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SELECT COMMITTEE ON FAMILY, COMMUNITY AND SOCIAL AFFAIRS debate -
Wednesday, 28 Feb 2001

Vol. 4 No. 1

Social Welfare Bill, 2001: Committee Stage.

I welcome the Minister and his officials, Tom Mulhern, Tim Quirke and Geraldine Gleeson. It is proposed to sit until 8 p.m. and to take a break at 5.30 p.m. Amendments Nos. 2, 33 and 49 have been disallowed because they involve a potential charge on the Revenue. A list has been circulated of proposed groupings of amendments.

SECTION 1.

I move amendment No. 1:

In page 5, subsection (2), line 13, after "one" to insert "and may be cited together as the Social Welfare Acts, 1993 to 2001".

I thank the Minister and his officials for their briefing on the Bill. It was conducted at short notice in my case because I was debating the Carer's Leave Bill, 2000. The amendment is an old chestnut which we feel should be made. There are many references to the Social Welfare (Consolidation) Act, 1993. I have attended Committee Stage of the Social Welfare Bill for the past three years and this is my second attempt to have this amendment made. There is a widespread feeling that we are proceeding on an ad hoc basis in regard to social welfare legislation as evidenced by our receipt of an amendment by the Minister his morning.

The Minister will say the amendment is covered by section 3(8) of the 1993 Act but there remains a necessity to examine social welfare provision under more generic legislation. Everybody in opposition experiences difficulty when debating a Social Welfare Bill and preparing amendments. There is a feeling that the legislation is being rushed through, similar to the Finance Bill, at great speed. We are trying to facilitate its passage but the Opposition is not given much time. In other countries the civil service assists Opposition members in drafting technical amendments based on previous Acts. Unfortunately, this has not happened yet in our democracy. The two largest Bills each year are rushed through the Houses. This legislation is more important to the 900,000 social welfare recipients but it is being rushed through at breakneck speed because there will be a second Social Welfare Bill later in the year. The amendment is a reference to the necessity for further consolidation in this area, despite what the Minister might say about the 1993 Act.

I welcome the Minister and his officials and look forward to working with them. This is the first time I have attended the committee. I thank you, Chairman, for allowing me to contribute to the debate, even though I have not taken up membership of the committee yet.

I support Deputy Broughan's amendment, which he also tabled last year. The various Social Welfare Acts since 1993 have been very complex and there is a need for consolidated legislation. The Minister made a commitment on this matter last year. A social welfare regime is needed whereby changes that are made every year can be easily understood.

While many of the headline changes were announced in the budget we are only getting to debate them in late February and early March. That is unsatisfactory from a parliamentary point of view. The process in which we are engaged requires a guillotine on the passage of the legislation at the end of March so that the new changes can be implemented in the first week of April, which I welcome. However, because there is a guillotine it is very difficult to have an effective input to the major policy changes in this legislation.

There is a need for greater consolidation. There will be a great deal of confusion this year and next year given the changes that will occur in social welfare provision such as the short tax year in 2001, an additional Social Welfare Bill in the autumn and the euro changeover. Consolidation is needed and Deputy Broughan's amendment would be a useful instrument in achieving that.

As I said last year, my advice is there is no need for this collective citation. It is already contained in section 3(8) of the 1993 Act. Work has begun on consolidation and we do not expect it to be finished until next year. However, the work on consolidation is ongoing.

Could the benchmarking process be used for a more consolidated approach? I understand an interim report will be published. The point Deputy Hayes and I make in regard to the variety of schemes administered by the Minister is valid. Last year on Committee Stage we discussed 44 or 45 major payments. For example, all backbenchers received the same information regarding the mobility allowance and we were all trying to track down the Minister responsible. Certain aspects of the social welfare system are upsetting at times, particularly payments to health boards and who ultimately carries the can for them.

Last night, for example, a delegation of health sector workers came to the House to see me regarding pension provision. They feel they are being short-changed as a result of amendments made in this area by the Minister. There is a necessity for a cleaner, simpler regime through legislation.

Consolidation merely brings together provisions of legislation into one Act - it neither adds nor subtracts in terms of provisions. Regarding benchmarking, it has specific terms of reference in relation to indexation of social welfare payments and I cannot see how it could be used as a vehicle to promote consolidation. In the planning section of the Department work is ongoing on bringing forward a consolidation Bill, but it is at a relatively early stage as there are quite a number of other issues on our agenda, with much planned legislation, as I indicated, which will take precedence.

Amendment, by leave, withdrawn.

Amendment No. 2 is out of order.

Amendment No. 2 not moved.

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 passage 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 payment increases.".

While I recognise there has been substantial progress this year in moving forward the dates of payment for many of the increases announced in the budget and included in the Social Welfare Bill, there is still a need to clear up the dates of operation for some of these changes. I refer specifically to child benefit, the increases in which will be effective from 1 June. We need one date upon which all increases are introduced. It would be churlish of me not to accept that there have been improvements this year, but the longer the period between the announcement and the increase, the more difficult it is. The Minister should bring child benefit in line with other increases in unemployment assistance and unemployment benefit. There are also tidying up difficulties regarding 4, 5 and 6 April, which should be considered by the Minister. I am particularly interested in child benefit and do not see why the increase cannot be brought forward to April.

I will repeat what has been said in the hope the Minister might at least take note of what we are saying. There are a number of dates for increases coming on stream, and it is very confusing for ordinary people. Last year there was a difficulty in terms of some of the free schemes coming into force in October. The amendment concerns providing a fixed date when all new schemes and increases can be brought on stream. Of course, the Minister will tell us what he has done, that he has brought certain dates forward, and no doubt we will get a history lesson in that regard outlining the marvellous job he has done. Nonetheless, a valid point can be made for all benefits and other changes, such as changes in income tax, to kick in at the same time. Last night, for example, the Minister announced a change in relation to stamp duty on the purchase of houses which came into effect from 14 February. Why can all changes not come on stream at the same time? From next year all welfare benefits will kick in from 1 January, and I hope this will include child benefit. In his speech on Second Stage the Minister was very good in setting out what child benefit would be payable in 2003 but he did not say when it would kick in. In Britain, increases in social welfare payments kick in from the week following their announcement. Their system is equally as complex as ours.

Seventy-eight pence.

I do not care about the amount, it does not matter. They can announce and implement a change without having to wait months, and that could be done here if the will existed. Perhaps today the Minister will tell us they will all come on stream at the one time.

I support my colleagues in Fine Gael. It was deplorable that in Charles Haughey's time benefits and increases were delayed almost to the end of the year. The Minister has been recovering ground lost by predecessors from his party. The move to 1 January is very welcome. Unfortunately, the Minister has missed his key target of 1 January in relation to increases and is accepting that increases will not be paid as promised on that date. Therefore, a key election promise of Fianna Fáil has been broken by the Minister. It is regrettable that he has not kept to the timetable announced by the Minister for Finance, Deputy McCreevy, two years ago. When will child benefit increases be made next year? It seems the Minister will have to back-date all payments at this stage.

Minister, is Deputy Broughan's history lesson correct? Was it not the 1973-77 Government which should have been referred to?

The Chairman is supposed to be impartial.

I am just asking the appropriate questions.

It was not a Fianna Fáil Government which brought forward the budget from early February to early December in recent times, which in effect lengthened the period between the announcement of increases and receipt of them. It is wrong that social welfare recipients should have to wait so long for increases and we have endeavoured to set the dates as close to budget day as is humanly possible. When I came to office increases in payments were made in late June and early July, the dates adhered to by the previous Government. Benefit increases will now be paid on 5 April and next year they will be effective from 1 January. There are logistical problems because of the cycle of book payments etc.

Regarding the UK experience, I and my officials are not aware of what Deputy McGrath mentioned about the kicking in of benefits. Our understanding of their system is that they have a longer lead-in time. It may be that their announcement is more designed for PR than reality - perhaps the decisions and announcements were made previously and reannounced.

Regarding child benefit, in recent memory it has always been paid in September. This is the first Government to undertake to bring that progressively forward and in this year the changes will be effective from June. We hope that over following years we will progressively bring this date forward.

Deputy Broughan referred to an election promise. We did not make an election promise in relation to bringing payments forward, rather a decision was made during the lifetime of the Government to align the tax and social welfare years. We have gone even further than anyone anticipated by coming to 1 January. It is exactly the same regarding this amendment. Irrespective of what happens with the delivery of the increase, people will obviously continue to get their primary payment. They will also get their increases effective from 1 January irrespective of when they actually get them. That goes to the core of the amendment, to a certain extent.

How long does that take?

It depends. If people go on electronic fund transfer, and quite a number of people are, they would get their payment on the due date. Obviously if people wish to get their payments on the due date they will be informed that this is the way to go. Anyone on a post office book, as Members will know from yesterday's Question Time, will need a six month period in which to implement the changes in those books. This is not an easy system and cannot be changed overnight. What we are trying to do, as Deputy Hayes has encouraged us to do, is to reduce the time between announcement and delivery.

Regarding the amendment, different commencement dates reflect the fact that some payments are made in advance, such as disability benefit and pensions, while others are made in arrears, such as unemployment benefit. Neither our system nor the post office would not be able to cope with everyone getting paid on the same day. Also, events such as unemployment and maternity take place on different dates for individual cases, so it would not be possible to deliver increases and payments on one date. While increases for this year are scheduled for different dates they are paid as and from the same week, 1 April 2001.

Why does this process take six months? Can the Minister do anything about resources so that it will not take that long to change? What is the problem? To clarify, when will child benefit be paid from next year?

Child benefit for this year will be paid from June. We have not made any decisions as those are obviously budgetary decisions which will be made at budget time. We have indicated already a substantial investment in child benefit. Not only did we increase it hugely to £25 and £30, we brought it back three months, which costs a substantial amount of money. If we did so progressively the cost would come out of the £330 million earmarked for next year and each following year.

Regarding the six month period, I am sure I offered committee members the chance to visit the printing works where all these books are produced by a commercial company. That company has had the contract for some time. When Deputy Woods was Minister he took us down to see how the system operated and the committee did not take up my request, to my surprise. It was a learning experience for me that time to see how the system works.

We must take the Minister up on that.

The Deputy is correct that this year, given our good decision to bring the payments back to 1 January, there will be a delay in paying people and obviously resources will have to be put into ensuring that is lessened or eradicated in following years. The Government has agreed that that would be the case. The situation with a private company such as the one which has this contract is that it will not invest in more machines that would be lying idle for long periods, so obviously that is something we will have to negotiate with that company in the coming year.

Yesterday the Minister put quite an emphasis on the importance of child benefit when I raised the issue of child poverty. Given that child benefit is the main mechanism the Minister is using to tackle child poverty, would it not have made sense to bring the payments forward to an earlier date given the well documented level of both relative and consistent child poverty in Ireland relative to our EU neighbours? If that is the Minister's policy——

That is why we brought them forward. With the amount of money available we could have brought them forward a couple of months more but that would have reduced the overall amount we were giving people - the £25 and £30 - out of what was available. I have made the point in relation to other social welfare payments that one is better off giving people a higher increase over a 12 month period than reducing it. I accept what the Deputy says. She should accept that this costs £85 million for three months - from September to June - but it could go up because the amount will rise by over £300 million. That was the rationale, to bring this back progressively and Members should accept our bona fides on that.

The Minister has clarified that it costs approximately £85 million to implement the change we have outlined in this year's funds, so it is a money argument as against a bureaucratic or book argument. It is not really about books. If the issue is about money, it is about money and it would be fairer of the Minister to flag that to the committee as against saying it is about books. If we cannot design a system of payment which can get around this problem it says a lot about our commitment to IT and other changes in the workforce. If this is about money it makes the argument that much easier as I suggest to the Minister that it is then unfair that he should therefore, from April to June, not allow the changes he has already announced, in respect of child benefit, minimal as they are, to kick in. It is important to clarify the issue and I am glad the Minister did so but this is not really about book payments. One could possibly introduce a situation where in the first week of June the backdated amount of money adults and parents have lost as a result of the failure to implement the increase could not be brought about. This is easily done if the commitment is there, so this amendment has clarified for this side of the House the precise reason we cannot have commencement dates for these increases occurring at the same time.

Since I have arrived the Minister invited us on a junket to the printers. Even if we see the perspiration on the foreheads of people dropping with exhaustion to get these books out, what will that do to rectify the delay in getting the books out?

The Deputy would not be expected to take his shirt off or roll up his sleeves.

Seriously, what good will it do?

As I said earlier, it is to allow the committee members to understand the complexity of the situation involved.

We want to avoid the delay in getting the books out.

By going there the Deputy will see and better understand exactly what is involved in this. Deputy Hayes referred to minimal changes. The minimal changes we have made to child benefit, if one can call them minimal, are far more excessive than the ones he and his party called for no less than six months ago. We have gone further——

Here we go with the history again.

It is not history; it is fact. We have gone further in relation to child benefit than any of the Opposition parties even sought. The facts speak for themselves.

With regard to post office books, they are the preferred option of the vast majority of social welfare recipients. There has been reluctance to opt for any other payment method. We deliver our payments in many different ways but the preferred one, by far, is the book. Much of that is to do with that fact that old age pensioners and widows, in particular, like to get out, go to the post office and enjoy the social interaction. They would not have that with EFT.

We must work with the system that exists. If we are to continue on the strategic route of bringing forward the payments as near to the date of decision, that is, budget day, as possible, we will have to ensure that the wherewithal is available to do it. However, we will also have to encourage whoever has the contract and give them the resources to deliver the books more quickly. Ultimately, there is no point trying to pull back the payment dates as near to budget day as possible unless there is the wherewithal to deliver the payments at that time.

This boils down to pounds and pennies. If the will was there, the Minister could do it by a number of methods. First, the Minister could pay them retrospectively. The money could kick in immediately and, as soon as the cheques and books are ready, the money would be paid for the period for which it is owed. Second, is it not beyond the ingenuity of officials in the post office, having been briefed on the increase, to pay the additional payments from the first day without the books being changed? It is easy to do that. As far as I know, that is what happens in Britain. People are paid as soon as the increase has been made.

Third, while the Minister says the preferred option of many people is the book, does the smart card system not operate in post offices? The customer's smart card goes through the post office machine, just like a credit card, and the assistant pays him or her the amount indicated on the screen. Why not extend that system? Eventually, the Minister could get rid of all books and operate on smart cards. The Department has far more control in that case and will be able to implement, almost instantly, the changes that occur. Might that not be a better way to invest the Department's money? In the longer term, it would eliminate the need for books.

There are plans to move towards the type of system suggested. The payments made by using the smart card are generally short-term payments, such as unemployment payments. There are plans to move towards an easier system and that is one of the reasons the company that has the contract for delivery of the books is not prepared to move too far down the line, particularly because there is also a general trend to move towards becoming a cashless society. Undoubtedly, EFT will become far more popular as the years pass.

We are caught between having a system that is preferred by the people - everybody wants to get "the book" - and the inevitable move toward the use of better technology. The preferred choice of my Department would obviously be electronic fund transfer which means that everybody would get his or her payment on the day. It would also cost a good deal less, as we discovered previously during debates on the issue of rural post offices. However, we must hasten slowly in this regard because there are implications down the line. There will be encouragement for people, in the changes we have made for 1 January, to opt for EFT if they want their payments on the due date.

In relation to commencement dates for maternity benefit and maternity leave, approximately 8,500 women missed out because the Minister did not opt for an earlier commencement date. He had the opportunity to do so, given that he was introducing the improvements to ensure women would benefit immediately. The issue of commencement dates is extraordinarily important. Many women are disappointed that they have lost out on these.

The Government made those welcome changes. It was not the fault of the Department that the changes could not be introduced earlier. The original decision by the Government was to introduce the changes - as would have been the case with any decisions made by the Fine Gael Party when it was in Government - on a date in the future. However, we decided to bring the date forward as quickly as possible. We were caught with the change of regulations in the maternity leave area. The regulations had to be changed before we could introduce the benefit, so there was a time constraint. While some people were disappointed when the announcement was made, it was made clear that it would date from 5 April and many more people qualified, who would not otherwise have done, when we brought the date forward from 5 April to 8 March.

I am not convinced by the Minister's arguments. If I were a cynic, I would suggest that the variety of dates, which stretch from April to June, could provide this Government with many opportunities to go to the polls either within that period or shortly afterwards. If the money is available to pay these increases, they should be paid now.

The Minister's argument on Second Stage was clear. He said increasing child benefit was a direct way to help families deal with the problem of child poverty. If that is the argument, the increases should be effective from 1 April. If the Minister gives a commitment that he can pay those families the difference between April and June, I will withdraw the amendment. It is hard to believe the suggestion that a private contractor is determining the methodology of payments because they have failed to come up with a means of providing books for people who receive their payments in that way. It is right and proper that people who will require additional resources from child benefit should receive those payments in April. This is a most important matter. I am not putting a frivolous or technical argument to the Minister. Payment is required now. If these changes cannot be made today, given the amount of money in the economy, when can they be made? This is an important point of principle so the amendment should be pressed.

I have two questions for the Minister. First, what is the total cost of printing the various books and so forth that are produced by the Department each year? The Minister probably does not have the figure - I knew I would catch the officials out somehow today.

Let us stick to the amendment.

Chairman, this is relevant. What is the cost and does it go to tender? I received an e-mail about maternity leave. The order was made on 8 February but it does not take effect until 8 March. Why was there a four week lead in period? Could the order not have been expedited from the day it was made? Was it necessary to have a four week lead in period? If so, why?

We may be wandering from the amendment. I think the order is made by the Minister for Justice, Equality and Law Reform. Let us not wander too far from the amendment.

The Minister rightly congratulated staff regarding the recovery of a few hundred million pounds which were fraudulently acquired. Some commentators stated that the Department might owe arrears. I think it was Fintan O'Toole who commented on the difference in the manner in which we chase people who owe the State taxes and those who received social welfare payments to which they were not entitled.

The Minister has admitted on several occasions that he is going to miss his 1 January deadline. Will he be able to make this up in terms of interest payments to those on social welfare benefits who will receive increases on 1 January due to the introduction of the euro? These people will suffer for a number of weeks before the Minister pays them the arrears. Does he intend to make up the additional interest on the arrears to which these people might be entitled? He will miss the date for a range of book related payments and people might be entitled to certain money over weeks or months. How is the Minister going to make this up to them? He is not prepared to give the date next year on which child benefit will increase.

We must keep to the amendment. We are touching on later amendments. This amendment refers to dates.

It is obvious that Deputy Hayes does not recall 1997, which is not too long ago, when his party did nothing about bringing child benefit back from September and gave paltry £1 and £5 increases. These were unbelievably low increases at a time when money was available. The increase was £1 as opposed to £25. This year's increase is amazing.

Deputy Hayes may or may not be aware that there is only so much one can do in one year with a budget package of £850 million. He stated that the country is awash with money. However, there are constraints on the public finances and one has to cut the cloth to one's measure. Over a three year period we have undertaken to pay a substantial amount of money - £1 billion - in child benefit. The aim will be to bring the increases forward progressively as much as we can.

It would be wrong to be critical of the company which produces the books. It is not just a simple matter of printing a few books. This is a high security, high risk business. By and large, it has not gone wrong over the past number of years and credit is due to the company involved. Only two companies in Ireland have the wherewithal to deliver these books and this company is a past master at it. The printing contract is worth about £1.8 million.

I cannot say when I will introduce increases in child benefit. I am not going to give a date as this is a budgetary matter.

Can the Minister give a target?

Whether the Deputy likes it or not, it is the Government which makes decisions.

In response to that——

Let us keep to the amendment.

The Minister stated that there are constraints on public expenditure and that we all have to be responsible in respect of the amount of money spent in the economy. The Minister hates to be reminded of the fact that he went to his Cabinet colleagues late last year to try to obtain an additional envelope of money for people in this category and was dramatically turned down due to the effects of inflation. He understood, recognised and proposed the kind of dramatic increase in expenditure to deal with the crisis we had and continue to have. I am using the arguments the Minister used to his colleagues before he was so dramatically chucked out of the Cabinet room. It was one of the most humiliating blows suffered by the Minister.

This is an important amendment. We have the money and the resources. With a little additional IT comprehension we should be able to put in place the kind of regime which would allow people on relatively modest incomes to receive the increases back dated to April.

Obviously I cannot comment on issues discussed in Cabinet.

I will read the papers in 30 years.

I would advise the Deputy not to believe everything he reads in the papers. I will give him another history lesson. I have been more successful than any of my predecessors in getting progressive percentage increases in the social welfare budget. Last week the Deputy said he might have been in short trousers. I assure him he was not in short trousers three and a half years ago when his party's budgetary package was £215 million.

There is no comparison between the resources available then and now.

This budget amounts to £850 million - more than four times as large. Money is being dedicated to a pension fund for the future. That is where much of the money is going. We are putting money away for a rainy day. I hope the Deputy agrees with this decision and, unlike the Labour Party, does not want to raid that money. That is prudent government.

If the economy had not been managed successfully between 1994 and 1997 the Minister would not be in the position he is in today.

The Deputy's party did not deliver an iota to ordinary people. It gave £1.80 to old age pensioners. Shame on it. It also gave a £1 increase in child benefit. That was just three and a half years ago.

Amendment put.
The Committee divided: Tá, 7; Níl, 8.

  • Broughan, Tommy.
  • Browne, John (Carlow-Kilkenny).
  • Coveney, Simon.
  • Fitzgerald, Frances.
  • Gilmore, Éamon.
  • Hayes, Brian.
  • McGrath, Paul.

