the country. Why is the amount expected to reduce from £40,000 last year to £32,000 this year?
Perhaps there is a bigger focus on home this year for a particular reason.
Subhead A3 deals with advertising, cleaning services, conferences and miscellaneous items. This is a ragbag of items but it shows an increase of over 64%. Why does this arise? I hope the increased cost of cleaning services will not arise as a result of advertising falling down around our ears.
I notice there are 4,200 staff members. Where are they based and how many are in Ballina or Letterkenny?
This is a topical issue at present so my memory serves me correctly. There are approximately 1,300 staff members in Dublin and the rest are in local offices. There are approximately 450 in Sligo and there is a significant number in Longford and Letterkenny.
There are few staff in Carlow.
There is none in Monaghan.
I am waiting for someone to accuse me about the 90 in Dundalk. In 1981 Dundalk was the first town mentioned in the first tranche of decentralisation but it has taken 19 years for it to happen. We should have got the then Department of Posts and Telegraphs but the party to which the Deputies belong came into Government in the early 1980s and it was against decentralisation. Responsibility for posts and telegraphs was given to Telecom Éireann and it decided it did not want to go to Dundalk because it was given a job to break even. I have a good grounding for 90 but I am unhappy it is not more. I was waiting for someone to criticise me about that.
We are not criticising the Minister.
I am talking about criticism from outside, not from here.
I have made a case for Bandon.
I received representations from local Fianna Fáil activists in that area to whom I listened carefully. Some 255 employees in the Department have qualified for the loyalty bonus totalling £1.8 million. A small number who did not come within the agreed criteria have appealed their cases. These are currently under consideration. The current staff number is 4,150.
How much did each of the 255 employees receive?
I do not have the figures with me but I will get them for the Deputy.
Is the loyalty bonus for past service or do the employees commit themselves for a certain number of years?
It related to the year 2000 project. We had to give them a loyalty bonus because people were leaving at that time and we needed to keep them in the Department. There were losses in my Department because we had the biggest number of IT people given that we had the biggest IT project in relation to Y2K. Criteria were set down in all Departments in an effort to keep people. I can give the Deputy the figures of the number of people lost.
I raced through my opening speech and then I had to listen to a diatribe from a number of people so I hope I am given an opportunity to respond. Deputy Jim O'Keeffe referred to the specifics of the Estimate. A number of criticisms were made, including one by Deputy Broughan about old age pensioners. For the first time in living memory, my Department has been inundated with telephone calls in the past two weeks from people around the world, including Ireland, who cannot believe the increases they have received. Some people questioned if the increases were correct or if the Department had made a mistake and given them more than that to which they should have been entitled. If Deputies do not believe me, I challenge them to seek under the Freedom of Information Act the note sent by an official to me from the pensions office in Sligo about the telephone calls received. Any Opposition member who criticises me is not living——
On a point of order, the Minister spoke for 15 minutes and because we have an abbreviated time Deputy Broughan and I deliberately cut our comments to five minutes.
So did I.
We asked a number of questions.
The Deputy made general points.
Are we having a discussion on the general points with an option of the right of reply for committee members because the Minister is at our committee? I have no problem listening to the Minister making political points which he also does at Question Time but a number of questions were asked which we would like to tease out.
Political points were also made by the Opposition to which I must respond.
That is fine if we have enough time. I am willing to stay here until midnight.
I will give the Deputy a flavour of the specifics.
We are trying to keep to our programme. I was lax with everyone, particularly Deputy Broughan, although Deputy Jim O'Keeffe and the Minister kept to the point.
I ask the Minister to answer the questions.
I must make a number of points in answer to some of the political lies told by the Opposition.
Here we go again.
As regards the specifics of the Estimate, farm assist is estimated to increase by 131%, carer's allowance by 36%, supplementary welfare allowance by 20%, family income supplement by 18%, employment support services by 15%, child benefit by 13%, one parent family payment by 13% and disability allowance by 13%. The increases we have given are far in excess of the rate of inflation at 4%, to which the Minister for Finance referred today. This is compared to the 2.5% increase in 1995 when inflation was 2.5% - in other words, there was no increase. The Minister for Finance was criticised for his prediction. However, he was not criticised last year when he predicted that inflation would be 2% and it was 1.6%.
We were only starting on the euro roundabout.
