SELECT COMMITTEE ON FAMILY, COMMUNITY AND SOCIAL AFFAIRS debate -
Thursday, 1 Mar 2001

Vol. 4 No. 2

Social Welfare Bill, 2001: Committee Stage (Resumed).

NEW SECTIONS.

Debate resumed on 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.".

-(Deputy Hayes).

Amendment, by leave, withdrawn.

Mr. Hayes

I move amendment No. 37:

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

"20.-The Minister shall, within three months of the passage of this Act, prepare and lay before both Houses of the Oireachtas a review of the social welfare provisions available to those who are seeking asylum and the need to increase direct provision for this group of people to £20 per week for adults and £10 per week for children.".

This amendment relates to social welfare provisions for asylum seekers. Some 11,000 asylum seekers are currently awaiting the determination of their applications by the State. While this issue does not come directly under the Minister's remit, these determinations take an unacceptable length of time, thereby increasing the level of poverty of asylum seekers.

Will the Minister outline what provisions exist for people who find themselves in this predicament? As I understand it, asylum seekers receive a direct provision of £15 per week per adult and £7.50 per week per child from the Department of Social, Community and Family Affairs. Last November, when Fine Gael made submissions in regard to the Social Welfare Bill, we proposed that these payments should be increased to £20 and £10 per week, respectively, which would not even represent a significant increase. What general provisions apply to people who find themselves in the appalling position of having to wait an unacceptably lengthy period to have their applications determined? These people receive very small amounts of money from the State on which they are expected to live. This is a human rights issue and I would like to know whether the Minister intends to increase these allowances.

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

The recommended weekly allowance for people who are provided with full board accommodation, all meals and other services, is £15 per adult and £7.50 per child. These amounts are intended to cover personal requisites. Furthermore, exceptional needs payments under the SWA scheme are administered by the health boards. These payments have been made in many cases for families going into direct provision. A small number of asylum seekers are in receipt of other social welfare payments, such as UA, one parent family payment, pensions and disability allowance. Asylum seekers and refugees are also entitled to claim child benefit which will increase significantly in June.

Deputy Hayes may be aware that some time ago I established a working group comprising representatives of relevant Departments to examine issues relating to the assessment of means for SWA purposes for asylum seekers. The membership of the working group comprises nominees of the health boards, Departments of Finance, Justice, Equality and Law Reform, Environment and Local Government and Social, Community and Family Affairs which chairs the group. The group's terms of reference are to review the existing arrangements for the payment of basic weekly SWA to people who have means other than cash to partly meet their basic needs; to review the circumstances in which people claiming SWA rent supplement are refused on the grounds that they are not in need of accommodation and to consult with interested parties and make appropriate recommendations.

One of the issues being examined by the group is what constitutes the most suitable arrangement for paying asylum seekers in direct provision. SWA is intended to be a short-term intervention to provide a safety net to ensure that nobody is forced to live without the minimum level of resources set out in legislation. Apart from a small number of people in exceptional circumstances, it was never intended that any category of people would have to rely on SWA for a prolonged period because of the absence of alternative arrangements to meet their particular needs. In that context, the working group is considering whether the SWA is the most appropriate mechanism to provide weekly payments to asylum seekers in direct provision accommodation centres. The merits of the possible alternative approaches such as setting out a separate scheme or making weekly payments in cash at the accommodation centres are being considered.

Any changes in the current arrangements will at least maintain, if not improve, the quality and level of service provided to the people concerned. There is no question of reducing the entitlements of asylum seekers to below the SWA level. The SWA level system guarantees a minimum level of resources to every person in the State and this will continue to be the case. I expect the report of the working group to be finalised in the near future at which stage I will bring it to Government.

Mr. Hayes

When was the basic provision of £15 per adult and £7.50 per child first decided?

Mr. D. Ahern

I cannot remember the exact date offhand but it would have been after the introduction of direct provision on 10 April 2000.

Mr. Hayes

Although this figure was arrived at last year, no attempt was made either in the Social Welfare Bill or by regulation to increase it. Given that all other basic payments have been increased, albeit by relatively small amounts, I cannot understand why this basic payment was excluded.

Chairman

Will the Minister clarify whether those in direct provision receive child benefit?

Mr. D. Ahern

Yes, they do.

Chairman

Is there any claw-back on that?

Mr. D. Ahern

No.

Chairman

What is the logic behind that? Why not provide them with unemployment assistance as well?

Mr. D. Ahern

Some asylum seekers are in receipt of UA.

Chairman

I am referring to those in direct provision.

Mr. D. Ahern

Parents of all children resident in the State are entitled to child benefit; it would be inequitable to exclude those in direct provision. That would treat children differently which we cannot do.

Mr. Hayes

Why is there need for this provision? If people are being treated the same, whether refugees or otherwise, why should there be any distinction?

Mr. D. Ahern

In what sense?

Mr. Hayes

In relation to this additional payment, why not treat these people like anyone seeking support from the local departmental office?

Mr. D. Ahern

Given the numbers coming here, the Government decided to change the system for asylum seekers to direct provision, which is quite normal in western Europe. The Government subsequently set the amounts payable. It then set up a working group which had not reported in time for the budget or this Bill. However, it will report in the near future when the method of payments will be looked at again.

Mr. Hayes

What is the Minister considering in relation to the methodology of payment for people who find themselves in this position?

Mr. D. Ahern

The method to date has been reasonably successful in delivering money to people. There are suggestions that perhaps accommodation centres should hand over the money rather than through our offices. There are a number of other suggested ways of delivering money to people. However, this is how it is being done at the moment and we cannot second guess what might be in the report.

Mr. Hayes

Is the Minister prepared to back-date the payments? I refer again to the very small basic amounts which have not been increased in the context of this Bill. It seems strange that while every other allowance is being increased, this payment is excluded from that criteria.

Mr. D. Ahern

Like every social welfare payment which is set from year to year, this payment was set less than a year ago. If CWOs believe that people on direct provision have exceptional needs, there is a fall-back provision whereby money can and has been paid to these people.

Mr. Hayes

I am not convinced by the arguments I have heard. However, I will withdraw the amendment with a view to tabling it on Report Stage.

Amendment, by leave, withdrawn.

Mr. Hayes

I move amendment No. 38:

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 people with disabilities, prepare and lay before both Houses of the Oireachtas a report on the feasibility of-

(a) improving the personal assistance scheme, and

(b) doubling the provisions available for home help.”.

It will be interesting to hear the Minister's reply.

Mr. D. Ahern

The issue of personal assistants and home help services is not a matter for me but for the Department of Health and Children and the health boards. It is not appropriate to include this aspect in the Social Welfare Bill.

Amendment, by leave, withdrawn.

Chairman

Amendments Nos. 39 and 41 are related and will be discussed together.

Mr. Hayes

I move amendment No. 39:

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

"20.-The Minister shall, within three months after the passage of this Act, prepare and lay before both Houses of the Oireachtas a feasibility study into doubling the fuel allowance scheme during the winter months.".

This issue was mentioned continuously on Second Stage and it was referred to last year during Committee Stage of the Bill. It is nothing short of a scandal that this allowance has not been increased since it was first established. I do not accept the arguments put forward by the Government. We are talking about significant groups of people who are dependent on heating for themselves and their families over this period. The amendment proposes to accept the report whereby the Minister would present to both Houses a feasibility study into doubling the fuel allowance scheme during the winter months, which is equitable and correct. I will be interested in hearing the Minister's reply.

I cannot understand why this matter has not been touched on by the Minister, given the need to provide adequate heating for people, particularly elderly people who live on their own during the winter months. Doubling the allowance for people on small incomes would be a sensible move. We saw last year the volatility that exists in fuel prices. Between September and December last year, there was an increase of between 15% and 20% in the total cost of fuel, yet there was no appreciable increase in terms of the allowance for that period. That is all very well for people on moderate rates of pay who can soak up that increase. However, those who are dependent on social welfare support and on small pensions cannot do so. We are all aware of countless cases of people who were affected last year, particularly at the end of the year, as a result of the general increase in the price of fuel. This allowance needs to be increased. Deputy Broughan is also tabling an amendment along those lines and something should be done about the issue in this year's Social Welfare Bill.

Mr. Broughan

I endorse everything my colleague has said. In his reply to Second Stage, the Minister stated that the review of the national fuel scheme indicated the additional money should be put into the personal rates and QAAs. In the Dublin region, people regard the £8 as being an integral part of their benefit.

There was an outstanding question in relation to senior citizens. Given the vagaries of our climate and the fact that we can have cold weather in July and September, should we consider a 52 week season for those over 66 years of age? There were reports in the media this time last year of energy and heating poverty for many citizens. This was one of Barry Desmond's innovations during the coalition Government, led by Garret FitzGerald.