Níl

  • Ahern, Dermot.
  • Ahern, Noel.
  • Brady, John.
  • Brennan, Matt.
  • Browne, John (Wexford).
  • Foley, Denis.
  • Moloney, John.
  • Wade, Eddie.
NEW SECTIONS.

I move amendment No. 4:

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

"2.-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 increase in the consumer price index since the commencement of the Act of 2000, and the said report shall compare the percentage increases in payments set out in Schedules A and B to this Act with the corresponding provisions of the Act of 2000.”.

We discussed elements of this amendment in the previous debate. Before Christmas, the ESRI made an interesting report to the Labour Party which showed conclusively that last year, by the skin of his teeth, the Minister gave a very modest rise indeed. I do not want to go through history lessons but the effective inflation rate for most of last year was almost 7%, yet the Minister gave a very basic increase of £4. Even impartial State economists agree, however, that either there was no rise in basic rates last year or as regards some benefits and assistance payments, perhaps there was a tiny rise of literally 50p or £1, when one factors in the significant inflation.

As the Minister knows, inflation had a profound impact on public life last year. My colleagues in the trade union movement, particularly in SIPTU and IMPACT, were deeply upset at the way in which rampant inflation threatened to totally unhinge the PPF. The whole programme seemed to be under threat last September, as the Chairman will remember, and that was why I raised the matter at this committee. Workers had the trade union edifice to stand up for them and make the point, as Mr. Cassells, Mr. Geraghty, Mr. McAloone and others did very eloquently in September and October. They called on the Taoiseach to immediately instigate the review mechanism, whereby the PPF was effectively renegotiated. That happened because of a mechanism in the PPF which the trade unions had inserted so that workers' representatives would have an opportunity to re-examine the programme if inflation went ballistic, as it did, due to pressure from the falling euro. Social welfare recipients, however, have nobody except us to make the point for them.

Deputy Hayes is right in saying that towards the end of the year the Minister's friends in the media pushed out the story that he had asked the Cabinet for £74 million. He knew that despite all the bravado at this committee last year and during Dáil questions he had short-changed social welfare recipients who had lost out drastically due to inflation. The ESRI says that was the case. The Minister came in with his request for £74 million but he was told to get lost, perhaps by the Progressive Democrats wing of the Cabinet, led by the Ministers, Deputies McCreevy and Harney. They said they would not give any significant package such as was sought by this committee in January to make up the short-fall to social welfare recipients as we did for workers covered by the PPF. There is no such mechanism for social welfare recipients. I am walking in the footsteps of a former Minister, Deputy De Rossa, in asking the current Minister if it is possible to insert in the Bill some mechanism that would track inflation from now on.

Our entry into the euro zone has been a roller-coaster experience; we have been up and down, but mostly down. It is a helter-skelter ride and we really do not know where we are heading after the negotiations at Nice. I remember the major debate on the Nice treaty between the Minister for Foreign Affairs, Deputy Cowen, and Deputy John Bruton. We are not quite sure where it will lead. If the euro strengthens against sterling before a, hopefully, re-elected Labour Government can bring Britain into the euro zone, we could be faced with a difficult prospect later this year or next year.

Everybody appreciates that the £8 basic rate was not what most of the groups we met before Christmas wanted. Nearly everybody wanted a basic £14 increase, including the Combat Poverty Agency. The Minister granted an £8 rise but the Irish National Organisation for the Unemployed said that the minimum rise should have been £10 to allow for inflation last year. The Minister should have given £5 to make up for what was not granted last year and another £5 to cover this year. That would have amounted to £10 but the Minister did not do so and, therefore, he is running the same risk this year. We can no longer believe the Department of Finance's inflation projections. The Minister's Department is much more reliable in this regard.

While we have discussed this issue in a previous debate, we need some mechanism in the legislation which may be binding on the Minister and his successors. The Minister has given us a load of history lessons, but I do not want to go into the history of the issue again when the Minister responds.

One of the extraordinary aspects of the Minister's administration of his Department, which we will be drawing attention to in the forthcoming general election campaign, is the percentage of money spent on social protection as a ratio of the national income. It is officially the lowest in Europe. We used to be the second lowest after Luxembourg, but we have now gone to the bottom of the social protection league. I know these figures do not refer only to the social welfare budget, but Denmark spends up to 30% on social protection, while the United Kingdom and Finland spend 27%. Spain is the second lowest, spending only 21%. The Minister mentioned pension increases but the UK still spends a much higher proportion of national income on social protection programmes.

I studied economics and I know it depends on how one looks at the figures. Some of the Minister's officials have told me that this year social welfare spending is down to less than 7% of GDP. We need a mechanism whereby social welfare spending will keep pace with inflation. When I first became a member of this committee a couple of years ago I heard Deputy De Rossa eloquently arguing for such a mechanism because of the onset of the euro. The fact remains valid and the Minister should consider such a measure this year. Workers have eloquent and determined trade union leaders from SIPTU, IMPACT and other unions to stand up for them, but social welfare recipients have nobody but Deputies, including the Minister.

I support this amendment. My amendment No. 2, which is similar, was ruled out of order for reasons that I now understand. This is an important matter, particularly as the PPF had a rough ride before it was accepted. I learned from my first economics lesson that inflation affects people with small incomes more than any other group in society. We should insert in the Bill a legislative provision to allow us and the Minister to report, at regular intervals between now and December, to the Dáil or this committee on the effects of inflation on the Minister's proposals. This is important for all the reasons Deputy Broughan has outlined.

The Minister may claim that he is meeting the targets which he set and which were set for him in the PPF. Another commitment was made in the PPF, however, that as economic growth continued to increase we would re-examine the increases that were given by way of the annual Social Welfare Bill. The increases of between £8 and £10 are insignificant this year given that people on low incomes had to catch up last year because of inflation. It is, therefore, absolutely essential that it is provided in legislation that the Minister should report to the House or this committee on the effects of inflation on people in this category. It is important that this provision is made for future Ministers. I commend the amendment to the committee.

I support Deputy Broughan's proposal. Those in receipt of UA or UB are paid £77.50 per week which will rise to approximately £85 per week when the legislation is enacted. How can anyone survive on that income? Much of the increase given to these recipients last year was eaten up by inflation. Many of us do not fully realise that a crisis can arise for them every day with some unforeseen expense, such a child needing money for school or a bigger than anticipated ESB bill and so on. It is important that their payments should be maintained at a level at which they can survive. A provision could be made to automatically compensate them when inflation rises. The Minister was aware of the inflation problem last year and tried hard to bring forward payments. He appreciated the problem. If he accepted the amendment, perhaps it could strengthen his hand if a similar scenario arose and he had to return to Cabinet. He could say to his colleagues that increased payments are provided for under social welfare legislation. It could help him if the issue arose again and he would able to deliver increases. Perhaps he will accept the amendment in that light.

I correct Deputy Broughan's statement that the average inflation rate last year was 7% as it was 5.6% according to the consumer price index.

It was running at 6.8% late in the year.

The average rate was 5.6% and it has always been the case in regard to inflation, no matter which Government has been in office, that if there was a problem in any given year it would be examined the following year. Towards the end of 2000 the Government examined all these issues and made a good decision to provide a 100% Christmas bonus to social welfare recipients rather than a 70% bonus at a substantial additional cost. Money was put in the people's pockets at a crucial time.

That is the Minister's third attempt.

Whenever my party has been in Government, the Christmas bonus has remained the same or been increased as was the case last year whereas when Fine Gael and the Labour Party have been in Government the bonus has remained the same or been decreased. When Garret the Good was in Government the Christmas bonus was reduced.

The Government also made a decision when increasing the Christmas bonus to examine inflation in the context of the budget. Social welfare increases in the budget ranged from 10% to 18% depending on the scheme, which is well ahead of the anticipated rate of inflation for 2001 at 4.5%. One does not need to be a rocket scientist to figure out that substantial compensation is built in for those who did not benefit as anticipated because of the increase in inflation. The same applies to old age pensioners, although the effect was not as acute in their case.

During the Government's tenure in office there has been a substantial improvement in real terms in the position of social welfare recipients. The figures are stark. The old age contributory pension has increased by 40%, a real increase of 19% as opposed to 4% during the tenure of the Rainbow Coalition, albeit over three budgets as opposed to four.

The Government had a budget surplus.

Widowers and those in receipt of unemployment and disability benefits have received real increases of 11%. Non-contributory old age pensions have increased by 41.5%, a real increase of 24% as opposed to only 4.7% when Fine Gael and the Labour Party were in Government. Similarly, short-term unemployment assistance has increased by 28%, a real increase of 12.5%. I do not accept the comments regarding inflation. Old age pensions have increased by between 36% and 41.5% since the Government took office, a real increase of between 19% and 24%.

I do not accept Deputy Hayes's remarks about the commitments under the PPF. They have been delivered. Over the lifetime of the PPF, which covers three budgets, we promised to deliver £1.3 billion extra in social welfare benefits. In the first of the three budgets we have delivered £850 million; therefore, we are ahead in that regard. The previous Government committed £525 million to Partnership 2000 over three budgets. The outturn ultimately reached more than £1 billion under this Government. Our record stands on its own.

I do not accept Deputy Broughan's comment that this committee is the only body which looks after the interests of social welfare recipients. The Government has made a huge commitment which has been proven by the resources we have committed in this area. Equally, in the partnership process the community and voluntary sector is a strong advocate of this position.

CORI said the budget was very disappointing.

In my view CORI misunderstood the commitments in relation to the PPF, a view shared by others who are part of the partnership negotiations. Over the lifetime of the Government we have provided real increases, which contrast starkly with the policy decision, made by a Government of which Fine Gael and the Labour Party were a part, to link social welfare with the rate of inflation. Fianna Fáil in Government has never done that nor will we. Fine Gael committed itself to giving increases at the rate of inflation, not surpassing it or going below it.

I appeal to the Minister to eventually learn that he must compare like with like. We have heard this story and the same old tune has been played on the fiddle every day on Question Time, etc. The Minister is very lucky the land is flowing with milk and honey, with budget surpluses which were never heard of. How can the Minister treat us as morons by presenting figures that do not stand up? He repeats the same thing every time he speaks. If a pensioner has £96 and the rate of inflation is 5.6%, the increase is £4. However, the Minister says he provided an increase of £10, and asks what Garret FitzGerald did. If the Minister wants to use history, then what did the 1977 Government plan under Jack Lynch do? It nearly buried the country. The great leader, Charles Haughey, did not do much better. If the Minister wants we can go back to Brian Boru. He is not comparing like with like, he is making no effort to be intelligent and is treating us like morons by making comparisons which cannot stand up. The Minister has a good grasp of his brief and I ask him to enter reality and stop wasting our time by giving us gibberish. He does the same on Question Time over and over again. It is not right that the Minister is wasting our time by giving us nonsense.

I have listened to the debate, including to Deputy Hayes, who is a young Deputy and has a lot to learn. I have been in different countries, including the UK and America, and there is no culture as generous to old age pensioners as Ireland. I say this without fear of contradiction. The health service——

The Deputy is straying from the issue.

I am, but I did not interrupt the Deputy when he was speaking. The health service in the US is terrible and it is also terrible for pensioners. Far more money is being provided here than in the UK. The Minister, since his appointment, has increased payments in every budget in line with the commitment he gave when he became Minister. I have been a Member of the House for over 19 years and schemes and increases were mostly introduced by a Fianna Fáil Government. I was on the Opposition benches a few times when Fine Gael and the Labour Party were in Government and I saw no worthwhile increases being introduced.

What about old age pensioners?

Old age pensioners are getting far more——

(Interruptions.)

A couple aged over 66 years on a contributory pension will receive an increase this year of £25 per week, bringing it up to £185 for a couple. A single widow will get an increase of £26 per week bringing the pension of a widow with three children up to £191 per week, a very good increase without question and I am very happy with it. Inflation is not as high as has been suggested. Charles Haughey introduced more free schemes than any other Minister.

For himself.

I wish the Deputy would withdraw that comment. He brought in schemes, and was recognised for doing so——

Ask the true believers.

Ask the people who realise what Charles Haughey did for the elderly. He introduced free schemes, including free travel. Fine Gael was in Government for quite some time over the past 19 years and brought in almost nothing. It should be ashamed of itself rather than criticising what the Minister is doing.

I wish to set the record straight. Deputy Brennan said a widow with three children would now receive £191 per week. I think this is slightly exaggerated.

It combines the huge increase in child benefit.

The briefing note the Deputy got from the Department must have put him astray. He said a widow and three children would get £191, but the figure will be £158.

Declan Bree, a former Deputy, whom I would like to see returned to the House, contacted me——

I would like to see Deputy Bree return - he is a very good friend of mine.

I hope he returns. He contacted me about the miserable £5 fuel allowance which has not been increased for 12 years. We are getting much history, but for 12 of the past 14 years Fianna Fáil has been in power. It is like the long era of Fianna Fáil power up to 1973. The party has had every opportunity to do something more dramatic in relation to social welfare, but it has done nothing.

We are not too sure about the euro while Britain, by far our biggest trading partner, is not part of the euro zone and may never be part of it, which may result in economic uncertainty. Economists working for State agencies, such as the ESRI, have said there was next to no rise last year in social welfare benefits. It is deplorable that people are on assistance rates of £85.50, and even worse is the provision of £54 for adult dependants which will be introduced in April. I accept what the Minister said in relation to inflation and that it should not be a guide. The measure should be the income of the country and by that measure the Minister has not done well as we have had growth rates of 8% and 10% over the time of the Government.

I asked the Minister three years ago to give the 100% in relation to the Christmas bonus even though I was not the social welfare spokesperson at the time but three times the Minister said no. Last year, because he knew it was something I would ask around October, the Minister jumped the gun and issued a statement saying he would do so, though he had four chances to do so previously. The public relations section of his Department is fairly famous since Deputy Woods' time, when we got statements from him every day of the week.

Can we not have some mechanism dealing with this? The voluntary pillar is very disappointed and feels it has failed regarding PPF. That is why this committee is important. Surely there is some way we could monitor this through either the Christmas bonus or another budget. There may be a general election, in which case those of us on this side of the House can implement that.

Irrespective of the banter and history lessons, this is an important amendment which does not involve an additional penny of public expenditure. It provides a mechanism whereby the Minister can report regularly to us about the effects of inflation. That is all. What does the Minister feel is the main objective of social welfare payments? Is it just to keep people going on small sums of money or is it a way to get people out of poverty? Between 1997 and 2001, when this Government has been in office, for every £1 increase in the lowest rates of social welfare, someone on the average industrial wage got £4.10 while someone on £60,000 got £6.80 and someone on £100,000 got £9.40; those figures relate purely to tax cuts and do not include wage increases.

Whatever the history lessons from this or the other side, it is clear that the gap between the rich and poor is growing. The mechanisms and changes suggested by the Minister are insufficient to reduce that gap and to give those on low pay a decent rise so they can contribute to society like everyone else. I ask the Minister to reconsider this amendment and to answer my question as to the objective of social welfare payments.

The Deputy raised a number of issues. Regarding his questions, the Government has been singularly successful in reducing consistent poverty in Ireland. Our philosophy goes back to a point Deputy Broughan was trying to make, though he was not giving the full facts regarding the proportionate spend of our society on social welfare as opposed to other societies. If one looks at the spend in Italy on pensions compared to Ireland one would think they are spending much more than us on old age pensions but the reality is they are spending a lot less. They have a much greater cohort of old age pensioners than us. We have the lowest spend on pensions in Europe in overall figures but in reality we have the most generous old age pension regime in the world, as Deputy Brennan said.

This relates to what we were saying about poverty. Since the Government took office 120,000 people have come off the live register. That is not only a saving for the Exchequer and the taxpayer as those people are in a productive mode and that affects the overall social welfare spend. The sickness schemes have also shown a fairly dramatic fall in participants because again there are people taking jobs and not relying on social welfare.

It is the Government's job to ensure that those on social welfare who through no fault of their own are unable to fend for themselves, like old age pensioners, lone parents or those on disability benefit, are given reasonable increases. Our record in this regard, as Deputy Brennan said, is second to none. If one looks at the percentage increases for any of the schemes they are dramatically ahead of anything given previously.

In comparison to what?

In comparison to what was given previously. To what else can we compare it? We can compare it to the UK where social welfare pensions went up by 75p at the same time that they rose by £7 in Ireland.

There are other people - people in jobs.

One cannot compare people in jobs. The reality is that people in jobs will also get a higher increase than those on social welfare.

The gap has grown.

That is an inevitable consequence of economics. I do not have to give an economics lesson; that will always be the case.

It is a policy decision.

No, it is always the case. When one looks at the last few years, it is undoubtedly the case that with the supports available to people who are unemployed or on disability benefit, there are so many supports built into the system that it pays people to go out and work. Those who work see the benefits and that is one of the reasons, as we discussed yesterday, the numbers on FIS have fallen. It is because of the economic situation. One cannot look at this in isolation. The situation since the Government took office is that instead of paying people to do nothing, we have tried to get them into employment which is now available while more than looking after those in the social welfare system.

I return to the commitments of the PPF. Any objective reading of that and any yardstick in relation to real increases, which is the phrase used in the commitments, such as the commitment to reach £100 in general increases, will show that we have more than fulfilled our commitments and will do so in the remaining lifetime of the agreement.

Amendment, by leave, withdrawn.

I move amendment No. 5:

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

"2.-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 implications of closing the differential between the rates of periodic benefit and assistance paid to an adult dependant and the rates paid to a qualifying adult, and of removing any limitation of the amount of payment made to a couple as opposed to a corresponding payment to two adults who are not living together.".

This amendment relates to the ongoing disastrous situation of dependent adults due to the social welfare regime over the years. The Government obviously set a target through PPF of moving to the 70% rate over three years, which includes the remaining lifetime of the Government. The increases in relation to the dependants on contributory pensions to bring people up to the non-contributory rate is welcome and a good step forward and I commend the Minister. However, we are still left with the situation, across a range of social insurance and social assistance payments, where adult dependants are on low rates. I referred earlier to the £54, which will be introduced in the next few weeks, where the Minister gave £7 to the dependants of people on long-term unemployment. I am aware the Minister held a forum and that my colleagues in Fine Gael also had a forum. We, too, held a forum for the main representative bodies of people who depend on social welfare income and there was a unanimous desire to move to the 70% rate this year. This would have meant an amount of £56 in the context of long-term unemployment assistance of £85.

I am aware this is related to the situation of older women in the economy and people who dropped out many years ago for home duties who did not have sufficient stamps. There are other amendments in that regard and I do not wish to stray into that territory but it is related to the fact that seniors will not be eligible for full payments in their own right. I call again on the Minister to look at the possibility of moving towards a better rate of payment. I believe the current rate is insulting, as I have pointed out every year in the House. It is now a miserly £54 for an adult dependant and this amendment seeks to highlight this issue again.

I support this timely amendment. It is particularly timely that Deputy Broughan should talk about the individualisation of social welfare payments when the Minister for Finance is going a long way towards completing the individualisation of taxation. The issue of individualisation would not sting nearly as much if it were applied across the board. However, it is not applied in social welfare.

This payment of £54 often goes to the woman who is at home. She sees that payment as the total regard the State has for her. Her husband is worth almost twice as much by virtue of the fact that he is the recipient of the payment while she is the adult dependant. It is a very small amount. Where would one go with £54? The Minister and I could not manage on anything like that amount for a week. I hope the Minister will move towards full individualisation as quickly as possible.

It would also overcome the terrible problems, which we have discussed previously, created by the disincentives to people to get married. If two people are on full rates of social welfare and they are living together - the Department probably does not catch them - there is no incentive for them to get married. If they do, their payments will be reduced to the main payment and the adult dependant payment. They will lose between £30 and £40 per week when it is already difficult to survive. It is a disincentive to getting married. The chairman has spoken about this issue before. The sooner we reach full individualisation of social welfare payments, the better.

This is one of the anomalies in the system which dates to the bad old days when there was not enough money and people on small rates of income were dependent on the State for everything. I accept the Minister's argument that the situation has changed and that we must change with it. For the information of the committee, however, will he outline the general cost that would be borne by the Exchequer as a result of this change? It is a change that is necessary, right and proper given our current circumstances.

Does it date to the bad old days, Minister, or is it due to the commission on social welfare?

The relationship of the QAA to the personal rate was considered in the report of the working group which examined the treatment of married, cohabiting and one parent families under the tax and social welfare codes, which was published in August last year. The working group proposed, on foot of research on equivalent scales undertaken by the ESRI for the group, that the QAA should be increased to 70% of the personal rate. The Government intends to reach this recommended level over a period of three budgets. This was the second budget.

Following 2001, the relationship between the QAA and the relevant personal rates ranged between 63.2% and 67.7% for those under 66 years and between 68.9% and 75% for those over 66 years of age. The percentage increases range from 13.3.% to 25.9%, averaging around 15% for those under 66 years. The Government gave a commitment to increase the QAA for people over 66 years to the full old age pension non-contributory rate. As a result, we gave a special increase of £15 for qualified adults over the age of 66 years. As Deputy Brennan indicated, old age pensioners will get between £20 and £25 per week in April for a couple, which is a dramatic increase in one's weekly income. I believe it will be much appreciated. The sentiments expressed by Deputy Brennan would be fully understood by all those in receipt of the increases, even non-Fianna Fáil supporters.