Those people who got the 2% got more than was originally intended.
We are in the euro orbit now.
However, no one asked for that to be taken back.
The Minister for Finance has no control over it.
Everything evens out over a period of time. The people in receipt of social welfare, particularly old age pensioners, can rest assured that they are getting a sizeable increase above the rate of inflation. Deputy Jim O'Keeffe referred to carers and children. The Estimate increase for carers is 36%. How can the Deputy criticise that?
What good is that to anyone?
I deny that the increase in child benefit is derisory. It is an increase of 13% on a big budget. Deputy Broughan said the Department is standing still. That is nonsense and nothing but bluster from the Deputy who has his tongue firmly in his cheek. Any objective observer knows there have been more developments in this Department since I came to office than during any other Minister's term.
The Minister for Education and Science, Deputy Woods, will not like to hear that.
I refer the Deputy to a number of developments he did not mention, such as those relating to people who made contributions prior to 1953 and to people over 56. The Deputy said no one listens and that this is not the right way to proceed. Many of the ideas in relation to capital assessment, to people who made contributions prior to 1953 and to those over 56 years of age came from my parliamentary party and from this meeting. The Deputy should give me some credit for that.
Deputy Broughan also said the spend on social welfare is falling as a percentage of national income. That is correct because the economy is moving forward in leaps and bounds. The Deputy may believe everyone should still be on social welfare, but that is not my philosophy and that is where we differ.
I do not believe that.
The Deputy said that senior citizens are falling behind and he referred to recent data. However, that data referred exclusively to the time his party was in office up to 1997. It did not refer to the years we were in office.
They were recurrent interviews.
The income of old age pensioners has increased by £18 per week in my three budgets compared to a miserable £7 when the Deputy's party was in office. Old age non-
contributory pensions have increased by 25% in the past three years, which is over twice the rate when the Deputy's party was in office. I do not accept the Deputy's points in this regard.
I ask the Minister to answer the questions.
I have taken note of all the points.
I can put up with the Minister making political points but it is wrong to compare a Celtic tiger economy in 2000 to our economy in 1995, 1985 or 1975, when the position was different. This is a different economy.
I ask the Minister to reply to the specific questions at this stage.
Deputy Broughan also said I have not kept my commitment in relation to the £100 for old age pensioners——
We were given a statement by the chairman.
- —but neither did the Deputy. I am just referring to points in relation to what he had to say to me. Does the Deputy expect me to remain mute?
The chairman made an opening statement and then we made opening statements. The procedure then was that we asked questions in relation to subheads A.1 to A.8. We have not been given the replies to those questions. The Minister has wandered into his usual political excuses. I suggest the Minister be restrained and be made answer the questions he was asked.
I must put on record that Deputy Broughan said that if an election was called in four weeks' time, I would not have kept the commitment made when we came to office in relation to £100 for old age pensioners. That is not correct. The commitment we gave was to bring old age pensions to £100 by 2002. We will bring them over the £100 level in the next budget.
There was a question about the number of payments made through electronic fund transfer. There are 238,216 recipients on EFT, many of whom - 114,000 - are in receipt of child benefit. The total number of child benefit recipients is 513,000, out of which 114,000 payments go directly into bank accounts. There are 123,000 payments by cheque and 113,000 payments by post draft. There are 905,000 PPO books.
Which other payments go straight in?
Everything - there are 138,000 old age pensions, 17,500 widows and one parent family payments and 11,000 disability benefit, invalidity and other disability and caring payments made by EFT. There is no such facility for carer's allowance.
Not many get it anyway.
I must reject that, there are almost 15,000 recipients.
How long has that facility been available?
For a good few years. I can get the Deputy the exact date. In regard to EU travel, over the past presidency there has not been huge emphasis on social security. The social affairs committee has been more concerned with labour related issues. That might be a reason, although I am not sure. However, that has been my experience.
There was an increase of £1.2 million in advertising, which was mainly due to special allocations for advertising publicity in the family services area, which is a new area. The 16% increase in cleaning is due to the increased cost of contract cleaning, which has risen due to the introduction of the minimum wage.
The issue of IT consultancy was also raised. That is all related to the euro, which will be a huge project. We will have to take in outside experts for the Reach and Grow projects. The euro issue will be far bigger than the Y2K one because it will relate to us in particular. There is a deadline for that.