Mr. D. Ahern

He was the Minister——

Mr. Broughan

No, that was the previous leader of the Labour Party who joined Fine Gael.

Mr. D. Ahern

Where is he now?

Mr. Broughan

Exactly. In the 1970s, he introduced the framework for social welfare, including some major innovations in labour law to support for women. We can give my former leader, Michael O'Leary, a few plaudits.

Sitting suspended at 11 a.m. and resumed at 12.15 p.m.

Mr. Broughan

Since 1984 there has been no increase. The national fuel scheme was reviewed a couple of years ago and the Minister said last week that any improvement should be made in the personal rates. There is a strong view that it should be increased. I was not telling Deputy Brennan the true state of affairs the other night. Apparentlly some of our colleagues on Sligo County Council passed a motion seeking to have it increased to £10. They consider it disgraceful that that has not been done. The whole area of lack of heating will have to looked at again.

Chairman

As an aside this is an issue we come into contact with on the ground. The matter was discussed by our own committee where there was no real consensus. Everyone sought to have it increased, some sought a weekly increase while others sought to have the number of months or weeks extended.

Mr. D. Ahern

We had more than two.

Chairman

My view, the minority view, was that it should be doubled for six or eight weeks from Christmas to mid-February but I could not get much support. I thought that was the way it should go as it would peak at a time when demands were highest. I recall attending a meeting after the budget last year at which I was pleased to push all the positive elements. It was at a time when the fuel scheme was coming to an end and the social welfare increases were about to be commence. If the old age pension was increased to, say, £20, and suddenly at the middle of April it was reduced it would be difficult to explain. It is easy to look for an increase but it is difficult to arrive at a solution which will satisy everyone.

Mr. D. Ahern

That was my view. We discussed this issue intensely this year and were conscious of what was previously suggested in the programme of evaluation, a study carried out on the scheme in 1998, to which reference was made by Deputy Broughan. It recommended the current rates of payment should remain unchanged, if improvements in the primary payment rates fully compensate recipients for all price inflation, including fuel price inflation, which is what has happened.

Mr. Hayes

Is it?

Mr. D. Ahern

It has happened. I can give the Deputy the facts and figures I gave him previously at a meeting of this committee. The amount of increase in payments vis-à-vis the CPI on fuel is dramatic.

Mr. Broughan

We met representatives of another group before Christmas who said the price of fuel has increased by a minimum of one-third since the mid-1980s, although oil prices fell during that period.

Mr. D. Ahern

I can give the Deputy the figures. According to the consumer price index, the fuel and light component rose by 25% and overall the CPI rose by 52% over the past 15 years, although the total weekly payment to a single pensioner in receipt of the fuel allowance rose by 79% while the total weekly payment to a single unemployed person rose by more than 106% in the same period. I acknowledged at Question Time during the year that fuel inflation had not risen in the last number of years, apart from last year. That is one of the reasons I closely examined the fuel allowance provision, but we were subject to the same difficult arguments to which the Deputy's party was subject when in Government. We considered increasing the allowance for the three months in the middle of the period when it would be coldest, of which some were in favour and other against. The beneficiaries would find the loss of fuel allowance of £5, £8, or £10, if it was increased, major in April as they would consider it part of their income. I said that instead of increasing the allowance for a three month period, I would rather extend the period and even, perhaps, reach the stage where the fuel allowance would run into the entire payment. That was one of the reasons we extended it by a three week period this year. It would cost £41.5 million to double the allowance from £5 to £10.

Mr. Hayes

For the three months?

Mr. D. Ahern

No, for the entire period.

Mr. Hayes

What about for the winter months?

Mr. D. Ahern

I would not be a great fan of providing the increase for only the winter months. What are the winter months? We are into March and there is snow on the ground.

Chairman

It could be increased from Christmas on, as the beneficiaries have money in their pockets as a result of the Christmas bonus in December.

Mr. D. Ahern

I am not a great fan of——

Chairman

There are different views on it.

Mr. D. Ahern

To give it for three months——

Chairman

Even for six weeks or eight weeks.

Mr. D. Ahern

To increase it for three months, I expect the cost would be a matter of dividing 41 by 2. We could have shaved a pound off the old age pension or off the general increases and given it in fuel allowance. In the context of having a pot of money, I considered it was better to give the benefit in the general increases, which is what we did. I could have taken something off those benefits and given it to the fuel allowance, but I decided the other way was the best way to proceed because those beneficiaries will get an increase of £1 or whatever it was, for 52 weeks as opposed to 29 weeks.

Chairman

While the statistics on those living in disadvantaged areas given yesterday are correct, they are national. People increasingly have central heating in their homes but those in poor areas must still rely on a coal fire. Since the introduction of smokeless fuel, people have got good value out of coal, as they do not have slack. The corporation is pursuing a case with the Department of the Environment and Local Government to ensure there is central heating in tenants' houses. It would be helpful to analyse who are the poorest of the poor, those who must rely on a coal fire. Coal was better value in the old days when one could apply wet slack to it. The statistics are correct in that more people have central heating in their homes and few people rely on coal fires, although the poorest do and it is difficult to target them.

Mr. Hayes

Research I completed recently reveals the number of local authority homes that have central heating in Dublin Corporation compared to the number in South Dublin County Council area is astonishing.

Chairman

Is it high or low?

Mr. Hayes

The figure is approximately 80% in Dublin Corporation area compared to 40% in South Dublin County Council area. That variety exists throughout other local authority areas. There is a need to map exactly which estates have central heating and which do not. It is unbelievable the number of homes in this day and age that do not have central heating.

Mr. Broughan

Is that in quantitative or percentage terms?

Mr. Hayes

In quantitative terms. I will withdraw my amendment.

Mr. D. Ahern

The Chairman may recall that he in particular pushed for an increase in the disregard last year. The committee asked that it be increased to £25 and we increased it to £30.

Chairman

It has now been increased to £40.

Mr. D. Ahern

It was increased to £40 in the budget.

Chairman

I appreciate that.

Mr. D. Ahern

It is a big help.

Chairman

It is given that many people may be in receipt of a very small occupational pension and in a few months the disregard was increased from £15 to £40.

Amendment, by leave, withdrawn.

Mr. Hayes

I move amendment No. 40:

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

"20.-The Minister shall, within three months after the passage of this Act, prepare and lay before both Houses of the Oireachtas a report justifying the difference in payments in respect of child dependant allowance, and setting out in such a report, the cost to the Exchequer in abandoning the existing payment differences in child dependant allowance.".

Amendment put and declared lost.

Amendment No. 41 not moved.

Mr. Broughan

I move amendment No. 42:

In page 21, before section 20, but in Part 4, to insert the following new section:

"20.-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 doubling the back to school allowance.".

This amendment was triggered by a survey carried out by my colleague, Deputy Shortall, our spokesperson on Education and Children, in late August. The Chairman might recall her being on the news at that time. Her survey was carried out in Dublin North West, a constituency she shares with the Chairman. She identified the cost of sending a child back to second level to be in the order of £500 to £700. As a former teacher, I recall she wrote the details on a blackboard. I commend the Minister on the improvements he has made in this area but there is still a significant gap in terms of the major costs imposed on parents, even having regard to the level of the back to school allowance. This area needs to be addressed given that, increasingly, children have commitments to recreational and sports facilities and memberships centred in the school. We spoke last night about school meals and the desirability of extending the pilot scheme on the northside to the rest of the country. While there are increases in child benefit and we discussed the child dependant allowances, there seems to be, as Deputy Shortall showed in her little study, a period of time where young families or families with children in both primary and secondary school are under enormous pressure.

I asked the Minister in the past to consider the possibility of a double payment for difficult periods such as around now when there are First Communions and Confirmations. The key time, however, is probably the late summer when people are back from a holiday or whatever and are trying to get a large sum of money together. In my experience, families in my constituency depend at that time to a large extent on supplementary benefit. Often they make up the gap for the new uniform, sports gear and so forth through the welfare officers in the health clinics.

There have been debates, as Deputy Shortall said, about the desirability of uniforms. Paradoxically, the parents of children in schools in more disadvantaged areas have, on balance, been in favour of uniforms. It is a cheaper option than having to have the latest gear for the children and having to constantly buy new clothes just for school. In most areas children wear the school uniform.

I am aware this issue is an old chestnut but it is an important matter for parents. Perhaps we and the health boards could examine it again.

Mr. D. Ahern

I have children so I appreciate the costs involved when they go back to school and I can imagine the difficulty for people on low incomes. That was one of the reasons we increased it last year by £20 on each point. That was a 46.5% increase for children under 12 years and a 34% increase for children aged 12 years and over. The allowance now payable is £63from two to 11 years and £78 from 12 years to 22 years.