In principle, the QAA rate is set at less than 100% of the personal rate on the basis that there are economies of scale where two people live together in the same household and that account should be taken of those economies when the second person does not have a direct entitlement to the payment in his or her own right. However, the group recommended that the existing arrangements for making separate payments should be made available on a more general basis. This issue was considered under the PPF and it was agreed to develop proposals to progress the individualisation of social welfare payments in the context of the continuation of joint assessment of means.

A number of working groups will be established to produce proposals to progress the implementation of the administrative individualisation within the social welfare system - that basically means dividing the existing payment - and to provide proposals to develop a fully inclusive social insurance model which would facilitate combining work and family responsibilities in the context of changing work and social patterns. The group dealing with administrative individualisation has been established and is at present examining the issues associated with this proposal.

We have gone further in this budget than was the commitment in the PPF by proposing the increase in the QAA for people over 66 years of age. However, I share the views of Opposition Members and given the more widespread PRSI cover in the system, there will be a situation - although it probably will not be in the lifetime of this Dáil - where people will get a payment in their own right on the basis of the contributions they made. That is as it should be. However, the QAA currently caters for a situation where people historically opted out of the workforce and, in some cases, were forced out of it and were unable to continue their contribution record. I am on record as endeavouring to change the system, as far as possible, to alleviate some of those difficulties. However, we will not be able to go the full way in that respect.

The Minister told us yesterday that approximately 87% of the 900,000 get payments in their own name. What number of QAAs are involved?

I am not sure off hand. The figure is decreasing but I could not give the number off hand. We might be able to give the number to the Deputy on Report Stage.

I withdraw the amendment for now, Chairman.

Amendment, by leave, withdrawn.

I move amendment No. 6:

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

"2-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 provisions of the Social Welfare Acts which are not in force by reason of the fact that a commencement order has not been made, and the plans, if any, for bringing such provisions into effect.".

It is traditional for the Labour Party to table an amendment such as this. The amendment concerns the fact that a number of significant provisions in Social Welfare Acts from the 1990s have not been brought into force. Last year the Minister read out about six important provisions on which no commencement order has been made. This highlights our initial discussion on the need for consolidation and simplification of the social welfare code so that legislation is implemented.

Two years ago we discussed the section regarding road blocks manned by Garda, Army and social welfare officials. This provision was being implemented and Deputy Joe Higgins was interested in that section. However, this section has fallen into disuse.

The Minister withdrew the order. They stopped all that.

I did not.

We discussed that section for days but it does not seem to be operating. Allegedly senior gardaí refused to take part in those kinds of patrols which is understandable given the range of important work they have to do. Is this area still giving rise to concern as suggested by our legal advisers?

All sections of the Social Welfare Act, 2000, with the exception of section 31, have been commenced. Section 31 provides for changes in the administration of the SWA scheme which will be addressed in conjunction with other administrative issues.

All sections of the Social Welfare Act, 1999, have been commenced. However, there are some provisions of earlier Acts in respect of which commencement orders have not been made. These include section 17 of the Social Welfare Act, 1998, which provides for actuarial reviews of the social insurance fund to be undertaken on a five yearly basis which will be commenced later this year.

Part 4 of the Social Welfare Act, 1997, provides for the introduction of a new sickness allowance scheme. The overall purpose of the scheme will be reviewed this year as part of the review of income maintenance schemes for people with illnesses and disabilities. All those who would have qualified for sickness allowance are being catered for through other payments such as SWA.

Section 26(1)(b) of the Social Welfare Act, 1997, contains 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. Section 10(4) of the Social Welfare (No. 2) Act, 1995, provides regulatory powers under which a divorced person may receive a qualified adult allowance in respect of more than one person. The need for this provision is kept under review on an ongoing basis.

Section 22 of the Social Welfare Act, 1995, provides regulatory powers designed to standardise the arrangements applying to various social welfare schemes concerning absence from the State. It is planned to introduce the relevant regulations later this year.

Section 20 of the Social Welfare Act, 1994, provides for the integration of occupational injury benefit and unemployability supplement, payable under the benefits scheme, with disability benefit. The overall role of occupational injuries benefit payments will be included in the review of the sickness/disability schemes taking place this year. Decisions on the implementation of this section will be taken in light of the findings of this review.

When I was spokesperson on Enterprise, Trade and Employment we had not implemented many EU directives. Is there a similar situation with regard to social welfare? We did not have information on this side of the House last week as it was becoming a major issue. However, with respect to the new European anti-poverty programme, the Minister will have to submit a revised programme with more significant targets than the existing NAPS or some of the discussions we held last October on the revised NAPS target. Is this also the case regarding European legislation?

We are fully compliant with European social security directives. The only outstanding area involves pensions which will be included in the forthcoming pensions Bill. As regards NAPS we have to bring forward action plans in June and we will be doing so fairly soon. That process is ongoing.

Amendment, by leave, withdrawn.
Section 2 agreed to.
SECTION 3.

I move amendment No. 7:

In page 5, line 27, after "amended" to insert "to the extent that the instrument concerned is consistent with that provision as so amended".

This is similar to the previous amendment in that it involves a small additional provision which we feel would be a safeguard concerning the continuance of instruments provisions in this section. The amendment stipulates that any additional instruments are consistent with the provision as so amended. It is a small technical amendment which is desirable.

I thank the Deputy for tabling this amendment which I accept on the advice of the Chief Parliamentary Counsel.

Amendment agreed to.
Section 3, as amended, agreed to.
NEW SECTIONS.

I move amendment No. 8:

In page 6, before section 4, but in Part 2, 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.".

I raised this issue on Committee Stage of last year's Bill. I was contacted by a number of people from the west Cork and Kerry areas who were retired on British pensions but who did not receive a number of allowances payable in this jurisdiction, particularly the living alone and over 80 allowances. This issue should be re-examined as it is a concern for Irish people who have returned to the State to live in west Cork, Kerry and other areas. These people feel that some of the provisions regarding senior citizens do not apply to them. There is a grey area as to the extent to which such people can access the benefits we have introduced for pensioners which were so eloquently spoken of by Deputy Brennan.

I support this amendment. A large number of people are returning from Britain to live in Ireland, some are living in my area.

They are coming for the good pensions.

No. More often than not they are returning home having had to leave this country in the 1950s and 1960s. Having worked abroad they are coming home and are back with their families. Some of them find it hard to settle back into life here and to get used to our ways because the Ireland they knew was different from what it is now. I know some of them have difficulty understanding why they do not qualify for various allowances. They are assessed on everything they have, although their pension might be low. Social welfare officials are currently examining British pensions and because sterling is strong, they are increasing their value which means the pension they might get from here will be low. Deputy Broughan and I raised this issue a couple of years ago when sterling was weak against the pound. We asked for it to be examined, but we were told that could not be done. It is mean to reassess it just because sterling is strong.

We should also bear in mind that the British Government, for all its faults, pays the Exchequer a huge sum of money. The last time I checked it had paid approximately £65 million to the Government to look after its pensioners who are here and to give them health benefits, etc. That is a substantial amount of money to pay not to the relevant health boards or social welfare offices but to the Exchequer. We should bear in mind that many of these people, who were forced out of Ireland, are now coming back and reinvesting their foreign currency here. The type of report suggested by Deputy Broughan would be worthwhile as it would give us a fair indication of what is happening and how we can best support these people.

Deputy Broughan raised this issue last year and he clarified on Committee Stage that his question related to people who had British pensions and whether they would qualify for the living alone or over 80 allowance. This allowance is an integral part of the Irish pension system and is designed to cover specific contingencies. As such, it does not have applicability vis-à-vis pension payments made under different social security regimes of other EU member states or countries with which we have bilateral agreements. This is fully in accordance with the EU regulations which allow member states to decide which benefits are granted and under what conditions. The free schemes are different and they are available to people resident in thecountry, subject to fulfilling the minimum conditions.

As regards the pension payments to this country by the British Exchequer, I suggest to the Deputy that the Exchequer makes a substantial payment to Britain for Irish pensioners living there. As I said before in relation to pre-1953 contributions, which the Chairman successfully exhorted me at my parliamentary party to introduce, we estimated that 3,000 people would qualify. However, that figure is now 12,300 and it is rising. A large proportion of those people are UK residents who are becoming aware of this change in the contributions and who are now qualifying for the special 50% pension.

As regards people who are being assessed on their additional income from a British pension, there is an ongoing examination of all means tested payments. The recent changes made to the amount of capital people on means tested payments can have are substantial and beneficial. Many people will benefit from those changes which are being made to allow them to retain some money and also their social welfare payments.

I understand there is an ongoing review of the entitlement to payments under the social welfare code based on contributions made. However, an anomaly has arisen, particularly in relation to people coming back from abroad. I know of two men with families, who live beside each other, and one of them worked for a short time here before he retired. He is now getting a full contributory pension. While he worked in Ireland before he went away, it was in the black economy. His next door neighbour, who is a little younger, worked for Leitrim County Council as an under-age worker, although the age limit may have been manipulated slightly for his benefit. He is recorded as having paid two years' stamps with the county council before he went to England where he worked for 30 years. He has now returned home and is working here again. He will have accumulated eight or ten years' work here when he reaches pension age, but because of the averaging system and the fact he had stamps previously he will miss out badly on the contributory pension. He will get a greatly reduced rate, although his contributions will be greater than those of his neighbour who was here for a short time. This is because the averaging system counts back to the first day one started work and got the first stamp. That is a disadvantage. Is this issue part of the ongoing review? It mainly affects people who have been resident abroad for a while. I ask the Minister to accept the amendment in the context of the review of contributory pensions.

I do not know of the specific case but there is an examination of the contribution system. We are moving towards the view that we should move away from the averaging system and consider giving people credit for total contributions. There is an examination currently under way in that respect. I hope it will come to some conclusion and that recommendations will be made to me in the near future. I, like any other public representative, am acutely aware of the anomalies which can be thrown up as a result of the averaging system.

When is that report due?

I am not sure. The Deputy should table a parliamentary question to me on that issue. We launched one phase some time ago where we made some changes and we said there would be a second phase some time this year, perhaps before the summer.

An indication was given by some of the Minister's colleagues when we were talking about pensions that it would be before Easter.

That may have been the case. It is a fairly difficult and complex issue. It may be Easter, but I was being careful when I said before the summer. I would like to think it would be on my desk with some recommendations before the next budget to see if we can do anything. One issue is to back date the homemakers scheme to try to give women extra credit for the stamps they have. It is an extremely complex issue. We must be fair to those people who have made contributions over their lifetime. When we start reducing the level of contributions required, we must be careful not to discriminate against those people who have made full contributions over their lifetime.

Amendment, by leave, withdrawn.

I move amendment No. 9:

In page 6, before section 4, but in Part 2, 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 implications of introducing a system of benchmarking or indexation of all social welfare payments for the purpose of giving security of income to all recipients thereof.".

This amendment relates to part of the discussion on amendments Nos. 3 and 4. The Minister has belatedly, towards the latter part of his administration, appointed the benchmarking committee under the chairmanship of Professor Kennedy. I understand we will receive an interim report in a few months and a full report towards the end of the year. Most of those interested in the area of social welfare income see the necessity for benchmarking. The banter in which we have engaged today, however, illustrates the fact that it is hard to get a handle on the income supports the State should provide. To revert to Deputy Hayes's earlier question, what is social welfare for? That is the fundamental question we must ask. Even independent economists would say that the gap between higher income earners and the lowest 30% has widened significantly under the Government.

In our discussions before Christmas, the Senior Citizens Parliament and the trade union representative group for pensioners asked us to aim at providing non-contributory pensions based on 34% of the average industrial wage. By my reckoning, this would provide a basic non-contributory pension of £113 per week, not £106, based on average industrial wage figures for 1999. People have spoken about median and per capita income, but it is necessary to move away from this type of Poor Law approach to the social welfare net and pension provision. We should look at social welfare income as part of the general income structure, but the Government has failed to do so. The State has also failed to do so for most of its history.

Labour Party Deputies in the 1920s, 1930s, 1940s and 1950s should have taken a more robust attitude to the two main parties, particularly as regards the poorer sections of the community. In previous decades the levels of welfare provision, particularly in Dublin city and county, were so appalling that people were driven to emigrate in their tens of thousands. Some are now returning to live here.

We must put in place a system, such as the one pensioner representatives are rightly seeking, which will form part of another partnership programme after the PPF, if there is to be one. Many voices in the trade union movement and my own party are of the view that we should not take that route for the simple reason that low-paid workers and those on social welfare have not gained sufficiently from the partnership agreements. The amendment refers to something very basic.

The Minister misled the committee in an earlier contribution on pensions. He mentioned Italy as an example, but the reason social protection provision is so high as part of national income in other European countries is that they have far better welfare regimes. The German Government, which is Labour led, is debating whether to cut final income for pensioners from 70% of a person's final income to 65%. The equivalent Irish figure could be 30% if one is talking about non-contributory pension with little occupational income. This country is not even at the races compared to Germany or Italy.

In recent years we have been lambasted by the Minister for Finance, Deputy McCreevy, over his decision to salt away so much money for pensions provision in 30 years time. We did not get a chance to discuss the matter. When the Dáil was not sitting one summer the Minister just came along and said, "I'm going to do this whether you like it or not". The Minister refers to us as wanting to raid that provision, but should we not be doing something about pensioners living in poverty, despite the Minister's much vaunted increases?

This time last year an survey of pensioners by Kitty Holland in The Irish Times found that many pensioners on the north side of Dublin were still living in poverty. They were living basic lives and had very little to spend on a night out and not enough for energy supplies. When the man or woman of the house was working, they had a reasonable income, but it collapsed as they moved into the contributory pension area.

Much will depend on what is considered the benchmark. It is a fundamental issue. Social welfare should be benchmarked against average national income. That is the recommendation I expect Professor Kennedy to make at the end of the process. It should be a significant figure. Senior citizens are correct to seek rates of 34% and 40%. I commend the Minister for appointing the commission. We will receive its report later, but the step was taken belatedly given the seriousness of the issue. Throughout the history of the State we have expected people to live on rotten, low incomes.

In an earlier contribution the Minister referred to the £100 target in the PPF. He outlined that he and the Government are making progress in fully meeting it before the end of the third year of the PPF. To repeat to what I said, there is another part of that commitment which clearly states that we should review the £100 target as growth in the economy increases. Even from the period when it was first negotiated and accepted by all concerned the target was seen to be dated. Given the inflationary problem encountered last year and the general rise in prices, those on small incomes are suffering. We will have to renegotiate the £100 target because it is part of a commitment for another year. That is the reason the amendment in respect of benchmarking is so important.

Deputy Broughan asked the Minister about the percentage of social spending on many schemes. I understand we prop up the bottom of the European league table for social spending as a percentage of GDP. While the average is about 28%, we are at 16%. Many of the Scandinavian countries are at figures well above the average. The Minister said that one of the reasons spending in this area has gone down is that many people have returned to work and are no longer relying on the social welfare system. That does not provide much comfort or credibility, however, for the sections of the community in need of supports such as child benefit and carer's allowance. We can take no comfort from the fact that spending as a percentage of GDP in this area has fallen over the lifetime of the Government. There are much more sophisticated models in other EU countries for supporting people both in and out of work. We have not even begun to understand the full range of entitlements which people should be drawing down.

I welcome the Minister's establishment of a benchmarking commission. Is there a commitment in the group's terms of reference to report by a specific date? This is an urgent matter as we approach the mid-point of the PPF. Finality is needed in respect of the Government's policy on benchmarking. It is important that an amendment such as Deputy Broughan's should be provided in the legislation. Will there be a decision in this regard before the next Social Welfare Bill? If we knew the answer to that question, it would beeasier to judge whether the amendment is necessary.

Will more power be taken out of the political process through the benchmarking process?

Deputy Broughan referred to old age pensioners living in poverty. I will not give the Deputy a history lesson but any objective examination will show that over the lifetime of the Government the contributory pension increased from £78 to £106 per week. It increased from 27% of income to more than 31% and is approaching the 34% of income level proposed in the NPPI. The interpretation by certain individuals of the PPF commitments in my view and that of many independentcommentators is not correct. Our commitments on minimum payments are stark. Weare well on the way to achieving them during the lifetime of the PPF. There is also acommitment to increase all rates of social welfare to a level above the rate of inflation. That will be achieved during the lifetime of the agreement.

The benchmarking and indexation group set up under the PPF had its first meeting in December 2000. The Chairman may be correct that, similar to all issues relating to social partnership, benchmarking to an extent will take power from the Oireachtas. That is a good price which we must pay to ensure stability in our society over the past decade continues. The group has had a number of meetings and is due to make an interim report in April. Its terms of reference do not provide that it must report by a specific date but the final report will be published before the end of the year.

Will the interim report be published or will it only be sent to the Minister?

I am not sure what is the group's view in that regard and, therefore, I cannot give a commitment. I have no doubt given that it is a PPF group the interim report will be made available but I will not second guess its position on that. The final conclusions of the group will be made public and the Department will consider its recommendations.

It is not an easy issue. NESC has already examined it and there were detailed talks during the PPF negotiations in this regard. Neither group could reach a definitive agreement. The chairman of the benchmarking group is extremely capable and was a good choice. It is hoped the group will bring forward recommendations on which we can act over time.

Did the Minister set out terms of reference?

I will read them.

Were figures included?

No, these terms of reference were agreed during the PPF negotiations. They require the group "to examine the issues involved in developing a benchmark for adequacy of adult and child social welfare payments, including the implications of adopting a specific approach on the ongoing up-rating or indexation of payments having regard to long-term economic, budgetary, PRSI contribution, distributive and incentive implications in light of trends in economic, demographic and labour market patterns and to examine issues of relative income poverty".

Does it include any reference to EU policy?

Not that I am aware of. It is similar to paragraph 3.2. of the PPF.

Amendment, by leave, withdrawn.
SECTION 4.

Amendment No. 11 is related to amendment No. 10 and both may be taken together by agreement.

I move amendment No. 10:

In page 6, between lines 19 and 20, to insert the following subsection:

"(3) The Minister shall as soon as may be after the passage of this Act prepare and lay before both Houses of the Oireachtas a report on the increases granted to unemployment benefit recipients, having regard to the impact of such increases on:

(a) the local authority differential rent scheme, and

(b) the rental subsidy scheme for private accommodation.”.

Deputy McGrath and I have tabled two amendments to provide for a report on UA and UB. The basic 8% increase and the 10% increase at the top of the scale are unacceptable for both categories of payments. The lowest social welfare rate will be £84 per week. The 1998 living in Ireland survey puts the poverty line in terms of the basic 50% payment at £93 per week and if that is indexed to 2001 the payment would be £102 per week. The lowest rate of payment at £84 per week is unacceptable.

When the increase kicks in, as my colleague Deputy McGrath has stated on other occasions at this committee, it will have a negative impact for many people living in local authority accommodation. Depending on the scheme put in place by most local authorities, under the differential rent scheme, people's rent will be increased. The increase under the legislation will be eaten up by the differential rent scheme and increases in other parts of the economy. Both amendments are essential if the Government is serious about this significant group of people having a decent quality of life under the UA and UB schemes.

What percentage of the total social welfare spend is made up of UA and UB? The Minister continually points out that one of the reasons expenditure is reducing is that more people are returning to work.

I concur with Deputy Hayes's comments. The amendments relate to UA and UB because they had to relate to the legislation but they could relate to all social welfare payments. The Minister is aware of the problem. He said in the House on one occasion that when increases kick in the local authority differential rent system does also and the community welfare officer then reviews household incomes. A constituent contacted me recently. He was one of two people in rented accommodation. Their rent had increased by £3.50 each per week while their social welfare payments had increased by £8 per week each. They felt badly that so much was being clawed back instantly by the local authority under the differential rent scheme. I do not know how to resolve this because the scheme is generally good but there is a problem with the claw back.

The bigger difficulty is in the private rented sector where social welfare recipients are entitled to a rent allowance. Because of changes in social welfare payments the base rate for calculating rent allowances changes. Therefore, the amount of money people have to pay out of their own pocket increases. This claws back any increase they are getting in social welfare payments. People affected feel very bad about this. They see the Minister and others announcing an increase of £8 or £10 per week while they receive much less than this when the claw backs are taken into consideration. Such people feel they are getting a raw deal while others are doing particularly well. What can the Minister do to protect the increases given to social welfare recipients so they are real rather than having part of them clawed back? I have not mentioned the claw back which results from inflation. These taken together will almost negative some increases. I ask the Minister to prepare a report and bring forward some real examples of how this works, what happens and what can be done about it.

I support both amendments as they raise important issues. Our local authority amended the differential rent scheme about five years ago and we inserted a clause that only 15% of an increase in social welfare benefit can be passed on, a reasonable system. This is a problem across the board and weekly we try to cope with homeless people and people in private rented accommodation. In the Dublin area there have been unbelievable increases in rents, up to £1,000 per month per house, which highlights the impact on desperate young couples and young women who have tears in their eyes trying to cope with demands for increased rents and who know the rent supplement will not match the increases.

This morning the Taoiseach raised this issue of housing and how it impacts on people, especially those on social welfare income, in private rented accommodation. This will be one of the significant issues in the coming general election and the amendments try to address it. There is no point handing out something with one hand and taking it back through the local authority differential rent scheme or the rent supplement administered by the health boards.

I thank the Deputies for raising this issue. I do not have responsibility for the differential rent scheme and I would not be able to produce a report on it - I do not have the wherewithal within the Department. It is a matter for the Department of Environment and Local Government. The Deputies who are members of local authorities have some say on the differential rent scheme, though I know much of the scheme is dictated by the Department.

Regarding increases over the years, particularly the stark increases in recent years, it is important people do not lose out or end up in a situation whereby the entire increase is clawed back under the differential scheme.