The point is that the Department seems to be paying an extra £7 million to outside experts in 2000, while the Minister said the loyalty bonus for his 245 existing staff only came to £1.8 million. Is it wise to concentrate so much extra money on outside consultants rather than gearing up the Department's own staff?
There would have been some reliance on outside experts for the Y2K project but, by and large, it could be dealt with in the Department. A report was done on the Grow project which set out exactly how we should proceed. It recommended we get outside experts, as was done for the Reach project, because we did not have the necessary know-how in the Department. There is £2 million for the Grow project, which is the civil registration system, £1.855 million for the Reach project, £1.45 million for the euro project, £0.831 million for the service delivery model under the integrated long-term scheme system and about £0.619 million for other consultancies, mainly in the family affairs unit and the planning area.
I gather the IT staff got roughly £7,000 each as a loyalty payment to stay on the job. Did they say they would leave if they were not paid this? Is it the same as gardaí saying before a protest march that if they do not get an extra bonus payment for dangerous work they will resign?
My recollection is that this system was set up to try to retain people because there was a huge haemorrhaging of IT staff from the Civil Service over recent years. This was brought in to ensure we would keep our people, particularly in regard to the Y2K situation. They were being enticed away by private businesses where they could potentially earn much more money. It was necessary to bring this in for all Departments, not just mine. It has happened before, although not necessarily in the IT area.
Is it an ongoing or one-off payment?
It was a one-off payment in regard to Y2K in my Department.
That is different. Is it finished?
Yes.
The projected payment to An Post in the Estimate in 2000 is £21.2 million. The contract with An Post expired last December and the new one is being challenged by the European Union. I want to see the contract renewed. Will the Minister give us an assessment of the up-to-date situation? Where stands the challenge? Has it been rejected? When does he expect a decision?
We are waiting for a decision but we have not heard yet. Some recent newspaper reports suggested that something was coming from the Commission. However, we inquired and nothing had come from the Commission. We are still waiting.
Will the Minister give a realistic assessment of when it will come out of this limbo?
I cannot off the top of my head. I will be able to give an answer at Question Time next week. We would have thought a decision would have been made on at least one area prior to this, but we are still awaiting decisions on the two aspects of competition and procurement.
Is the Minister confident that the State case will be upheld?
As I said before, the previous Attorney General categorically advised that we were totally within our rights to do what we did. The current Attorney General has also said that. He has also sought opinion from a number of independent barristers, all of whom are of the view that we are on solid ground in this respect. We are confident. However, we will face up to any decision. The Government wants to do everything to ensure the An Post network continues. The Minister for Public Enterprise, who has the main responsibility for post offices, has already given this commitment and has invested funds in new technology in this area.
Will the Minister give a rough breakdown of the £21 million that is paid to An Post? Is it paid per transaction or is it a global figure negotiated with An Post to deliver services across the country? What is the rough cost per item in that payment? Is the Department charged for payments made directly through the banks? Who picks up that charge? As we saw on last night's news, the banks do not do anything for nothing. Some of the banking charges in this country are the highest in Europe. Does the Department have to pay the banks for that service, or do the recipients of the payment which is credited to their accounts have to pick up the tab at the bank for that payment? Is it part of their transaction charges or does the Department pay anything? Some £9 million is involved in paying certifiers for medical certificates. What is the approximate cost per certificate or visit? Are the special reports for disability and carer's allowance applications the ones that go to appeal, or does that concern the initial certificate? Supposing that Mrs. Murphy is applying for a carer's allowance for looking after her mother and a certificate is completed for that person, does the Department pay that doctor for providing the certificate or is it at the stage when it goes to appeal and a further report is required?
May I remind members that we are well over our time schedule so we will move on after those questions have been answered by the Minister.
As regards the last point, I do not have the information to hand but I will obtain it for the Deputy. The cost per transaction with An Post works out in the region of 80p. There is a small cost to us concerning the electronic funds transfer but, at the most, the estimated cost would be approximately 3p per transaction, although I will double check it for the Deputy. The other costs include 50p per cheque issued. This figure includes postage costs of 30p.
Those are cheques that have been issued directly to Mrs. Murphy?
Yes. The cost is 80p.
Is that the cost to the Minister's Department of issuing that cheque?
Those are not the post office costs.
Does the 50p include the cost of the stamp?
At 30p, yes.
