Amendment No. 2 is out of order.
SECTION 4.
Amendment No. 2 not moved.
Question proposed: "That section 4 stand part of the Bill".
I am disappointed my amendment was ruled out of order. We are now dealing with real poverty, real desperation. The personal rate of unemployment assistance was increased from £58.90 to only £60.40 per week. Even more harshly treated were those in receipt of unemployment assistance and pre-retirement allowance. A married couple with two children in receipt of such benefit will receive an increase of only £2.40 per week, from £124 to £126.40 per week. I do not know how a family of four can make ends meet on £126.40 per week. On old age non-contributory pension and blind pension, a married couple with two children will receive £126.40 per week. The personal rate of carer's allowance was increased by only £1.50 per week. A family with two children will receive an increase from £87.40 to £88.90 per week. Those increases are miserable. This Bill was an opportunity for the Minister to redress the budget allowances, but he did not avail of it. Department of Social Welfare figures show that 196,390 people are in receipt of unemployment assistance with 62,841 qualifying for child benefits. Two-thirds of those in receipt of unemployment assistance do not qualify for child benefit.
It is appalling that in circumstances in which for the first time in 27 years we have a balance of payments surplus those in dire poverty were not given something worthwhile. My amendment merely proposed that the rate of assistance provided under the section be increased in accordance with the recommendations of the Commission on Social Welfare. Does the Minister have plans to do something for this category in the autumn if inflation rates rise to 2.5 per cent or, as predicted by the ESRI, to 2.8 per cent?
There is no point in repeating the arguments we heard this morning. The same case will be made by the Opposition against this section as against the last section. This section provides for increases in the weekly rates of assistance payments as announced in the budget. Subsection (1) provides for an increase of 2.5 per cent in the weekly personal and adult dependant rates of social insurance and social assistance payments. Subsection (2) provides that the increased rates will be payable from various dates from early to mid-June 1995. The cost of the social assistance increases for 1995 is £21.2 million and, in the full year, £38 million. Almost 418,000 recipients and 371,000 dependants, a total of 789,000 people, will gain each week from the improvements in the rates of social assistance payments. With the improvements in the rates of social insurance payments, this means a total of approximately 814,000 recipients and over 609,000 dependants will gain — 1.4 million people overall. It is disingenuous of Fianna Fáil to argue, as it seems to be doing, that not giving an increase in child benefit and spreading the money saved between the 1.4 million people would, some way, lift them out of poverty. That is nonsense. Even if we were to give the increase that Fianna Fáil is arguing for it would be .5p in the £1 extra. Therefore, it is nonsense to pretend that its proposal would change the situation of people on assistance payments. I made a specific decision on this occasion to apply more than 50 per cent of the additional money available to me in this budget in a way which will seriously tackle poverty. All the evidence indicates that the worst poverty is in families with children.
This year's allocation for payments under this section is even less than last year. In 1994 the allocation was increased by £49.5 million whereas this year the increase is £38 million.
Is the Deputy arguing from the viewpoint that there would be a larger body in receipt of assistance?
Yes.
Surely if there were more people on assistance we would have a bigger problem.
I am saying that the amount of money being transferred to the people who come under this section of the Bill is less than that transferred last year. They are the full year figures given by the Department. The people on the lowest payments, short term unemployment benefit and supplementary welfare allowance, the lowest payment of all, will only get £1.50 a week. It is extraordinary that the Minister should ask what difference another .5p in the £1 would make. One would ask what use would 2.5p in the £1 be. The next thing the Minister would do is to take away 2.5p.
I agree with the Deputy. I would like to be able to give an increase of £10 a week.
The reality is——
Exactly.
——that increases should at least be kept ahead of inflation and .5 per cent extra would do that whereas the amount given to people on the lowest payments will not.
The Deputy's colleague argued a few minutes ago that an extra .5 per cent would not keep the increases ahead of inflation. The Deputy should make his mind up. He is being inconsistent.
