Select Committee on Social Affairs debate -
Thursday, 6 Jun 1996

Page 2

Estimates, 1996.

Vote 40: Social Welfare.

Chairman

I welcome the Minister for Social Welfare, Deputy De Rossa, and his officials. I look forward to an interesting and productive debate.

A suggested timetable for the meeting has been circulated to Members. This is a proposed timetable, the purpose of which is to ensure that all subheads receive proper consideration and that we have a focused debate on these issues. I see it as a general guide to the debate and I intend to be flexible in applying it. Provision has been made to meet until 5.30 p.m., although it has been indicated to me that some Members may wish to conclude at 4.30 p.m. I have no objection to that if Members insist, but that would mean that each Member would have to cut a few minutes from their contributions.

The Select Committee must consider the Revised Estimate for Social Welfare, Vote 40, for the year 1996. Our responsibility to consider Estimates relating to Social Welfare, Health, Education, Labour, Law, the Gaeltacht and Equality is delegated to us by Dáil Éireann in the interests of a comprehensive and worthwhile debate on Government expenditure proposals. It imposes a serious obligation on us which I am confident we will properly discharge.

The 1996 Estimate for Vote 40, Social Welfare, is £2,606,555,000 and it represents a 7 per cent increase in the previous year's figure. Our timetable suggests that we examine this sum under various subheads. I look forward to a constructive and informative debate.

Minister for Social Welfare (Proinsias De Rossa)

I am pleased to present the 1996 Estimates to the Select Committee on Social Affairs. The Estimate for my Department for 1996 amounts to £2,606,555,000. This is the figure which appears in the revised Estimates for Public Services and it takes account of the changes in overall public expenditure arising from the budget earlier this year.

The amount of more than £2.6 billion represents the sum provided by the Exchequer this year to fund social insurance and social assistance schemes and services. It also covers the cost of implementing the various improvements in social welfare announced in the budget, such as the increases in weekly rates of payments, the increases in the monthly rates of child benefit and the adjustments in PRSI rates for employers and employees. The sum also includes a special provision of £55 million for equal treatment arrears payments.

The main elements which make up the total Estimate for 1996 are social assistance payments which are funded totally by the Exchequer and which comprise the single biggest item of expenditure in the Estimates. They comprise a comprehensive range of means tested payments, including unemployment assistance, payments to pensioners, widows, lone parents, carers, people with disabilities and low paid workers with families, supplementary welfare, secondary benefits and child income support for all families. The total cost under this heading will be £2,396 million this year.

Social insurance benefits and pensions are paid from the social insurance fund which in turn is funded by PRSI contributions from employers, employees and the self-employed. The Exchequer makes good the deficit which arises each year between income received by way of PRSI contributions and social insurance benefits and pensions paid out. This payment to the social insurance fund amounts to almost £82 million this year. Payment to the social insurance fund to cover the costs of arrears to married women arising from the provisions of equal treatment legislation will amount to a further £55 million this year.

Administration costs for my Department's schemes and services, as covered by the administrative budget agreement, will amount to almost £135 million this year. Receipts into the Social Welfare Vote as appropriations-in-aid, which show up as a credit figure on the balance sheet, amount to over £61 million this year. Overall, the net figure comes to a total of £2,607 million which is the amount of the Estimate before the committee.

As members are aware, the amount of the 1996 Estimate does not represent the full extent of social welfare spending in Ireland. Total spending this year will, it is estimated, amount to a total of £4.35 billion, including the £55 million being provided to cover the cost of further equal treatment payments. Of the total spend of £4.35 billion, the Exchequer will contribute some £2.65 billion and the balance of £1.7 billion will be met mainly by employers, employees and the self-employed by way of PRSI contributions.

To put these figures in perspective, we spend almost £11.8 million each and every day of the year on social welfare. Some 900,000 people receive a weekly payment and over 1.5 million people benefit from those payments when adult and child dependants are taken into account. A sum of £3 million a day is spent on payments to elderly and retired people; another £3 million a day is spent in payments to unemployed people; £3.8 million a day goes on family income support, including child benefit and payments to widows, widowers, lone parents, carers and low paid workers with families in addition to other miscellaneous allowances and £1.5 million a day goes to the sick and disabled. The balance, amounting to around 5 per cent of total expenditure, covers administration expenses.