I have responsibility in relation to SWA and I have made some changes in that regard which are of benefit to people. Pensioners on SWA rent or mortgage interest supplement did not get the benefit of the additional increases as it was automatically clawed back through a reduction in other SWA schemes. However, in the budget this year I announced that the first £5 of additional increases in social welfare payments would be disregarded for rent and mortgage interest supplement purposes. In other words, instead of a reduction of £10 per week in rent or mortgage supplement, couples on pensions will get a net gain of £5 as a result of the changes. People on one parent family payments and unemployment benefit are not affected by clawbacks of budget increases in terms of the rate of rent and mortgage interest supplement. In this case, weekly payment rates are increasing by £8 for a single person and £15 for a couple.

The operation of the claw back will be examined in the fundamental review of the SWA currently under way. The differential rent scheme is the responsibility of each local authority and the issue of excluding social welfare payments is a matter for those on local authorities, subject to the overall guidelines laid down by the Department of the Environment and Local Government.

The Minister seems to be neutral on whether this could be included in the Bill. The amendment only asks the Minister to produce a report from his perspective. There have been many such examples in the past, most notably the interdepartmental committee which produced work on the rental scheme for private accommodation, which the Minister has been trying to implement for some years in terms of moving responsibility from the Department to local authorities. Did that committee discuss this issue, as I suspect it did? The current problems relate to IR difficulties in terms of implementation. It would be useful to include the amendment as it would at least highlight for the Department of the Environment and Local Government and local authorities which have not complied with the compassionate understanding of the differential rent scheme in the way in which Dublin Corporation has, the concern of the Minister and the Department in respect of ensuring the increases are not clawed back through dramatic increases in rent. I put it to the Minister that both amendments would help the case of the Department in highlighting the need for such provision.

I have nothing further to add. Deputy Broughan is correct in saying those on SWA rents are in substantially more difficult circumstances than those on differential rents. Differential rents are designed to assist people, and as their income increases the rent increases, which is implicit in the system - it is the quid pro quo for what is in effect a very beneficial system of housing.

The application is not similar in each local authority.

That is not an issue. Generally there are broad guidelines which are adhered to by local authorities and they cannot simply stray from them. The issue of uniformity in the system must be raised with the Department of the Environment and Local Government. Our role concerns income adequacy and people have to meet whatever demands are on them from that income. It has been a bone of contention with members on all sides. It has been previously raised with me but, as I have said, this is primarily a matter for the Department of the Environment and Local Government.

Amendment, by leave, withdrawn.
Question proposed: "That section 4 stand part of the Bill."

On Second Stage I raised the situation of a widow over 66 who was on the top-up injury benefit and whose husband got killed at work. Is that widow getting the full £12.90 increase this year? The last couple of years she did not.

She gets a £10 increase. The widow's pension paid under the occupational injury scheme is paid at a higher rate than other social welfare payments. Nevertheless, in this year's budget I provided that a £10 increase would apply to widows over 66 in receipt of this payment. Those receiving the general widow's pension who are over 66 receive an additional £2.90, which brings their payment to £102 as a first step in bringing the payment into line with the OACP rate. No special increase was necessary for those OIB widows over 66 whose rate is now £109.40. It is because they are on a higher rate.

That confuses me every year. Is there a policy decision within the Department to do away with that top-up? For the last couple of years the widow over 66 did not get the over-66 increase. That is the fourth year in a row and now she is losing £2.90 this year. Is there a long-term aim to abolish that top-up for occupational injuries?

No, I do not think so but the view was taken by the Department, regarding one or two of those pension rates at a higher rate than normal, that a huge number of people are not involved and because they are on the higher rate, the increase they would get would not be as much as those on the general rate. I will look at this again as I would not like the perception to be that these people are losing out.

I put down a parliamentary question on this and I thought I got an assurance that it would not happen again. I do not understand it. If there is a policy decision to abolish this we should be told.

The £2.90 was a special payment to widows on a particular rate of pension——

Over 66.

——and that was to bring them up to the contributory pension.

The particular case I raised - there are only 50 or 60 people involved - involves a widow whose husband was killed at work. This will be the fourth year in a row she perceives that she is not getting the full pension increase her widowed neighbour is receiving. She always had a top-up but that seems to be reduced year by year.

I guarantee I will look at this.

I do not understand where this is coming from.

Question put and agreed to.
Amendment No. 11 not moved.
Section 5 agreed to.
NEW SECTIONS.

I move amendment No. 12:

In page 6, before section 6, to insert the following new section:

"6.-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 implications of introducing a personal childcare payment of £20 per child per week.".

One of the best parts in the budget and the Social Welfare Bill was the significant increase in child benefit to the rate set out here, £67.50 and £86. Many constituents would probably ask why it is not the same rate for all children, in other words, why does the £86 not apply across the board and why does everyone not get the £30 rate? Nonetheless, it is significant progress to bring the rate for the first child up to approximately £16 per week. There are still many parents who feel there is confusion between the necessity for increasing basic income for children and providing resources through the social welfare system for child care. In other words, the provision of child care is an entirely different task. This amendment contains a spelling error and should read: "parental childcare payment" of an additional £20 per child per week.

Labour and Fine Gael discussed an amendment to this effect last year but I abandoned the distinction of between zero and five because I agree with the Minister. Children are expensive all the way through, or become increasingly more expensive, so the distinction should probably not be drawn. Last year Deputy O'Keeffe put forward a target payment per child of £25 per week and we should be aiming for that for every child. Studies have shown a basic living standard for a child costs £40 to £45 per week and we are a fair distance from that target.

Friday is family at work day and I know the Tánaiste said on radio this morning she wanted a massive expansion of child care facilities. She admits the Government has failed to provide that, despite the Minister for Justice, Equality and Law Reform's war chest. We have not had the resources coming through. Pat Kenny raised the issue of using schools during holidays and after 3 p.m. with the Tánaiste this morning but we have failed to get the necessary resources. I know that goes beyond the remit of this amendment but we could have adopted the Childcare 2000 proposal to have a major parental child care payment. Our trade union colleagues would suggest working through the taxation system and they have sent all of us tough letters on that matter, pointing out that the Minister for Finance did nothing to provide resources through the taxation system when speaking on the Finance Bill. This will be a major area of discussion in the forthcoming election and the record will show that despite the Minister's increases this year, he has signally failed to provide a basic income for children and he has absolutely failed to provide a network of child care support systems for parents. We are as far away as ever from that. The Tánaiste has also failed in that regard; she has made no demands of business regarding this matter. I have been trying to get the Minister for Justice, Equality and Law Reform to provide resources for major child care projects which are ready to go but it is very difficult.

I do not accept what the Deputy says. It is true we are starting from a low base. We did not have the resources up to a few years ago but we now have the necessary resources. Our national development plan contains a commitment to spending a significant amount of money in this area and the Minister for Finance and the Minister for Justice, Equality and Law Reform have front loaded this year's provision from £45 million to £104 million in relation to the increase in supply of child care places. The purpose is to try to achieve an increase in the supply. Like the housing issue, which will not be solved unless there is an increase in supply, the child care problem will not be solved unless there is an acceleration in the number of places. That can only be achieved by front loading expenditure. To judge by the money expended in recent months the take up in terms of applications by private operators has been very successful. I accept there are planning difficulties with child care facilities. In some residential areas residents are objecting through the planning process to the provision of crèche facilities in their area.

I reject the Deputy's comment on my involvement in assisting child poverty. This is the largest investment in the children of this country in the history of the State.

This year.

In any year. The Government's commitment to invest £1 billion over three years is more than the Opposition has ever done and more than many lobby groups, even in their wildest dreams, expected. The Combat Poverty Agency would normally be critical of Government decisions, but it was highly complimentary of our action in this area. It believes it is the right way to tackle child poverty. None of the many lobby groups, where there are as many opinions on this issue as there are Deputies, could agree on the way to deal with the provision of child care payments. I met some of the groups, following which they were more divided among themselves as the best way of providing assistance.

Perhaps they were dissatisfied.

We took the most equitable option. The comrades in the trade unions, most of whom support Fianna Fáil while making subscriptions to the Labour Party, wish to do it through the taxation system, but that fails to take account of the 29% of the population who do not pay tax or those who are on the lower end of the pay scale.

The Minister could have selected both options.

We selected the best option, which will put money into the pockets, not of the husbands but the mothers to enable them look after the children. All research has shown that is the best way to deliver money to those people who primarily have the care of children. Ultimately, it is a question of giving people assistance towards their child rearing costs so that they and they alone make their own decisions on rearing their children. The Government will stand on its record on the issue of child related payments.

It is a dubious record.

I do not need to repeat the amount spent on this area by the previous Government. People have very short memories, but I do not.

Despite what the Minister has said he must admit the Government has failed on the question of child care, and not because of the failure to allocate money. In the budget of 1999, the Minister announced an allocation of £46 million to child care. Of this, £20 million was to be allocated to capital projects, but by the end of last October only £58,000 had been drawn down. The Government allocated a further £25 million to capital projects knowing the money would not be spent, although it provided media headlines. The total allocated by the end of last October was £3 million.

This is similar to the health services where there is substantial funding available but where the management of the provision of the services is causing problems. If the Government is serious about child care it must be proactive in managing the provision of facilities. A measure that might help is to provide that estates of more than 75 houses should have a designated house for the provision of child care. Our local authority is implementing this. It means that when people are buying houses they will know where the child care facilities will be provided.

Deputy Broughan's suggestion about how to become more proactive on the issue is a start. When Government Deputies knock on the doors they will be told they have failed in this area. Chairman, I will be unable to rejoin the committee because I am meeting a delegation from Finland.

I ask members to ensure that debate is relevant to the amendment and not to introduce other issues, such as planning or moneys from the Department of Justice, Equality and Law Reform.

The Minister has said he favours taking radical action to increase payments to all children through child benefits. Like St. Paul on the road to Damascus, he has only recently been converted to this approach. He has had to spend three years in Government to understand the policy implications of the views he has expressed to the committee. The difficulty is that in the period since 1997 much has been lost in terms of the payments that could have been made from the substantial budget surpluses.

If the country is serious about dealing with child care it is necessary to ensure that a tier of the education system is devoted to a State child care system. While many initiatives at local level are very good in terms of the subvention they receive, there must a national commitment to a national system of child care, as there is in Denmark, Sweden and other north European countries. That is the only long-term way in which options will be provided to families. The Government's policy fails to address that.

I do not accept the criticisms of the Opposition. I thank Deputy Broughan for, at least, accepting my arguments on child care, child care payments and aid related payments. I have made them since I became Minister and was alone in arguing against the latter. Deputy Broughan asked about the application of two different rates. The Combat Poverty Agency or the ESRI investigated carefully the option of one or two payments. It strongly recommended that because there is a higher risk of poverty in large families the payment should be greater for them. That is the reason they are graduated for the first two children, then third and subsequent children.

Fine Gael has been all over the place on this issue. There was a huge difference in approach by the former leader, Deputy John Bruton, and the current leader, then finance spokesperson, Deputy Noonan. At one point one said that £20 per week would be given in respect of children under the age of five year while the other had promised £25.

There was not a big difference between them.

The difference would have amounted to £100 million.

The Minister is being disingenuous.

What about the lack of direction by the Government?

When it was indicated to them that the rearing of children after the age of five years does not become less costly and that large families would be subjected to a huge loss in terms of income adequacy, they decided to invent another payment between the ages of five and 12 years.

The Minister is misinterpreting Fine Gael policy on the issue.

Fine Gael policy is all over the place. The Government has gone further than anything proposed by Fine Gael. The direction we have taken is the correct one. It puts money in the pockets of mothers. I am surprised that Deputy Fitzgerald is opposed to it. This money will allow mothers to make choices about the rearing of their children. At the end of the Government's term of office, especially following the next budget and another increase in child benefit, I will be prepared to go before the people who will give their answer to the Government's commitment to children.

The Minister is confusing child benefit and child care which are not the same.

Amendment, by leave, withdrawn.

I propose that we take a break until 6.30 p.m. Is that agreed? Agreed.

Sitting suspended at 5.45 p.m. and resumed at 6.30 p.m.

Amendment No. 17 is related to amendment No. 13. Amendments Nos. 13 and 17 may be discussed together. Is that agreed? Agreed.

I move amendment No. 13:

In page 6, before section 6, to insert the following new section:

"6.-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 implications of bringing the child benefit for twins into line with the provision for multiple births of 3 or more children.".

All members will have received campaign documentation from Parents of Twins Ireland. The agency is most concerned that twins be treated the same, in terms of child benefit, as other multiple births. Triplets, for example, receive six child benefit payments per month, that is, £282 in total, while quadruplets receive eight child benefit payments per month, that is, £394 in total, whereas two children born together are treated as one and a half and receive three child benefit payments, that is, a total of £127.50. The amendment deals with the question of whether significantly more should be paid for twins, the most common form of multiple birth.

In a household that I visit now and again there are two children with their grandparents. The little boy and girl are within three months of each other in age. I can imagine, therefore, the additional extra care cost which falls on a couple who have two babies of the same age. The two children I mentioned are aged about one year and 14 months, respectively. It is a similar situation to twins, although these children belong to two different families and the grandparents are providing the child care. I am aware that Miss Hilliard, the leader of the organisation mentioned, has been in contact with the Minister to ask if he has spotted the anomaly. Obviously, he has not or he would have changed the rates.

Having read the reports of Committee Stages of the Social Welfare Bill in previous years, I am aware that this issue regularly arises. It is an anomaly. I cannot understand the reason various Ministers have refused to recognise it and respond appropriately. There seems to be a suggestion of economies of scale and that twins are somewhat different from other multiple births. It is a discrimination in the social welfare code.

Whatever about existing rates of child benefit, the gap will widen from 1 June. I implore the Minister to look sympathetically at both amendments given the reporting mechanism in place. The Minister will present another Social Welfare Bill later this year and perhaps he will consider this issue before then. I would be interested to know the amount of money about which we are talking in terms of ending this discrimination. We need to address this issue which is a bone of contention for the parents of twins.

Prior to the introduction of the Social Welfare Act, 1998, child benefit was payable at double the normal rate for each child where three or more children were born together. The rate was double for triplets. In the case of twins, child benefit was paid at the normal rate. However, a grant of £500 was payable on the birth of twins and further grants of £500 were payable when the twins reached the ages of four and 12 years.

In fulfilment of our pre-election commitments I introduced two key additional measures in the Social Welfare Act ,1998. First, the rate of child benefit payable in respect of twins was increased to 150% of the normal child benefit rate and, second, the £500 grants, which were previously confined to families with twins, were extended to include all families with multiple births of three or more children. Both these measures took effect from September 1998 at a full year cost of £4.8 million.

The enhanced child benefit rates payable in the case of twins and other multiple births give an appropriate level of recognition within the child benefit scheme to the special nature of such births and their additional associated costs, and fully implement the commitment made in this regard.

As we have provided for significant gains for all families with children, the child benefit rates will kick in from June 2001, three months earlier than usual. The cost of providing for double child benefit payments for twins is estimated at £10.2 million in a full year, based on the improved rates recently announced in the budget. That figure would be higher in the context of next year's increase being similar to that granted this year. However, I have stated that I will keep an eye on the issue. I have other pre-election commitments with which we have complied. I have stated that I would prefer to fulfil all the commitments and then return to the issue of twins. I will examine the issue in the context of the next budget, but I cannot give any guarantees.

Amendment, by leave, withdrawn.

Amendments Nos. 15 and 40 are related to amendment No. 14 and these amendments may be discussed together.

I move amendment No. 14:

In page 6, before section 6, to insert the following new section:

"6.-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 implications of providing for a uniform rate of child dependant allowance by increasing the different rates to the maximum rate and of increasing the child dependant allowance for widows and widowers to £20 per child per week.".

I was struck by the unanimity of the social welfare submissions I received before Christmas. I think it was the Society of St. Vincent De Paul which made the point that the general increases in child benefit were welcome. During the partnership Government, my colleague, Joan Burton, then Minister of State at the Department of Social Welfare and who, I hope, will return to the House after the next general election, was very keen on extending child benefit.

Things have changed a little, however, in the past seven years. That was the reason the Society of St. Vincent De Paul was of the view that we should try to better target resources at the children of those on social welfare incomes. This is particularly the case given the points made on earlier amendments on the manner in which social welfare incomes have fallen behind general incomes. I received particularly strong representations from the Widows Association and individual widows with young children stating that the £17 rate was disgraceful. Widows with children face difficulties. This would be a way of targeting resources at them.

An additional child benefit payment could be made to those on social welfare, but why would one do so when there are child dependant allowances? Schedule B concerns rates of assistance. The rate for a qualified child, where payable, is £13.20. The one-parent family rate is £15.20. Some of the rates in Schedule A, such as disability and unemployment benefit and old age contributory and retirement pensions, are £13.20. Widow's and widower's pension is the only rate which is slightly higher. The representations I received were to the effect that we should re-examine child dependant allowances.

We have heard all the arguments and I understand the general points the Minister makes about increases in child benefit. The Combat Poverty Agency highlighted the fact that a particular problem arises concerning the 12% of children who still live in consistent, never mind relative, poverty. That is a huge percentage of children. The Minister has an instrument at his disposal to address the issue, but it is obvious that he is not going to move on it today. However, he should examine the issue again or establish one of his famous departmental committees. My amendment calls for £20 per week per child, but one could argue for £25 per week for children in these circumstances.

This is a way of topping up the whole family's income. I was struck by the fact that so many groups, including the INOU, were of the view that we should look at this issue again. What would the £13.20 payment be if we had indexed it up to 2001? I urge the Minister to reconsider the implications of upgrading child dependant allowances.

Child dependant allowances are paid at different rates ranging from £13.20 to £17. Standardising these rates is an outstanding recommendation of the Commission on Social Welfare. What are the Minister's plans concerning these allowances? It seems the intention is to allow them to wither away. They have not been increased for seven years. The Government is working through child benefit, but it has never formulated a policy on child support. Will the Minister elaborate on the Government's policy in this area? Does it intend to abolish child dependant allowances? Is this what is happening? What is the long-term plan on basic income for children whose needs cannot be met by families?

The Minister talks a lot about child benefit which he confuses with a subsidy for child care. Child benefit will never be a subsidy for child care as the cost of the latter is enormous. Child care is not available. Will the Minister clarify the Government's policy on child dependant allowances? Are there plans to standardise them? Perhaps the Minister views this allowance as irrelevant although all the submissions we have received highlight its importance for families and advocate its standardisation. The argument advanced is that the standardisation of the allowances would not create a poverty trap and would not act as a disincentive in terms of people taking up employment. What direction is the Government taking in regard to child income support and how does this allowance fit into its plans given that nothing has happened in this regard for seven years?

The CDAs have been considerably rationalised over the years in line with the recommendations of the Commission on Social Welfare. Some 36 rates applied at one time compared with the current three. Deputies will be aware that the loss of CDA by social welfare recipients on taking up employment can act as a disincentive. In the case of widows, it can also act as a disincentive to remarriage. On taking office, I examined the policy direction to freeze CDAs which commenced under former Minister, Deputy De Rossa, in his first year in office. I concurred with the rationale behind that decision and the strong recommendation made by officials to me and the former Minister that available money would be better spent on the universal child benefit payment rather than the CDA as its loss on taking up employment or on remarriage acts as a disincentive.

The policy of non-indexation of the CDAs and increasing child benefit above the rate of inflation has been in place since 1994. It is important to recognise that over that period, the combined child benefit and CDA payment has increased by more than double the rate of inflation. In 1994, child benefit payments represented 29% of the total child benefit-CDA payment for a family with four children but currently represent 47% and will further increase to 57% from June onwards. The cost of child dependant allowances in a full year currently amounts to £257 million and the introduction of a standard rate would prove extremely costly. The cost of paying all CDAs at the higher rate of £17 is estimated to be in the region of £49 million per annum while the estimated cost of paying a standard rate of £20 per week per child is £102 million. That would run counter to the thrust of existing policy in this area. Child benefit has been hugely increased in recent budgets at a cost of £330 million this year alone. Last year, the figure was £106 million, a substantial increase on the previous year when the increase totalled £40 million. I do not accept the Deputies' criticism that the Government does not have a policy in this regard. Most people would accept that the policy direction we have taken in regard to child poverty and child benefit is the correct one.

Childcare 2000, in its famous campaign prior to the budget before last, argued that parental child care payments should be taxed although that would raise all manner of questions. I spoke earlier about the various sectors in our society and, if one were to take the top 20%, it would be possible to raise questions about the fairness of across the board increases. However, if the Government were to decide not to go down that road because funds go to the primary carer in any event, it should be possible to re-examine CDAs. I was struck by the coherent arguments advanced by some organisations, particularly by widows, that child dependant allowances offered one means of targeting resources at the poorest 12% or 15% in society, the majority of whom are social welfare recipients.

I will undertake to re-examine the matter but I cannot guarantee any changes in this area. The labour market has changed since 1994 and has changed even further since 1997. However, the Government has already made a policy decision to invest heavily in child benefit; that will require significant resources and will not leave much scope to do anything else in this area. I will consider the matter further in light of the representations made.

I welcome the Minister's willingness to reconsider this matter. Many people expressed concern that increased allowances would act as a disincentive and would put families into the poverty trap on taking up employment. Given the change in the employment market, that argument is not as strong as it would previously have been. If one considers the issue of child poverty and the provision of resources to the most vulnerable families which still depend on social welfare, the child dependant allowance would directly benefit those families and could significantly reduce levels of child poverty. I look forward to the Minister coming back to us on this issue. Perhaps he will outline his views in the Dáil if further parliamentary questions are tabled on the matter. Many organisations such as the INOU and the St. Vincent de Paul Society strongly advocated the standardisation of these allowances which they felt could have a positive effect on child poverty levels. I am sure they made their views clear in the pre-budget forum.