The Department will spend almost £2 million on order books and children's allowance books. Are they printed in-house? Does the Department have its own printing system or is it done by private contractors?
It is done by a private company called De La Rue.
Does it have to tender for it?
It is in Bray. I recall asking the committee whether it would visit that facility some time ago, but the committee members did not take me up on that point. On a previous occasion I actually visited the premises to see the operation.
I was there too. It wanted the contract to print the lottery tickets.
It is a security printer and there are very few such companies in the country which would have that capability. The work is obviously put out to tender, as everything has to be, but it is restricted to a few companies.
The Minister mentioned decentralisation and while everybody, including the Chairperson who, rightly, has nominated the north side of Dublin for——
He has pushed very strongly for it.
Yes. Ballymun and Finglas in particular. When I was on the Committee of Public Accounts we had a lengthy wrangle about this issue. Decentralisation costs were clearly indicated in the Estimates but there was a feeling that they did not reflect extra telecommunications capacity. We are decentralising but we are a small State. We could decentralise in a totally different way, which would be to put most services, of every kind, in localities. In other words, instead of Dundalk becoming the headquarters of the pay unit for this Department, which I have no problem with, all the services for that region could be based in Dundalk and Drogheda. In addition, services for the Dublin region could be based in Dublin. That would entail a more localised system of Government. The fact is, however, that the Minister has gone this way and obviously Sligo and Longford are used to dealing with such matters in those areas. Is it the Minister's intention to include in next year's Estimates specific figures for whatever costs are associated with decentralisation, both in the communication and other areas?
I have no doubt that if and when decentralisation takes place in my Department there will be a breakdown of the costs involved. Some time ago I saw the cost breakdown for Dundalk, which I took issue with because I felt it was incredibly high. However, transferring a Department to Sligo or elsewhere not only causes huge difficulties for personnel but also costs a lot of money. It is the Government's view that with increased technology there is no reason so many people should be in the centre of Dublin.
I do not know the cost of medical certificates, but I will obtain the information for the Deputy. Doctors are paid for each disability benefit certificate that is issued, as well as for special medical reports for carers and for disability allowances.
Is it for the report that is on the application form?
No.
If I make an application for a carer's allowance, does the doctor invoice the Department of Social, Community and Family Affairs separately for that, or is it automatically paid out? Does the Department see which doctor submitted the report, and pay out a standard fee? If I am a private patient and have paid the doctor to complete the form, does the Department still pay out for that form? What about doctors who are part of the GMS, where the procedure is done under a GMS certificate?
I will convey the information to the Deputy in writing.
We now move on to section 3, social assistance - subheads B to W. Are there any questions on that section?
Will the Minister accept that because of the way in which the presentation is laid out, it can give rise to the wrong - or perhaps as far as the Minister is concerned, the right - reaction to the figures? The Minister is fully aware that with figures one can have lies, damned lies and statistics. The Minister mentioned an increase of 36% for carers, but does he accept that can give a false impression because there is a huge element of double counting? It is the same with child benefit where there is an increase of 13%. I will focus specifically on that matter, which is on page 8. The increase of 13% is due mainly to the additional costs in the budget 2000 improvements and that is why there is an element of double counting. The Minister is talking about increases last year and this year. What is the percentage increase in child benefit for the year 2000 provided in budget 2000? As I recollect from the budget, the child benefit increases will only come into effect in the last four months of the year. They are relatively modest amounts. I would be interested to know what that percentage increase will be for the year 2000. It gives people the wrong impression that they are getting a lot of money but they are only getting it for a few weeks of the year and are getting only a very small percentage.
I raise a minor issue which intrigues me. I had not realised the Department had engaged international consultancy to any great degree. I see a figure of £300,000 for the 1999 outturn.
What is it?
It is appropriations-in-aid.
What is it about?
It is about international consultancy. Receipts for 1999 were £300,000 and projected receipts for 2000 is £250,000. Will the Minister give us a brief outline on what is involved? As somebody with an interest in overseas aid, I wonder what the Department of Social, Community and Family Affairs does in that area and if it is related to overseas aid?
On receipts for international consultancy, up to December 1999 the Department provided consultancy services in the field of social security. The demand for such services came mainly from central and eastern European and African countries. The services were terminated in December 1999. The 2000 Estimate provides for the balance of the receipts in respect of services already provided.
