The Minister of State will be unavailable after 10.55 a.m. as he has to attend a Cabinet meeting. It will, therefore, be necessary to adjourn at 10.55 a.m. until 2 o'clock. There are 30 sections, nine Schedules, the Title and the report of the Select Committee remaining to be dealt with. It would be helpful if Members could expedite business as speedily as possible. Given that so many sections are outstanding it is not possible to discuss them all in detail, nor is it possible to allow time for detailed discussion on what some Members might regard as the important sections. It is estimated it will take until at least 8.30 p.m. to conclude if we debate all sections. I take it all Members will co-operate fully to try to proceed through the sections as quickly as possible.
SECTION 17.
We pointed to this difficulty at an early stage when the Minister continued to insist to speak to sections which the committee was prepared to speedily approve and agree.
I appreciate the dilemma of the Minister of State in that he cannot be with us too long. However, when planning this meeting were we not aware that there would be a Cabinet meeting this morning which the Minister would attend? Did we make an error of judgment in arranging the meeting for today?
It would have been helpful to know the Minister and Minister of State would not be available this morning.
It was my ignorance of the procedures that probably caused the problem. The Minister would have assumed I was available this morning and I was not aware I had to attend a Cabinet meeting. I apologise to the committee for any confusion caused. Subject to the agreement of the committee we are prepared to make up whatever time is lost in so far as we can. The present arrangement was made because it was not possible to anticipate all the eventualities.
We will now proceed.
Is deserted wife's benefit being terminated? Is there a means test for the one parent family payment, and if so what kind? Where a qualified parent is in receipt of maintenance from his or her spouse, a disregard equivalent to the rent of mortgage repayments made by that parent up to an amount to be prescribed will also be applied in the assessment of means. In cases where maintenance orders are made in the courts to pay, say £50 or £60 per week to a deserted spouse, why can the full maintenance not be paid to the deserted person? Why is it confined only to the amount of the rent or mortgage? Much was made of the one parent family payment over the past year. We want clarification on these matters.
This section deals with the one parent family payment. The lone parent's allowance applied previously, so to some extent there is merely a change in title from lone parent's allowance to one parent family payment. All this is combined within the assistance side, so it is an allowance even though it is termed a payment. Who will not qualify for deserted wife's benefit after 31 December 1996? The position of existing deserted wife's claimants is preserved. For example, I presume those over the age of 40 with no dependent children, who would previously have obtained deserted wife's benefit, will not get it after 31 December. Those with deserted wife's benefit whose income is greater than £10,000 will presumably not be included within the scheme. Will the Minister clarify the position?
Will the Minister also advise if, in the long-term, this change will result in a saving to the social isurance fund and an additional cost on social assistance? We understand that the current cost of the deserted wife's benefit to the social insurance fund is approximately £75 million. What saving will there be against the normal cost for deserted wife's benefit, bearing in mind that the position of existing claimants is preserved, in the first full year after 31 December 1996? Presumably after this date, new claimants will not arise within the deserted wife's benefit. What savings are estimated from this with regard to the social insurance fund for 1997?
The one parent family payment appears to be similar to the lone parent's allowance, with some adjustments. There is an increase in the threshold of the means test level and the desertion clause has gone from the current lone parent's allowance scheme. Again, the position of existing claimants will be maintained. They will go into the one parent payment scheme. The removal of the desertion clause will result in a new method of determining separation. Will the Minister advise on the criteria to determine separation? The scheme will now apply, not to deserted but to separated couples, and to either party of a separated couple. How will this be done? While the Minister may advise that it will be set out in subsequent regulation, the dropping of the desertion clause is a major change to the system. It will no longer be a question of being either constructively deserted or deserted in a clear-cut way.
Presumably more people will qualify for the one parent family scheme because of the raising of the means test. What are the estimates of the extra number of people who will qualify and the cost of the increase in a full year?
There are many questions to which I must reply and I probably will not have time to deal with all of them before the meeting is suspended. Deputy Joe Walsh asked about the determination of the means test and the disregard. This is an improvement on the previous scheme. The name of deserted wife's benefit is being changed and it is being revamped to make it more beneficial to a considerable category of people who previously would not have qualified.
Deputies asked about the status of people who may qualify for lone parent's allowance under the new scheme. Previously there was a rigid means test for this allowance which left a number of people at a distinct disadvantage. People who paid contributions and received deserted wife's benefit were in a reasonably good position in that they were rightly able to qualify on the basis of their contributions or those of their husbands. They were originally entitled to earn virtually any amount but a ceiling of £14,000 a year was introduced. This ceiling has been adjusted on a number of occasions and is being changed again.
The scheme has also been changed to make it more accessible. Under the previous scheme the onus was on the wife to prove she was deserted. The argument about constructive desertion arose at regular intervals with the result that in some cases a great deal of hardship was caused by the necessity to prove this point. In general the new scheme will be more beneficial and will result in a considerable saving of administrative time in that the same degree of reference and investigation will not have to take place. Obviously a person must be separated in order to qualify for the scheme. It was never intended to accommodate people other than those genuinely entitled to it. Nobody should have any doubt about that.