Inflation may run higher than 3 per cent but the Minister knows that in setting the rate at 2.5 per cent he is going below the expected increase in inflation of 2.6 per cent or, as suggested by one of the other Deputies, 2.8 per cent. Certainly by starting where he does, the Minister leaves no leeway for any drift. Will the Minister take steps later in the year to compensate people if the predictions about inflation are right? People on, for example, disabled person's maintenance allowance get £1.50 a week extra, the same applies to people on short- or long term unemployment assistance. The person in receipt of a non-contributory widow's pension also gets only £1.50 a week.
No matter what else it is doing, for whatever reason, the Government has left people in this sector short because the increase is too small. The Minister should re-examine this section and consider giving an increase of a minimum of 3 per cent. It is probably too late in the day because much of the money that could have been used to help people in this sector in compliance with the recommendations of the Commission on Social Welfare has been spent. It was not used in the interests of those people who will suffer as a result. I ask the Minister to reconsider his position. What he calls .5p in the £1, in an effort to minimise it; is an extra .5 per cent, and it does matter to people who have so little. For example, a person in receipt of short term unemployment assistance currently receives £58.90 per week which falls a long way short of the figure of £66.90, the lower rate recommended by the Commission on Social Welfare. An effort should have been made to bridge the gap, even by £2. Instead the figure of £58.90 will be increased by £1.50 per week to £60.40. This is a miserable increase, unless the person concerned also receives child benefit.
On the question of child benefit, the numbers, which have been supplied by the Department, are not as high as one might have thought. Of the 196,000 recipients of unemployment assistance who will receive an increase of 2.5 per cent, less than one third, 62,800 approximately, have child dependants and consequently receive child benefit. The remaining two thirds do not benefit. That is a source of concern. We accept that where child benefit is payable it will offset the smallness of the increase but that theory is flawed. While an important step has been taken, many of those living in great poverty will not benefit from the increase in child benefit. In addition unemployment assistance is means tested and is one of the lowest payments.
The Minister has said that the increase in unemployment assistance is adequate and his partners in the rainbow Government will troop in and agree with him, but it is very disappointing. If any member of the committee was in receipt of £58.90 which was to be increased by £1.50 per week to £60.40 they would not be very happy. The Minister is badly mistaken. Of the 16,500 in receipt of supplementary welfare allowance 7,500 approximately have child dependants, which means that more than half will not benefit from the increase in child benefit. They will also receive the increase of £1.50 which is extremely low.
The Minister has said he is doing marvellous work in tackling poverty but he is misleading the people because many of those living in poverty who need support will not benefit from the increase in child benefit.
When the Deputy mentioned that the Minister's partners. Fine Gael and the Labour Party, have rowed in behind him and agreed this is an adequate increase, all of us, including the Minister, stirred. No one is suggesting that the 2.5 per cent increase is anything other than the minimum. Those of us who live in the real world know how little it will do to raise the standard of living of those in receipt of a pension or social welfare. One of the reasons this is a significant budget is that it recognises that families and children in particular are at risk of poverty. As their income payments were way below acceptable levels — they were amongst the worst in the social welfare system — the elderly were targeted and over a series of budgets their payments were raised by way of special increases. In recent years the long term unemployed have been targeted, although their payments are still inadequate.
It is right to give families priority. I would like to have seen a more radical package comprising greater increases and taxation measures. I am probably unique in my own party in saying that there are others in the House who also favour radical reform. The targeting of families to remove the poverty traps in taking up employment is an important and significant step. As there is a limit to what we can do the Minister focused on two major objectives: to target families and honour the commitments made to women. It should be remembered that 70,000 households will benefit from equality payments which will range from modest to very substantial — twice the annual income in some cases. I do not expect anyone to be grateful for a 2.5 per cent increase but there is only so much one can do in a budget. Most fair minded people will accept that there is a crying need to provide for children although they are not happy that children have been identified as being at risk of poverty. Politicians find it easier to do what will make them popular, giving everyone increases above the rate of inflation and leaving families to struggle on. One cannot give special increases to everyone each year. As a consequence it is only possible to give increases in line with inflation to the broad categories of beneficiary.
I wish to ask the Minister a specific question about family income supplement which has not been increased. This allowance is payable to those on low pay who require a supplement to give them a sufficient sum to rear their families. How much would it cost in a full year to extend this allowance by 2.5 per cent?