When we examined this last year and increased it, we decided at the same time to establish a working group to examine the scheme. The review is currently in place and is examining all aspects of the scheme, including the rates of payment, income limits, the means test, time of payment, eligibility criteria and other issues. I expect the working group's report shortly and we will consider what proposals we can bring forward in relation to the future of the scheme. Perhaps the committee would like to make a submission. I do not know if Deputy Broughan sent in Deputy Shortall's research or if it only reached the television but if she wishes to feed it into——

Mr. Broughan

It relates to the chairman's constituency.

Mr. D. Ahern

Yes.

Chairman

Does the Deputy want me to comment on it?

Mr. D. Ahern

If she wishes to feed it into a productive process rather than a politically productive process——

Mr. Hayes

This is the productive process.

Mr. D. Ahern

——or if the committee wishes to study it, it could be forwarded to the Department. I expect the evaluation review will be available reasonably shortly so the sooner it is sent in the better.

Ms Fitzgerald

It is a valuable payment. When tackling child poverty, we should seek every opportunity for positive action and targeted payments. The number of children benefiting from the allowances fell by 11% in the last year for which figures are available. What are the most up to date figures on the number of children benefiting? I understand it was 183,000 in 1999. Are those the most up to date figures?

Mr. D. Ahern

I can get the Deputy the figures.

Ms Fitzgerald

If the allowance was doubled, it would cost about £10 million. The Minister mentioned the amount it is at present but he knows as well as I the cost of shoes and clothing for children. There is enormous pressure on families. There are huge expectations on the part of children and that puts parents under pressure. I am glad a group is studying it and that the Minister expects it to report shortly. We should take up his suggestion that, as a committee, we consider this matter and make a submission.

Mr. D. Ahern

The figures are 249,000 children in 1997, 209,000 in 1998 and 183,000 in 1999. The reason for the reduction is that more people are working and going off social welfare. This cannot be looked at in isolation. One of the arguments we made in relation to child benefit in September was that it was being paid at a time when children were returning to school. We will have invested a substantial amount in child benefit this year and in the next two years which will help the families involved. This is an extremely worthwhile scheme and I look forward to receiving the report of the working group.

Ms Fitzgerald

The Minister refers to child benefit as a type of cure all for everything. Is it his policy to use child benefit alone to tackle child poverty? There seems to be a reluctance to deal with it in the child dependant allowances. Despite the increases in child benefit, which are obviously welcome and of which we want more, is there not a case to be made that to tackle child poverty one must invest in schemes such as the school clothing and footwear scheme and not put all the focus on child benefit? Child benefit is a universal payment and I accept it is effective in tackling poverty. However, is there not a case also to be made for targeted schemes, such as the child dependant allowance, and for having a multifaceted approach to the problem?

Mr. D. Ahern

I do not disagree with the Deputy. I do not know how I phrased my reply but I did point out that one cannot look at these things in isolation. There is a myriad of schemes but the most important one, particularly because of the investment involved, is child benefit.

Chairman

There is also the point that as one increases the payments they become barriers to people moving on. I encountered a lone parent recently who was working one night per week for £40. She feared losing her back to school payment. There might be more logic in having two categories or some type of sliding scale.

Mr. D. Ahern

We have found that too. People go off the scheme when they go into employment but they do not realise they will lose it.

Chairman

It is a big jump. If it were a graduated scheme, it would target people better.

Ms Fitzgerald

That is a good idea.

Amendment put and declared lost.

Mr. Broughan

I move amendment No. 43:

In page 21, before section 20, but in Part 4, to insert the following new section:

"20.-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 removing restrictions in relation to accessing the increased mobility allowance for persons with disabilities who have availed of tax relief for private transport.".

Members received correspondence some weeks ago in relation to the mobility allowance from the Irish Wheelchair Association, people with disability and their carers. Deputy McDowell and I examined whether we could amend the measure in the Finance Bill or in this Bill. It is probably the responsibility of the Minister for Finance and the Minister for Health and Children. When we discussed the Finance Bill on Second Stage last week there appeared to be some movement in relation to this issue.

The Irish Wheelchair Association told us that, when it was doubled in the budget, people who applied for the VRT, the special allowance for vehicles for mobility impaired people, were told that they could not have both the mobility allowance and the tax allowance. Has this been revised? Is there still a problem in relation to people who apply for the first time for the VRT allowance in that they cannot also receive the £90 per month allowance?

Is it still the case that people cannot receive the mobility allowance and the tax concession? The position is confusing. For example, in terms of our different responsibilities in our party, I, Deputy McDowell and Deputy McManus found it difficult to pin down exactly who is responsible, although I think it is the Minister for Finance, Deputy McCreevy. Is there still a problem for new applicants, for example, a person with a child with a disability? Is it the case that if one avails of the car tax concessions, one will not qualify for the mobility allowance?

Mr. D. Ahern

I cannot answer the Deputy's latter question because it is not in my area of direct responsibility. I have a copy of a press release from the Minister for Finance about this matter and it is also an issue for the Minister for Health and Children. However, people who received the tax concessions towards the purchase of adapted private vehicles will now be entitled to retain the mobility allowance at the rate which applied prior to April 2001. The withdrawal of the mobility allowance will not proceed for people who receive the tax concessions. The increased rate of £90 per month will, as intended, be given only to those people who are not in receipt of the tax subsidies. Those benefiting from the tax scheme will be able to retain the mobility allowance at its existing rate of £45 per month. This does not answer the Deputy's question and I suggest he take up the matter with the Minister for Finance.

Mr. Broughan

A number of disabled people have said that they were told that was the position when they checked the matter with the health boards. New applicants will not be able to avail of both allowances.

Mr. D. Ahern

I will raise the issue with the Minister for Finance and perhaps the Deputy could do likewise.

Mr. Broughan

Should the provision be amended in the Finance Bill?

Chairman

The Minister will probably table an amendment in that regard.

Mr. D. Ahern

I am not sure.

Mr. Broughan

Such an amendment would be welcome because there is widespread interest in the matter.

Mr. D. Ahern

Mobility allowance is not my direct responsibility. It is a matter for the Department of Health and Children, but the Minister for Finance is involved because it is connected to tax concessions.

Mr. Broughan

There are a number of such areas in addition to the mobility allowance. The position in that regard is confusing for everybody. The problem is that there is no direct line of responsibility and it is difficult to pin anybody down.

Mr. Hayes

A similar example is the issue of personal assistants.

Mr. Broughan

Yes.

Mr. D. Ahern

It is a matter for the Department of Health and Children.

Mr. Broughan

The Minister for Finance took the kudos on budget day for the decision to double the allowance.

Mr. D. Ahern

He takes a lot of kudos for social welfare changes.

Mr. Broughan

Exactly. What legislation includes the original conditions of the mobility allowance? It must have been sponsored by the Department of Health and Children. However, if the amounts have been altered by regulation, the House will not have an opportunity to amend them.

Mr. D. Ahern

The Deputy should raise the matter with the Department of Health and Children.

Chairman

It is included in the Finance Bill.

Mr. Broughan

That is fine. I will withdraw the amendment and I appreciate the Minister's commitment to make representations about the matter to the Minister for Finance because we have been asked to raise it by the Irish Wheelchair Association and other groups representing people with disabilities.

Amendment, by leave, withdrawn.

Mr. Broughan

I move amendment No. 44:

In page 21, before section 20, but in Part 4, to insert the following new section:

"20.-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 earnings disregard for one-parent family payments.".

This amendment relates to section 20. Some of the changes introduced by the Minister regarding the assessment of maintenance are valuable, but I am concerned that the £12,000 limit is still in place in relation to one parent families. The former Minister, Deputy De Rossa, was the last person to change the limits in 1996. We spoke yesterday about average industrial earnings and the fact that they may now be £360 or £400 per week. A little over half that figure is a low amount.

The objective of the disregard is to encourage people to return to work. We spoke extensively about young mothers last year and the committee recently discussed Deputy Fitzgerald's excellent report in this area. It is important to get people back into education and then into work. There has been much success in this regard which is obvious in constituencies. However, in the context of the valuable improvements made under section 20, the Minister could have gone further and considered the overall disregard. This figure has been in place throughout his tenure.

Mr. D. Ahern

A review of the one parent family payment was published on 5 September last. The review did not recommend any adjustment in the level of disregard because, as it stands, it is adequate to support the level and nature of employment, much of which appears to be part time, undertaken by lone parents. Only 300 lone parents exceeded the income limit in 2000. The review also found no evidence to suggest that the level of disregard is suppressing the level of earnings to which recipients aspire.

The level of earnings of 15% of the lone parents involved was between £2,000 and £4,000 while the earnings of 14% was between £4,000 and £6,000. The level of earnings of 8% of those involved was between £6,000 and £8,000, while the earnings of 4% was between £8,000 and £10,000. Some 3% earned between £10,000 and £12,000 while 2% earned over £12,000. The balance of 39% had no additional earnings.