I do not recall any suggestion being made at our pre-budget forum about the CDAs.

The submissions include references to the need to standardise the allowance.

Most groups were of the view that child benefit should be increased.

People also feel that child benefit should be increased but that the Government should adopt a two-pronged approach.

Amendment put and declared lost.
Amendment No. 15 not moved.
SECTION 6.

I move amendment No. 16:

In page 7, between lines 7 and 8, to insert the following subsection:

"(2) The Minister shall, as soon as may be after the passage of this Act, prepare and lay before both Houses of the Oireachtas a report on the extent of child poverty and the feasibility in the context of the existing surplus funds within the Exchequer, of increasing child benefit to £100 per month per child.".

We have been over this ground already on the question of child benefit and have been treated to a series of propagandist messages from the Minister since budget day. There is a widespread feeling on this side and among members of the public that since this Government took office, we have not witnessed the level of improvements in child benefit which our economic surplus would warrant.

While we welcome this year's improvements, Fine Gael vehemently opposes their introduction three months down the line rather than in the first week of April. I urge the Minister to re-examine child benefit rates even if they only apply for a nine month period until 31 December. We hope to see significant improvements in this area in the next Social Welfare Bill. As Deputy Fitzgerald correctly pointed out, the Government does not have a coherent policy on children and the supports which should be put in place to look after them. In spite of the Minister's propaganda, the rates which have been set are very disappointing in view of the resources which exist within the economy.

I will not go over the same ground. I do not accept the Deputy's comments. At the end of the period during which the Government indicated it would spend £1 billion on child benefit, families with two children will receive £117.50 per month and those with a third or more children will receive £146 per month. That represents a substantial investment in children. The most recent independent survey carried out by the ESRI showed that the level of consistent poverty among children had reduced to 12%, a decrease of almost 30% in 12 months between 1997 and 1998. This accelerates the downward trend in child poverty figures with consistent poverty among children halved from 24.8% in 1987 to 12% in 1998. The Government is committed to further reducing poverty in society. We are examining new targets to be set under the national anti-poverty strategy. Child poverty will be one of the issues.

Does the Minister consider child benefit to be a payment to cover child care costs?

Yes, we had this discussion earlier. It is a payment to families towards child rearing costs to allow them to make their own decisions on how they organise their lives in terms of whether both parents work or one remains at home. If we did anything other than provide child benefit, we would discriminate against a large section of the community. It is the fairest, most equitable way of putting money in people's pockets to assist them with child rearing. Child benefit will never pay people to care for their children, which is ultimately their responsibility alone.

Child care costs for many people range between £70 and £120 per week. Through child benefit, one can never hope to give the families a choice. Child benefit does not provide parents with the ability to pay such costs. Is it not confusing to think child benefit can pay for child care? One only has to examine the figures quoted by the Minister. There is no doubt child benefit is increasing and heading in the right direction. It is not true that it is a payment for child care given the costs. Perhaps it is a contribution but it is good to give people a choice. If the Government expects that child benefit will pay for child care or even be a subsidy towards it, it is not realistic given the costs of child care. Is it not necessary to adopt another policy through the social welfare or taxation systems, as promised in the programme for Government? Is it not confused thinking that child benefit will pay for child care given the costs?

The inference in the Deputy's suggestion is that the taxpayer should fund parents totally for looking after children. Child benefit or the taxpayer could never totally fund the cost of child care places for parents who work. We are making a contribution through child benefit towards child rearing costs. Ultimately, it is their responsibility to look after their children and to decide whether they wish to work or stay at home. It would be discriminatory to do otherwise.

Is the Minister saying the Government does not have a responsibility to develop a child care infrastructure which is accessible by parents?

No, I have already said——

My implication does not relate to the taxpayer. As a society Ireland has an obligation to provide more facilities other than child benefit, which is not enough. The Minister is confusing policy if his Department continually says child benefit is a payment for child care costs because it can never be. It is only a drop in the ocean given the child care costs parents face. The reason I am going back to this is that it is a confusing policy at Government level, not just at departmental level, to claim that child benefit will cover child care costs.

Nobody is claiming that. I have not said that. We had this discussion earlier but the Deputy was not present.

I heard that part of the debate but it is also relevant to this amendment.

The earlier discussion related to increasing the supply of child care places, which can only be done by investing in infrastructure. The Government has fast-tracked a commitment to spend £400 million this year on the provision of child care places. Only then will the cost of child care reduce for those who are paying excessive amounts currently. Is the Deputy seriously suggesting that if there is a change in Government her party will fund totally the costs of child care for people who work? That would be a false promise. The Government committed itself to taking into account those families who decide their own circumstances in terms of whether both parents work or one stays at home, and to give them a contribution towards their child rearing costs, not a contribution towards paying child care which is their responsibility. That involves a substantial investment. It will also have the added benefit of resolving many child poverty issues.

Does the Minister accept there is a fundamental contradiction in the Government's position? At one level it is encouraging a new group of people to re-enter the workforce to take up job vacancies but, at another level, as Deputy McGrath said in terms of the number of places it has provided directly or supported, it is failing to meet that additional group's demand in terms of child care. The exchange in which the Minister is engaged with Deputy Fitzgerald exposes the contradiction between a fiscal policy which dramatically favours individualisation and a policy which does not meet his targets for the provision of child care places.

Is the Minister aware of the cost in Dublin per week to a family of placing a child in a crèche? Does the State have any responsibility in providing child care as another layer of education? The majority of funding for pre-school facilities is provided by the State with some local contribution. Is the Minister saying the State has no responsibility in providing child care through pre-school education facilities given that a significant number of other EU countries with modern social welfare and education systems already do so?

The State makes provision in many guises. My Department provides substantial funding to community development projects and family resource centres so that they can provide child care facilities within communities where they are most needed. Many other initiatives in this regard are funded primarily by the Department of Justice, Equality and Law Reform which has responsibility for this area. One must have the supply to encourage people into the workplace. It will take some time to build up that supply but the resources are available now. When one looks at everything we have done in context, we have put a huge investment into the supply side, and into the demand side, in the guise of child benefit. The Deputy mentioned individualisation and the tax code, which helps women in particular who choose to go out to work. They get the entitlement they should have been entitled to as equal partners and not as an appendage of their husbands, as was the case heretofore. A combination of those three initiatives will make a substantial start on a long road towards providing proper child care facilities and supports to parents. It will take some time and cannot be done with a magic wand. It is simplistic for the Opposition to say nothing is happening. There is a lot happening and anyone who looks at the initiatives objectively, particularly those in the area of the Department of Justice, Equality and Law Reform, will see that there are many changes in the area and that it has received many resources in order to meet demands.

The Minister said we are being simplistic but he is being simplistic in saying the increases in child benefit he made give parents a choice. The reality is that they do not.

What is the Deputy saying should be put in place?

I have lots of ideas.

The Deputy should pin her colours to the mast because she must come down on one side or the other. Should this be done through the taxation code? If so, then she is excluding at least 30% of the population.

The Minister is saying——

The Deputy does not have any answers.

I do. The Minister is saying that child benefit increases give parents a choice. However, unless those increases are substantially higher they do not, in effect, give parents a choice because the cost of child care and child rearing are so substantial now that the increases in child benefit do not effectively give parents any more choice.

I do not accept that.

That is the truth. If it costs £70 to £120 per week then the increases in child benefit do not make a substantial difference to the costs. Child benefit should be higher and we should have a child care policy.

Is the Deputy saying that the State should, in effect, pay people to have their children fully minded in crèches so they can go out to work while other mothers who decide not to work will get no payment?

The Minister should not turn the argument around.

That is the logic of the Deputy's argument.

There is an obligation on the Minister, who has it in his own policies, to help parents combine work and families. I am questioning the Minister on his continual assertion that child benefit gives parents choice about child care. It does not and he is confusing——

No. I said it gives them the payment——

There are no child care facilities out there.

——to make their own choices.

It does not.

The costs are too high so they do not have a choice. Government policy has neither provided the child care places nor given sufficient increases in child benefit to help realistically.

Again, the Deputy has a simplistic view because she is in Opposition. As I said, it takes a substantial amount of time to build up the places required in order to bring the cost down. Child benefit, as I said, is a payment to people as a child rearing cost so that they can make their own choices. We are not forcing them to do something, as would be the position if we brought in a taxation method of paying people; we would not be giving people a choice and we would be discriminating against women in the home.

The Minister is not giving people a choice.

There would be discrimination against women in the home.

There is no choice at present because there are insufficient child care facilities, nor has the Minister improved child dependant allowances or child benefit.

More has been done since we entered Government than when the Opposition was in power.

I will withdraw the amendment with a view to resubmitting it on Report Stage,

Amendment, by leave, withdrawn.
Amendment No. 17 not moved.
Section 6 agreed to.
NEW SECTION.

I move amendment No. 18:

In page 7, before section 7, to insert the following new section:

"7.-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 implications of the extension of the family income supplement to the families of persons who are self-employed and phasing out of the back-to-work scheme.".

This relates to a broader issue regarding the FIS. Many of us hoped the Minister and the Minister for Finance might have agreed to refundable tax credits and working this through the taxation system. The objective of bringing in the tax credit system seemed to be achieving refundable or positive tax credits rather than directly involving this Department at all. Obviously we have not achieved that desirable goal but the Minister replied to a parliamentary question about the back-to-work enterprise scheme during a recent Question Time. The question related to the 38,000 people who have availed of that scheme. Two years ago the Labour Party carried out a report on the back-to-work scheme from the employee and enterprise sides. The constant refrain from the latter side was the difficulties people suffered after the fourth year and that was the context for this amendment and a similar amendment last year - we are seeking to support some people.

I understand that the Minister's report commented on the enterprises some people had created. We on the north side of Dublin are familiar with the partnerships and people entering the hackney or taxi industries. Obviously questions have been raised about this scheme as an enterprise support mechanism or as a mechanism to help people out of long-term unemployment. Nevertheless, there is still a strong necessity, given my experiences of the northside partnership area over the last 14 to 15 years, for some sort of income support system for those who want to move into self-employment. Given how tough that can be in the early years, when one's long-term unemployment assistance is withdrawn, this was another method we saw as helping to sustain small businesses.

There is a range of other supports and one of our key supports in our area is to provide cheap enterprise space, which one might get for one-tenth for commercial space in the same locale. There are subsidies through the general community in that regard.

The Deputy's position is normally that taken by the farmers' lobby. Us urban people——

I know last year Deputies Crawford and McGrath put down a strong amendment regarding the general situation of the self-employed but it is a tremendous achievement for a slightly older person to go from unemployment to self-employment, running one's premises, doing the books and perhaps eventually employing someone else. It is hard enough to go from unemployment to employment but this has been a valuable scheme in many ways and going back to our pre-budget submissions, I was struck by the suggestions of Fr. Healy and CORI on refundable tax credits. We thought the Minister for Finance might surprise us with those this year but he did not.

The Chair made the argument against the extension of this. The argument made about FIS is that it is for employees and not the self-employed. There has been pressure from the farming sector to have it extended and there is a working group under the PPF to look at the possibility of integrating FIS with the taxation system rather than the social welfare system. As the Deputy will know, FIS is not available to self-employed people. I accept that when people come off welfare, it is as if there is a sudden death. In relation to self-employed people, it is a sum of about 25% and my Department has taken a number of initiatives to help people entering self-employment under the particular scheme. We have provided a sum of £250,000 to enable them to meet the cost of public liability insurance for their employment, something which is a big burden on them. We have provided an extra £250,000 to the First Step organisation to help it expand its programme of interest free loans to self-employed participants. The Deputy will probably know there are separate arrangements with the credit unions to guarantee loans to scheme participants.

It is an issue all right but pending the review of FIS generally, I cannot give any commitments one way or the other in relation to it. The question of extending FIS to self-employed back-to-work allowance people would obviously have implications and there would be knock on demands from other groups, such as farmers, to have it extended to them as well.

Amendment, by leave, withdrawn.
Section 7 agreed to.
NEW SECTION.

Amendment No. 35 is related to amendment No. 19. We will take amendment No. 19 and amendment No. 35 in the name of Deputy Hayes together.

I move amendment No. 19:

In page 7, before section 8, to insert the following new section:

"8.-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 implications of extending the social welfare free schemes to widows and widowers with dependent children and of raising the widowed parent grant to £2,000.".

This is a big issue for widows and widowers with dependent children. I also included the widowed parent grant in the amendment. Widows feel hard done by because there is still a range of anomalies in relation to their treatment which the Minister has not addressed. I know it is an old chestnut but we always come across the problem people on disability benefit have in accessing a full benefit. The Minister gives them a half rate in regard to disability benefit and that has been the situation over the years. A number of widows currently on disability benefit feel they have missed out, even though their contributions should have given them entitlement to it. I know we are moving into the territory of drawing more than one welfare benefit but, nonetheless, there is still a feeling that many widows and dependent children are suffering.

The Minister told me that the free schemes work out at an additional £9 or £10 per week on average for senior citizens. The extension of the free schemes to the over 70s is something on which I would commend the Minister. It was a very valuable development. Indeed, I got a lot of mail during the year from 72 and 73 year old men pointing out that the mortality rate among men increases as they advance into their 70s and that very few people over 75 years of age would be able to take advantage of it. However, I welcome the movement in that regard. I also welcome the extension of the schemes to the carers.

However, there seems to be an anomaly and the Labour Party and Fine Gael amendments concentrate on that. Given that this is a relatively small group of people, why can we not give them this little extra provision? Looking at the survivors' rates, widows with dependent children are a very vulnerable type family in that perhaps the major income of the family is suddenly snatched away after the trauma of the person dying. I mentioned this before in relation to Members of this House. Given the expense of and the difficult life in politics, if a Member with dependent children dies, think of the difficulties people at that level would face, not to mention somebody on a lower income. I ask the Minister to look at making provision for widows with dependent children, in particular.

As Deputy Broughan rightly said, his amendment No. 19 and our amendment No. 35 try to really improve the position for widows. As someone who was just elected in 1997, of all the groups one meets, this is one that stands out. Such people face a very difficult period when they have to deal at increasingly younger ages with the death of their spouse. The State has to show some leeway, particularly in these good times when we have the opportunity to deliver some kind of increase to them.

As Deputy Broughan rightly said, the extension of the free schemes to people over 70 years of age was a very worthwhile announcement. However, with a small amount of money, we could improve the position for widows and widowers.

I hope the Minister might agree even to a report between now and next October-November. This is my first Social Welfare Bill and it is unlike any other legislation in which I have had the privilege or misfortune of being involved since 1997. All these amendment seek a report, so no additional expenditure would be incurred by Ireland plc. We are simply asking for reports. Given that the period between now and next October, when the Minister will frame his next Social Welfare Bill, is relatively short, there would be much validity in introducing these reports. I ask the Minister to consider both amendments.

I thank the Deputies for raising this issue which is one that has been exercising my mind for the last number of years. I have looked at it in much detail because I get many representations from my parliamentary party, in particular, saying that we need to do more for widows. A review of the free schemes was carried out two years ago and it looked at this issue of extension to other groups, from old age pensioners to those on disability. It strongly suggested that there should be no change in terms of giving the free schemes to additional categories because the scheme was targeted at particular groups initially. If one was to give it to widows, there would be knock on demands from other groups, such as lone parents and other single people.

I strongly looked at the issue of extending the free schemes but over the last three budgets, I brought forward an increase in the bereavement grant from £100 to £500 and I introduced a new special grant for widows with children giving them an extra £1,000 so that a widow or widower, on the death of their spouse, would get £1,500 cash to assist them at that particular time. We also made changes in the continuance of payments after death for six weeks. We rationalised all those to make sure there were not discrepancies and anomalies, as there had been.

We looked at the free schemes but I finally came to a pre-election promise and that was to raise the widow's pension to the old age contributory pension rate. That is the reason we started along the route of giving a special increase of £12.90 to widows over 66 years. Some 68,000 widows will get the special increase of £12.90. That will be followed next year with a further special increase in order to bring them up to the level of the old age contributory pension. There is an exemption in relation to the free schemes which was made a number of years ago. It permitted widows and widowers between the ages of 60 and 65 years, whose late spouses were in receipt of free schemes, to retain their entitlements to ensure their households did not suffer a loss. The Government has also made substantial changes in the taxation code to assist widows.

This is an issue that is high on my agenda. It is not that I am against producing reports but I strongly suggest that the committee examine this issue. If it can make some recommendations, we will consider them. This issue has been at the core of discussions the Department has had at a policy level.

The Minister correctly pointed out that if the scheme is extended to one category of people it could have knock on effects. What are the problems with the knock on effects here? Are they purely financial?

Yes, they would be financial. In effect, it would mean giving the free schemes to everybody.

Is it not a useful way of delivering benefit to people?

Ultimately it would mean, particularly in relation to free travel, that everybody would have free travel.

There has to be a benchmark.

Some people have it on the DART already, late at night.

Amendment, by leave, withdrawn.
SECTION 8.

I move amendment No. 20:

In page 8, between lines 18 and 19, to insert the following subsection:

"(5) Noting that the tax year 2001 is of 38 weeks duration and noting that tax allowances are allowable at 74 per cent of the normal annual rate, that the Minister shall, as soon as may be after the passage of this Act, prepare and lay before both Houses of the Oireachtas a report on the impact of section 8 on taxpayers who will no longer be entitled to receive the PRSI 'tax holiday' in this tax year.".

This matter was raised by my colleague, Deputy McGrath, and the Minister responded in his concluding remarks on Second Stage. This will be a shortened tax year, from 1 April to the end of December. It is a nine month period instead of a 12 month period and the number of weeks is obviously fewer than in other years.

In section 8 the Minister is increasing the PRSI ceiling for employees from £26,500 to £28,250. We welcome that; it is good policy. The situation to date for employees with incomes above those thresholds was that they got a PRSI holiday for the part of the tax year that their income exceeded the PRSI threshold. In the last tax year, almost 340,000 employees availed of this holiday, which averaged about £300 per person. Since the 2001 tax year is a shortened tax year of 38 weeks, we argue that it will have an effect on the ability of that group of taxpayers to claim their PRSI holiday at the end of the year. The personal allowances and the PAYE allowances announced in the Budget Statement and provided for in the Finance Bill are 74% of the annual amount. In a later amendment, this Minister refers to this 74% amount, given the shortened tax year.

We argue that it is not unreasonable to expect the PRSI ceiling to kick in also at 74% of the value. This is something the Government clearly forgot. Under the current proposals, this group of taxpayers will not gain a tax holiday at the end of the year because of the special circumstances this year, so the amendment seeks a report on this matter.

The amendment in my name to which the Deputy referred relates to voluntary contributors——

It is the percentage.

If I am referring to the same amendment, it allows them to make the requisite contributions and not have them paying more than would be required.

This amendment suggests that PRSI contributors are being disadvantaged in relation to employee annual earnings ceilings which will apply in the transition year 2001. This is incorrect and I am anxious to clear up confusion in this regard. Normally, employees who have annual earnings in excess of the ceiling have a period, referred to as a PRSI holiday, at the end of each tax year where they do not make an employee contribution. This period, in the case of a person earning £36,000 per annum, would run from mid-January to 5 April in a normal year.

In the transitional year 2001, this contributor will pay PRSI from April to December 2001 and continue paying PRSI from 1 January 2002. He/she will have a PRSI holiday in the period October to December 2002. The overall effect is a delay in the commencement of the PRSI holiday period by nine months on an ongoing basis. This contributor will not lose as a result of the alignment process. He/she will have two holiday periods, one in each of the calendar years 2001 and 2002. The only change is the period where the holiday comes into effect. Overall, all employees who pay at the main rate will gain as a result of the 0.5% reduction in the employee rate, from 4.5% to 4%.

There is no justification, in equity, for a reduction in the PRSI annual earnings ceilings in 2001. Any such reduction would only benefit higher earners, who comprise 13% of all employees. If a reduction of 26% was adopted, these contributors would pay less PRSI in the calendar year 2001, unlike all other contributors. This would represent a once off gain to a relatively small number of higher income employees.

It is also important to remember that I am making provision in the Bill so that nobody will be disadvantaged with respect to entitlement to benefits as a result of the nine month short tax year. It follows, therefore, that it is also appropriate that PRSI contributors make the same contribution as they would ordinarily make in the nine month period from April to December of any year. A similar situation will apply to income tax and this is the purpose of the 74% tax allowances. The employee PRSI ceiling is not an allowance and therefore there is no necessity to reduce it. In fact, to do so would be unfair to the vast majority of contributors.

What is at issue here is a matter of timing. Nobody is losing. People will get the PRSI holiday in the last three months of 2002 instead of in the first three months of that year. To do what the Deputy suggests would effectively mean that people would have two holidays in 2001.

That is the net issue. There are two calendar years but there are three tax years. Deputy McGrath's question is why, therefore, are there not three PRSI holiday opportunities for taxpayers in those three tax years? From April 2000 to April 2001 is one tax year, April 2001 to December 2001 is a second tax year and January 2002 to December 2002 is a third tax year. There are three tax years but, as the Minister points out, there are only two tax holidays, one in 2001 and one in 2002. Deputy McGrath's point is that the allowances have already been changed to take account of the three tax years in the Finance Bill. Why is there not the same application of that principle in the Social Welfare Bill?