Deputy Woods asked who will qualify after 31 December. In addition to the general saver position to be applied to all existing recipients of deserted wife's benefit and allowance and prisoner's wife's allowance, the Bill provides for a specific transitional arrangement for women who, by virtue of being aged under 40, lose entitlement to deserted wife's benefit because they no longer have a child dependant and who would otherwise have re-qualified for benefit under the existing provisions on reaching the age of 40. On the introduction of the new provisions the entitlements of women aged between 38 and 40, who would otherwise have qualified for deserted wife's benefit on reaching the age of 40, will be maintained.
On 31 December 1996, those who qualify under the present headings will remain so qualified. Anybody applying after 1 January 1997 will fall to be judged under the new criteria; there must be a cut off point. It might be slightly more beneficial for some people to apply before 31 December and for others to apply afterwards. No matter which way the scheme is devised, some people will be slightly better off and others will be potentially worse off.
By and large, this scheme is appreciably better than the previous two schemes in that it equally and fairly distributes payments to the group directly affected. In a fair minded fashion it allows people to work and earn a reasonable income and provides a reasonable income for those who cannot work, which would be better than a means tested payment in the normal sense but which might not be as good as contribution-related benefit.
Is it the case that any woman aged over 40 who previously received deseted wife's benefit and has no children will not now receive it?
That is right.
Under present circumstances such a woman would qualify even if she had no children. Once this change is made she will not qualify for deserted wife's benefit or the one parent payment because she does not have a child.
There is a slight disadvantage for those aged between 40 and 55. It is the old story of being too young at one stage and not old enough at another.
I appreciate the Minister's reply.
Unfortunately I must now leave the meeting. Everything will be done to facilitate a full debate later.
Deputy Joe Walsh and Deputy Woods asked a number of questions about the one-parent family payment. The objective of the payment is to abolish the concept of desertion, to dispense with the need for intrusive questioning associated with proving desertion, to provide for equal treatment for one parent families, to be non-judgmental in terms of the reasons for lone parenthood, and to improve the incentive for lone parents to take up available work opportunities, all of which are progressive, constructive and beneficial. Those who must rely on such payments will be in a better position than heretofore.
The new payment, which amalgamates the existing deserted wife's benefit and lone parent's allowance, represents a considerable overall improvement on existing arrangements. The main features of these improvements are as follows. The first £6,000 of earnings from employment or self employment, which is the equivalent of £115 per week, will be disregarded. Under the present arrangements only £24 per week plus an allowance for child minding expenses incurred are disregarded in the case of lone parent's allowance. In assessing maintenance payments in disregard equivalent to the rent or mortgage payments paid by the parent, up to a prescribed amount to be set at £100 per week will be disregarded. Under the present arrangements maintenance payments received by the parent are assessed as means for the purposes of lone parent's allowance. A woman on deserted wife's benefit is required to pay over to the Department any maintenance payments received under an order of the court. Members referred to this earlier.
I am concerned that at present a person in receipt of deserted wife's benefit must hand over £60 or £100 received under a court order to the Department of Social Welfare.
This will change under the new arrangements. Under the 1993 Act, payments are collectable by the Department when made by the spouse to the wife.
The legislation was introduced in response to much criticism of alleged runaway husbands who were not honouring their responsibilities. However, many people missed out on the fact that introducing that particular element did not improve the situation for wives. In fact, it left their situation exactly as it had been. Payments made in respect of mortgage could be disregarded under the old system and this is being allowed now also. With regard to payments made in respect of maintenance, where the separation agreement did not identify specifically that a payment was in respect of a mortgage, it falls to be collected by the Department. The purpose of mentioning mortgage payments specifically is to ensure that particular payments do not fall victim to the collection by the Department which would be due under the 1993 Act.
In assessing the maintenance payments, a disregard equivalent of the rent or mortgage payments paid by the parent up to a prescribed amount to be set at £100 per week — in other words, a £400 per month mortgage — will be allowed. Any sum above that amount will be assessable for collection by the Department. Under the present arrangements maintenance payments received by the parent are assessed as means for the purposes of lone parent's allowance and a woman on deserted wife's benefit is required to pay over to the Department any maintenance payments received under an order of the court — that is what we have been talking about. It is a question of differentiating between payments made under an order of the court or separation agreement towards a mortgage as opposed to towards maintenance, which is not specified. Any Deputy advising constituents in that type of situation would always have advised them against unspecified maintenance and in favour of payments which target mortgages specifically as it is far better for the wife and family. A ceiling on the earnings of £100 per week is imposed but it is a reasonable one. It means that a mortgage of up to £400 per month is catered for under maintenance if that maintenance is available. If it is not available, which is the other side of the argument a woman in a similar set of circumstances would not have the benefit of such a beneficial settlement and that would be slightly unfair. I think it is a fairly reasonable way to address that particular problem.
The opportunity of the introduction of the new payment is being taken to commence the process of standardising the provision for the assessment of capital. Under the proposed provisions, the first £2,000 of capital will be disregarded, the next £20,000 will be assessed at 7.75 per cent and capital in excess of £22,000 will be assessed at 15 per cent.