Mr. Broughan

The Minister could ensure it was not an issue if he wanted to encourage people to return to full-time work and meet the cost of child care. Perhaps the disregard should have been altered in line with inflation, which was significant last year. The overall impact could still be a deterrent to somebody working full-time or pursuing a career. I am aware of many cases where people have secretarial experience and want to become legal secretaries or solicitors. Does the Minister agree the lack of a larger safety net is a disincentive to such people?

Mr. D. Ahern

The level of disregard was always regarded as an incentive to getting people back to work. It also created distortions in the workplace, of which the Deputy is aware, in terms of other people who did not receive the single parent family payment. The review was a thorough examination of this area and there was full consultation with all the groups involved. The strong recommendation was that the disregard limit should remain the same. I have already implemented some of the review's other recommendations. The figures regarding the income cohorts show it has an effect in bringing people into the workforce. Unless I get evidence that shows otherwise, I will not consider changing it. The evidence in the review is that the disregard should not be increased.

Mr. Hayes

The Minister said only 300 people were over the threshold of £12,000.

Mr. D. Ahern

Yes.

Mr. Hayes

What was the total payment?

Chairman

Some 300 people were involved last year so that probably means that 300 are involved every year, does it?

Mr. D. Ahern

Only 300 people exceeded the £12,000 income limit and had income in addition to their payments.

Chairman

Does that mean that 300 were knocked out every year?

Mr. D. Ahern

I would think that just 300 went over the limit in that year.

Mr. Hayes

In the previous tax year?

Mr. D. Ahern

Yes.

Chairman

One could nearly make the system self-enforcing if it could be policed a bit better. The Deputy has a point in terms of some people, but others are ripping off the system. There is no point in giving a greater subsidy and making it a greater encouragement for people to cheat the system. Depending on who one meets when and at what clinic, one can see it both ways. Generally, however, many people are claiming the money but they are not lone parents.

Ms Fitzgerald

Which begs the question as to how one can change the social welfare system, does it not?

Mr. D. Ahern

I could not possibly comment on that.

Mr. Hayes

I can see the headlines.

Mr. Broughan

We have discussed at length the role of community employment and the large numbers of people on lone parent benefit who find that attractive. The review examined all the difficult aspects. The Minister will have to examine changes to that aspect of the labour market so that everybody is treated fairly. From time to time, people tell me that the allowance is a bit low. We should re-examine the matter.

Mr. D. Ahern

We will keep it under review. As I said, however, this review only reported last September. It was a very expensive review, including much consultation with outside groups. Subsequent to the launch of the report we went though it with the groups. One of the major beneficial proposals was the issue of the 50% maintenance retention which will allow people some flexibility. It also creates an incentive to the other partner.

Ms Fitzgerald

Has the Minister been able to increase the staff in his Department who are dealing with the maintenance issue? What success rates is he having with it? Most people would agree that the lack of child care places is still a big deterrent to lone parents being able to combine their work and family responsibilities. When working on the report on teen parenting, we found that the lack of supports for those not living with their families - and the lack of opportunity to continue in education, not to speak of employment - meant we were still failing them in not offering those kinds of supports. We must focus on the provision of child care.

Mr. Hayes

I am new to this area but I have never come across a Department with so many reviews and commissions. Yesterday, I clocked up about six and two have been mentioned today, although one was reported last September. How many reviews of departmental schemes are currently under way? Who organises them and who participates in them?

Mr. D. Ahern

In response to Deputy Hayes, I will try to get that information, although we do not have it immediately to hand.

Mr. Hayes

The Minister might send it to me.

Mr. D. Ahern

As regards the number of people in the maintenance recovery sector, one could be critical of the Department's efforts not to follow these. In many cases, however, the errant spouse or partner has gone away. One third of them have disappeared, one third are on social welfare, so they are not a mark, and one third are in employment. We have been following those as best we can and although they may not necessarily be in employment, most of them are. We have been doing our level best to follow them but the returns are not huge.

Ms Fitzgerald

Yes.

Mr. D. Ahern

We could adopt the attitude that was adopted in the UK with the child support agency, but that blew up in their faces.

Ms Fitzgerald

It was not very successful.

Mr. D. Ahern

I fully accept the other point the Deputy made about child care. That goes back to the argument we had yesterday that one cannot just wave a magic wand and create all the child care places overnight. It will take some time.

As regards Deputy Hayes's earlier query, it is a sign of an extremely successful Department that we have been able to fulfil the mandate that has been set down by the Department of Finance, not only during this Government's period in office but also during that of previous Administrations. If my memory serves me correctly, the programme evaluations may have been set up in the previous Government's time in office. That was aimed at evaluating each programme across the Government service. My Department is second to none in carrying out these reviews. From time to time the Government receives a briefing from the Minister for Finance as to what Departments have delivered on their expenditure reviews and my Department, singularly, has been the most successful. Generally, arising from these expenditure reviews in my Department, beneficial changes are made in the schemes. During my time there have been very few negative decisions.

Mr. Hayes

Purely from a policy point of view, I am asking the Minister if these reviews are automatic or made at the Minister's selection.

Mr. D. Ahern

I can assure the Deputy that they are not automatic. We religiously favour reviews but there is a set timetable concerning them, taking one scheme after another, and some of them take longer.

Mr. Hayes

Three yearly reviews.

Mr. D. Ahern

We did a review of the free schemes and the carer's allowance.

Mr. Hayes

The Minister went through them yesterday.

Chairman

Generally, a report is issued on nearly everything the committee examines.

Mr. Hayes

I am just interested for my own information.

Mr. D. Ahern

We also did a review on the one parent family payment.

Mr. Hayes

What is the difference between a review and the benchmarking commission?

Mr. D. Ahern

That was set up under the PPF.

Mr. Broughan

The Department of Social, Community and Family Affairs seems to be very innovative and interesting. We should have mentioned that it featured on television last year. The only person who was missing was the Minister. I did not see him.

Mr. Hayes

He was on the promo.

Mr. D. Ahern

Will I tell the Deputy that story?

Mr. Broughan

No brainstorming sessions.

Mr. D. Ahern

I might embarrass some of the officials beside me but it is a good story.

Mr. Hayes

He was on the promo, though.

Mr. D. Ahern

The offer was made but the Minister declined.

Chairman

He declined an extra expense.

Mr. Broughan

There were a few television stars. It was very interesting, actually. Many people mentioned it to me.

Mr. D. Ahern

Declining that advice?

Ms Fitzgerald

Was that before or after the Cabinet review?

Mr. D. Ahern

I was told I would find it very difficult to justify the expense that was originally being suggested in relation to the programme.

Mr. Broughan

I have a final point concerning the one parent family.

Mr. D. Ahern

I was on it, by the way.

Mr. Broughan

Were you?

Mr. D. Ahern

I was, once or twice.

Mr. Broughan

I missed that.

Mr. D. Ahern

Sitting on the table every now and again.

Mr. Broughan

There were one or two stars on it, of course, although they are not present. To revert to Deputy Fitzgerald's report, the Minister said he was decentralising the one parent family payment. We are always aware of the paternity issue. We were just discussing that and it relates to the improvement the Minister made this year. A huge amount of work obviously needs to be done for young men to encourage them to take seriously their responsibilities which are for life. We are always aware of the potential role of these young fathers when somebody applies for the one parent family allowance. Does the Minister make them aware of their responsibilities? Is there any way we could make improvements in that regard?

Ms Fitzgerald

May I come in on that point, briefly?

Chairman

Yes, but we are trying to move on. We have asked the Department for its formal views on the Deputy's report.

Ms Fitzgerald

I suggest the Minister targets young teenage parents first and try to intervene there and support them.

Mr. D. Ahern

The experience of most of our staff would be that it is very difficult to get both parents. That is the nature of the payment. I know what the Deputy is saying and, obviously, it is a bigger issue than the income adequacy or the income provision my Department expends. We see our role in relation to the one parent family payment as supporting the one parent. In terms of a more holistic approach, the family affairs unit, in particular, has looked at and helped separated fathers. Our difficulty with the one parent family payment is locating the other parent.

Amendment, by leave, withdrawn.

Section 20 agreed to.

Sections 21 to 23, inclusive, agreed to.

Mr. Broughan

I move amendment No. 45:

In page 27, before section 24, to insert the following new section:

"24.-Section 20(6) and 224(7) of the Principal Act are hereby repealed.".

This is a technical amendment to make clear that those sections are repealed.

Mr. D. Ahern

Sections 20(6) and 224(7) provide that in any proceedings instituted under the Social Welfare Acts, where the Collector General or any officer duly appointed by the Minister sign a certificate stating that the amount is due and payable in respect of the employer or self-employment contribution by a defendant, that certificate shall be evidence that the amount is due unless the contrary is proved.