Is it part of the aid programme or does the income come from the countries concerned or from international bodies such as the UN?
It is directly to countries which we would be assisting in terms of giving social security advice. We did this in Lithuania as well.
What are the main countries in which we have been working?
We have been working in central and eastern European and African countries and Lithuania.
In relation to child benefit, I can give the Deputy a breakdown of the £59.6 million increase, which is a 13% increase. The cost of the 2000 budget increase is £33.5 million. The additional cost of the 1999 budget increase is £27.2 million. There was a slight decrease of about 2,000 in the numbers qualifying which brought it down by £2.9 million.
In regard to carers, the cost of improvements is £20.9 million, which is a 36% increase. That was made up of cost of 2000 improvements, £4.3 million, additional cost in 2000 of 1999 budget increases, £10 million, and provision in 2000 for the trend in increased numbers in the average number of recipients, £6.5 million.
The percentage increase in the amount of child benefit for the first and second child from last year to this year is 23.2% on £8, and in regard to £10, it is an increase of 21.7%.
Effectively, the only extra money payable for child benefit this year, in the 2000 budget, is £33 million.
It is £35.3 million. Because it is paid in September, obviously there is a lag.
In relation to subhead B, non-contributory pensions, does the Department do ongoing studies on mortality rates, particularly in the more disadvantaged areas? One often gets the impression when working in those areas that many people will never benefit from a pension because people tend to die very young. Has the Department or the Combat Poverty Agency done any research in that regard? Does the Minister expect that eventually all the money for non-contributory pensions will come for the social insurance fund and that this side will gradually fade away?
I refer to assistance. When the Minister gets reports from the local partnerships and the local development groups, they often say that for those who do not have a job, the residue, if you like - the under 55's - it is due to certain types of disability. In my constituency, that would include addiction and other problems. Has the Minister undertaken any new initiatives in relation to the type of information beginning to flow from his Department and the voluntary sector on those on unemployment assistance?
In relation to lone parents, does the Minister intend looking again at income disregards for the remainder of this year? We often get very poignant letters from men and women who are lone parents and who want to work but believe it is difficult. During the present Administration, the disregard has remained the same.
In regard to FIS, with which we dealt under a previous Vote, what has the Minister done on the public relations side to make people aware of it? Has the Minister reviewed the cost of caring area? Has he looked at this in terms of all the costs, including health care, the carer and so on? Is it something at which he might look in another budget? The free schemes have been transferred to the other fund.
On the grant to the Combat Poverty Agency, this committee had a discussion with the Combat Poverty Agency about a month ago. I asked it about the spatial dimension to poverty and to what extent it had focused on that. It seems to have a more general focus. What progress has the Minister made in identifying the famous 25 areas? When will we know what areas will get that extra funding and the criteria? Will we take an awful statistic like mortality rates, which at times seem to identify areas that have grave social problems? Is that taken into account under subheads such as T.1?
In relation to old age pensions, non-contributory and contributory, the Deputy will see from the subhead that there is a small increase in the non-contributory pension of 2% or £8 million, whereas there is a large increase in the contributory pension of 10% or £38.8 million. The Deputy is correct that over time, although relatively slowly, we will reach a situation where, in effect, everyone will be on a contributory pension and a non-contributory pension will, more or less, be a thing of the past.
On the national spatial targeting of areas, the Cabinet Sub-committee on Social Inclusion and Drugs discussed the choosing of the 25 areas last week. The parameters are being set in conjunction with the social partners. Ultimately, that committee will make a recommendation to the Cabinet on the choosing of the 25 areas.
I looked at the website of the Minister's counterpart in the UK and at some of the ideas and interesting developments. In terms of the criteria for spatial disadvantage, would there be merit in the Minister bringing forward a Bill on that? The Minister could decide what the criteria would be so that it would not be at the discretion of individual politicians and we would have a clear criteria for the future, wherever the area.
Obviously there is a time constraint, given that the Programme for Prosperity and Fairness is up and running. If the Deputy tables a parliamentary question, I will give him details of the type of criteria, but the National Anti-Poverty Strategy would be fairly central in advising on the indicators we should use. The original strategy indicated that it would be wrong to think that there was poverty only in major urban areas. At one of my first meetings with the Combat Poverty Agency, I insisted that it focus on rural poverty if it was not doing so already. Obviously the White Paper on Rural Development indicated that in bringing forward any policy we would need to be conscious of the fact that there is a considerable amount of rural poverty. From that point of view, the Deputy's concerns are being taken on board. Obviously we will be doing all this in conjunction with the social partners.