Is that an improvement?
Yes.
Has the Minister estimated how many extra people that might bring in?
About 2,000 people overall. The disregard of £2,000 reduces significantly the effective interest rate for most recipients. For example, the effective rate is just 4.5 per cent where the person has capital of £5,000, 6 per cent where the capital amounts to £10,000 and people will not be effectively assessed at 7.5 per cent until the level of capital approaches £25,000.
I also draw to the attention of Members the progressive nature of the new arrangements under which the effective interest rate increase for those with higher amounts of capital whereas under the present arrangement the effective rate actually reduces as the level of capital increases. That was something which needed to be addressed.
Deputy Woods also made the point that a woman with earnings of up to £14,000 can qualify for deserted wife's benefit at present whereas earnings of £12,000 would be applied under the new arrangements. That is true, but only about 7 per cent of women on deserted wife's benefit have earnings of over £12,000. That particular ceiling was as fair and even a balance as could be struck vis-�-vis the £14,000 which was there previously.
Is is not a reduction?
It is a reduction in the ceiling but provision is adequately made for the person to avail of their payment and employment. As the remuneration from employment progresses obviously it would be assumed that there must be a ceiling and consequent reduction. On balance, it is reasonably fair and will prove to be so in operation. It will improve the situation for the vast majority of lone parents with earnings.
The most importnt point to remember is that it is a means of introducing a new system of payments for women who are deserted wives or lone parents. It eliminates stigmatisation or categorisation of the various people who may have to apply for the payment. It also brings into the system an element of equality and equity which was sought previously but not achieved simply because over a number of years payments had to be introduced in quick succession to meet emergency situations. There was no sense in postponing the requirement in order to come up with a comprehensive Bill. This Bill is fairly comprehensive. It tends to address in so far as is possible all the difficulties which presented themselves, takes account of social change in general and recognises those already in receipt of a particular payment and those who will now qualify. It also takes the costs into account and the obvious need for budgeting in those circumstances. For example, a working parent on lone parent's allowance without child minding expenses whose earnings exceed £2,400 per year at present receives a reduced rate of payment whereas under the proposed arrangements the maximum rate will be payable up to an earnings level of £6,000. For the large number of families in that category there will be a fairly dramatic increase in entitlements. This mens that the parent can earn up to £115 per week and still qualify for the maximum rate of payment.
Under the present arrangement, where the parent has childminding expenses, the maximum rate is only payable up to an earnings level of £4,200 in the case of a one child family, £4,700 in the case of a two child family and £5,300 in the case of a three child family. Under the proposed arrangement, the maximum rate is payable up to an earnings level of £6,000 or £115 per week.
In the case of a parent in receipt of one parent family payment whose earnings exceed £12,000, special transitional arrangements will be applied under the reduced rate payment to be specified in regulation which will be paid for one year to alleviate any hardship associated with consequences arising from separation.
The figure of £12,000 represents 85 per cent of the average industrial earnings, which again indicates that a great deal of time, energy and effort were put into identifying how best the ceiling could be pitched. From my and Members' experience of dealing with such cases, the £12,000 ceiling is as near to adequate as possible.
I asked the Minister about the increase in cost in the lone parent's allowance scheme this year, the figure for the last year and that for a full year — I know it is now called the one parent family payment. What is its overall effect on the cost?
The combined effect of the overall changes being made will give rise to additional costs of £10 million in a full year. With regard to the effect of the social insurance fund, in broad terms about 600 women would cease to be entitled to deserted wife's benefit in a year and the annual cost of the DWB payments to these women would be about £3 million in a full year.
The cost of these 600 women would be about £3 million?
That is correct.
The Minister said that 7 per cent, or approximately 952, women on DWB will be over the £12,000 ceiling and would then not be entitled to these benefits if they remained over that figure. He also said that 600 women will cease getting these benefits in the next full year. Is that the net effect? The Minister gave us two different sets of figures.
There would be a shift in these figures at any time. Some women may go back into the workforce, others would have been in the workforce, been in receipt of payment previously but their income would have exceeded the previous £14,000 ceiling by one means or another while some may have formed new relationships and, consequently, gone out of the system. There would have been that shift in any event.
Is the overall cost increase in the one parent family payment system currently estimated as £10 million in a full year?
Yes. That also includes other extra costs of increases etc., associated with the current budget.
Would that scheme include people getting deserted wife's benefits but not those whose deserted wife's benefits ceased in the full year?
That would happen in any event.
That would be a saving off the £10 million in the net overall figure for the two schemes?
Yes. That would occur in any event, even if this change was not being made.
The definition of a qualifying parent in the Bill is one "who has at least one qualified child normally residing with that person". I sought clarification so that if there was joint custody of the child, both would be considered qualifying parents. I put down an amendment to that effect but it was ruled out of order.
That is currently being examined and will be dealt with under a separate heading.
Under the lone parent's allowance, neither parent in a joint custody case qualified. However, this is now a normal state of affairs and people in these situations should qualify.