These figures demonstrate the comprehensive nature of the coverage provided by my Department to the wide range of people in need of our services. They also dispel forcibly the myth perpetuated by certain media interests that the Department of Social Welfare is focused exclusively on unemployed people. The figures themselves show that, in broad terms, one-third of our spending goes on the elderly, one-third on supporting families and one third on unemployed people.

When I appeared before the committee last year for the first time as Minister for Social Welfare I spoke about the fundamentally new approach which we adopted in framing the social welfare aspects of the 1995 budget. We set out to ensure that resources were directed at those in greatest need. The key words were "targeted" and "focused" as we deliberately moved away from the previous scatter gun approach which sought to appease all interests but failed, by and large, to satisfy anyone, most notably those at greatest risk of poverty. The clearest example of this fresh new approach was the decision to mount a direct assault on poverty through an unprecedented increase in child benefit payments, a £7 increase per month per child at a cost of over £100 million in a full year.

In this year's budget, we have continued the reforming approach adopted in 1995. Two main objectives underlay the budget measures. First, we set out to consolidate the gains achieved in 1995 by again providing for substantial increases in child benefit and by providing for increases in general social welfare payments in excess of the projected rate of inflation. Second, the budget contained a range of measures designed to tackle the greatest problem facing Irish society today, long-term unemployment.

The Government is aware this problem cannot be solved overnight, but the measures contained in the budget represented a cohesive and imaginative first step towards its resolution. They also represented the Government's determination that all citizens should share in the benefits of a successful economy and that these benefits should not be confined to those fortunate enough to be in secure, well paid employment.

In relation to social welfare reform, I draw the committee's attention to a number of notable measures which will help, in particular, to ease the transition from unemployment to active participation in the labour market. Substantial concessions have been introduced in relation to PRSI contributions for employees and employers. The employee's PRSI free allowance has been increased substantially from £50 to £80 a week. Thus, employees on full rate PRSI will not have to pay any contribution until their weekly earnings exceed £80. The ceiling for their contributions is only being increased by £15 a week.

Changes have also been introduced for the self-employed and "modified" contributors who will not now pay anything on the first £20 a week of their earnings. In addition, the minimum annual contribution payable by the self-employed has been reduced from £230 to £215. The employer's PRSI rates have been lowered from 9 per cent to 8.5 per cent in the case of the lower rate and from 12.2 per cent to 12 per cent in the higher rate. The ceiling increase from £25,800 to £26,800 is modest.

The total full year cost of these PRSI reforms amounts to almost £121 million and represents a fundamental strategic shift in the structure of employee PRSI. It demonstrates in the clearest possible way the Government's desire to encourage the creation of new jobs and to reward the enterprise of the employers and employees who are producing wealth and contributing to the State finances. I will return to the issue of PRSI generally later.

The 1996 budget also provided for the elimination from the social welfare system of a number of disincentives to taking up employment and these have now been given legal effect in the Social Welfare Act, 1996. Payment of child dependant allowances, which previously would have been lost immediately an unemployed parent took up employment, will now continue to be paid for a period of 13 weeks to people who have been unemployed for 12 months or more if they take up work which is expected to last for at least four weeks. This will provide an important level of support in the critical early months of employment. The income thresholds governing entitlement to family income supplement are being increased by £10 a week at each point. The effect will be that most recipients will gain an extra £6 a week. Further changes to FIS will make the scheme more accessible and responsive to the needs of those who avail of it.

The Social Welfare Act, 1996, introduces a crucial change to the arrangements governing the payment of unemployment assistance. A most undesirable side effect of the existing, extremely complex arrangements is that people who have the opportunity to do some part-time or casual work can find they are barely any better off as a result. This situation has been crying out to be rectified and I am pleased to have been able to do so. The new simplified arrangements will ensure people will now be able to avail of such opportunities secure in the knowledge they will be significantly better off as a result.