The income disregard for lone parents has worked quite well. Despite the myth about lone parents, a large proportion of them are in employment. Some might say that they are working in community employment schemes or on FÁS courses, but it is estimated that over 40% of them are in employment. Therefore, that disregard is working relatively well. We obviously must be conscious of the fact that if one was to increase that disregard it would lead to inequities in the workplace. At present that accusation could be levelled, where people feel that one section of the community is being given a special bonus and they are not.
I want to start with the issue nearest my heart, the farm assist scheme. The use made of figures by the supporter of the Minister is unique. I refer to the statement that farmers are getting an increase of 131%. Unemployment assistance has been reduced dramatically and that allows for the fact that farmers are being withdrawn from that end. The only figure which matters is that the Minister has provided for 8,200 recipients in the Estimate. This obviously falls far short of the hype created on the introduction of the scheme that 20,000 farm families would benefit from this. Does the Minister intend reassessing that scheme to make it workable?
On subhead G, are there many drop-outs in the back to work scheme? There are 39,500 people involved. Is there any way that these people who must drop out for whatever reason can return to the scheme?
There is a small increase in subhead H. Has the Minister put any thought into working together with his counterpart, the Minister for Enterprise, Trade and Employment, to make sure that some of these people could be utilised on community schemes where some of the community groups are finding it difficult to find participants due to the three year rule and all the legislation. It would be much better if some of these people between the ages of 55 and 60 were allowed to work indefinitely on such schemes. I contend that some people could benefit from a move from the pre-retirement allowance to a community employment scheme.
None of us can be proud of the increases provided to people with a disability in recent years compared to those given to old age pensioners. The Minister needs to look at this area.
As far as the Border region is concerned, I welcome the Department's continuing support for the Programme for Peace and Reconciliation, which is important. I hope that new scheme is up and running as soon as possible.
I thank the Deputy for his remarks about the peace agreement. He can rest assured that there will be continuing support in that respect.
The Deputy wants me to have another look at the assessment process for the farm assist scheme. That was considered in the Programme for Prosperity and Fairness and, in consultation with the social partners, and particularly the farmers, we made the agreed changes in the budget immediately following the conclusion of the agreement. These changes come into effect in October 2000.
Can there be some realistic agreement that farm accounts, where relevant and properly put forward, would be accepted by the Department of Social, Community and Family Affairs? All sorts of mythical figures are being drawn out of the sky regarding how farmers should have sold so many animals. No account is being taken of mortality or many other issues here. I would ask the Minister to re-examine the situation in the interest of fairness.
The scheme has not met the purpose which the Minister set down for it. It has not applied to the numbers intended by the Minister, farm organisations and everybody else. The Minister for Agriculture, Food and Rural Development stated that it simply has not worked - those were his words, not mine.
I do not accept that.
The numbers speak for themselves.
We set up the scheme. I negotiated the scheme with the farming organisations who, in effect, expressed themselves happy with the scheme which was produced.
Maybe they are not as much involved with these people as I am.
Perhaps. We estimated that a certain number of people would avail of the scheme, but that did not materialise. There were 40,000 people on the streets of Dublin not that long ago and, as I said many times both in the Chamber and at this committee, it was never the intention that the farm assist scheme would take care of the problems of these 40,000 people. I think people would accept that not everybody who congregated in Dublin was in severe difficulty.
This year the estimate for the scheme will increase substantially. The Department even publicised the fact that the take-up was slow, in the hope that farmers would avail of the scheme. It was also emphasised that there would be many farmers who had not been assessed for many years who would be eligible for the scheme. These farmers may find that, whereas they may have disclosed their circumstances a number of years ago, my Department is not aware of their current circumstances. That would obviously mean that many people would fall out of the system.
Many of the assessors stated that they could not take into account the seriously bad year last year but that it had to be based on an average of ten years, yet some of those people are having their systems reassessed within 12 months. The statement that it is not being assessed for a long time is just a red herring.