That issue will be dealt with by way of regulations. It will also have to take account of equal custody in the event that it is agreed. There will be some exceptions to every rule. Although custody may be agreed in some cases, it may not operate effectively. For example, children living with one parent may not wish to observe a custody order made by the courts. There have been a number of incidences that caused difficulties for everybody involved. These were not created by differences specifically identified by somebody but by natural differences that arose by virtue of the fact that in some cases, although the parents may have agreed to full, partial or joint custody etc., one or other children, by virtue of their circumstances relative to their parents, might not have been able to adjust to the new situation and, consequently, created problems for one or both parents.
That cannot be dealt with specifically. It is not possible to deal with every situation that may arise in these cases at this stage but the issue the Deputy raised will be dealt with by way of regulations, which is the best way to do it.
How many women over 40 years of age with no dependent children are currently in the scheme? I presume, since these women would be the main losers, the Minister would have worked that figure out?
Some 157 women between 40 and 54 years of age on deserted wife's allowance and 169 on deserted wife's benefit, a total of 326 women, would be affected.
Is that the figure for the number of women between 40 and 54 years of age group receiving DWB, out of the 13,000 women with no children?
The Deputy will agree the number is quite small in relative terms.
It seems an extremely small number out of 13,900. In the case of lone parent's allowance — or the one parent scheme as it will be — people leave the scheme once their children move out and it is therefore not surprising that the figure is small. However, it is surprising that the number is so small in the case of deserted wife's benefit.
The number of new awards during 1994 to deserted women between the ages of 40 and 54 without children was 169. That figure is for a single year. The existing awards would cover all ages as we have not broken them down by age. The total number without child dependants is 4,224.
They cannot benefit in future. The existing payments will be maintained and represent a little less than one third of the total.
They represent 29.6 per cent. The relevant figure is 169 in a single year. For DWA, the figure is 157. The numbers are almost even.
I understand it now the Minister has explained the figure of 169 is for a single year. I could not understand how it could be the overall figure.
The Minister mentioned there would be a non-judgmental system for deciding on separation. This is a change. I appreciate what the Minister is trying to do in terms of removing the desertion clause, constructive desertion or the other ways in which a breakdown is currently measured. However, if there is no clause and we have, as the Minister defines it, a non-judgmental system, how will the payment be awarded? Will it be the case that if a couple separate, both will become eligible for what was the deserted wife's allowance but covers both male and female applicants now?
Determining desertion and whether the applicant is entitled to deserted wife's allowance or benefit has always been difficult. The regulations made it difficult for deciding officers to determine in some instances whether a woman had been deserted. I am sure Members have had experiences of individual cases where it took an amount of time to prove desertion. The resulting delay caused serious hardship in many cases, particularly where children were involved. Members opposite have dealt with cases where, with the best will in the world, the nature of the regulations and legislation and phraseology used made it difficult for a deserted person to achieve her entitlements.
This legislation proposes to smooth that process somewhat and regulate it. Deputy Woods asked what criteria we will use to determine whether a person has separated from a spouse and whether they will be the same as those currently applying to lone parent's allowance, which was the better of the two systems in terms of guidelines. Those criteria are that the parent has been separated for at least three months, has made efforts to obtain maintenance from his or her spouse and is not receiving maintenance in excess of the maximum rate payable to one parent appropriate to his or her family circumstances. That is the ceiling we talked about a few moments ago.
Members will appreciate that pursuing the erring partner and obtaining evidence as to whereabouts has caused some difficulty. That has always been the case and there is no great change there. The same rules apply. In the past, for example, a deserted wife with three or four children could find herself in an awkward situation if she had to take upon herself the burden and responsibility of locating her former spouse who might not be anxious to assist. I happen to be dealing with one such case at the moment.
Any regulations pertaining to this Bill must have regard to those type of situations. Every year information comes to us to the effect that somebody is at a slight disadvantage by virtue of the husband being found or the husband having gone missing without a trace. It can be difficult to operate within those two parameters and benefit the lone parent. That applies equally to deserted wives and deserted husbands.
Section 162 contains general regulatory powers, including powers to specify the circumstances in which a person is to be regarded as a separated or unmarried person for the purpose of the one parent family payment. The Minister is saying that in effect the same criteria as those which applied to the lone parent's allowance will apply. They are that the person has at least one child who is dependent on and living with the applicant who is not living with someone as husband or wife and satisfying a means test. If the applicant is separated, he or she must have been separated for at least three months, have made efforts to get maintenance from his or her spouse and not have adequate maintenance from his or her spouse. Are those the criteria that will apply?
Generally, they are the criteria that will be applied. I would like to ensure that, in so far as possible, although it is difficult to achieve the optimum in every situation. No hardship should be caused to those in the worst possible circumstances. A husband or wife with no income outside the home can be placed in a very vulnerable position if they have to pursue maintenance through the courts or use other methods to find a former spouse and ascertain whether maintenance is likely to be paid. Under the proposals it will be easier to determine whether maintenance payments are likely to be made.