These provisions have been in place in relation to employment contributions since the introduction of PRSI in 1979 and since 1988 in regard to self-employment contributions. The purpose of the amendment contained in section 24 is to provide that in future such certificates can be signed on behalf of the Collector General by an officer of the Revenue Commissioners. This was requested by the Revenue Commissioners so as to be consistent with changes being made in the Finance Bill to allow an officer of the Revenue Commissioners certify the assessment and debt due in income tax.

Mr. Broughan

What is the effect of our amendment in that case?

Mr. D. Ahern

The amendment would, in effect, remove the certificate which obviously is necessary.

Mr. Broughan

Maybe I will come back to that.

Amendment, by leave, withdrawn.

Section 24 agreed to.

Mr. Broughan

I move amendment No. 46:

In page 27, before section 25, to insert the following new section:

"25.-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 qualification for carer's benefit or carer's allowance to additional categories of persons who took leave from employment prior to the passing of this Act and who are not otherwise eligible for payment of carer's allowance or benefit.".

This issue arose at the introduction of the Carer's Leave Bill. I was spokesperson for the Labour Party on Second Stage and I think I will be again on Committee Stage when we look at the amendments. I received many representations from people who had undertaken a caring role for perhaps a senior member of their family. Because we have been slow to introduce carer's leave - the benefit is contingent on the leave - those people ended up missing out on this in that the qualification conditions when they took leave would not have been sufficient to enable them to go back now and ask for that leave. It is a bit like the maternity and adoptive leave provisions about which we spoke last night. A spouse who does not qualify under the means test for the carer's allowance will now miss out on the carer's benefit as well because, as far as I can figure out, Committee Stage of the Carer's Leave Bill will not be taken until 28 March.

Chairman

Is the Deputy talking about somebody who took leave five years ago?

Mr. Broughan

A year and a half ago.

Chairman

Since it was announced?

Mr. Broughan

It would have been before it was announced in one case of which I am thinking. Another person took it since it was announced.

In terms of carer's leave, the provision at the moment is for six weeks' notice and I will table an amendment in that regard. It is longer than the notice required for maternity or adoptive leave. There is a group of people who are falling between the stools - this goes back to the carer's issue again - who seem to be missing out because of the current disregards in regard to the allowance and who will not qualify for benefit. I know the Minister made some amendments in relation to the way in which one could make one's contribution, to which we are coming, but one would still have a problem with a group of people who will not be able to take advantage of it.

It raises the question of why we could not have dealt with the carer's leave last year. We are talking about the Department and, as I said, I used to try to help invigilate in the Department of Enterprise, Trade and Employment and I sometimes found it very difficult to get reports from it. It published reports on Sunday mornings which one would get three days later after which the Tánaiste and Minister for Enterprise, Trade and Employment had gained massive publicity. We would not even know what was in the report.

Mr. D. Ahern

Did she not use a blackboard?

Mr. Broughan

No, but she used to issue a cheap little white report like, for example, the employment action plan. Does the Minister remember that in which he was also involved?

Mr. D. Ahern

It was very successful.

Mr. Broughan

Given that the two Departments had a fairly light legislative schedule, I do not understand why the Carer's Leave Bill was not put through this time last year. When the carer's benefit started in October, people would have known it was there and would have been able to fulfil the conditions in terms of notification of their employer and insurance contributions. They could have taken 65 weeks to 15 months. That is the point of the amendment.

I do not know how we can do this retrospectively. It is very like the adoptive and maternity leave issue and it should be highlighted. The benefit will not be operating properly for some time. Is this not a problem? The people who are on benefit at present do not have the protection of the leave legislation. I do not see why the Minister did not run the Carer's Leave Bill with last year's Social Welfare Bill, or get the Taoiseach to do it in tandem. Why are we ambling along so much later? It will not be law for months.

Mr. D. Ahern

In the preparation of the budget at that time, we decided to bring forward the carer's benefit. It was fairly simple from our point of view to include it in the Social Welfare Bill. The issue of carer's leave is the responsibility of another Department. It is a complicated area and there are a lot more issues involved. That is one of the reasons it took time to produce that legislation. The difficulty then is trying to get through the parliamentary counsel's office which faces a huge burden of legislation and getting time in the House. I would like to think the Bill will be passed sooner rather than later.

On the point raised by the Deputy, the claims for carer's benefit are accepted from 26 October 2000, the commencement date of the scheme. However, a person giving up employment in the six months prior to that date for the purpose of caring and with the agreement of the employer would not be debarred from claiming. In all cases where the care commenced earlier than the application for carer's benefit, payment will commence from the date of application.

This is a new and beneficial scheme. People are availing of it and the numbers are increasing. It will take time for the numbers to increase further, but, as far as I am aware, we are not experiencing great difficulty in terms of people getting consent from their employers. Problems would arise if the employer created a difficulty not covered by the legislation, but we have not been notified of any.

Mr. Broughan

In a letter I received from a carer she points out she has been caring for her father since January 1999 and was granted carer's leave by her employer. She did not qualify for carer's allowance under the homemaker's scheme. On applying for benefit under the new scheme she was told over the telephone that she qualified as sufficient PRSI contributions to the year ending 5 April had been made. She has now been told, however, that she will not get the benefit as the legislation covers only those applying for leave.

Mr. D. Ahern

When did she apply?

Mr. Broughan

She is out of work since January 1999.

Mr. D. Ahern

When did she apply?

Mr. Broughan

Presumably around Christmas.

Mr. D. Ahern

Of this year?

Mr. Broughan

Yes.

Mr. D. Ahern

Perhaps you could forward the details. The scheme was introduced on 26 October 2000 and only those giving up employment in the six months prior to that would have been involved. She would have been on the far side of that. It is as much leeway as we could have given in the circumstances.

Mr. Hayes

What would have been the total number involved?

Mr. D. Ahern

The numbers availing of it are relatively small because it is only building up. As at 16 February, 258 claims were received of which 87 were awarded. The number of non-resident claims awarded amounted to 19 while the number of claims refused amounted to 75. Reasons for refusal included care recipient being medically unsuitable - 23; insufficient contributions - 11; full-time employment conditions not met - 13; and 13 weeks' employment not satisfied - 28.

Chairman

By non-resident do you mean not resident with the person being cared for?

Mr. D. Ahern

Yes.

Amendment, by leave, withdrawn.

Mr. D. Ahern

I move amendment No. 47:

"47.-In page 27, lines 14 to 35, to delete subsection (1) and substitute the following:

"(1) The Principal Act is amended-

(a) by the substitution in section 82A (inserted by section 10 of the Act of 2000) for subsection (1) of the following subsection:

'(1) Subject to this Act, in this Chapter

"carer" means a person who has attained the age of 16 years and who-

(a) resides with and provides full-time care and attention to a relevant person, or

(b) subject to such conditions and in such circumstances as may be prescribed, does not reside with but provides full-time care and attention to a relevant person;

"relevant person" means a person who has such a disability that he or she requires full-time care and attention.',

(b) in section 82B (inserted by section 10 of the Act of 2000)-

(i) the substitution in subsection (5) for 'subsection (1)(a)' of 'subsection (1)(a) or regulations under subsection (6)’, and

(ii) the insertion after subsection (5) of the following subsection:

'(6) Regulations may provide that, subject to such conditions and in such circumstances as may be prescribed, in the case of a person who is absent from his or her employment within the three-month period referred to in subsection (1)(a), by reason of being on such leave from that employment as may be prescribed, the condition specified in subsection (1)(a) shall be regarded as being satisfied in respect of that person if he or she was engaged in remunerative full-time employment as an employed contributor for such period of three months (other than the three-month period referred to in that subsection) as may be prescribed (and the period that may be so prescribed may comprise two or more periods which, taken together, amount to a period of three months).’,

and

(c) by the insertion in section 82H (inserted by section 10 of the Act of 2000) after paragraph (a) of the following paragraph:

'(aa) carer’s benefit shall not be payable in respect of the full-time care and attention being provided to a relevant person in any case where the relevant person is in receipt of an increase of disablement pension under section 57 in respect of constant attendance,’.”.

Both of these measures were originally introduced in section 31 of the Carer's Leave Bill, currently on Second Stage in the House. Since they both involve changes to the Social Welfare (Consolidation) Act, 1993, it is time to incorporate them into the Social Welfare Bill. The purpose of the amendment is to extend the scope of the carer's benefit scheme to employees over the age of 66 and to remove the requirement that a care recipient must have reached 16 years of age. In line with other short-term schemes, the carer's benefit scheme is payable for up to 65 weeks up to pensionable age of 66 years. In reality the insured individual will, at age 60, opt to claim the old age contributory pension, which is payable at a higher rate. However, as employment legislation extends to cover all employees regardless of age, an employee who is over 66 years may still avail of the carer's leave scheme. To ensure consistency between the schemes this age limit has been removed.