Allied to the reforms I described, further measures are being introduced, primarily under the direction of my colleague, the Minister for Enterprise and Employment, which focus specifically on the needs of the long-term unemployed. These include a refocusing and extension of the community employment programme, the introduction of an £80 a week recruitment subsidy payable to employers in respect of new employees who have been unemployed for three years or more and the introduction of a new scheme of work trials which will aim to place 5,000 job seekers, who have been unemployed for at least six months, with employers who have prospective vacancies or who are in a position to offer worthwhile work experience. Members will have seen notices in all the newspapers recently advertising the availability of these new arrangements and encouraging workers and employers to avail of them.

In my Department, the back to work allowance, which has already proved successful in encouraging long-term unemployed people and lone parents to return to employment, is being further extended with an increase in the number of participants from 10,000 to 15,000 in 1996. Additional funding is also being provided to assist participants engaging in self-employment ventures with business advice, technical advice and training.

The Government, through the initiation of this wide ranging package of measures, is demonstrating its willingness to provide the opportunities and rewards for employers to create new jobs and to provide real opportunities for the long-term unemployed, in particular, to participate in the labour force.

The 1996 Estimate shows very clearly how large and complex the social welfare system is today. It is a system which has evolved and developed over a long period of years and, by and large, it has served the country very well. There is unquestionably, however, a need to reform and streamline the social welfare system to enable it to interact more effectively with other services, such as health and employment. While this level of reform is necessarily an incremental process, substantial progress has already been made through the social welfare legislation enacted over the past two years. In the context of the wider reform of the social welfare system, I would like to briefly draw the committee's attention to some of the other ongoing initiatives in the social welfare area which are not explicitly referred to in the Estimate before us today but which are nonetheless crucial to the work of my Department.

The Government has committed itself to the development of a major national anti-poverty strategy. A high level interdepartmental committee is now working on drawing up the strategy in consultation with, and including participation by, those affected by poverty. This is the first time an Irish Government has committed itself to set out an across the board national strategy designed to address all aspects of poverty and disadvantage.

Last year I announced the establishment of the Commission on the Family which is examining the needs and priorities of families today and which will recommend how they can be strengthened and supported for the future. The commission will make an interim report to me and to the Government later this year and will produce a final report by June 1997.

The work of the Expert Group on the Integration of the Tax and Social Welfare Systems is now being finalised and I will be seeking Government approval for the publication of their report in the next few weeks. This report will provide invaluable guidance on the steps required to restructure the taxation and social welfare systems. I should mention that the group made a number of valuable recommendations prior to the 1996 budget and several of these were adopted by Government and legislated for in the Social Welfare Act, 1996.

The ESRI has been commissioned to review the minimum adequate income rates that were recommended by the Commission on Social Welfare in 1986 and I expect to receive their report in the next few months.

My Department is also preparing a discussion document on social insurance and the PRSI system which will be published shortly and which will provide a good focus for an informed debate on this critical element of the social welfare system. The number of people contributing to and benefiting from the social insurance contribution and payment system serves to emphasise the significance of the system in Irish life today. More than 1.3 million employees make social insurance contributions each year. Some 135,000 employers and a similar number of self-employed also make social insurance contributions each year; and pensions and benefits are paid out to more than 400,000 individuals and families each week.

The Government is committed to the maintenance and development of the social insurance system. It represents a valuable long-term social contract between employers, employees, the self-employed and the Government. By the same token, it is not a static system and it is appropriate that its future development should be considered now. The discussion document will provide a useful framework for that debate and I would urge all members of the committee and the two Houses to study it closely when it is published and make their views known. I would be happy to come before the committee when we have published that document if the committee wishes to discuss it with me.

The continuing development and reform of our social welfare system provides us with the challenge of meeting the many competing demands of an increasingly diverse Irish society. It is vital that the limited resources available to us are put to the best possible use in the interests of all those who are reliant to a greater or lesser extent on the social welfare system.

I am satisfied that we have achieved an appropriate distribution of the funding available in 1996 and, therefore, commend this Estimate to the committee.

Mr. J. Walsh

I welcome the Minister and his officials here for this debate and to answer questions in relation to the Estimate. We have discussed social welfare in the budget and the Social Welfare Bill already this year.

The social welfare system is a comprehensive one and has been built up over the years. We have reached the stage where a sizeable portion of Exchequer spending goes on social welfare — in excess of £4 billion per annum or almost £12 million per day. In the Irish context that is a considerable payment and involves a range of schemes to ensure the less well off and those people most in need are given the greatest assistance.