It should be easier to determine whether it will be above the guidelines, thus creating another problem. Under the present system any amount over £24 per week available to that parent renders them liable for a longer delay in dealing with the application and, taking into account the other factors relative to that family, it could cause further delays that would militate against the well being of the parent. Obviously there would be a reduced rate as a result of whatever income might be available.
The Minister of State spoke about erring spouses who leave taxpayers to foot the bill. How many people are in the control section of the Department to follow up these runaway dads — or cads as they are sometimes called — who do not live up to their responsibilities? How many prosecutions have there been of those who fail to make contributions resulting from court orders? How much has been paid in the last couple of years to the Department of Social Welfare under these maintenance orders?
On a separate matter, can people in receipt of either deserted wife's benefit in the past, or now the one parent family payment, participate in FÁS community work schemes? I am glad we have clarified the fact that this one parent payment is means tested. In some cases not alone is the capital means tested but it is more penal because, over a certain amount, 15 per cent interest is put on which is more than ever before. Even though much political capital was made out of the imposition of the £14,000 figure, it has now been reduced to £12,000.
If the Department of Social Welfare is issuing press releases in future they should not mislead the public as was done on 19 February 1995 when, under the heading "De Rossa reveals his plans for a new lone parent allowance", the number one item was that there would be no means test. Of course there is a means test. Further on the press release said: "The Minister said that the new payment, instead of being means tested, would be earnings related". It is more than earnings related because capital and other sources of income are brought into account. We want truthful press releases from the Department.
Worse again, on Second Stage, the Minister, Deputy De Rossa, proceeded to lecture everybody in the House on means test and income related requirements. We would all be a lot better off if that degree of misleading information and arrogance stopped.
Everybody in the House is seeking a fair system whereby people get reasonable allowances and remuneration on an equitable basis. However, where you have a Department, the head of which seems to put more time and effort into looking after his own position and his own party activists' positions than the people which he has a statutory and constitutional responsibility to look after, it is a sad day for the poor and the less well off in society.
Although it was turned down, I sought a base line for the less well off so that we would be better able to plan. Who is responsible for drawing up these press releases? Are they people the tax-payers are paying through the nose for? Are they earning more than Deputies? Nowadays a TD earns £32,000 to £33,000 a year, but programme managers are paid £42,000 to £43,000 per annum. Are such dishonest blurbs the result of their work which costs the tax-payer so much money? As Members of the Dáil we deserve better than that. The general public deserves better also.
Having said that, there are some important improvements in this scheme. The requirement to prove desertion has gone and there is regard for mortgage maintenance. I welcome that but it would be of great benefit to everybody if we were a bit more up front about it.
I wish the Deputy had started off by welcoming the Bill. That would have been more positive from my point of view and I am sure the Minister, Deputy De Rossa, would have preferred it also. This area has preoccupied public energy from time to time. This will be recognised by Deputies opposite, two of whom are former Ministers and know what it is like to be on the other side of the fence. The public perception is that there is a huge amount of abuse in the system which should be pursued vigorously by a large investigative unit.
The purpose of the exercise is to pursue, in so far as the Department can, all those who abuse the system. However, one should not necessarily determine success on the basis of the numbers of prosecutions because it has proven quite difficult in the past to seek maintenance. That is true of cases that I have dealt with personally, and I am sure other Members must have come across similar instances where, in attempting to extract maintenance from an erring spouse, if that spouse becomes unemployed it is of no benefit to pursue the individual. It is not only a problem in this country but in every other country with similar schemes.
In November 1990, 17,004 cases had been examined to determine liability on the part of the spouse to make contributions to the Department. The results were that no trace at all could be found in 4,452 cases. They disappeared without trace and could not be found. That is quite common, odd as it may seem. Social welfare payments were 8,079, or 48 per cent of the total. There were 4,000 employed, not including self-employed. That left 4,473, and 865 were unable to pay, if I read this correctly. Some 753 were under active investigation and 2,286 were to be investigated. The number unable to pay were already determined and those cases have been processed. Altogether 4,473 were processed, out of which 865 had no resources.
Deputy Walsh also inquired as to the total number of persons dealing with that area. One higher executive officer, one executive officer and two clerical officers are dealing with that area.
What amount of money was recovered last year and how much is it estimated will be recovered this year?
The amount is about £850,000.
Having regard to the total amount paid out by the taxpayer, £850,000 from erring spouses is very small.
It is, but one has to be careful not to allow this situation to militate against the lone parent who has care of the children. It can be very difficult to arrive at the ideal solution. We have all had lone parents come to us and say that previously the spouse had been paying £50 or £60 per week towards maintenance and that the Department of Social Welfare suddenly decided to take it back. They have become accustomed to that extra payment. However, in other cases the lone parent never received any financial support from the erring partner and will not under the present system.
The Department has an opportunity to recover some money from the partner who has gone elsewhere and that is why the cases are being pursued to that extent. It causes some hiccups in the system and concern to deserted wives or lone parents who may feel the Department of Social Welfare is specifically targeting them. They do not become aware of the legislation until somebody knocks at their door and tells them that the maintenance payments they are receiving from their partner are now to be paid to the Department. The figure recovered so far is about £800,000.