With regard to the definition of care recipient, the carer's benefit legislation is closely related to the carer's allowance scheme. However, there is a fundamental difference between the two schemes in that the carer's allowance scheme requires the care recipient to be in need of full-time care and attention for more than 12 months, where the minimum period required to qualify for carer's benefit is six weeks. This is to facilitate employees in cases of trauma and short-term situations. Those who care for children under the age of 16 years or who are in receipt of domicillary care allowance may qualify for a carer's allowance as the nature of their disability is long-term and this provision is also provided for in the carer's benefit scheme. However, to facilitate employees in cases involving children under 16 years, it is proposed to extend the provision under carer's benefit scheme to children under 16 years who, for reasons of shorter-term illness, do not qualify for a domicillary care allowance and who, therefore, are not currently covered by carer's benefit.

Amendment agreed to.

Section 25, as amended, agreed to.

SECTION 26.

Question proposed: "That section 26 stand part of the Bill."

Mr. Broughan

The Labour Party strongly opposes this section. With regard to those who qualify for a partial contributory pension, given the way the system operates, an adult dependant in receipt of a qualified adult allowance could end up with a higher rate of payment as a qualified adult than a person on the personal rate. It may be asked what is the relevance of this, given that the payment will still be significantly below the amount payable to a person in receipt of a full contributory pension with a qualified adult. Why should a negative line always be taken by cutting the slight advantage the social welfare code has given to these recipients? Would it not be better to leave matters stand? That is why we seek the elimination of this section.

Mr. D. Ahern

This arises because of the inordinate increases the Government has provided in respect of QAAs, especially this year and especially also in respect of a couple aged over 66, where the QAA would amount to £15 to bring one up to the old age non-contributory rate. If this were to continue to apply to pro rata pensions, a peculiar situation would arise where the person on the personal rate, who is the main contributor, would become progressively worse off than the person on the QAA rate. For example, if the structure of payments was to be left unchanged, the following would be the case from April 2001. A person with a pro rata pension would be entitled to an increase from £24.00 to £26.50, whereas a person with a QAA would increase from £64 to £79.60. Such discrepancies widen further up the scale. The problem is especially prevalent for those on an average of five to nine and ten to 14 contributions. The former is a small category comprising only 60 cases with virtually no new additions. In the case of those with 15 to 19 contributions the difference is marginal, but in all cases the rates will diverge as the QAA moves towards the maximum old age non-contributory rate, which will stand at £95.50 from April 2001.

However, in all cases, the rates will diverge as the QAA moves towards the maximum old age non-contributory rate which will stand at £95.50 from April 2001. It would be wrong to give larger increases to the QAAs and that is the reason they are pegged at proportionate rates, particularly for those on pro rata payments. This does not apply generally to any of the new pro rata pensions we introduced such as those for people with pre-1953 contributions, for self-employed people over the age of 56 or some of the older pro rata pensions; it only applies to a reasonably small number of cases. The position would be inequitable if we were to do otherwise.

Mr. Broughan

How much money will be saved as a result of implementation of this section?

Mr. D. Ahern

I do not know. There is very little money involved.

Mr. Hayes

Is the Minister stating that there are only 60 cases involved?

Mr. D. Ahern

No, there are more than 60. There are 60 cases in a certain category between five and nine, which is where the disparity is at its worst. I am not sure of the overall figure involved.

The other aspect is that those people with pre-1953 contributions and self-employed people over the age of 56 will receive pro rata increases based on 50%. If we were to agree to the Deputy’s proposal, those people would feel that they were badly let down because their increases would be pegged at 50% whereas people in the other situation would obtain much more.

Mr. Hayes

They are coming from a lower position.

Mr. D. Ahern

Not necessarily. There is only one personal rate under the 48 category, namely, that involving the pre-1953 and the over 56 pensions, and this relates to only about 60 cases. Approximately 2,957 people are in the rate bands which are causing concern.

Mr. Hayes

Do they all involve people with pre-1953 contributions?

Mr. D. Ahern

No, the pre-1953 cases are all new, as are the over 56 cases. They are already organised on a 50-50 basis. It would be unfair——

Mr. Broughan

It is happening at present. Why not just let the hare sit?

Mr. D. Ahern

We need to take action because we have given the inordinate increases. What we are doing, in effect, is not only distancing the QAA from the personal rate, but also discriminating against those people on fixed——

Mr. Broughan

Would it be possible to obtain a briefing on the detail of this matter before Report Stage?

Mr. D. Ahern

Yes.

Mr. Broughan

In that event, I will withdraw the amendment.

Mr. D. Ahern

It was announced when the budget was introduced that there would be proportionate increases.

Question put and agreed to.

NEW SECTION.

Mr. D. Ahern

I move amendment No. 48:

In page 28, before section 27, but in Part 4, to insert the following new section:

"27.-(1) Section 11(1) (as amended by section 12 of the Act of 1996) of the Principal Act is amended by the insertion after paragraph (aa) of the following paragraph:

(aaa) in such cases as may be prescribed, persons who, on 5 April 1995, were employed in an employment to which paragraph (a) or (aa) applies and which is prescribed, and who cease to be so employed, but immediately on such cessation become employed in another employment which is prescribed, under terms and conditions which provide that he or she continues to be employed in a permanent and pensionable capacity and for payment during illness on a basis considered adequate by the Minister,’.”.

People employed in a permanent, pensionable capacity in the Civil Service, local and public authorities and other public bodies are liable for a modified rate of social insurance. Modified rates of insurance provide cover for a limited rate of benefits - widowers, widows, orphans contributory pensions, carer's benefit and bereavement grant. In 1996, following the formation of a strategic alliance with KPN-Telia, Telecom Éireann, or Eircom as it has become, was no longer regarded as a public authority under the social welfare code. In view of the fact that employees continued to be employed in a permanent and pensionable capacity, with adequate sick pay arrangements, the then Government decided that the modified rate of social insurance should continue to apply. The Social Welfare Acts were amended to provide for the continued application of the modified status.

In view of the recent agreement between Eircom and Vodafone on the sale of Eircell, representations were made by Eircom on behalf of its Eircell employees with regard to their social insurance position. To address these and any analogous situations which may arise in the future, the amendment provides that I may make regulations to provide that such permanent and pensionable employees will retain their modified status, provided their new employer contracts them under the same permanent, pensionable and sick pay arrangements.

It has been brought to my attention that amendment No. 48 contains a superfluous "(1)", which, with the committee's agreement, will be removed. This would only be necessary if there was a second subsection.

Mr. Hayes

Is the Minister stating that the modified status provision to which he refers was not contained in any previous Social Welfare Acts.

Mr. D. Ahern

Provision would have been made when the previous transfer occurred.

Mr. Hayes

In 1996?

Mr. D. Ahern

Yes.

Mr. Hayes

That was the first occasion on which it was introduced.

Mr. D. Ahern

This was a benefit

Chairman

Which reference to "(1)" does the Minister want it to be removed from the amendment?

Mr. D. Ahern

The "(1)" at the beginning of section 27 should be removed.

Chairman

Is that agreed?

Mr. Broughan

The Minister stated that the position of the employees would remain the same "provided their new employer contracts them". What will be the position of these employees?

Mr. D. Ahern

In what sense?

Mr. Broughan

The Minister will recall that I referred to health board employees who discovered that their occupational pensions were being clawed back and had been reduced to almost nothing. They seemed to end up with almost no protection

Mr. D. Ahern

To whom is the Deputy referring?

Mr. Broughan

Low paid employees of the health boards.

Mr. D. Ahern

This is not the same issue.

Mr. Broughan

I know that.

Mr. D. Ahern

This has been requested by the unions and they will not consent to the transfer until such time as they are satisfied that their members' pensions and other benefits, including PRSI, will be protected.

Mr. Broughan

Will the Minister's Department alone be involved in resolving this matter or will the Department of Finance also be involved?

Mr. D. Ahern

I was obliged to obtain consent from the Department of Finance and this was readily forthcoming from the Minister, Deputy McCreevy. Ultimately, however, it is my call.

Mr. Broughan

How well protected will be the employees' rights?

Mr. D. Ahern

We have indicated in correspondence that we are prepared to proceed with this provision in the Bill, provided all the circumstances are, in effect, the same and that a similar situation will obtain under the new arrangements.

Amendment, as amended, agreed to.

Amendment No. 49 not moved.

Section 27 agreed to.

SECTION 28.