Generally the farming organisations have not been knocking on my door on the issue of the difficulty of assessment, in that the type of assessment which is being carried out by my Department has been agreed for many years. The assessment is conducted on a certain basis. The farming organisations understand that it is not the same type of assessment as that which is carried out in the calculation of income for taxation purposes. Deputies from all sides of the House come to me from time to time and indicate that there are particular difficulties in specific cases. If there are such individual cases, I will have the Department look at them to see whether anything can be done.
On the increase of £20.4 million in the Estimate for 2000, we estimate that there will be an increase of about 3,400 in the average number of recipients at a cost of £13.7 million. Expenditure for a full year in 2000, as opposed to nine months in 1999, will amount to a further £5.3 million. As already stated, the cost of implementing the improvements in the 2000 budget will result in an increase of approximately £2.5 million. Will Deputy Crawford restate his point in relation to the pre-retirement scheme?
Would it be possible for some of those involved in the pre-retirement scheme to be included on community schemes?
The Government is considering the issue of older people in general and is keen to re-involve them in the workplace, particularly in light of current difficulties in the labour market. People on pre-retirement allowance will be included in those considerations.
Deputy Crawford also referred to the cost of disability allowance, an issue to which Deputy Broughan may also have referred earlier. The caring allowance is referred to in my Department as the "continual care payment", namely, the payment to be made to carers over and above their carer's allowance. It was suggested in the carer's review that before the continual care payment could be introduced a needs assessment system would have to be put in place in order to assess the needs of individual carers and care recipients. A pilot project involving the Department of Health and Children and my Department and chaired by the Minister of State at the Department of Health and Children, Deputy Moffatt, is currently under way in the Western Health Board area with a view to discovering how such a needs assessment system would operate. If such a system is ever extended to the entire country, there will be a requirement to provide a huge level of resources, and rightly so.
Under the existing system, a doctor may sign a certificate in respect of carer's allowance and that is more or less accepted. However, not all the 15,000 people on carer's allowance find themselves in the same circumstances and some of them may require additional assistance. These issues are all under consideration at present.
The Minister referred to the fact that there was a major increase in contributory pensions as opposed to non-contributory pensions. A scheme was eventually introduced in respect of self-employed people with less than ten years' qualifying contributions which allowed for those with five years or more contributions to qualify for payment. It was originally estimated that this would cost between £70 million and £80 million but the figure was later reduced to £30 million and it is now believed that it will cost £11 million per year. How can the Minister justify a situation where people with ten years' contributions only qualify for half the full entitlement if their date of birth preceded the start date of their pension by a number of days? These people should be entitled to at least nine tenths of a pension, based on the fact that they paid ten years' contributions. Those with seven years' contributions should qualify for seven tenths. The Minister has taken a step in the right direction but there is a need to regularise the position.
I thank the Deputy for complimenting me in that regard. In effect, I was the first Minister, despite promises from my predecessors——
We dragged the Minister screaming through the Dáil in respect of this matter.
No, that was not the case.
It is on the record of the House.
We made a commitment in our programme for Government, which was published before the last election, that we would take action in respect of this matter, and we have now done so. As regards taking further action, perhaps the Deputy's party could do so if it ever returns to office. I have delivered on the commitment we made before entering Government. Perhaps we will make further commitments in the run-up to the next election in 2002.
Is the Minister referring to the next election or the one after it?
The Deputy is like a turkey looking forward to Christmas.
With regard to the new changes that will be introduced, when will application forms be available for those who paid insurance contributions prior to 1953 and who might qualify for pensions? I expect that these forms should be ready for issue in the near future and perhaps the Minister can inform us of the exact date on which they will become available.
Deputy Crawford referred to a number of cases where reasonable action did not appear to have been taken in respect of people's entitlement to farm assist payments. I am familiar with a case where the yellow form - I am not sure of its designated number - was completed and it emerged that the farmer in question, who was a bachelor, had a nil income. The social welfare officer decided to ignore that fact and assume that the farmer had an income of £3,000 per annum or £60 per week. When I brought the matter to the attention of the social welfare officer, I was informed that such an assumption should not have been made. The case is now under review.
It is unbelievable that a person was treated in this way and that, despite completing the relevant form, a notional figure for income could be plucked out of thin air. The individual in question is meticulous in terms of the way he does things and he could produce receipts to prove that his income is nil. However, this was ignored and a notional figure arrived at. Is that the norm or are the circumstances to which I refer extraordinary?