I do not expect Fianna Fáil to accept the strategic approach I have taken. It is an approach Fianna Fáil could have taken when in office but they did not. In response to questions in the Dáil I have said I do not regard the increases as sufficient; they are what is possible to give in terms of the resources available to me in the Department of Social Welfare. It is interesting that what Fianna Fáil is proposing would result in the princely increase of 30p a week on what I am giving. I cannot see how people would be any less insulted by an additional 30p a week from Fianna Fáil than they would be with the 2.5 per cent increase I am providing.
In quoting specific rates and personal rates, the Fianna Fáil spokespersons are ignoring the adult dependant increases and various other improvements in the system. It is part of the job of those in Opposition to identify what they see as weaknesses or mistakes. As far as I am concerned it is not a mistake, it is a specific strategic approach that has been adopted and which I believe is the correct one.
The argument has been made that those on assistance payments are the people living in most poverty. It is invidious to make such comparisons. Studies show that it is families with children who are at greatest risk of poverty and the more children there are, the greater that risk is. That is why I have targeted many of the resources available to me in that direction.
It is interesting that Dr. Woods said — perhaps unintentionally — that the money available at budget time has now been spent and that other money could have been used to give this increase. I would be interested to know what other money the Deputy is talking about. Is he talking about the increases that were given in other social welfare areas and, if so, would he identify what social welfare areas should be cut in order to provide the 30p a week that he is arguing should be given on top of the 2.5 per cent?
Family income supplement, which does not come under this section, is only paid to those in work who have children. In line with strategy of directing resources to child support through child benefit, the family income supplement was not increased but the child benefit was increased. It is much better for the person on family income supplement to get an increase through child benefit rather than FIS because if one's income increases one loses the family income supplement whereas child benefit is retained regardless of increases in pay.
In relation to the family income supplement, could the Minister indicate the cost of increasing the ceiling by £10? It was normal to increase it each year by £10 or £20. The effect of not increasing it will exclude people from the scheme.
As Deputy Woods knows, my intention and the intention of this Government is to implement the commitment in the Programme for Government to move towards a child benefit supplement which will replace child dependant allowances and family income supplement and will be payable to people whether on social welfare or on low pay, depending on their income. It would be income related. In line with that objective I decided it would be better to allocate increases for children in child benefit rather than in child dependant allowances or in the child related family income supplement. I did not want to fiddle around with the family income supplement in advance of putting in place a new scheme of child benefit supplement.
To lift the ceiling on family income supplement by about £10 would cost approximately £3 million in a full year and approximately half that this year. It should also be mentioned that for people who are in work we have introduced a £50 exemption for PRSI which will be of significant benefit to people who are currently on family income supplement. These are all aspects of the budget which are being ignored by the Opposition for its own reasons in order to make a propaganda point about the inflation-proofing of social welfare assistance and benefits. The PRSI improvements, child benefit improvements and various improvements in carer's allowance and so on are all being ignored by the Opposition in pursuit of its rather foolish obsession with the inflation rate.
In relation to unemployment assistance the figures supplied by the Department of Social Welfare to my colleague, Deputy Joe Walsh, indicate that a total of 196,390 people are on unemployment assistance. The Minister has referred continually throughout this morning's discussions to the increase in child benefit. We have acknowledged that it is a significant increase and we have paid tribute to the Minister for that, but of the 196,390 on unemployment assistance, only 62,841 receive child dependant allowances. This means a large number of people in the bracket I have mentioned obviously do not benefit at all.