Mr. D. Ahern

I move amendment No 50:

In page 29, subsection (1), lines 1 to 19, to delete paragraphs (a) to (f) and substitute the following:

"(a) sections 18(1)(a), (c) and (h) (in so far as they apply to self-employed contributors) (as amended in each case by section 9 of this Act), and section 23(1) (as amended by section 11 of this Act) of the Principal Act shall have effect as if for each sum specified therein there were substituted £148, and

(b) section 18(1)(b) of the Principal Act shall have effect as if for the sum specified therein there were substituted £91.76.

(2) For the purposes of determining a person's liability in respect of voluntary contributions or optional contributions payable in accordance with the Principal Act for the period commencing on 1 January 2002 and ending on 31 December 2002-

(a) section 18(1)(h) of the Principal Act (in so far as it applies to optional contributors) shall have effect as if for each sum specified therein there were substituted \187,

(b) section 22(1)(b)(i) of the Principal Act (as amended by section 11 of this Act) shall have effect as if for the sum specified therein there were substituted \93,

(c) section 22(1)(b)(ii) of the Principal Act (as amended by section 11 of this Act) shall have effect as if for the sum specified therein there were substituted \234,

(d) section 22(1)(b)(iii) of the Principal Act (as amended by section 11 of this Act) shall have effect as if for the sum specified therein there were substituted \140, and

(e) section 24B(1)(a) of the Principal Act (as amended by section 8 of the Act of 1995) shall have effect as if for the sum specified therein there were substituted \1,012.”.

This amendment provides for the appropriate measures, consequent on the alignment of the tax and calendar years, which will apply in relation to the minimum amounts payable by certain voluntary and optional contributors. Unlike other contributors, liability to both voluntary contributions for former employees and optional contributions is based on reckonable income in the preceding tax year, subject to the payment of a minimum amount. This amendment will not disturb that principle. Voluntary contributions payable in 2001 will be based on reckonable income in 2000 and 2001, subject to the payment of a minimum amount. The amount payable in 2002 will be based on reckonable income in 2001, the short tax year, again subject to the payment of a minimum amount. It is necessary, therefore, to provide for a reduction in the minimum amount payable by voluntary contributors to 74% of the normal full year. Similar arrangements are proposed in regard to optional contributors who pay the minimum amount. The annual PRSI-free allowance for optional contributors will also be reduced in 2002 on a once-off basis to 74% of the full year. This also reflects the fact that the contributors will pay optional PRSI in 2002 based on income in 2001, the short tax year.

Overall the arrangements which will apply to these voluntary and optional contributors will be identical to those which will apply to employee and self-employed contributors generally in regard to 2001 income. Sections 9 and 11 also provide for ongoing reductions in the minimum amount payable by all voluntary and optional contributors with effect from April. This is independent of changes provided for as a result of the transitional tax year.

Mr. Hayes

The Minister is putting a 74% rating on the minimum amount payable on the basis of the tax year. The principle that applies here is the same as that which I pointed out yesterday on behalf of my colleague. The Minister has not adjusted the employee PRSI ceiling for the 74% rating.

Mr. D. Ahern

It makes no difference because people are not losing out. It was pointed out that people on higher incomes would gain. The Deputy said people would have two tax holidays in one year which was never intended.

Mr. Hayes

I gave that explanation to my colleague earlier and he is yet to be convinced. We will examine it again on Report Stage.

Mr. D. Ahern

Perhaps the Deputy's colleague could be briefed in advance of Report Stage.

Amendment agreed to.

Chairman

Amendment No. 53 is related to amendment No. 51 and both may be discussed together.

Mr. D. Ahern

I move amendment No. 51:

In page 29, subsection (2), lines 26 and 27, to delete "and 82C(1)(a) (inserted by section 10 of the Act of 2000)” and substitute “, 82C(1)(a) (inserted by section 10 of the Act of 2000) and 115(1)(b)(i), (b)(iii) or (b)(iv) (inserted by section 19 of the Act of 1999)”.

As a consequence of the alignment of the income tax and calendar years it is necessary to make transitional arrangements to ensure the preservation of rights in regard to benefits. These are technical amendments to ensure that rights to bereavement grants are also preserved.

Amendment agreed to.

Mr. D. Ahern

I move amendment No. 52:

In page 29, subsection (4), line 42, to delete "section 82C(1)(c)” and substitute “sections 32(1), 38(a), 41B(1)(a), 41H(1)(a), 43(1) (as amended in each case by section 20 of this Act) and 82C(1)(c)”.

Amendment agreed to.

Mr. D. Ahern

I move amendment No. 53:

In page 29, between lines 47 and 48, to insert the following subsection:

"(5) For the purposes of determining a person's entitlement to bereavement grant under section 115(1)(b)(ii) (inserted by section 19 of the Act of 1999) in respect of the benefit year commencing on 7 January 2002 and ending on 5 January 2003, the said section shall be construed as if the words ’the 3 or 5 complete contributions years immediately preceding the last complete contribution year’ were substituted for the words ’the last 3 or 5 complete contribution years’.”.

Amendment agreed to.

Section 28, as amended, agreed to.

Section 29 agreed to.

NEW SECTION.

Mr. Broughan

I move amendment No. 54:

In page 30, before section 30, but in Part 6, to insert the following new section:

"30.-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 that insurance and assistance payments to be announced in Budget 2002 would come into effect on the dates specified in relation to any particular payment in the subsequent sections of this Part.".

This relates to the Minister's confession during Question Time that he was missing 1 January and that, as many commentators believe, social welfare recipients will be hit with a double whammy in regard to the increases in terms of euros. It is unfair to set a date. Perhaps we can again blame the Minister for Finance who said during this eighth or ninth budget that he would deliver payments to social welfare recipients on 1 January. The problem regarding books and so on identified by the Minister, Deputy Ahern, yesterday will mean that people will be disappointed. It will be confusing. People will exaggerate a little in that the problem will be no more confusing than exchanging sterling when on a trip to the UK or pesetas when in Spain. People figure out after a few days whether they are being treated fairly. Why should the Minister set a target date and then fail to meet it? He should not say he will take measures unless he intends to do so. He should walk the talk.

Mr. D. Ahern

It is churlish of the Deputy to criticise a good move by the Government. We could have taken the easy option and decided to continue with the tax year beginning on 5 April, but we would have been criticised.

Mr. Broughan

That would have been more honest.

Mr. D. Ahern

People would not have received their money. They would have lost £85 million.

Mr. Broughan

They will not get it anyway.

Mr. Hayes

Will the payments be back-dated?

Mr. D. Ahern

Yes.

Chairman

To when will they be back-dated?

Mr. D. Ahern

Approximately eight weeks to mid-February. There is a logistical difficulty. We could have taken the easy option but we are putting £85 million in people's pockets following this decision. Every effort will be made to ensure social welfare recipients get their money as quickly as possible after 1 January.

Mr. Broughan

The Minister has not informed us yet about child benefit.

Mr. D. Ahern

That is a budgetary decision. The Government has made enormous efforts in pulling back payments generally and child benefit.

Mr. Broughan

Fianna Fáil Governments pushed them out.

Mr. D. Ahern

I accept that, as did Labour which acquiesced in everything.

Mr. Broughan

We could not do any different because they were bad times.

Mr. D. Ahern

The Labour Party was in Government in good and bad times.

Mr. Broughan

We have never been there during a good time.

Mr. D. Ahern

I stand over my record as Minister. More changes have been made in this regard by us than any previous Administration. People will receive their payments.

Mr. Broughan

Does the Minister accept that in 1973 people were ripped off left, right and centre? The State has rounded the money up or down appropriately but there is a perception that there will be massive rip-offs, for example, in regard to groceries. People could get stroppy. There is speculation that a general election might take place in the autumn because of this uncertain era. The social welfare rates will look great, although that depends on the increases that are proposed. Some people may be fooled because they will get \127 for £100 but many people will be upset by traumatic conversion to the euro.

Mr. Hayes

Is it the Minister's intention from 1 January that the new allowances and increases will be effected and none of them will be operable until mid to late February when people will receive a back-dated payment similar to that applying to the tax changes? This is a deliberate political strategy on the part of the Government to try to buy the next election because that appears to be the only window of opportunity for it to call an election. This emerged during the Finance Bill debate yesterday. What is the Minister's policy in this regard? Will the changes come into effect on 1 January but not be operable for six to seven weeks when people will receive a back-dated payment? It has the hallmarks of Fianna Fáil cute hoorism. We will have to wait to see what happens when the budget is announced in December. What is the Minister's policy position?

Chairman

The two Deputies say opposite things. Deputy Broughan said it is dreadful, that people will be horrified when they receive their cheques and that there will therefore be a general election in the autumn. Deputy Hayes said the opposite. The Minister has explained that it takes time to distribute the books.

Mr. Hayes

I put a political slant on it.

Chairman

Whenever they are ready, people will receive their back money.

Mr. Broughan

The Chairman's brother has two windows.

Chairman

The Deputies opposite should make up their minds which way they want to call it.