A number of worthy schemes are listed under subhead G. There is a pilot project for early school leavers in respect of which expenditure of £10,000 has been provided. Will the Minister provide further information about this project?
Following Deputy Broughan's comments in respect of the income disregard for single parents, the Minister indicated that an increasing number of these people are returning to work. The income disregard is very helpful in this regard and the Minister indicated that 40% of these people are now in employment. With regard to incentives for people to return to work, there is a major incentive which might be provided to those on unemployment assistance, unemployment benefit or lone parent's allowance. The major disincentive which prevents these people from taking up employment relates to the rent allowance scheme. According to the Estimate, £113 million has been expended in this area. There is a pound for pound disregard in respect of rent allowance, which many people believe to be a major disincentive. A person in receipt of a rent allowance of £30 or £40 per week who takes up employment and earns, for example, £50 per week will immediately lose that allowance. People to whom this happens believe they are working for virtually nothing. Will the Minister consider the position in this regard?
The single parent income disregard is excellent and provides a great incentive for people to return to work. However, the disregard in respect of rent allowance nullifies a major part of the benefits which might accrue to those who re-enter the workforce.
My final point relates to FIS and the position in relation to self-employed people. Progress does not appear to have been made in this area, despite the fact that we were expecting great strides to be made in the budget. When does the Minister propose to give serious consideration to this matter and satisfy the concerns of the many members of this party who have sought action in this regard?
I delivered on the commitment in Partnership 2000 that qualification for FIS should be judged on a net income basis. The new partnership programme contains no commitment in respect of FIS. My views on the issue of extending qualification for FIS, which I enunciated on a number of previous occasions, are clear.
With regard to pre-1953 contributions, a scheme is already in operation but I am not sure if application forms are required. A fairly methodical examination is being carried out in the Department in respect of old cases and we will publicise the fact that certain people with pre-1953 contributions may qualify for payment, in order to encourage them to come forward with information about their insurance records prior to 1953. Given that thesecontributions were made pre-1953, that will require a great deal of work. Already people are benefiting from this measure. I had correspondence from one person relating to three of his family members resident in England and I recently informed them that they were entitled to a pension based on their pre-1953 contributions. The issue of assuming income for assessment——
Are application forms and explanatory leaflets available? For example, like all Members, I have been receiving correspondence on this issue for some time, even before the changes were made. People are wondering when to make their applications and what are the terms.
We published a newsletter last year, which was sent to 330,000 old age pensioners, and we will update that with all the latest information, including that relating topre-1953 contributions. We will undertake a publicity campaign but we are not aware of all the people involved. We cannot just push a button.
When will that take place?
That will happen over time as people come forward in regard to the pre-1953 issue.
The scheme is due to come on stream in October. Payments can be claimed from then onwards and usually the Department has a three month lead-in time. I expected that explanatory booklets and application forms would be available in advance. Some people are not getting information but they think they will qualify. Perhaps they will not but if the scheme was advertised early at least they could get their applications in so that they could be examined. Eight or ten of my constituents are seeking application forms.
I accept what the Deputy says and that will happen. With regard to the assumption of income, if he gives me the detail of the particular case, I will have it checked, but I do not condone such action. Given that there is a sophisticated appeals structure within the social welfare system, cases such as that will always come to the fore. It is more than likely as a result of the Freedom of Information Act, 1997, that such cases will come to light.
We have concluded the debate on subheads C to W. Five minutes had been allocated to discuss No. 4, social insurance. Will we wrap up or come back?
With regard to rent allowance, will the Minister comment on the disincentive——
Will we finish the meeting or come back? We only have five minutes to discuss social insurance.
The Minister will take questions in the House next week.
Rent supplement is an issue and there is a commitment in Partnership 2000 to modify it. We have made some amendments to it but it was raised with me recently by the partnership section in my Department in regard to its withdrawal, something which I have undertaken to examine again.
How quickly does the Minister expect——
I have already asked my Department to examine it. There will be good news. We have made changes.
There are no questions on No. 4. Is that correct?
I thank all the members and you, Chairman, for making today's discussion possible, and I thank all my officials. A great deal of work is going into making sure that a rabbit is not pulled out of a hat to surprise us, as members will see from all the booklets.
Did the Minister organise the vote?
We opened a book beforehand on what issues would come up and all the favourites were raised.