People in receipt of deserted wife's benefit at present will retain the benefit. Women who get employment will also retain it as it is distinct from an allowance. However, there is concern that under this section, women will not qualify for deserted wife's benefit in the future when they take up employment. Is that correct?
No, what the Deputy said first is correct. Those who qualify for deserted wife's benefit at present will not be affected. Their situation does not change because their entitlement is already established under existing legislation so they must be allowed to continue. The new regulations will apply to those who make application after 1 January 1997. If I were in Opposition I might say that this is a negative aspect. However, the new scheme is much fairer and attempts to achieve a reasonable balance between the benefits available to deserted wife's and deserted wife's allowance beneficiaries under the old scheme. We have already gone into the details and I do not wish to repeat them.
The method and manner of the means testing on the deserted wife's or lone parent's allowance scheme militated against a woman in the household looking after a family, especially as the children got older and went to school when it might be possible for her to go out to work and improve her position. Where I have dealt with such cases myself, I have always tried to encourage women in that situation to become independent again. If they are dependent on the social welfare system they feel trapped, they feel they can never progress from the system and feel stigmatised by virtue of having to remain dependent on it.
The new scheme will be much better because the disregard income has increased to £12,000 from the previous figure of £24 per week. After that, child-minding costs are taken into account. Deputy Walsh may say this scheme is means tested. There is a means test, but it is very benign and will be much more beneficial to the applicants. It is much more responsive to the vulnerability of the people who depend on this payment.
From past experience I have found that the length of time it takes for the applicant to qualify can also be a factor in the system, simply because the person making the application can be very vulnerable and may have come through a traumatic time. They may find that family resources and morale are very low. The person concerned may well be at the end of his or her tether and at the end of all that may have to go through a very rigorous process which could take a year in some cases. I have dealt with cases where the process has taken up to a year and in some cases two or three years, and if the responding spouse was not responsive they could find themselves very isolated and at a serious disadvantage, even more so if the unfortunate woman in that situation found herself in a position to take up part-time work.
She could find herself in a vulnerable situation if her former spouse was not conscious of her predicament or did not wish to help. She was often forced to resort, with the co-operation of a health board or health boards, to supplementary payments to tide her over.
In common with all systems, I am sure there will be some snags in the new payments system. However, we must wait to discover them. The attitude will be to address whatever difficulties arise as under the old lone parents system. Under that system, 90 per cent of cases were dealt with satisfactorily in the shortest possible time. However, the remaining 10 per cent ran into difficulty for many reasons which were not the fault of the Department of Social Welfare or the applicant and these difficulties could militate against the quality of life and financial security of the applicant and his or her family. We must bear this aspect in mind. The new scheme proposed in the Bill is appreciably better than the previous system and this will prove to be the case when it is put into operation.
I ask the Minister to focus on those who apply for deserted wife's benefit today. It is not means tested because it is not based on stamps; they receive the benefit regardless of whether they go to work. Is the Minister saying that, under this section, a deserted woman who can work and retain the benefit today will be means tested for it next year? Will the deserted wife's benefit become an allowance despite the stamps she has paid? Will the section do away with her benefit?
The short answer is "no".
Will the Minister clarify the position? I am talking about a woman who is deserted and goes to work after 1 January 1997.
A means test exists at present.
Not for the benefit.
Yes, for the benefit also. It was introduced in the 1993 Act. I was a member of the Opposition at that time and I did not make enough capital from it then. It slipped by, although reference to it was made. Originally, deserted wife's benefit was not means tested, but provision for a means test was made in the 1993 Act.
There was a ceiling of £14,000 which is now being reduced.
The ceiling was £10,000 to £14,000. However, £12,000 is an increase on the £10,000 limit.
If it was the dirty dozen then, what should one call it now?
The danger is that somebody might examine the £10,000 to £14,000 limit at some stage in the future and decide to reduce it to £8,000 to £10,000. This would not be progressive and I am sure the Deputies would not favour it. This is why provision is being made for a £12,000 ceiling. This is a much more scientific identification of the situations in which people find themselves and a much more focused approach to the problem.
It will show up in one's means test if one has capital over £2,000
The regulations dealing with capital are also very benign. The committee should note the views of the Commission on Social Welfare in relation to the insurance-based deserted wife's benefit. The commission stated that, in the event of marital breakdown or desertion by her husband, a woman is likely to experience long-term income needs and the question arises as to the most appropriate way in which these needs should be met. The commission said that, while the case for income support may be clearcut, it is not clear that this support should be provided by an insurance scheme. The assessment of maintenance being paid in assessing eligibility for deserted wife's benefit dilutes the insurance concept. The commission continued that, while it was not convinced that desertion can be regarded as an insurable contingency, it recognised that any attempt to make alternative income maintenance provision must take account of the acquired rights and entitlements of those currently in receipt of deserted wife's benefit.