I have received a document from the Conference of Religious of Ireland — I am sure all members have received it — which outlines its response to the budget. Its members have gone into very substantial detail in critically examining the various changes in the budget. They have given their own particular response, as they do every year, to the budget. The document states that it is an insult to offer an adult an increase of 90p per week on an already miserly payment of £36.60. Ninety pence per week to someone on £36.60 is not much of an increase. Without the child dependant allowance available to them they do not benefit from what is a significant increase but £36.60 is still an extremely small amount. It could have been targeted in a more direct way, which the Minister mentioned this morning as his strategy. The large numbers of people to whom I referred do not benefit. They are the real poor about whom we are talking. They are right at the bottom line, with very little else coming to them. I do not know how they make ends meet on such a payment as, taking inflation into account, the small increase will be frittered away. What will happen if inflation is 3 per cent or 2.9 per cent? I accept the Government has to make its decisions on forecasted figures, that it is the only way it can be done, but the Minister for Social Welfare pointed out this morning that previous attempts at forecasting proved incorrect. Is there any reason to believe that the figure he is using will prove correct this year? Most of the information suggests it will not. From my understanding of the commercial world, I think inflation will be above 2.5 per cent. The increase of 90p per week on £36.60 is, as stated in the document from which I quoted, derisory. It surprises me that the Minister holds the line on that and says it is fair, reasonable or defensible; it is indefensible.
Deputies have not heard the words "fair" or "reasonable" from me in terms of increases. As I have already said, you could give a £10 per week increase to everybody and it still would be insufficient in the kind of society that exists today, with the high cost of living, but unfortunately I do not have that money to give. The argument is made on the basis that if Fianna Fáil was in office it would give an extra 30p per week on top of the increase I am giving, but that is not a sustainable argument. Deputies ignore the fact that the increases this year will be paid six weeks earlier than normal — I have given a commitment that increases next year will be paid even earlier and I hope, in at least the next couple of budgets, to bring the date for payment of increases forward to April. That is a significant advantage to people on social welfare. Like others, I am aware of the disappointment people felt when increases were announced in budgets in January and they did not get them until late July. As mentioned by Deputy Flood earlier this morning, as soon as people got increases, the local authority moved in and took 75 per cent of them in rent increases. This argument by Fianna Fáil is spurious.
On the increases this year, single people without children, living in a local authority house in the Dublin area, will not face the 75 per cent clawback they faced last year. In the Dublin area the clawback is confined to 15 per cent, a couple of pennies. That is a significant advantage. I urge Deputies who are a member of a local authority to seek the same approach adopted by other local authorities. In addition, people living alone in private accommodation on social welfare may qualify for rent allowance. People living in local authority accommodation will qualify for differential rents and in certain circumstances will also qualify for additional support by way of supplementary welfare allowance, which was also increased in the budget.
The debate is a bit of a nonsense in that what we are arguing about is whether we should have given an additional 30p. It makes more sense to target the resources you have in a way which specifically deals with poverty in a real sense. I remind Deputies that all the studies show that poverty is greatest in families with children. That is not to say that single people, living alone on unemployment assistance are well off. Their position will be addressed by me in the future, but in a strategic, not an ad hoc way, simply applying percentage increases, with half a percentage extra here and half a percentage extra there. Their circumstances will be addressed in a real way in an attempt to rid them of poverty rather than simply genuflecting in its direction.
There is very little else I can say in response to points raised on this section. Deputies opposite are ignoring the increase from £10 to £25 per week for single people whose assessment for unemployment assistance is based on parental income. They are also ignoring the fact that single men or women living at home with brothers or sisters and whose parents have died will be assessed solely on their own income, not on the income of their brothers or sisters, which was the case in the past. A pensioner on a contributory old age pension or retirement pension whose spouse is under 66 years of age, with an additional increase of £8 per week, will get an increase of £9.70 a week, or 8.3. per cent, bringing their weekly payment to £125.90. This increase includes £5 per week fuel allowance.
Concentration on the 2.5 per cent increase ignores the fact that the disregard for fuel allowance is being increased. There are significant improvements in the carer's allowance and 1,000 new carers will benefit, at a cost of £3 million. There are various other improvements which I will address later. The debate so far has been a bit of a sham, given that Fianna Fáil is looking for excuses to vote against an increase in social welfare and arguing that if it was in office it would give the princely sum of an additional 30p per week.