It is because we have, in effect, only two benefit years. The Deputy cannot equate RSI with the tax years; it must be equated with the benefit years, that is, social welfare benefits. Nobody is losing out as a result of this. That is how it has been organised in the Bill. It is only a matter of delaying the holiday because of the nine month period. Nobody will lose out in relation to contributions made or benefits gained.

In other words, there will be no difference in terms of the total amount that taxpayers would not fail to gain. If Deputy McGrath's amendment was accepted, however, they would obtain a tax benefit at the end of this year and another at the end of 2002. Is the Minster stating that if the two were added together it would be the same as obtaining the full amount at the end of 2002?

Over the entire two year period, there will be no loss to people in relation to PRSI contributions or no gain either.

The point Deputy McGrath makes is that, administratively and in terms of how it will operate for taxpayers, it would be a better system if at the end of 2001 they obtained a proportion of the tax holiday to which they are normally entitled and obtained the remainder at the end of 2002. Is the Minister stating that there is no net difference between the two systems?

That is the point we are making, but I am not sure that Deputy McGrath is making the same point. As I understand it, the net effect of what he is proposing to do would be to give somebody two PRSI holidays in the same year and another holiday in the following year.

One at the end of each tax year.

Yes, but they would also have one at the start of the nine month period.

I will withdraw the amendment and allow Deputy McGrath to revisit the matter on Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 21:

In page 8, between lines 18 and 19, to insert the following subsection:

"(5) The Minister shall, as soon as may be after the passage of this Act, issue a statement to both Houses of the Oireachtas on the impact of abolishing the ceiling on employers PRSI as it affects competition and employment policy.".

My party's spokesperson on Finance and I referred to the matter covered in this amendment in our contributions on this Bill and the Finance Bill. The Minister is abolishing the upper ceiling limit on employers' PRSI from the previous amount of £36,600 and there is a great deal of concern among employers about this measure. I tabled the amendment, which requests that a report be placed before the Houses, in order that we can discuss this matter in detail.

The major concern expressed by employers was that this measure was introduced so suddenly and that the Government made no attempt to outline its policy in this area. Given the difficulties that are emerging in the US economy and the problems our economy is experiencing with regard to the supply of labour, many people have pointed out that this will act as another disincentive in terms of attracting skilled people to come here to take up the considerable number of jobs on offer. I repeat the point made by IBEC that this was a very sudden move and that no effort was made to indicate that it would happen.

The amount of money involved is significant. If we take a person with a salary of £50,000 - I do not fail to recognise that this is a sizeable amount - under the old regime, with the ceiling of £36,600 in place, the amount of employers' PRSI to be paid would have been approximately £4,300. Under the new scheme, however, an employer is obliged to pay over £6,500 in PRSI on a salary of £50,000. That may seem to be a small increase when viewed in conjunction with significant improvements in corporation tax and other measures that have been introduced by the Government. However, we have an obligation to assess these measures against employment and competition policy. These changes in PRSI will not just affect multinationals. Many domestic businesses which are obliged to employ people on high salaries could be exposed as a result of the abolition of the ceiling. As a result, I ask the Government and the Minister to allow us to report on the effects of this measure in respect of competition and employment policy.

On this occasion I cannot support my colleagues in Fine Gael. I accept that this decision was sprung on people but the broader issue the Minister for Finance raised, namely, the contribution of business to the national Exchequer, remains important. We made a decision - I believe Deputy Quinn was responsible for initiating it - to start reducing corporation tax to 12.5%, which is an amazingly low rate for business and is one of the reasons the Minister, Deputy McCreevy, got into trouble recently with is European colleagues. I recall, when I taught economics, looking at national accounts where the contribution from business on the taxation side was practically zero, the only exception being the few thousand pounds paid in corporation tax. It was only during the 1990s, with the advent of the IFSC and similar enterprises, that there was any kind of decent return in terms of the amount paid in corporation tax. I am amazed that it is still increasing in overall terms, even though the rate is decelerating to 12.5%.

The Minister for Finance stated that he was only going to claw back £150 million or £160 million through this provision, which is fair enough. We are moving towards a position when everyone will qualify for contributory pensions and when people are going to have some form of PRSA or occupation pension. Included in this could be people of foreign origin who are working here at present but who, having returned to their home country, could be entitled to claim an Irish pension. The Minister's action, therefore, is fair in terms of enabling us to recover some funding from business, which obtains such extensive help from Enterprise Ireland, IDA Ireland, etc.

With regard to Deputy Broughan's question, is this part of the claw back, is it thefull claw back or are there further measures to come?

I cannot predict the changes that might be introduced in future budgets. Deputy Hayes made the point that it will affect ordinary people. It will not do so, in a direct way, in that it is an employers' contribution, not an employee's contribution. It would not, therefore, deter people from returning to this country to work.

One of the reasons we have been so successful in encouraging large international industries to establish operations here is the 12.5% rate of corporation tax. While Deputy Broughan might try to claim some credit for his party leader, Deputy Quinn only made his announcement a number of short weeks before the last election. When we entered office we had to commence the negotiations in relation to reducing the rate of corporation tax and, thankfully, we were extremely successful in our efforts.

The total cost of the various changes in corporation tax announced in the budget will amount to £214 million in a full year, which is substantially higher than the projected yield of £150 million from this particular change. I do not accept the arguments made by other people. We have probably one of the lowest, if not the lowest, levels of PRSI in Europe. We are way ahead of Britain in respect of virtually all the rates and there has been ceiling on employers' PRSI there for many years. In my opinion, ours is a reasonable response. I agree with many of the sentiments expressed by Deputy Broughan in this regard. The social insurance fund needs to be maintained in relatively good stead because the rainy day will come soon in regard to PRSI and demographic trends.

It was a policy decision to abolish the PRSI ceiling. Why was the decision taken to abolish the ceiling as opposed to extending the limits significantly?

It is somewhat unfair that there is a ceiling. Why should people at the higher end of the scale not pay their fair share? Ceilings tend to assist the better off.

The Minister considered the matter closely with his colleague, the Minister for Finance, and is convinced this change will have no adverse effect on our ability to attract the brightest and best back to Ireland at a difficult time in the labour market.

If the brightest and best examine the social insurance contributions payable in Ireland as opposed to elsewhere, they will realise this regime and its benefits are much better than comparable systems in western Europe.

Is the Minister concerned about employment and competition policy?

I will always be concerned about employment but companies do not make strategic decisions based on relatively small money in comparison with the overall scheme of things. Given that the corporation tax return, based on the steps taken to reach a rate of 12.5%, is much higher than its yield, much of the publicity engendered by this change was unwarranted.

Amendment, by leave, withdrawn.
Section 8 agreed to.
Sections 9 to 11, inclusive, agreed to.
NEW SECTION.

I move amendment No. 22:

In page 10, before section 12, but in Part 3, to insert the following new section:

"12.-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 implications of making provision for the extended payment of maternity or adoptive benefit to women who take maternity or adoptive leave on or before the commencement of this section but after the making of regulations under the Maternity Protection Act, 1994, or the Adoptive Leave Act, 1995, extending the period of leave.".

The amendment refers to the welcome extension of maternity and unpaid leave by four weeks. We discussed earlier the introduction of the additional four weeks from 8 March. People who are on maternity and adoptive leave from 8 February are entitled to the extra unpaid leave but they cannot avail of the additional leave with adoptive and maternity benefit. A timeframe had to be laid down in this regard and the Minister for Justice, Equality and Law Reform zeroed in on 8 March but many women on maternity leave felt they were hard done by because of this decision.

A more generous view could have been taken and everybody who had applied under the Maternity Leave Act, 1994, and the Adoptive Leave Act, 1995, could have been included. Both Acts provide for a requirement of four weeks leave but there is a strong demand to be generous in this regard and include all those who are currently on adoptive and maternity leave. Many people contacted me within hours of the provisions being made public. The Minister for Justice, Equality and Law Reform informed my colleague, Deputy O'Sullivan, that this was impossible because of the operation of both Acts.

Nonetheless this could have examined in a generous light. I have tabled an amendment with a similar request in regard to carer's benefit. Many people have contacted me who took carer's leave at their own expense in the past few years and feel they have also been excluded from availing of additional benefit because of the way the Carer's Leave Bill, 2000, has been drafted. When it comes into operation they will be discriminated against and they feel they should have been considered.

I appreciate the Minister would have to go back to the Minister for Justice, Equality and Law Reform to introduce new regulations and so on under the two Acts but there is a question of equity in this regard.

I claim credit for the extension of this provision to adoptive leave because the original intention under the PPF was to review and improve the maternity protection legislation but it was pointed out that the same was needed in regard to adoptive leave. That is why it was extended, even though it was examined by the PPF working group.

We have been as generous as legally and practically possible. We originally intended to introduce this provision on 5 April and make the announcement on budget day but because of representations from the public and both sides of the House we decided to introduce it as quickly as possible. We were prepared to pay the extra money involved to introduce the provision earlier. The constraints of the two Acts involved restricted us and we had to propose positive motions in both Houses of the Oireachtas.

Could the provision have been made retrospective under the legislation?

No, we tried to do so but the Attorney General strongly advised us that it could not be done retrospectively once the regulations were signed. One must still provide four weeks' notice if one wishes to avail of unpaid maternity or adoptive leave. If people are availing of four extra weeks of unpaid maternity leave they are doing so at the employer's behest and not as a legal imperative. The regulations were signed on 8 February and will come into operation on 8 March.

We introduced the provision as quickly as possible and we cannot do much more. The necessity to have motion passed in both Houses of the Oireachtas was also a constraint.

Amendment put and declared lost.
SECTION 12.

I move amendment No. 23:

In page 10, after line 42, to insert the following subsection:

"(5) The Minister shall, as soon as may be after the passage of this Act, prepare and lay before both Houses of the Oireachtas a report detailing the implications of:

(a) extending maternity leave to 20 weeks, and

(b) introducing paid parental leave for 5 days.”.

I welcome the increase in maternity leave and I congratulate the Minister on the change in adoptive benefit because it is important. Combining work and family can prove very difficult, particularly following the birth of a baby. We have been very slow to extend maternity leave and that has not made life easy for people. I welcome the improvements because they are good and necessary. Had we not made them now, we would never have made them. The economy is strong enough to make them now, and they are undoubtedly economically driven rather than child driven. The improvements have taken a long time to be passed into law and we are still low by EU standards in the leave we give to parents. The amendment seeks to extend maternity leave to 20 weeks and to have consideration given to paid parental leave.

Does the Minister have figures for those who have taken parental leave? One of the problems is it is unpaid and those who take it lose pay and take it at their own expense. The Minister said in the Dáil recently that he was considering this issue. Has any progress been made? A new report is being published today by the Department of Justice, Equality and Law Reform. Will the Minister update us on that? The amendment extends the provisions the Minister brought forward in maternity and paid parental leave.

The extension to maternity leave was agreed at social partnership level. Obviously there were differences of opinion and a compromise was reached. As soon as the report was issued the Government agreed to provide the necessary resources in the budget to implement the measures and that was done more quickly than was thought by the social partners. Any extension of that would have to be discussed with the Minister for Justice, Equality and Law Reform, who would have direct responsibility for it, in consultation with the social partners.

As regards parental leave, there is provision under the Parental Leave Act, 1998, whereby employers are obliged to pay up to three days'force majeure leave for urgent family reasons. That is available in certain cases. The Minister for Justice, Equality and Law Reform is in consultation with the social partners. He has sought nominations from various interest groups for a working group to conduct a review on this. It is expected the group will commence deliberations shortly and that the question of paid parental leave will be raised in the context of that review.

While we would like to see improvements, conflicting interests are involved and it is a question of trying to marry them as best as possible. That is what happened with maternity leave. I thank the Deputy for her comments about adoptive leave. The improvements were relatively easy to make because a huge amount was not involved for employers in terms of finance and numbers. Paid parental leave is on the Government agenda and is one of the issues it wishes to promote. Obviously that must be done in consultation with the social partners.

Does the Minister have a date for that review?

No. The Deputy should take it up with the Minister for Justice, Equality and Law Reform.

Is the review established under the Department of Justice, Equality and Law Reform an interdepartmental one? This is a social welfare issue as well. Will the Minister's Department be represented on it?

We will. We are the paymasters. We would have to have some view.

Amendment, by leave, withdrawn.
Sections 12 and 13 agreed to.
SECTION 14.

Amendment Nos. 24, 25 and 32 are related and may be discussed together by agreement.

I move amendment No. 24:

In page 16, between lines 44 and 45, to insert the following subsection:

"(2) The Minister shall, as soon as may be after the passage of this Act, prepare and lay before both Houses of the Oireachtas a report considering the implications of:

(a) increasing the respite care grant to £1,000 to all carers including those who are excluded by virtue of a means test,

(b) removing the disqualification, whereby carers in receipt of social welfare payments are excluded from qualifying for a carer’s allowance in special circumstances.”.

This is a touchstone issue as far as our party is concerned in terms of the provisions of the Bill. While we recognise there has been a small improvement in the respite care grant, it does not meet people's needs. This point was made repeatedly on Second Stage. There are more than 120,000 carers. The Minister in his reply to the Second Stage debate stated that 17,000 carers have been in receipt of the grant and that, as a result of the changes he has introduced, another 4,000 to 5,000 will receive it.

The amendment calls for an increase in the respite care grant to £1,000 and that it be available to all carers, including those excluded by the means test. It is the least we can do for a huge section of people who provide care for many people and who receive very little in return. This is the minimum the State can do to recognise their contribution. The amendment also proposes the removal of disqualifications whereby carers in receipt of social welfare payments are excluded from receiving a carer's allowance in special circumstances. I understand Deputy Broughan has a more specific amendment in this regard.

This was an area where there was general disappointment with the Minister's announcement of changes in the Bill. The improvements are meagre, small and insufficient. While he has made improvements in other areas, he has not made matching improvements for carers. The Minister stated that, because so many more people are working, the claim on social security and the financial resources to meet it are not as great as they once were. However, other states have a much more integrated system of providing assistance for carers. We need to follow those examples. I implore the Minister to examine these amendments because they are touchstone issues as far as our party is concerned.

This was the substance of a similar amendment last year. When one meets carers at conferences or through their representative bodies, it is obvious their time and health are under severe pressure when caring for an older person or a child with a disability. Many people at the carers' conference in Drumcondra last summer told me the key issue is to have some time to themselves. They want some time off in the form of a significant break during the year. After that conference I spoke to older women from my constituency who cared for men who were not that old, in their early 50s, who were suffering from Alzheimer's disease. I found it very moving and emotional as they described the enormous pressure they were under. I thought the Minister would just double this from £300 to £600, particularly if one thinks of the costs involved if one is on the carer's allowance of £80 per week. If one were trying to put together money for a reasonable holiday in the west or south-west, or indeed going abroad, £400 is a small amount to be offered. That is why I suggested £1,000 to enable people to have a week or ten days away. I ask the Minister to examine the possibility of doing this for the most vulnerable and heroic group of our fellow citizens.

There is an old rule that I referred to in discussing the position of widows regarding people being unable to get full disability benefit even though they felt they were entitled to it. Those on lone parent benefit who are also looking after seniors with a grave disability, a young woman looking after a couple of children and trying to care for a seriously disabled older person, had their claims for carer's allowance refused by the Minister. These are special cases that should be looked at again. No matter how expensive it is to look after the carers of Ireland, we in the Labour Party feel it is a fundamental issue and most people would give the Minister marks for introducing carers benefit, though it took him a year to get it to this stage although people are still not really covered. When will this Bill be introduced? It will be at least well into April, which is a year and a half after the Minister took the kudos and bows from the carers of Ireland; only then will people be covered by carer's leave legislation. I do not see why the Minister did not get onto the Tánaiste and say he wanted the legislation in the parliamentary session which ended this time last year. It should have passed before last Easter to be fair to those seeking carer's benefit.

We need a bigger respite and a comprehensive system of caring for these people. We did the basic mathematics on this matter. Last night there was a big meeting of carers in Limerick under the strong leadership of Ger South, who has been a vigorous proponent of the rights of carers over the years. Over 200 people turned out for that meeting though there were no Fianna Fáil representatives there. The Labour Party was represented by Deputy O'Sullivan and Fine Gael——

That is the drudgery of being in Government. The Deputy is keeping us locked in here.

It was Monday night. It was specially organised so that Deputy O'Dea and the other famous representatives there, who was keeping an eye on the new Leader of Fine Gael, could have turned up. Only Labour and Fine Gael were there to make the commitment to remove the means test for carers and to look at this on the basis of medical need. There is a groundswell there.

We did the mathematics on this last year and no matter how one works it out, the 120,000 carers referred to by my colleague are carrying out £2 to £2.5 billion worth of work. The Minister is prepared to give them only £120 million worth of income through the social welfare system. There are ongoing questions to answer about this. The Minster has tinkered this when it demands a full scale collective response to these very vulnerable groups - the carers and those they look after. We have to work with the Department of Health and Children on this and there is a motion down on the cost of caring allowance but the fundamental issue remains - carers are hard done by.

The Minister was not as generous this year as everyone thought with the disregards. The Taoiseach sent a message to the meeting the other night that he will increase the disregard next year to £330 per year for a family. I am not sure if that was cleared with the Department of Family, Community and Social Affairs.

Is the Deputy sure it was not Deputy O'Dea who sent the message?

He could have turned up. The basic point is that the respite grant of £400 is miserable. What about the people on lone parent benefit - I came across two instances of that - and other benefits also? They may also have a caring role but the Minister will not relax this rigid rule that one can only have one benefit at a time. How long does the Minister have left?

A year and four months.

The Minister has 16 months left.

Not according to the Taoiseach.

The Minister should not make the same mistake John Major made in going for the last hour of the last day. He has 16 months left to deliver for the carers and the general feeling is he has abandoned them and has not delivered. He has tinkered with a few things but he has not delivered. These two amendments are proof of what is needed.

For the purposes of balance it is only fair to say the Minister did lift the disregards to the level this committee asked for in our pre-budget discussion.

Respite care has been very important to carers and they are very appreciative of it. The fact it exists at all shows the huge need that is there. These amendments suggesting respite care is increased should be accepted by the Minister. There is no need to repeat at length the extraordinary demands that caring places on people and the fact that it is a 24 hour job. We have all met representatives of the carers' associations and those who are carers and it is an extraordinarily demanding job that has gone largely unrecognised.

One of the major shortcomings of the social welfare system is the absence of recognition for caring as such. We have two payments but neither constitutes a recognition. One is the carer's allowance, which is means tested, as we know, but is really for low income carers. The other is a short compensation for giving up work. The contribution of family carers is simply not recognised or rewarded. Is the Department engaged in any policy development in this area? We have these allowances but has any thought been given to a cost of care payment or cost of disability payment, whatever one wants to call it? Is any work being done on this in the Department? Is it being considered? Should we not be planning for the introduction of a carer's payment which is not contingent on means or social insurance? What is the policy direction of the Government on this? Obviously, the voluntary organisations in this area would like to see such a development.

There is a lack of coherence between social welfare and tax policies. The home carer's tax credit is exactly the same, whether one is caring for a healthy 18 year old or an incapacitated child or adult. This credit is not available if the person being cared for is a spouse, yet there is a reasonably generous tax allowance if a person can afford to employ a carer to look after an incapacitated person at home. There is a lack of coherence between the taxation and social welfare approaches. Will the Minister tell the committee whether he is considering introducing a cost of caring payment as opposed to the two payments currently in place, one of which is means tested for low income carers and the other is compensation for giving up work? Will there be recognition of caring per se or will there be any other developments in that area?

The Minister should make special provision for those caring for people with Alzheimer's disease. A friend of mine who is caring for her mother who has this disease does not qualify for a carer's allowance because her income is too high. I would like to see something being done for this person. If this woman visits friends or relatives, her mother is always on edge and wishes to leave after a short time. This is a full-time job but, thankfully, the woman gets home help and respite breaks from people who look after her mother. However, there should be special arrangements for people with Alzheimer's disease.

I compliment the Minister on extending the mileage in relation to the carer's allowance, particularly in rural areas. I know of a case where a daughter lives within six or seven miles of her parents. This woman is caring for her parents as well as for her own family. After putting her children to bed, she travels to her parents' home and remains there until approximately midnight. This woman was refused carer's allowance because she lived some distance from her parents. TheMinister has increased the mileage which allows that person to qualify for the carer's allowance, which I welcome. If that woman did not care for her parents, they would probably be in St. John's Hospital, Nazareth House or some other institution in Sligo. Because of the allowance this woman is receiving, she is keeping her father and mother out of an institution. I welcome this change to the proximity rule, particularly in rural Ireland.

It is difficult to disagree with any of the comments made. While the Minister has made great progress, will the Department of Health and Children live up to its responsibilities?

The Chairman is correct when he refers to the Department of Health and Children. I am not trying to abdicate responsibility but people tend to think this is the only support available to people. There are a myriad of other supports, primarily in the Department that has primary responsibility in the area of caring for the infirm. It is somewhat disingenuous of the Opposition to say I tinkered with the system or made minimal changes. They suffer from very short memories. There have never been more changes to a scheme than in this case since I became Minister. There has been an 81% increase this year in recipients of carer's allowance since we came to office. The changes in this year's budget, which are anything but minimal, are substantial for 5,000 people. This will mean that by the end of this year there will be well an increase of over 100% in the number of people in receipt of this allowance; it will increase from 9,000, when we came into office in 1997, to 22,000 the nujmber of people in receipt of carer's allowance. These people will also receive the benefit of the free schemes, which very few of them were receiving up to now. People over 66 years of age who were receiving carer's allowance will now qualify for all the free schemes. The amount of money dedicated to the scheme was £35 million in 1997, £110 million currently, together with another £21 million; £21 million was the cost of the improvements we have made here.