The proposal for the new one parent family payments not only addresses fully the issues raised by the commission in this area, but, in so doing, also provides for a comprehensive unified payment for all one parent families which contains significant incentives for parents to get back into the labour force. This is a crucial element of the Government's efforts. Under the previous lone parent's allowance system, a woman was penalised once she moved into the labour force. Consequently, her family was also penalised because the children were destined to remain dependent on the system for as long as they remained there. The mother was penalised if she moved into the workforce because her allowance was reduced commensurate with her income. As a result, many women were afraid to move into the labour force.
There is a host of files on my desk at present containing inquiries from women who want to know what the precise net consequences would be if they moved, as they wish to do, from lone parent's allowance into the workforce. This might be for a short time initially because if one is out of the workforce for a number of years, one may not have confidence. One may require training on a FÁS scheme or other education to get back into the workforce to ensure beneficial effects for oneself and one's family. This scheme is far better than anything which existed previously and I am sure lone parents, even after 1 January 1997, will agree this is the case.
Is it the case that a woman with a gross income of £13,000 at present, which is a net income of approximately £6,500 after tax and PRSI, and who is entitled to deserted wife's benefit today, will not be entitled to it if she is deserted after 1 January 1997? If she wants to work after 1 January 1997, is it the case that she will not be entitled to the benefit she receives at present? The circumstances will change for a woman who is entitled to work and to receive the benefit at present. She will lose this benefit once the section is enacted.
That is not the case.
I hope it is not the case. I am delighted that is not the position.
Under the current scheme, deserted wife's benefit is means tested. This test was introduced in 1993.
It is not entirely means tested.
A means test exists.
There is a ceiling on it.
There is a means test and there can be consequent reductions. If a woman's income exceeds that ceiling, there is a consequent reduction in her deserted wife's benefit. It is not as it was in the beginning. It is important to remember that many people are unaware of the changes which have taken place in relation to deserted wife's benefit because many women are under the ceiling. Nevertheless, the ceiling exists and the 8 per cent or 9 per cent of people whose incomes were over £12,000 knew about it and the consequent reduction in their benefit.
It is hoped in practice that a woman, if she goes back to work, will be in a position to build up her confidence again and establish herself as an integral part of the workforce and that she should then be in a position to progress and earn an income sufficient to maintain her and her family.
The danger of the old system is that a person claiming lone parent's allowance is caught in a poverty trap whereby they and their family are restricted to working within the eligibility guidelines for lone parent's allowance, otherwise they are immediately penalised for the income they earn. I have received inquiries from a number of people who have been receiving lone parent's allowance for four or five years and whose children are at school until 3 o'clock, allowing them to re-enter the workforce on a part-time basis. However, they are denied the opportunity to earn any appreciable income. A woman earning £13,000 would now qualify for a reduced personal rate of about £15 per week and any accompanying ancillary benefits.
What about the £12,000 ceiling?
The £12,000 has already overtaken it at that stage; that is its effect.
This time next year, despite the presence of the £12,000 ceiling, a woman earning £13,000 will still get——
No, it does not affect the present beneficiaries.
I am talking about the rules which will come into effect after 1 January 1997 — my question relates specifically to those women. The Minister of State said if they have an income of £13,000 they will receive £15 per week. Can that be correct, given the £12,000 limit in this section? Will she lose out?
No.
If her sister is in the same situation this time next year, she will not get that £15 per week because of the £12,000 ceiling.
She will qualify for only £15 at present.
In 1996.
That is right.
In 1997 she will qualify for nothing because of the £12,000 limit.
In 1997 her income will, as I said earlier, represent 85 per cent of the average industrial earnings. Any suggestion to the effect she will be in a worse position is inaccurate. The system is by far the more appropriate, progressive and attentive to the most vulnerable in society — those who have recourse to lone parent's allowance.
Will the Minister of State accept, on the basis of his own figures, that this woman who earns £13,000 gross, which is only £6,500 net, will get in 1996 a reduced personal rate of £15 per week in deserted wife's benefit; whereas under this scheme her sister who is in the same position will get nil in 1997?
No.
Will the Minister of State at least clarify this point?
A woman earning £13,000 would now qualify for a reduced personal rate of about £15 per week.
In 1996.
That is right. If she was receiving lone parent's allowance——
No, deserted wife's benefit.
Let us look at the positive side for a few minutes.
I am dealing with people——
If she was receiving lone parent's allowance she could earn a maximum of £24 per week, after which there could be a very serious reduction in her allowance. That is being addressed and there is a complete reversal to the effect that she can now earn £115 per week. There is a dramatic change from £24 to £115 per week in determining the means to assess eligibility for the new allowance. Only 8 per cent of the women involved are in the income bracket about which Deputy Wallace is worried. There is not a great deal of capital in pursuing that argument. It is far more beneficial to look at the huge improvement for the women who will benefit substantially from the change from £24 to £115 per week.
The Minister of State is ignoring my question.
I ask to be excused, Sir, as I have to discuss the Order of Business and fulfil other duties. I will leave you in the safe and capable hands of my senior colleague, the Minister for Social Welfare, Deputy De Rossa, who will, no doubt, reply at great length and with great enthusiasm.