Mr. D. Ahern

If, as Deputy Broughan has suggested, we will have an autumn general election, it is very stupid of us to decide to have the budget on 5 December. Surely we would have it in early autumn and then go to the country. As the Chairman said, each Deputy is saying the opposite to what other says.

Chairman

The Minister needs to delay it until about St. Patrick's Day.

Mr. Hayes

So there is a party position.

Chairman

Not yet.

Mr. D. Ahern

As we said many times, we will go to the country in the first half of the new year. People will be paid on 1 January if they are on electronic funds transfer and that will be an encouragement for them if they want to be paid their increases on 1 January.

Mr. Hayes

But if they are not?

Mr. D. Ahern

It is not a matter of sending out arrears cheques. There are different methods of payment and the Department will endeavour to ensure people receive their payments as quickly as possible, irrespective of the method of payment.

Mr. Broughan

Will the dates apply to electronic transfer?

Mr. D. Ahern

The intention is to pay them in the first week of January through electronic transfer. In the case of people who receive their payment in other forms, their increases will be given at different dates with backdating.

Mr. Hayes

To 1 January?

Mr. D. Ahern

Yes, so they will effectively receive their money from 1 January.

Mr. Hayes

What will be the latest time people will receive the increase?

Mr. D Ahern

We do not know.

Mr. Hayes

The Department is working on it.

Mr. D. Ahern

A huge logistical issue is involved, especially given that we have decided to have the budget on 5 December. There is a short period within which to organise ourselves.

Mr. Broughan

Why was that decision taken? Why not go with an earlier budget?

Mr. D. Ahern

There are a number of reasons and the Minister for Finance indicated them in his statement yesterday. They are mainly logistical - because of Estimates and because of the proper information necessary to put a budget together. Irrespective of which date we choose, either holding the budget early in autumn or late in December, it is still the case that a sizeable number of social welfare recipients, those with post office books, would still not have been paid on 1 January because of the cycle. The Government decided on the date of 5 December.

Mr. Hayes

How will those being paid through post office books receive their back money given that the same amount of money is printed on each page?

Mr. D. Ahern

It is expected that widows, whose books are renewed in mid-February, will have an additional payment in the book.

Mr. Hayes

Will the first payment be the backdated one?

Mr. D. Ahern

Yes. Old age pensioners will be paid a sum in mid-February which will pay in arrears and pay in advance.

Mr. Hayes

Will it be a cheque?

Mr. D. Ahern

It will not necessarily be a cheque.

Mr. Hayes

If the budget is to be on 5 December, the Social Welfare Bill will have a small window of opportunity for discussion.

Mr. D. Ahern

Yes. We are examining different issues as to how pass the payments.

Mr. Hayes

I would not like to take publicity away from him but will it be possible on the same day the Minister for Finance makes his financial statement to have a short period when the Bill proper could be produced? It will have to be that type of timescale.

Mr. D. Ahern

Yes, I agree. We are examining those issues.

Mr. Broughan

The second Finance Bill does not have to be passed, as I understand it.

Mr. Hayes

It does to bring in the changes on 1 January.

Mr. Broughan

Some basic changes could be made. Other changes could be made later. The Minister made significant changes in the past few days on the finance side which indicate that he could be clearing the decks.

Mr. Hayes

That is the reason for the 1 June date for child benefit.

Mr. Broughan

There are ominous signs. The Minister should remember that people could be in a bad humour after Christmas.

Mr. Hayes

Let us hope they are not.

Mr. D. Ahern

I doubt it if they receive large increases.

Mr. Hayes

I hope the Government has money to give out after all this.

Mr. Broughan

Does the Department through Comhairle intend informing people about the euro?

Mr. D. Ahern

Yes. A complete campaign is ready to roll.

Mr. Broughan

People on low incomes should be told to be on the lookout for scams which can be reported.

Mr. D. Ahern

We are only concerned with social welfare payments and those are being rounded up.

Mr. Broughan

People should understand the value of their money with the increase.

Amendment, by leave, withdrawn.

Sections 30 to 35, inclusive, agreed to.

NEW SECTION.

Mr. Broughan

I move amendment No. 55:

In page 33, before section 36, but in Part 7, to insert the following new section:

"36.-A person whose income is below £315 per week shall not be liable to make contributions under the Health Contributions Act, 1979.".

This amendment relates to health contributions and my colleagues in the trade union movement were very disappointed that there was a failure to index link at least in line with average earnings the exemption threshold of £280 per week introduced last year as part of the rebalancing measures designed to benefit lower paid workers. By not doing this, the reviewed agreement of the Programme for Prosperity and Fairness has effectively been devalued. Substantial numbers of workers earn just below £280 per week and, when the 2% increase under the PPF review comes on stream in April, it will be negated because the health levy will kick in. Another group of workers will be similarly affected when the 5.5% increase under phase two of the PPF takes effect. There is a general feeling among trade union colleagues who represent the vast majority of workers that the threshold should be raised by 7.5% to avoid adverse effects on the earnings of thousands of workers and to ensure the original value of the PPF. I received representations on this in the context of the Finance Bill, but I want to see if the Social Welfare Bill can be amended by increasing the ceiling.

Mr. D. Ahern

Last year we raised the limit substantially from £217 to £280 to bring it in line with the lower rate of employer's contribution of 8.5%. The proposed increase will cost approximately £34 million and obviously it is an issue we will look at in future with an eye to simplification of the PRSI and levies system. That process commenced this year but I cannot accept the amendment as it would create different rates. It would raise the health contribution rate and at the same time leave the other one at the same level.

Mr. Hayes

Regarding the 8.5% and 12% rates, has the Department considered having one rate? I know the 8.5% rate is for those on a weekly wage up to about £300 per week.

Mr. D. Ahern

At one stage there was a lower rate - just one rate. The second rate was introduced at the request of employers because of low income employees.

Mr. Hayes

There is no change proposed.

Mr. Broughan

The Minister accepts my point, does he not? That point is that lower paid workers could reach the threshold.

Mr. D. Ahern

This was set last year and excluded many extra people to their advantage. We did not get political credit for this but when one built in the changes we made in relation to taxation, people gained substantially from this change and there was no proposal this year in the budget negotiations regarding changing this. It was moved from 217 to 218, which is a substantial change.

Mr. Broughan

The problem arose this year in terms of the overall pay agreements. We are going back to the fact that those were affected negatively by the 5.5% to 7% rate of inflation. The problem was that when people were compensated the Minister is now clawing that back to some extent.

Mr. D. Ahern

This was all negotiated at social partnership level and what the Deputy is proposing was not part of anything agreed at that level.

Mr. Broughan

Yes.

Mr. D. Ahern

There is a quid pro quo in all this.

Chairman

Generally I find those who complain about this are retired people rather than workers, who see it as another 2% PRSI, a health levy. My colleagues on occupational pensions as retired civil servants hate paying what they see as a 2% health levy.

Mr. D. Ahern

They were on big money.

Chairman

One did not have to be on big money. One just has to be on a pension of £218 per week. One found that those who got the annual £10 increase and who were riding the waves were suddenly paying this. Deputy Broughan mentioned workers but I find retired people are the most annoyed. This year many of them are winners because they are retired and over 70, so they will get the medical card and be exempt from the 2% levy. Many retired civil servants and ex-CIE workers, on pensions of £218 per week, will get a 2% bonus and they are the people who were most annoyed because they could not see why they had to pay what they called PRSI when they were retired.

Mr. Broughan

The bottom line is that there needs to be strong coherence between what is negotiated in a national agreement and what this Minister and the Minister for Finance do. Clearly it is bad if someone gets an extra £20 per week and then becomes liable for a health levy, ending up with less than £15. It negates the impact of a reasonable pay rise and we are talking about low paid workers.

Mr. D. Ahern

Over the last few budgets we have been fairly dramatic in our changes to the PRSI system. As I said, we will look at the Deputy's point in the run-up to the next budget.

Chairman

Many of them get away with this by arranging with their employers to get the increase as an annual bonus rather than on a weeklybasis.

Mr. Broughan

Some of the seniors referred to by the chair now have a medical card.

Chairman

Yes. The seniors will now get away with this if they are over 70 but people from smaller businesses find the figure is used on a weekly rather than a cumulative basis. If one has an agreeable employer one can get a monthly or quarterly bonus rather than a weekly increase and one need only pay once. We are not recommending that people fiddle the system but many of them are at it.

Mr. Broughan

The bottom line is the benefit of partnership. If we want a negotiated moderate rise in salaries it is important that all aspects of the equation are taken into account. If not, people might adopt a more vigorous attitude towards this type of provision.

Amendment put and declared lost.

Sections 36 and 37 agreed to.

Schedules A to F, inclusive, agreed to.

Title agreed to.