In the Estimate for this year I had hoped greater initiatives and innovation would have taken place in a number of areas, in particular, following last year's general increase of 2.5 per cent, an increase of 3 per cent this year was totally inadequate having regard to the cost of living and the low payment which people in a range of schemes are availing of. Also, I hoped that, at this point, a number of reports which we were promised over the last year would have been available to us. They are imminent, particularly, the ESRI report which we have been promised for some time and was a key part of the Programme for Government. However, that still has not been published. We are still awaiting the report of the expert group on the tax and social welfare systems. It is very desirable that they should be concluded and made available so that we can debate and discuss them and then proceed to take decisions.

It is vital and important that we, as a society, look after and ensure that the elderly be given every support; we should look after our elderly better because we have a very good economy and tremendous growth rate. All the indicators are right; net transfers from Europe are outstanding. In that context we could be doing something more for the elderly. A task force earlier this year reported very quickly — January — but it was only last week that the implementation of the recommendations of that task force were advertised. There was no need for half the year to pass without the recommendations being implemented because people living alone and elderly people are being assaulted and we owe it to them to do everything we can to help them. I hoped this year's Estimate would have had something additional for elderly people in institutions; we all know of people living in county homes and institutions. The pittance they get as a weekly allowance is one other area where we should seek to help them.

I have raised an anomaly here in relation to the taxation of the few pounds which elderly people put aside for a decent burial and to look after their funeral expenses. I am still waiting for something to be done about the notional rate of interest of 10 per cent. Laterally, for some claimants, that has been increased to 15 per cent and that is not in accordance with reality and the interest earned on various accounts.

I am also disappointed that the question of those self-employed who have made PRSI payments has not been addressed and tackled. We are not talking about a small number of people; we are talking about 50,000 people who have made PRSI contributions since 1988 and are left high and dry. All appeals for pro rata payments or an acceptance that they have made their contributions in good faith have fallen on deaf ears.

These are my initial comments. I look forward to clarification and perhaps elaboration on some of these issues in the detailed examination of the Estimates. Social welfare is well developed in Ireland and there is substantial Exchequer funding of £2.7 billion. On the tenth anniversary of the Commission on Social Welfare, it is time to take a fresh overall look at social welfare to see how it integrates with the taxation system and employment measures. To eliminate poverty everybody accepts more people must get work and come off the dole, and I do not think enough is being done to address that matter.

Ms Keogh

I, too, welcome the Minister for Social Welfare, Deputy De Rossa, and his officials to the meeting. I must apologise that the Progressive Democrats spokesperson on Social Welfare, Deputy Clohessy, cannot attend as he is unwell. I am substituting for him at rather short notice so I may not be able to stay as long as I would wish. I hope the Minister will accept my apologies and understand my predicament.

Social welfare is the largest single component of Government spending and it is right at the time of the Estimates to state again how important it is that we have a comprehensive system which will support people, particularly the most vulnerable. That is part and parcel of civilised society. I note that the total expenditure on social welfare in the current year is budgeted at nearly £4.4 billion, 36 per cent of current State spending on supply services, and is rising rapidly. Since 1992, it has grown by £830 million, an increase of nearly 25 per cent or almost three times the rate of inflation over the same period.

Unemployment is Ireland's single biggest problem and unemployment compensation is the largest item in the social welfare budget. If you take unemployment benefit, unemployment assistance and pre-retirement allowances, the total cost to the Exchequer in 1996 of compensating people who do not have a job will amount to more than £1,070 million, a staggering figure for this small country by any standards. To look at it another way, if unemployment compensation had an Exchequer Vote of its own, it would be the third largest area of public spending after health and education.

That, of course, underestimates the real cost of unemployment to the State. In its final report, the Government's task force on long-term unemployment assessed the total lost to the Exchequer resulting from unemployment. Taking account of unemployment compensation paid out and income tax forgone, the task force came up with a figure of £10,200 per person per year. Given that the total number of people out of work is closer to 350,000 than the official live register figure of 280,000, the annual cost of unemployment to the Exchequer is of the order of £3.5 billion or nearly £7 million per week. That, of course, is only in money terms and is in addition to the social misery and deprivation caused by long-term unemployment, factors to which it is impossible to attach an accurate financial cost.