I thank Deputy Fitzgerald for referring to the much needed respite care grant. People tend to forget that this Minister and Government introduced the respite care grant and increased it progressively in each budget to the current level. Obviously we will continue along these lines within the budgetary constraints that exist.

On the carer's benefit, I am particularly pleased about that scheme because, like anything relating to social welfare, when one gets a foot in the door, it is a bit like pre-1953. This has turned out to be an incredibly successful scheme. I have no doubt the carer's benefit——

Last year there were——

There were a few but the numbers are small. Like any scheme, it will take some time for numbers to build up. We estimate that somewhere in the region of 6,800 people will qualify for this allowance when it is fully up and running. I have no doubt, given the extent of the PRSI coverage, that it will increase over time.

I thank Deputy Brennan for his kind remarks and interest in this area. I made major changes in relation to the rules on close proximity. Until I became Minister, one did not receive a carer's allowance for looking after a relative who lived next door. I changed this regulation. Subsequently, particularly as a result of representations from Deputy Mattie Brennan, I was able to get sanction from the Department of Finance to do away with the close proximity rule which was causing difficulties. When this change was introduced, I gave a commitment that I would monitor its effects. That is just a flavour of some of the changes I made in this area.

In relation to overall planning, the Minister for Health and Children, Deputy Martin, and I met on a number of occasions recently to discuss the longer term view on how we should proceed. A consultancy study is considering the issue of long-term care and how we can perhaps marry the existing systems in order to have one coherent system. The Minister for Finance has already indicated that he is tabling amendments to the Finance Bill to assist people in their taxation arrangements in relation to insurance policies for long-term care. This is an issue I welcome and have promoted with the Minister for Finance to ensure people make provision for their problems which will manifest themselves in the future.

A lot of planning for the future is taking place. I would just say to Deputies that I fully accept the difficulties of carers. Each of us would have a life experience, so to speak, in this regard in our own families. In some cases, people will get assistance and in other cases they will not. The carer's allowance is a means tested payment. For a party, particularly the Labour Party, to say it will abolish the means test, will in effect mean giving the same amount of the limited resources available to the very well off as well as to those most in need. I do not agree with that policy direction.

To a certain extent the reason the Taoiseach was able to make a commitment to the meeting in Limerick was that I had already indicated on more than one occasion, publicly in the Dáil, to the carers' lobby groups and at parliamentary meetings this year, that having raised the disregard as requested by this committee, I aim to extend it to a stage where a family on average industrial earnings will be able to qualify for the maximum carer's allowance in the event of their fulfilling the other conditions. It was not rocket science. We had already promised that. In respect of Deputy Willie O'Dea, I am not altogether sure he was at the meeting, but I can assure Deputies that on Tuesday morning he lobbied me about the indications made at the meeting. If he was not there in person, his spies were. Without meaning to be in any way critical, it is important to say that the Deputies are relatively recent converts to the issue, given that all the major changes in the carer's allowance, over which I have sole operational power, have taken place during my tenure in office. Examination by any outside person will prove that to be the case.

The Department's estimate of the number of carers is about 50,000. Is it intended to revise that figure in the light of the finding of the pilot research in the Western Health Board area that there are 20,000 family carers in that health board area alone? If that estimate were taken to be extended over, say, ten health boards, the number of family carers could be over 200,000. Is the Minister standing over the figure of 50,000, most of whom are not getting a payment? What is the Department's estimate of the total number of carers in the country? How is the Department approaching that at present?

People were surprised by that survey. The Carers Association is probably the primary advocate of carers, and its estimate is probably about right. I understand it was based on projections made by the Carers Association in the UK and on the amount carers get on a pro rata basis there. I wonder why we do not carry out similar research here so that we would have a budgetary framework that would enable us to see exactly what it would cost if we were to do it on the basis of medical need. We do other things in the budget on the basis of medical need. The Scottish Labour Party, in coalition with the Liberals in the Scottish Parliament, are indicating that they will give free care to senior citizens. I am not sure it is such an unbelievably revolutionary idea. It will obviously put Mr. Blair under pressure in terms of the rest of Britain. It would mean something, ultimately an independent Scottish nation. It makes the point that perhaps it is not so revolutionary to consider a system of comprehensive care which would give resources to everybody in need. In terms of bilateral meetings with the association, conferences and so on, we are talking primarily about women because the vast bulk of carers are women. Hence it is also a gender issue. The great majority of carers are excluded from carer's allowance and probably will not qualify. Their situation will be no better. The Minister may talk, almost glibly, about whether we want to include the wealthy, but there is a large group of people we are still not reaching. That is why this is still and will continue to be such an important issue.

That is one of the reasons it is important to raise the disregard and bring in people who are at the lower end of the scale rather than bringing in everyone in one broad sweep. The average industrial wage is a target we would like to reach before we leave office. That commitment is very much appreciated by the care lobby groups, one of which recently went on an outing in Wales where they had their eyes opened in terms of the difference between what was available here, particularly in terms of carer's allowance, and what is available in Wales.

I understand that in the UK the local authority must assess the basic health needs of the carers. That does not apply here. There is no such right. That was Deputy Fitzgerald's point.

That is one of the reasons we set up the process of needs assessment as recommended by the review. The Deputy referred to the number of carers. Research was carried out in the context of the carer's review document which was published in 1998. I suggest that Deputies opposite should read it, if they have not already done so, to see exactly how the figure of 50,000 was arrived at. I do not know what the overall figure is. It depends on where one sets the bar. This is the whole issue in examining the proposal to have a continual care payment. It was suggested that a system of needs assessment in respect of both the carer and the person being cared for should be put in place before this is implemented. My Department does not have the capability of putting a needs assessment scheme in place right across the country. That would be the responsibility of the Department of Health and Children which would ultimately lead it and deal also with a number of other cross-departmental issues. The issue of long-term care is being looked at more broadly, and one aspect of that relates to changes made by the Minister for Finance in relation to tax relief on insurance policies.

Amendment put and declared lost.
Section 14 agreed to.
NEW SECTIONS.

I move amendment No. 25:

In page 16, before section 15, to insert the following new section:

"15.-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 implications of increasing the respite care grant for recipients of carer's allowance and benefit to £1,000.".

Amendment put and declared lost.

We now come to amendment No. 26. Amendments Nos. 27, 28 and 31 are related. We will discuss them together.

I move amendment No. 26:

In page 16, before section 15, to insert the following new section:

"15.-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 implications of abolishing the means test for carer's allowance.".

We have dealt in general terms with the subject matter of these four amendments which are an attempt to deal with key issues about which carers feel very strongly. We referred at length to the numbers qualifying for carer's allowance, the means test and the fact that many consider it a poor law approach to the whole area of provision for probably the most heroic people in the community. I ask the Minister to look at this matter. The case for abolition of the means test could be made. Based on the Minister's figures for the 1998 review what would be the cost and how could it be financed if we were to proceed along that road? It has been said there are other ways in which caring could be financed and some have referred to the social economy. Deputy Brennan referred to day care and to daily or weekly respite for the main carer who has a 24 hour job. Is the Minister working with the Departments of Enterprise, Trade and Employment and Health and Children on ways in which the burden of caring could be spread, where vital work could be done through the social economy and where people would be helped more extensively in their homes? That is an area that many carers say the State should look at and which would be helpful. The basic issue in this amendment is to bite the bullet and abolish the means test.

On amendment No. 27, we welcome the Taoiseach's commitment on the average industrial wage. It was stated that this was the recommendation of the committee. I recall saying during our discussion we should aim at the figures on the average industrial wage. I meet many semi-skilled 19 and 20 year olds earning £400 and I wonder about the famous average industrial wage. It is an almost esoteric type qualification now. The last figure the Minister gave me in 1999 for some of the social welfare rates was £333, but it could be £400 per week now. If the Minister cares to look at my speech, GDP per capita would be a great deal higher if the average industrial wage is £30,000 per annum. This matter should be considered. My amendment seeks to go a step further by seeking £150 for a single person and £300 for a married couple rather than £125 and £250 respectively. It is difficult to understand why the Minister did not take the extra couple of steps so that the rate would be close to the average industrial earnings target. I expect it will bring 5,000 or 6,000 new carers within the remit.

Amendment No. 28 refers to the demand I have heard among carers for a move beyond the carer's allowance to a broader based payment, with reference to medical needs and a continual care payment. Some were thinking in terms of a rate per hour. There could be more significant expenditure on recognising the role of caring rather than a basic income support for carers. We are actually saying: "You do a vital job in our community, you are on call 24 hours a day, seven days a week". This is the type of care provided for a man in his late 50s suffering from Alzheimers who has to be taken up the stairs, lifted into the bath etc. This is the type of work which many carers are providing without any real support from the State. I ask for a more comprehensive payment for carers.

In regard to amendment No. 31, Deputy Fitzgerald put forward a basic proposal before the budget. The Labour Party made a similar proposal which suggested £25 per week. If I am not mistaken, the British have such a payment. We still have not caught up with the British on child benefit. In sterling terms the rate per week for the first and second child will not be equal to British rates. Let us not forget that they have stakeholder pensions and have introduced the full "Blair-ite" agenda. While this Government has tried to be a "Blair-ite" Government——

Please stay with the amendment.

I thought the Deputy was being derogatory when he called me "Blare-ite". Every time I meet my counterpart Alistair Darling he asks what I am doing with the old age pension and why people there cannot get what those in the Republic of Ireland get.

Children might have said something different.

We are way ahead of the UK.

On the cost of caring allowance the Minister said we should also speak with the Department of Health and Children because the cost of disability, the aids and the accessories of caring should be paid either through the person with the disability or partly to the person with the disability and partly to the person who cares. There can be significant additional expense in that regard. Through the local authorities there is the disability extension where one can get lifts and various improvements of that nature. However, there is still an ongoing request for a monthly or weekly cost of caring allowance set at £25, £50 or whatever. This is an aspect of caring on which neither the Minister nor his colleague the Minister for Health and Children, Deputy Martin, have delivered.

In relation to the social economy the Tánaiste, in the proposals she is bringing forward, is acutely conscious of the need to assist carers. As a result of the budget changes the increase in the disregard is exactly as requested by this committee. Not only will that allow an extra 5,000 people to qualify for new carer's allowance recipients but 3,000 existing carers will receive an increased payment. The effect of all these increases will mean that a couple with two children earning a joint income in the region of £15,100 will qualify for the maximum carer's allowance while a couple in receipt of £26,000 will qualify for a minimum carer's allowance. Obviously all those people will get the free schemes and the respite grant.

There have been some major improvements in this area. This disregard is by far the most generous in the social welfare scheme. The Deputy has asked that the disregard be increased to £300 but I have indicated that over time it would be the intention to reach the average industrial earning which, in my estimation, is £360 per week. That would allow a larger number of people to enter the remit of the carer's allowance. I accept the carer's allowance as a social welfare payment is not designed to assist as well as a payment could be designed. That is the reason the issue of continual care was considered. The medical condition and medical signing required in respect of eligibility for the carer's allowance is a doctor's certificate together with some investigation by our medical people. The circumstances of beneficiaries in receipt of the carer's allowance differ. To an extent, it is not fair, if one beneficiary's circumstances are much worse than the another's.

Has the Minister not got experience of that from the Department?

That is the way the scheme is currently set up and that is why the review examined the issue of the continual care payment which will be based on a needs assessment.

Many benefits are contingent on medical referees. The Minister introduced a few measures to provide for those in receipt of invalidity benefit, including their being allowed to return to work. An anomaly arose last year concerning beneficiaries in receipt of invalidity benefit who got sick at work in that they were already sick. I forgot to table an amendment on that. Have we not got experience of giving benefits based on medical need? I cannot understand why we should balk at abolishing the means test for the carer's allowance.

We are not talking only about income.

Could a person in receipt of disability benefit who was quite wealthy and had enough stamps not move on to qualify for an invalidity pension. Would that person not qualify for an invalidity pension purely on the basis of his or her medical needs? That person could be allowed to return to work in certain circumstances and also, perhaps, be entitled to a living alone allowance and various other allowances. Is such circumstances not comparable to what I propose? Why is it necessary to require a means test for eligibility for the carer's allowance?

That situation is based on a person's contributions.

The carer's allowance scheme is a social assistance benefit, it is not based on contributions. Beneficiaries get only what they paid in.

Is it not similar to the position of pensioners in that those concerned will have a contribution record?

Ultimately they will and that is why many more people will qualify for carer's benefit. That is the rationale behind bringing in carer's benefit.

How stands the amendment?

I wish to press it.

Amendment put.
The Select Committee divided: Tá, 6; Níl, 8.

  • Broughan, T.
  • Browne, J. (Carlow-Kilkenny).
  • Coveney, S.
  • Hayes, B.
  • Fitzgerald, F.
  • McGrath, P.

Níl

  • Ahern, D.
  • Ahern, N.
  • Brady, J.
  • Brennan, M.
  • Browne, J. (Wexford).
  • Doherty, S.
  • Foley, D.
  • Wade, E.

I move amendment No. 27:

In page 16, before section 15, to insert the following new section:

"15.-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 implications of increasing the weekly income disregard for the carer's allowance to £300 in the case of a married couple and £150 in the case of a single person.".

Amendment put and declared lost.

I move amendment No. 28:

In page 16, before section 15, to insert the following new section:

"15.-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 implications of subsuming the carer's allowance into a new continual care payment to be paid to medically approved recipients without reference to individual or family means.".

Amendment put and declared lost.
Section 15 agreed to.
NEW SECTION.

I move amendment No. 29:

In page 19, before section 16, to insert the following new section:

"16.-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 implications of identifying key areas of disadvantage, both urban and rural, with proposals to give additional social insurance and social assistance supports to the population of those areas.".

I welcome the extra island allowance of £10. I am most familiar with the Beara peninsula in Deputy O'Keeffe's area, which encompasses an uninhabited island. However, in the context of the Minister's anti-poverty programme, Combat Poverty and the NAPS unit, I am occasionally dissatisfied regarding spatial disadvantage. The Minister's colleague, the Minister of State, Deputy Eoin Ryan, recently announced the RAPID programme which will cover 25 areas. However, the lack of information on areas of major disadvantage is a continual problem.

Crossing to islands is dangerous and some of them are cut off. I understand there is a lack of social provision and recreation facilities on islands but, as the Minister is aware from his constituency, there are islands of massive disadvantage in urban areas. I, the Chairman and other Deputies are familiar with such areas. As I said on Second Stage, the agencies have not put enough effort into defining these areas. For example, in terms of health disadvantage in the UK, over the past number of years the British Government appears to have had available to it a matrix of statistics in relation to mortality rates, the quality of hospitals and care issues. This is only one aspect, but if one lives in the home counties in south-west London, one's quality of life is significantly better and one's chances of mortality are much lower than if one lived in Manchester. Despite the association with some famous cultural icons, statistics show that one has a much higher chance of dying younger in Manchester than in other areas. However, such statistics are not available in Ireland.

The Minister and I are aware of some areas of the city where the mortality rates are the highest in the country and among the highest in Europe. The Chairman and I were members of the healthy city project a few years ago which showed that the north side of the city in general was perhaps the most deprived area in Ireland in terms of the indices of disadvantage. The Minister has been asked to extend the national anti-poverty strategy to other areas, but other issues also need to be addressed. For example, if one was to stay tonight in certain parts of the north side and west side of the city, the chances are that there would be a serious joyriding incident in one's estate and one would have to endure amazing aggravation and irritation for many hours. Crime levels are higher and one's access to medical care is lower. One's access to educational advantage is also lower.

The Dublin 10 postal district on the west side of the city has the second lowest take up rate of third level places in the country while the area in which I live, Dublin 17, has the lowest rate. In this context, it is extraordinary that additional social welfare benefits have been presented for certain areas of the country without reference to any statistics or research. The Minister, Combat Poverty or the NAPS unit have not carried out such research. The Minister could not outline the position in clear quantitative terms. Professor P. J. Drudy worked on a report on housing for the Labour Party. His figures showed that if a part of south-east Dublin - mainly the constituency of my party leader - is excluded, one finds that the remainder of the city is an area of massive deprivation. It is an important aspect which the Government has not addressed because it does not care and, primarily, it would not be seeking votes in those areas. The reality is that the Government has written off votes in some areas of the country.

I am looking for them.

Yes, Cathaoirleach, you are looking for them, but you are the exception, and your brother is also. Perhaps the Government parties know that they can find a plurality of votes in the wealthy areas of these constituencies. When the Minister introduces legislation such as this, it is welcome in so far as it goes, but when will he do something about deprived areas? I would accept improved provisions for education and health rather than income based improvements through the social welfare system. The Minister, however, has paid virtually no attention to this area and does not care about it. Perhaps he does not live in such an area, but I do. These areas have been hopelessly neglected by the Government, and not just by the Minister himself. The NAPS scheme and the Combat Poverty Agency have not paid enough attention to this matter. It is not just an urban problem because rural areas are also affected. I have seen similar statistics for long-term unemployment in parts of the midlands. I do not think the Minister has addressed the problem in general. I also mentioned this point on Second Stage because I feel strongly about it. I do not see why the Minister is not prepared to come forward with real statistics.

On what basis did the Minister select 25 areas for the RAPID programme? While it is welcome, I do not know how much money these areas will receive, although some backbenchers from the Minister's own party were able to tell me. I received a publication from the Minister of State, Deputy Eoin Ryan, listing areas in my own constituency which were included in the RAPID programme. The backbenchers, however, told me that another parish was included in it, so I feel the Government is making this up as it goes along. It is like a famous flats complex on the southside where the media reported on the horrible state of life many people had to endure. Yet, a few days later, the Taoiseach appeared with the city manager and said he was going to demolish the place. He did a rerun of an announcement he had Gmade two years earlier, but nothing will change for those residents in the foreseeable future. The Minister should address the spatial concentrations of poverty. A major initiative is required from agencies under the aegis of the Minister as well as from the Minister himself.

There is much merit in what Deputy Broughan said. Without a proper map or picture of this situation, one cannot locate social disadvantage or deprivation in specific areas. This matter has to be tackled estate by estate. We have two cultures in society but people in rural areas do not understand this to the same extent as those in urban areas. People in the majority culture are doing very well and participate fully in the new, successful economy. However, there is a minority culture which is pocketed in well defined parts of Dublin city and county, as well as parts of other large cities. The Minister will know about this. In these areas we have not dealt with the problems of poverty in a concentrated way.

I wish to comment on the RAPID programme. This morning a constituent rang me from a parish in my own constituency, which is not in the west Tallaght area but in central Tallaght. That community has the same level of social deprivation and disadvantage as west Tallaght but it is excluded under the RAPID scheme. How was the classification for this scheme established? How can one estate - which has the same levels of unemployment and one parent families, few private cars and a lack of participation in third level education - be left out of another larger conglomeration of estates which seem to be part of this scheme?

There is a need for some mapping agency to precisely identify the areas we are talking about. Under the broad brush approach, west Tallaght, north Clondalkin and other parts of Dublin city become the central focus of capital funding under this RAPID programme to the exclusion of other areas. That is the wrong policy approach.

I welcome the fact that the Minister was able to make improvements concerning island communities. That is both worthwhile and sensible, but if those improvements can be made in respect of certain rural communities, why can we not have the same approach to urban areas?

When the last Government introduced the "Breaking the Cycle" education programme in parts of west Tallaght, not all schools in the area were included. When it comes to social policy in Dublin city and county we seem to identify the same areas while ignoring others which should be included in such schemes. I support Deputy Broughan's mapping amendment to identify key areas of disadvantage, urban and rural, but particularly in relation to urban areas. The vast majority understands the kind of culture that exists in some of these communities, where policing is nowhere to be seen, there are poor levels of housing, people do not have private cars and there are all kinds of health problems, including higher mortality rates. We do not have the kind of close identification and mapping we should have. The amendment is necessary.

The RAPID programme has probably brought this matter to the fore, but how does one approach these problems? It is done by district electoral divisions rather than by estates. All the indices are in the RAPID programme.

The point is that they are not. Nobody checks the mortality rates, housing conditions or crime by district.

Certain indices are there, but it depends on the mix. I agree with the RAPID programme. If they asked the opinion of public representatives they would probably have received more logical answers. The RAPID programme has produced some rather strange things, but it was done in a statistical way.

How does that happen?

I agree with the Deputy that it depends on what indices or tables have gone into it. The answers that have emerged are not ones those of us on the ground would agree with. Certainly, in my area, estates that might be worst off did not come out of the pot, perhaps because they were in the same district electoral division as a smaller 50 house estate which did a balancing act on it. Funny things have come out, but I do not know how one can achieve a perfect world other than going back to the unstructured way of asking local public representatives who often provide the right answer, although it might not be the methodical way of doing it.

I do not for one minute accept what Deputy Broughan said about my party. He alleges that my party gives up on certain areas in the country, but that is typical of the arrogance of the Labour Party whose members believe they have the monopoly in looking after the less well off in society.

We are left to pick up the pieces.

Time and time again we get 40% of the vote, a large proportion of which comes from areas of the country that a party properly espousing socialist ideals would normally receive. We receive that vote, however, because our party, particularly in the person of Deputy Noel Ahern, represents those members of the electorate well. In some of the very poor areas of my constituency, I beat representatives of every party, including some of those from parties which are recent converts to the democratic process. I totally reject, therefore, the Deputy's assertion in that regard.