I wish to take up the point made by the Minister on what might or might not have been given by a Fianna Fáil-Labour Government or any other Government in which Fianna Fáil was involved. This year for the first time in many years there was a substantial surplus, not only in the social insurance' fund but in the accounts generally. At budget time there was money available to do some of the things the Minister talked about, to make a leap forward in terms of the recommendations of the Commission on Social Welfare. Even if it means only an extra £2 per week, that is significant to people on social welfare. An amount of £2 per week to somebody on £50 a week is obviously——
The Deputy is not talking about £2 per week; he is proposing an extra 30p a week,
I am not proposing an extra 30p.
The Deputy was proposing 3 per cent instead of 2.5 per cent.
I do not know where the Minister got that idea from.
I got it from the Deputy's Leader in the Dáil. The Deputies spokesperson said it should at least have been 3 per cent. Deputy Fitzgerald who is no longer here said it should have been 3 per cent.
They said it should be at least 3 per cent. The Minister should try to to keep his hat on for a minute, I know he is loosing his cool a bit over it——
(Interruptions.)
Would Members please address their remarks through the Chair. I now propose that Deputy Flaherty takes the Chair for a short period. Is that agreed? Agreed.
The Minister said it is invidious to make comparisons between poor people. The reason I mentioned that these people are among the poorest is these are all the means tested people who by definition are among the poorest. Everyone in this section is means tested and social assistance payments are proposed to give increases to all means tested people. Some people outside that area are poor and some people on incomes are poor. People on family income supplement wonder why this Minister has not given any increase in the family income supplement ceiling. The Minister is saying things will work out——
They will get child benefit——
——but they will be excluded from the scheme because of the ceiling and that means they will lose what they have.
You have to see it the right way.
By definition this section relates to the greatest number of people. The numbers are provided by the Department. A large number of people need assistance and support. That is why the Minister's comment that it is invidious to talk about who is poorer is inappropriate. By definition these people are very poor. Disabled person's maintenance allowance has moved from £61 per week to £62.50. The Minister will be aware that the position of many people on disabled person's maintenance allowance is particularly difficult and they are looking for some special form of assistance as are people on the blind welfare allowance. All of these people are in the poverty bracket and they need support.
The Minister will say that as far as he is concerned, he is keen to help them but not this year, they will have to wait for another year. The same applies to all the categories on low payments.
The supplementary welfare allowance rates are only 90.7 per cent of the Commission on Social Welfare recommendations. In the past few years something extra was given to people in this section each year to bridge the poverty gap for them while at the same time keeping them, at least, in line with inflation and preferably a bit above. In recent years we have managed to keep them that bit above inflation. Supplementary welfare allowance on the 1995 rates will now be 90.7 per cent of the main rate as will short term unemployment assistance. The pre-retirement allowance is 93.8 per cent of the main rate and lone parent's allowance is 93 per cent. Short-term unemployment assistance and supplementary welfare allowance are among the lowest payments and nothing special is being done for them.
In 1991 there was a general increase of 4 per cent and a long term unemployment assistance increase of 5.8 per cent. The short term unemployment rate and supplementary welfare allowance were increased by 11.1 per cent. The Minister is trying to confuse the situation by giving all types of cross references, but the reality is that increases were above inflation. In 1992, short term unemployment assistance, supplementary welfare allowance, disability benefit and unemployment benefit increased by 6 per cent. In 1993 short term unemployment assistance, and supplementary welfare allowance increased by 4.9 per cent. In 1994 there was a general 3 per cent increase against an outturn of 2.4 per cent in inflation and short term unemployment and supplementary welfare allowance were increased by 5.9 per cent. In each of those last years something positive and constructive happened for people in greatest poverty. We have gradually been closing the gap so they are now at 90.3 per cent of the main rate. The Minister knows by definition that those in the lowest group are on short term unemployment assistance and supplementary welfare allowance. What would it have cost to bring those two payments up even to half way towards the main rate this year?
To a degree we are repeating, although giving different examples the principal argument we all made in the first section. The Minister explained that he is not convinced by our arguments despite the barrage of examples. Other Members are waiting and we are only on section 4. We understand Deputy Wood's point, made extensively and repetitively.
I must emphasise that this is Committee Stage. The Minister made his point about the principle of the Bill and to which he is adhering. The principle of any Bill is dealt with on Second Stage and on Committee Stage Members go into its provisions in detail.