Perhaps the Minister will be able to clarify this point. I am not talking about people who are receiving an allowance today but those who are in receipt of benefit. I am concerned that some of my constituents who are receiving a benefit would not obtain it next year if the same situation arose. There is an income limit of £12,000. If a woman receiving a gross amount of £13,000 — which is £6,500 net — applied for deserted wife's benefit today in 1996, she would receive approximately £15 per week, which is the personal rate. If she, or her sister, applied this time next year, there is no doubt that under this section she would not get that £15 per week. Am I reading the section right when I say that with the abolition of deserted wife's benefit and the ceiling of £12,000, such a client would not get the benefits next year which she would have got if she applied in 1996?
I understand the Minister of State, Deputy Durkan, dealt very adequately with the points raised by the Deputy and I listened to his responses for a while. Her question has been answered. It is clear when a new scheme is being introduced, such as the one parent family payment which will benefit thousands of men and women rearing children alone, changes in current practice will inevitably result in future changes in qualifications also. The primary matter to remember is that no one receiving or qualifying for deserted wife's benefit up to 31 December 1996 will lose a single penny. A new regime and new qualifying regulations will apply from 1 January.
These regulations provide many benefits, particularly for the vast majority of women currently receiving deserted wife's allowance who will be able to earn a higher level of income as a result of the changes we are making. As indicated by the Minister of State, Deputy Durkan, a small number of women who might have qualified for deserted wife's benefit, if it still existed as a scheme, will have a lower ceiling applied to their earnings.
There will be a very small proportion of women in such circumstances. It is in nobody's interest that lone parents should be trapped forever on social assistance or on schemes such as this. The purpose is to enable them to enter the workforce while they are caring for children by allowing them to retain a substantial portion of the support provided by the taxpayer. The scheme is good and progressive. It eliminates the concept of desertion and provides equality between men and women. A person who is rearing a child or children on their own on a income below a certain substantial level—£12,000 is a substantial income—is allowed to keep their one parent family payment. That is not an inconsiderable assistance to lone parents, regardless of whether they are people whose spouses have left the home, people who have separated or divorced or people who are unmarried. We will not apply a judgment as to the cause of their lone parenthood. We will simply acknowledge the fact that they are rearing children on their own and support them in entering the labour force while doing so.
It is a positive move and I hope Deputies will welcome it as such.
The Minister and the Minister of State have given me long and detailed replies and the Minister concluded by saying that this scheme is a positive move. It is not a positive move for the person on whose behalf I asked the question.
It is a hypothetical question.
It is not hypothetical because many women receive this payment as a benefit. A benefit is a right; it is not an allowance that is means tested. It is a right based on stamps paid. This right will be removed from this group of women with the passage of this section of the Bill. I cannot understand why neither the Minister nor the Minister of State will simply acknowledge this to be true. They should admit that these women will lose their benefit which is based on stamps paid.
I asked this question to clarify if I understood the section correctly. All I required was clarification. There is no point in offering a general overview of the section. I am concerned that the people who at present receive this benefit as a right based on stamps paid will, after 1 January 1997 and because of the change in the ceiling, no longer have the benefit as a right. I must assume that will be the situation.
The Deputy can assume as she wishes.
If the Minister fails to reply.
I have replied to the Deputy.
Can the Minister clarify that the change in the ceiling——
I have replied to the Deputy and I do not intend to sit here for the day repeating what I have said. I have replies specifically to the point the Deputy raises. If the Deputy had listened carefully to my reply she would have heard her point addressed.
The question of the payment being a benefit was addressed earlier by the Minister of State. He dealt with that question and outlined how the Commission on Social Welfare addressed it. The point the Deputy is raising has been addressed.
I asked a specific question and the Minister concluded his reply by saying the section is a positive step.
The Deputy's colleague, Deputy Walsh, who was listening closely, can confirm that I clearly replied to the question the Deputy raised. The Deputy might not have been listening carefully.
It was a clouded reply.
It was not clouded.
It is not a positive step and there is no point in the Minister concluding his reply by saying that it is. It is a negative move for people who paid stamps and were entitled to this benefit——
It is a hypothetical question.
From January 1997 the same applicant will not be entitled to the benefit. I disagree with the Minister in his description of it as a "positive step".
Next year any parent who, for whatever reason,——
The Minister is not answering my question.
——finds themselves rearing a child or children on their own and whose income is below £12,000 will receive support from the Department of Social Welfare. They will receive support regardless of their gender or the cause of their lone parenthood. That is a positive move. The section eliminates the need for a parent to prove that they were deserted by a spouse in order to qualify for the payment. If the Deputy cannot recognise that as a positive move, I do not know what the Deputy would recognise as a positive move.
The Minister must also recognise that it is a negative step — people who were formerly entitled to benefits will no longer be entitled to them after 1 January 1997. I will recognise anything in the Bill that is positive for lone parents. However, the Minister should also be willing to recognise and admit a negative step. This is a negative step for people who were entitled to benefits. We should be honest and admit that.