I was not the lead Minister on the rapid programme - that responsibility fell to the Minister of State at the Department of Tourism, Sport and Recreation, Deputy Eoin Ryan. I was present when a briefing was given to the Cabinet committee on social inclusion when the officials from that Department were absolutely adamant in respect of the methodology used in choosing these areas. Two schemes were allocated to Drogheda and Dundalk in my constituency and I would not query the result at which the Department arrived in that regard. The Deputy may recall that these areas were designated in the PPF and it was decided that 25 areas throughout the country would be chosen. The methodology by which those areas were chosen was decided upon in consultation with the social partners. It was intended that the areas chosen would not be exclusively urban. However, the 25 areas chosen were all urban in nature.

The Government has agreed that schemes will be established in provincial towns and rural areas. I do not accept what the Deputy stated. There has been rapid progress in relation to the extension of the national anti-poverty strategy. The Deputies opposite are, apparently, still holders of the dual mandate, and as the national anti-poverty strategy is extended to local authorities it will be incumbent on them and their colleagues from all parties to ensure that it is implemented at that level.

It has not yet arrived.

It is being moved out. In any event, councils should be taking the lead. We can discuss these issues in an esoteric way but, ultimately, we need to see schemes being delivered on the ground. There will be an additional £4.5 million to be invested in the rapid programme to employ co-ordinating staff who will work in conjunction with the county development boards, or their equivalent in urban areas. That will commence in the near future. The aim of this is to fast-track and front-load the money that was designated to those areas, across a range of agencies, over the lifetime of the national development plan.

There is a great deal of work going on but, ultimately, this matter boils down to deliverability, which is the responsibility of the various agencies at local level, particularly local authorities. I reject any suggestion from any member, including the Chairman, that certain areas were chosen because of political considerations.

I did not say that.

The areas were chosen on the basis of good and logical methodology. If Members table questions to the relevant Minister, they will obtain the answers they require.

I do not believe the Minister has the information I require.

The Deputy is wrong.

When the rainbow Government was in office, the Combat Poverty Agency was given a role in investigating the position of schools because, in the early stages, it appeared that a number of better off schools gained disadvantaged status. The Combat Poverty Agency was supposed to take the lead in indicating which schools were disadvantaged. As I understand it, according to Deputy Shortall, there is now, more or less, no qualifying criterion involved. In my opinion it should be the responsibility of the Minister for Social, Community and Family Affairs to discover the spatial concentrations across a range of criteria. Deputy Hayes made a valid point about this matter. In my constituency there is a famously affluent area but there is also a very deprived working class area, with major socio-economic problems, situated in the centre of the former.

What is required is a breakdown on a constituency by constituency basis. I believe that the Government and the Minister's party has done this deliberately. Up to eight or ten years ago before the partnership process started, it could be clearly seen that money was granted to areas which were not in greatest need. For example, lottery grants were given to golf clubs and sailing clubs. Indeed, I recall from meetings of the Committee of Public Accounts that one Minister procured a grant for the sailing club in Kilkenny. That was outrageous.

The Deputy is completely off the wall and he is wrong.

You have done it deliberately.

The Deputy is making all sorts of bald and wild statements. He should inquire about the methodology used to choose the areas designated under the rapid programme. As far as I am concerned, the specific estates designated in my constituency were the correct ones to be so designated. The Deputy should check the position regarding the areas in his constituency to which he refers instead of making bald and wild statements.

I am not merely talking about the rapid programme, I am referring to the general scenario. The Minister was dragged screaming and bawling through the negotiations on the PPF——

If the Deputy discovers any proof that the areas chosen were the wrong ones, he should communicate that fact to the Minister of State, Deputy Eoin Ryan, or me. However, he will find no such proof.

To return to the amendment, one could make the case for additional income supports for people living in certain areas of the country. In my opinion, disadvantaged urban and rural areas should have been considered but the Government has refused to do so. There is an outrageous lack of health, education and sporting facilities in these areas. On Friday night last, the Minister for Tourism, Sport and Recreation, Deputy McDaid, made great claims for the "Bertie bowl", while international boxers and athletes are obliged to change in garden sheds etc.

The Deputy is being ridiculous

The Government has not taken this matter seriously or tried to take comprehensive action.

The Deputy is absolutely incorrect.

In relation to the rapid programme, why did not the Department work through the existing organisations, such as the partnership companies, which were established for that purpose?

The Deputy is absolutely incorrect.

What was the involvement of the Minister's Department in the selection process which obtained with regard to the rapid programme? In terms of the community aspect of its remit, the Department would, from time to time, allocate not insignificant sums of money for capital projects for family mediation centres etc. One would have thought that it would have had a role in terms of choosing the areas to be targeted under the rapid programme, given that it is the lead Department in relation to social welfare matters.

My Department had no role in choosing the rapid areas. They were chosen by the lead Department, namely, the Department of Tourism, Sport and Recreation.

Was that Department informed about the number of social welfare recipients living in the various areas?

All that information would have been made available to it. The Deputies are barking at the wrong Minister, they should table questions to the Minister of State at the Department of Tourism, Sport and Recreation, Deputy Eoin Ryan, and they will find that the process of choosing these areas was open and above board and accepted by the social partners.

Much of the data used in the rapid programme came from an outside agency. Should your Department not collate these statistics independently?

I do not have all those statistics.

It is a case of what is the mix of the cake.

I could provide statistics in regard to the number of people in receipt of payments but might not be able to do so in regard to the number in a specific estate. That programme was run by the Department which has a role in partnerships, ADM and all the other programmes.

It is a problem. Perhaps the rapid programme will provide another forum to address it. What other unit is the one to go by? The DED has imperfections because it has a bad estate and a good estate.

The Minister has admitted there is a considerable deficiency in terms of producing the evidence on which Governments can make policy decisions.

I have not. The necessary parliamentary questions should be tabled or the Minister of State at the Department of Tourism, Sport and Recreation should be called before the committee. However, I have no doubt whichever committee he is answerable to will be able to question him in regard to the choice of areas for this programme.

Was the Minister approached directly in this regard?

My Department was involved in providing information but it did not have a lead role.

Were the Minister's views on Dundalk and Drogheda sought?

No, nor did I have any influence. I said that publicly in Drogheda.

The spatial location of poverty is the Minister's responsibility. My party had a major role in establishing the Combat Poverty Agency. I read an interesting 1983 report by one of the Minister's predecessors, Barry Desmond, who was so able that he administered the Departments of Health and Social Welfare.

He made some disastrous political decisions for which the party is still suffering in my constituency.

He also made some good decisions together with former Deputy Cluskey. Mr. Desmond clearly identified that the location of poverty was the key. The Minister referred to politics and who represented the poorest of the poor. I accept Fianna Fáil and Fine Gael receive their share of votes and so on. However, there is a low turn-out in the poorest areas, particularly for local elections. Many of my constituents are not prepared to vote unless there is a strong local candidate running because they feel abandoned by the political system. We should know at least statistically what is people's quality of life.

I welcome the provisions for the islands. For example, people living on islands off the south-west coast enjoy a quality of life which encompasses music, culture and so on that is light years away from that in comparable low income areas of cities. My constituents in such areas cope with major insurrections nightly which the Minister for Justice, Equality and Law Reform, the Taoiseach and some journalists do not think is their business, yet people's lives are terrible. The Minister is responsible for many of these people's incomes and it is an area which I hope we will address if we get another opportunity in Government.

How will the Labour Party address it?

By establishing the facts and outlining them to people. That is a start at least.

Deputy, you have raised some interesting points and given me ideas. The committee might examine the issue and invite the Minister of State at the Department of Tourism, Sport and Recreation and his officials to appear before us. I am not a member of the Oireachtas Joint Committee on Tourism, Sport and Recreation but it does not spend a great deal of time discussing local development. The committee could take this issue up but can we leave it for another day?

The Minister is a member of the Cabinet sub-committee on social inclusion. The RAPID programme was brought to the attention of the Oireachtas Joint Committee on Tourism, Sport and Recreation. Was it instigated by the committee?

There was a commitment in the PPF to nominate 25 areas of disadvantage and it was agreed a certain methodology would be used to choose these areas. That was done in consultation with the social partners and it was always under the remit of the Department of Tourism, Sport and Recreation through the Minister, Deputy Ryan, and the former Minister, Deputy Flood, who had responsibility for the URBAN programme, the drugs task force and ADM programmes.

Amendment, by leave, withdrawn.
Section 16 agreed to.
SECTION 17.

I move amendment No. 30:

In page 20, between lines 37 and 38, to insert the following subsection:

"(3) The Minister shall, as soon as may be after the passage of this Act, prepare and lay before both Houses of the Oireachtas a report setting out the number of persons who will lose the living alone allowance as a result of gaining from the rent-a-room scheme contained in the Finance Act, 2001.”.

The Government has tabled a good amendment to the Finance Bill, 2001, to permit people to take in additional tenants without paying tax unless their rental income exceeds £6,000. I first proposed this scheme two and a half years ago, as housing spokesperson for my party. The Minister will be aware that two or three rooms lie idle in many homes. A typical example is an old age pensioner who owns his home, and it makes sense to utilise the available space.

The Government has introduced the rent-a-room scheme, the provisions of which are generous as people are permitted to take people into their homes and provide them with accommodation. If someone is in receipt of the living alone allowance and other benefits and it is Government policy to encourage others to move into their homes to utilise the empty bedrooms, it would make sense to ensure social welfare recipients would not lose benefits. The living alone allowance is not large but elderly people may not participate in the scheme if they feel they will lose the allowance.

The amendment ensures nobody will lose the allowance as a result of availing of the provision of the Finance Bill. It is a problem which could occur from time to time.

I made changes in recent years to ensure people who let a room would not lose their means tested payments, particularly old age pensioners and widows. The living alone allowance is not properly understood. I accept the Deputy's argument that we are encouraging people to use vacant space. At the same time, it would go against the spirit of the payment if we were to allow people to continue to avail of it while still being able to rent out rooms in their premises. Renting rooms means they receive additional money so there would not be a loss.

I understand the Minister's point but this is not about money. If we try to achieve a policy objective by means of a tax measure we should do so in such a way that older people are not discouraged from availing of it because they fear they may lose out elsewhere. This could make a psychological difference. Has the Minister set his mind against this completely or am I barking up the wrong tree?

Deputy Broughan and I have spoken about this at local authority level under the financial contribution scheme where people sell their houses and get senior citizen flats. The free schemes, such as telephone rental and television licence, the medical card and other benefits have been problems until now but they have been dealt with. It was the case last year that if a person sold his or her house to the corporation or privately, he or she would lose his or her medical card and free schemes because he or she would have money and would be assessed on that. All those headings have now been covered, except the living alone allowance, but that is a case of losing £6 and gaining £100. Of the other road blocks, the medical card was the main one and now everyone over 70 will get one.

My point is that we are trying to encourage elderly people to take people into their homes to provide them with accommodation. That is a clear policy objective which we support and welcome. At the same time, it is important people do not feel they are losing out, although they may not.

It could not be called a living alone allowance in the case where they took in a person. The change in taxation is recent and, as the Chairman said, because of representations made at committee meetings and meetings of our parliamentary party, changes were made recently so that people would not be disadvantaged because of their means when it came to means tested payments. This would apply where they took people in or sold their premises. While we will examine it, I cannot give a commitment because it would go against the principle of the living alone allowance to make exceptions in this respect.

An exception has already been made by virtue of the fact that a certain amount of the money people make from rents under the rent a room scheme is exempt from tax. That is for the purposes of achieving a national objective. I do not want to see the rent a room scheme lose out because of the small technical reason that people lose out on relatively small sums of social welfare payments.

They could try subdividing their houses.

They would then have two doors and the planning department might not accept that.

Amendment, by leave, withdrawn.
Section 17 agreed to.
Amendments Nos. 31 to 33, inclusive, not moved.
Sections 18 and 19 agreed to.
NEW SECTIONS.

Amendment No. 52 is consequential on amendment No. 34 and both may be discussed together by agreement.

I move amendment No. 34:

In page 21, before section 20, but in Part 3, to insert the following new section:

"20.-The Principal Act is amended by-

(a) the substitution in section 32(1) (as amended by section 17 of the Act of 1997) for paragraph (b) of the following paragraph:

'(b)(i) that the claimant has qualifying contributions or credited contributions in respect of not less than 39 contribution weeks, of which at least 13 must be qualifying contributions, in the last complete contribution year before the beginning of the benefit year which includes the day for which the benefit is claimed, or

(ii) that the claimant has qualifying contributions in respect of not less than 26 contribution weeks in each of the last two complete contribution years before the beginning of the benefit year which includes the day for which the benefit is claimed,

and',

(b) the substitution in subparagraph (a)(i) of section 38 (inserted by section 10 of the Act of 1997) for clause (B) of the following clause:

'(B) (I) that the claimant has qualifying contributions or credited contributions in respect of not less than 39 contribution weeks in the last complete contribution year before the beginning of the benefit year in which the relevant day occurs or in a subsequent complete contribution year before the relevant day, or

(II) that the claimant has qualifying contributions in respect of not less than 26 contribution weeks in each of the last two complete contribution years before the beginning of the benefit year in which the relevant day occurs,

or',

(c) the substitution in subparagraph (a)(ii) of section 41B(1) (inserted by Article 6 of the European Communities (Social Welfare) Regulations, 1995 (S.I. No. 25 of 1995)) for clause (B) of the following clause:

'(B) (I) that the claimant has qualifying contributions or credited contributions in respect of not less than 39 contribution weeks in the last complete contribution year before the beginning of the benefit year which includes the first day for which health and safety benefit is claimed, or

(II) that the claimant has qualifying contributions in respect of not less than 26 contribution weeks in each of the last two complete contribution years before the beginning of the benefit year which includes the first day for which health and safety benefit is claimed,

and,

(d) the substitution in subparagraph (a)(i) of section 41H(1) (inserted by section 11 of the Act of 1997) for clause (B) of the following clause:

'(B) (I) that the claimant has qualifying contributions or credited contributions in respect of not less than 39 contribution weeks in the last complete contribution year before the beginning of the benefit year in which the relevant day occurs or in a subsequent complete contribution year before the relevant day, or

(II) that the claimant has qualifying contributions in respect of not less than 26 contribution weeks in each of the last two complete contribution years before the beginning of the benefit year in which the relevant day occurs,

or', and

(e) the substitution in section 43(1) (as amended by section 8 of the Social Welfare (No. 2) Act, 1993) for paragraph (b) of the following paragraph:

'(b) (i) that the claimant has qualifying contributions or credited contributions in respect of not less than 39 contribution weeks in the last complete contribution year before the beginning of the benefit year which includes the day for which the benefit is claimed, or

(ii) that the claimant has qualifying contributions in respect of not less than 26 contribution weeks in each of the last two complete contribution years before the beginning of the benefit year which includes the day for which the benefit is claimed,

and',".

Amendment No. 34 provides for changes to the existing contribution conditions for short-term social insurance benefits. The change involves the addition of an alternative contribution condition for these benefits. This is designed to make access to the benefits involved more flexible for persons who have atypical work patterns and who may fail, under current arrangements, to qualify for the relevant benefits. The proposed new arrangements will benefit about 21,000 contributors, including a wide range of atypical workers and those job sharing and work sharing.

My Department had various meetings last year with both ICTU and the Irish Banker's Federation in connection with the PRSI position of certain job sharers. I propose to introduce an alternative contribution test for short-term benefits which has been developed by my Department. This will allow people who do not meet current contribution conditions, that is, 39 PRSI contributions paid or credited in the relevant year, to claim short-term benefits if they have 26 paid contributions paid in the relevant year and 26 contributions paid in the previous year. This alternative contribution test already applies to the carer's benefit. Extending it to other benefits will be of benefit to atypical workers, for example, job sharers, who, despite a long attachment to the workforce, find that their employment pattern means they have less than 39 contributions or credits in particular years.

While it was not possible to include these new arrangements in the budget for 2001 due to other competing demands, it is proposed that the new arrangements will be implemented in 2002. This will allow adequate time to put in place the necessary computer development. It will also give advance notice of the new arrangements to those who work on an atypical basis and provide substantial flexibility in work patterns.

This measure represents another significant development of the social insurance system. Access to short-term benefits will now be more flexible thereby ensuring that many atypical workers who fail to qualify for benefits will do so in the future. This flexibility will reflect developments in the changing working environment and will be of particular value to all those who have to combine work with family responsibilities.

Amendment No. 52 is an amendment to section 28 of the Bill to provide that transitional arrangements which, in relation to all other contribution conditions, will apply similarly to these conditions.

Amendment agreed to.

I move amendment No. 35:

In page 21, before section 20, but in Part 3, to insert the following new section:

"20.-The Minister shall, having regard to the financial difficulties encountered by widows and widowers, prepare and lay before both Houses of the Oireachtas a report on-

(a) the feasibility of extending to all widowers and widows:

(i) the free travel pass,

(ii) the free electricity allowance, and

(iii) the free telephone rental allowance;

and

(b) the possibility of a special increased payment to widows and widowers who have no other source of income other than social welfare.”.

Amendment put and declared lost.

I move amendment No. 36:

In page 21, before section 20, but in Part 3, to insert the following new section:

"20.-The Minister shall, as soon as may be after the passage of this Act, prepare and lay before both Houses of the Oireachtas a report on the feasibility of introducing a free schools-meals scheme.".

I will not take up much time on this because the Minister and I had an opportunity to discuss the matter on Question Time on Tuesday. I note from his reply that he expects a report this summer on a new school meals scheme. I do not know if the Minister can disagree with the amendment because it asks him to bring forward a report and, given that one is in the offing and will be with us some time this year, I am interested to hear his response. There is a need to expand this scheme radically, and we are one of the few countries in Europe which does not have such a scheme. While I welcome the fact that the Minister has put more money into the area over the past two years, we need to improve it further.

Has the Minister had discussions with the Minister for Education and Science about the benefits the scheme can bring to disadvantaged communities in particular, especially in respect of the nutritional benefits it can give children? There is a huge schoolgoing population and, if we are serious about doing something for the nation's diet and encouraging children to eat the right food, this is a direct way in which we can help and also deal with child poverty and improve the nutritional benefits of children's diets. Before Christmas the Minister said this report was due around the first quarter of this year but from what he said last Tuesday it may now be issued later in the year. We need to bring this problem to an end given the resources at our disposal.

I warmly support the amendment. The pilot programme launched in my constituency a year and a half ago involving three parishes in north Coolock had a big impact on families in the area and particularly on children. When we introduced the school breakfast scheme it gave the schools a chance to implement training in nutrition while also encouraging children to get up and come into school early. It was very valuable and I have seen the benefit of a good school meals system. Other countries take it for granted that hot nutritious meals can be provided for even very young schoolchildren who may have long days in school. This is also linked to the need to involve school resources such as buildings in child care, and nutrition is another aspect of this approach. I warmly support the amendment.

It would not be necessary to put this into legislation because the expenditure review group which is looking at this will report before summer. Obviously the report will be available to the committee at that stage so I suggest this amendment is not necessary.

I was out in Baldoyle recently to visit the schools mentioned by Deputy Broughan. It is an excellent scheme and it is hoped that the standard reached by a number of schools in Drogheda, in my constituency, will be met. I visited one of the pilot projects in Drogheda and there is a hot food service there. I am particularly interested in moving this project on with a view to putting substantial funding in place in the not too distant future provided the review comes up with what we are hoping for - support for voluntary groups based around schools to develop this project.

Does the Minister have a figure for how much this would cost to extend nationwide?

That will depend on the review and would also be affected by the take-up. We would be encouraging communities to come forward so we would not have an indication. It would also have to be done at second school level as well as primary.

Was last year's sum £300,000?

It was £300,000 this year and £100,000 last September.

How much of that was spent?

I think all of it was spent.

There was some suggestion that even the headline figure that was set aside for the pilot programme was not all spent.

I can check the figure. The figure was put aside in September so it may not have been spent by the end of the year but we added to it this year and it is now £300,000. I indicated yesterday that there were quite a number of groups seeking to be included so I do not think we will have any problems spending the money this year.

What about the report?

The report will be available when it is launched. It will be publicised like any other expenditure review from my Department.

Is this scheme just for Dublin?

No, there is one in Drogheda. There are nine projects in the country and Drogheda is probably the best. Those schemes were at the initiative of the local communities and started by those communities.

There was an earlier question regarding the Department of Education and Science and I have had discussions with the Minister for Education and Science. There have also been discussions at official level.

The Minister mentioned the voluntary sector. The groups in my area mentioned the logistical problems for volunteers - the amount of food that has to be stored and bought - and we may need a professional contribution also.

The Drogheda group got significant funding from the Forum for Peace and Reconciliation but that is probably not available to areas in Dublin, as it is Border funding. The Drogheda group got the funding to provide hot meals and their work is of a very high standard - they were trained but it is still all voluntary even though they may have a paid manager. The group receives approximately £22,000 from my Department towards the cost of the scheme, though there is also a local contribution. This has enabled the numbers served by the scheme to increase by at least 40% while reducing the cost to the children and parents by half.

This highlights the need for the amendment mentioned earlier by Deputy Broughan which seeks to highlight the exact areas of disadvantage in the country school by school. It seems strange from the education perspective that some schools have this service and others have not, even though the profile of the children from school to school would be the same. This highlights the need to map out nationally the areas of disadvantage.

The Select Committee adjourned at 10 p.m.
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