Section 7 provides for the continued payment of child dependant allowance at the full rate for up to 13 weeks to people who have been unemployed for 12 months or more and who take up employment which is expected to last at least four weeks. Unemployed people who take up self-employment, employment other than community employment, employment under a scheme funded by FÁS or seasonal employment will qualify for these payments. Where the person concerned qualifies for family income supplement at a rate higher than the value of child dependant allowance, family income supplement will be paid in lieu of child dependent allowance, effective from the date of commencement of employment. Any child dependant allowance which has been paid prior to the determination of the family income supplement entitlement will be treated as payment on account of family income supplement.
It should be noted that this is a very significant development in making our welfare system work friendly. One of the difficulties which people perceive to be a problem is the loss of child support when a person takes up employment. In most public and private employments there is no built in family supplement, unless the income is so low that a person qualifies for family income supplement. A person with three or four children, depending on the level of income they are being offered in the new job, may be only marginally better off financially in terms of their take home pay. The ability to retain for 13 weeks the child dependant allowance is an important reform and should not be passed over lightly. It will link in very effectively where the level of employment is such that a person will qualify for FIS and ends the gap which would have existed up to this year between application for FIS, taking up a job and receipt of FIS. This is important in the context of the other job initiatives the Government has outlined in the budget, particularly in relation to the long-term unemployed.
The most effective way of dealing with poverty in general is to ensure that a person can have access to a reasonably well paid job giving them an income which also enhances their self-esteem and encourages re-entry to community activity.
I do not propose to accept Deputy Walsh's amendment. It is now ten years since the Commission on Social Welfare published its report and the rates of pay recommended by the commission are obviously out of date. One does not know whether they are too low or too high. In order to assess that, the Government's policy agreement in December 1994,A Government of Renewal, contained a commitment to commission the Economic and Social Research Institute to review the minimum adequate rates recommended by the commission in 1986. The ESRI review is already under way and will be completed in July next. This review, which will be published, will put forward new rates and will provide an updated objective basis for assessing the adequacy of the current rates of social welfare payments. The ESRI review will also examine how the proposed rates could be indexed in future years. It is important that that point be emphasised. It would be relatively easy to establish a particular line at this time but it is a little more difficult to ensure that that line remains valid. We need a mechanism to ensure that the rates automatically click into place as they fall out of line with the actual standard of living in society.
The ESRI will be making recommendations on how adequate levels of income can be maintained. It would be inappropriate to use a rate set by the commission ten years ago as an official poverty line as this would pre-empt the review being undertaken by the ESRI.
The general increase in the rates of payment provided for in this Bill will mean that contributory old age pensions will increase to 110 per cent of the main rates recommended by the commission; widow's and widower's contributory pension will reach the main rate; the carer's allowance, which will reach 99 per cent of all long-term social assistance payments, will increase to 95 per cent of the main rate. Apart from the extent to which the rates recommended by the commission are out of date, it should be remembered that any given level of income that is deemed to be an adequate rate of payment for social welfare purposes is not necessarily an appropriate measure of poverty itself. It is generally accepted nationally and at EU level that other factors, in addition to income, should be taken into account in determining what is an appropriate definition of poverty in any society at any given time. At a broad level, these factors relate to a person's ability to participate in society. The proper debate on this whole issue will follow on the publication of the ESRI report. I would welcome Deputies' comments on the report following its publication.
The ESRI is working on another report, also expected in July, on the whole question of poverty. It will deal with household income. It has not been updated since 1987. That will be an important addition to our understanding of household income in Ireland and how the income of people on social welfare relates to general household income. The other report commissioned by my Department in relation to adequacy will also be an important part of that. It would be inappropriate to accept the proposal as outlined by the Deputy.