The Exchequer cost of funding unemployment highlights the huge dividend which could accrue to this country from solving the problem of joblessness. At a rough calculation, each reduction of 10,000 in the live register translates into a saving to the Exchequer of about £40 million. Consider what might happen if Ireland emulated the performance of the New Zealand economy which has created jobs at a phenomenal rate. Over the last three years, the total number of people at work there increased by 180,000. Almost 80 per cent of these new jobs were full-time positions. It is a particular bugbear of mine that many new employment prospects in Ireland are in part-time low paid areas and I fear for the future, particularly for Ireland's young people. The New Zealand situation contrasts with Ireland's, where, despite a much faster economic growth rate and the availability of billions of pounds in EU funding, half of all the new jobs being created are either part-time positions or places on Government schemes. Because they are creating real and sustainable jobs, the New Zealanders manage to translate increased employment into reduced unemployment, something which Ireland has signally failed to do. New Zealand's level of unemployment has fallen by 50,000 over the last three years and if we could achieve a reduction in unemployment of that scale, the saving to the Exchequer in terms of reduced dole payments would be of the order of £200 million. Taking account of the increased tax take once unemployed people move into paid jobs, the total gain to the Exchequer could be as much as £500 million. This would be sufficient to cut the basic rate of income tax from 27 to 20 per cent or, if that is not your fancy, to double the amount of money the State spends on the fight against crime every year.

Sadly, we are unlikely to see any reduction in unemployment of this scale in Ireland, not if we persevere with our present misguided policies. As the Minister knows, the Progressive Democrats have used every opportunity available to highlight the link between high taxation and high unemployment. Now one of the Government's development agencies, Forfás, has also espoused this line of thinking. Its report entitled Shaping our Future states on page 39 that further reductions in personal income tax are needed to promote enterprise and the incentive to work. That same message has been delivered to the Government by the EU. In a report on the Irish economy published earlier this week, the EU called for the reform of the Irish taxation and social welfare systems to stimulate the creation of new jobs. With all this advice from internal and external sources and with trades unions and business groups also calling for tax reform, we might expect the issue to be at the top of the political agenda.

I do not believe this is the case. The January budget was this Government's most recent opportunity to do something in this area and I do not believe the Minister for Finance, Deputy Quinn, made much of a fist of it. A single worker on £300 gained an extra £1.71 in take home pay, which is not even enough to be a pint of stout these days, not that I buy many pints stout.

The State imposes a heavy tax burden on relatively modest incomes. That was highlighted by the recent closure of Packard Electric, where it was costing the company up to £230 per week to give each worker £160 per week in take home pay. In other words, between income tax, the health levy, the training and employment levy and employee's and employer's PRSI, the State was taxing each Packard Electric job at a rate of nearly £70 per week.

If we are serious in our efforts to tackle unemployment, the Progressive Democrats believe the State must change our personal tax regime. Radical action on the tax front is needed. Firms must be encouraged to create jobs and people must be encouraged to take up such jobs, but this will require reductions in both personal taxation and employers' PRSI.

This Administration has been slow to accept the link between taxation and unemployment, and I want to hear more from the Minister on the issue of tax reform. The committee needs to know the Government's response to the Forfás report. Are the three Government parties agreed on the need for tax reform? Will people see a reduction in the burden of personal taxation in the next budget or are the ideological tensions on the issue between the Coalition partners too strong for that?

I take this opportunity to speak about the administrative structures of the Department of Social Welfare. It is the second largest unit in the Civil Service — the first is the Revenue Commissioners — with 4,400 employees. Several years ago there was a proposal to separate the Department's administrative functions from its policy functions and to create a social welfare services office. The idea was that the basic function of processing claims and payments could be devolved to an executive agency under a director general which would be able to achieve greater levels of efficiency, effectiveness and customer service than could be attained through the Department. Even today the Book of Estimates shows that the Department's staffing structure is divided between the Minister's policy making secretariat and social welfare services. However, these offices were never set up. I would like to know if there are any plans to revise the proposal and to create an executive agency which would absorb 90 per cent of the Department's staff.