This section, dealing with unemployment assistance, is the only one on which we can question the Minister directly about unemployment assistance, short term unemployment assistance or supplementary welfare allowance and get answers.
Acting Chairman
While appreciating Deputy Wood's argument we have a deadline of Tuesday next for completion of Committee Stage. Later sections are substantial and we will end up having to limit Members' rights to discuss them. This is to ensure we can cover the Bill overall, which will not be possible if Members continue to discuss the first few sections, engaging in repetition. It is up to Members.
I do not want to become involved in a debate with the Chair but supplementary welfare allowance and short term unemployment assistance are being allocated the lowest increase. In each of the last seven years approximately they have received the basic increase plus a special increase to bridge the gap and raise their entitlements. For these, the poorest of the poor, what would it have cost to raise their entitlements only? That question has not been asked today. Members have certain rights and, therefore, I do not accept the obfuscation. The electorate want to know the position. Will the Minister state what it would have cost this year, and in a full year, to bring supplementary welfare allowance and short term unemployment assistance the full way to the main rate, that is to close that 90.3 per cent up to the 100 per cent — to go half-way if you like?
On the Bill generally, most other payments apart from child benefit are not included in this section and would not affect quite a number of the people here anyway. Indeed most of the others affect small numbers only. As other members argued this is where a minimum increase of 3 per cent would have been essential, with which I agree. Anybody looking at those figures would have said they would not have accepted anything less than 3 per cent. We, and I am quite certain Members on both sides of the House, find it hard to understand how the Minister accepted less than 3 per cent. As far as this section is concerned the 2.5 per cent obviously is quite inadequate. The money transferred to this section. £38 million this year against £49.5 million last year, tells the whole story that I, Deputy Joe Walsh and, in particular Deputy Flood are trying to get across that this year less money has been transferred in real hard cash terms to the people in this section.
Finally no progress has been made on the recommendations of the Commission on Social Welfare. The Minister says he will leave that for another year, but he should have progressed further and continued what has been done in recent years to close the gap for the people at the lowest level. There has been no increase for children of those on unemployment assistance or supplementary welfare allowance, which would normally have accompanied them. No doubt the Minister will argue that will be reflected in child benefit and that those who have children will benefit indirectly. That is a separate issue from the main personal rates recommended by the Commission on Social Welfare, and which the Minister advocated. He was highly critical of me and Fianna Fáil previously for not having done enough in previous years to close that gap. As I said earlier, each year we had managed to step forward. I mentioned long and short term unemployment assistance and short term and supplementary welfare allowance, all of which were increased by 11.1 per cent in 1991 and, successively, by 6 per cent, 4.9 per cent, 5.9 per cent, above the normal rates, to keep closing that gap. We cannot accept that in relation to these people. They will be lucky if they can maintain their present position because inflation could well rise above the 2.5 per cent rate. If the Minister checks with the Department of Finance he will find that officials expect it to rise above 2.5 per cent although they might argue by how much. Therefore, people at the very poor end of these payments, by definition, will stand still at best while in practice we know they will lose.
I suggest the Deputy reads the document provided by the Department of Social Welfare as it includes those figures.
The Department did not supply me with that. Deputy Joe Walsh gave it to me when I came in here this morning and I am looking at it now. The Minister's predecessors would have had no difficulty in producing those figures.
(Interruptions.)
Judging by the performance this morning, the Department gave the document to the wrong person. What I wanted to say related to people on unemployment assistance and supplementary welfare, at the lower end of the scale, as they should be our concern. I found it difficult to listen to Deputy Woods and his new-found concern for these people when earlier he stated that certain savings effected in the Department related to what he considered to be fraud in the Department. One of the major complaints about the Department of Social Welfare are the various regulations.
Deputy Woods established a new section in that Department with a big headline stating that he intended to ensure that the fraud within the Department, which he estimated involved an amount of £200 million, would be wiped out.
Acting Chairman
Unfortunately, due to time constraints, we must conclude and we will resume next Tuesday in the Seanad Chamber as it is the only suitable venue available.
The Select Committee adjourned at 2 p.m. until 3 p.m. on Tuesday, 28 March 1995.