A recent report which proposed the creation of an executive agency to manage the courts service received a broad welcome. The Minister for Justice is committed to introducing legislation to set up such an agency. If it makes sense to establish an executive agency for the courts service with 800 employees and an annual budget of £27 million, surely it makes even more sense to set up such an agency for social welfare services which has an annual budget of almost £4.4 billion.

Last month the Government launched a major report on Civil Service reform. That document, Delivering Better Government, made specific reference to the need for executive agencies. The co-ordinating group of departmental secretaries, which drew up the report, said: “The group recommend that provision be made in the general legislative framework to permit the delegation of certain tasks to executive agencies or other appropriate bodies, each case to be considered on its merits”. I agree with that recommendation. Other countries which have gone through the process of public service reform have made extensive use of executive agencies as a means of improving efficiency.

The outline structure of an executive agency already exists in the Department of Social Welfare. Is it not time to pass the legislation necessary to establish the social welfare services office as an independent administrative entity? Improving the efficiency of the overall system would benefit taxpayers, social welfare claimants and the people who work in the social welfare service. I ask the Minister to consider such an initiative. I welcome the other initiatives he mentioned.

Chairman

We now come to the general question and answer session on Vote 40. The first group of subheads is A1 to A9 -administration.

Mr. N. Ahern

What is happening in social welfare offices throughout the country? A lovely office was built in Finglas some years ago. Is that building fully occupied or are people being moved into regional offices? Is the Department continuing to build such offices? Some people complained that they had to queue for a long time outside post offices to get their money. I presume the staff are doing good work behind the closed doors of those social welfare offices.

Mr. J. Walsh

Are we taking subheads A1 to A9 together?

Chairman

Yes. Members may ask questions on those subheads in any order they like once they stay within subheads A1 to A9. I hope Members do not ask questions on every subhead.

Proinsias De Rossa

We are continuing to build offices. Next year the Department will celebrate the 50th anniversary of its establishment. As Members can imagine, many offices are no longer adequate to deliver the Department's services. We are spending approximately £2 million a year to provide new offices. Any Deputy who is interested should visit the Tallaght office, which is the most recent development and houses a range of services including the Department's own services, FÁS, the health board, community welfare offices, etc. It is almost a one-stop-shop.

There were circumstances where offices were planned but then there was a change of direction in the Department. One will find an occasional office which was built in the past six or seven years and was caught in the changeover of moving payments to post offices. The Finglas office is one such example. The decision to build it was made, the plans were drawn up and then its construction was delayed for various reasons. When the agreement to build was finally given, the service had changed. The Department fully uses the building. It no longer uses the public area where people came in every week, signed on and collected their money. We now have monthly signings and money can be collected at the post office or it can be sent out in the post.

There is an increased range of services available in our local offices. We have located job facilitators and inspectors in these offices. We also have a greater range of information services. In addition, some of our Dublin regional services are located in the Finglas office. It was vandalised recently and all the windows were smashed because there were plenty of missiles around from the building work on the new road which connects with the new motorway. As soon as the construction work is completed on that road, we will replace the windows. There is little point replacing them at present because they will probably be smashed again in a few days' time.

The gardaí in Finglas have been interested for some time in acquiring new premises because they work in cramped conditions. They wanted to discuss if the social welfare office was available for that purpose. I arranged for officials from my Department to meet Mr. George Maybury of the Garda Sergeants and Inspectors Association to discuss this matter with him. We have now satisfied the gardaí in the area that the building is fully used. It would not be adequate for their purposes and the existing Garda station would be grossly inadequate for our staff. A straight swap is not an option. They have agreed that they have to pursue other avenues to acquire accommodation in the area.

Mr. J. Walsh

Overall there is a substantial administration cost; the total this year is £24.7 million. Has the Minister taken into account a recent report of the Comptroller and Auditor General on means testing which is a considerable cost in the administrative apparatus? The report pointed out that there are about nine different means tests between health and social welfare, as well as different assistance and allowances schemes.

Under subhead A.1 — Salaries, Wages and Allowances — there is a hefty increase — from 32 to 45 — in the number of people employed in the Minister's office and secretariat. Can the Minister elaborate on the need for those 13 additional people?

In addition, there has been a reduction of personnel — from 50 to 46 — in the social welfare appeals office. Various lobby groups have contacted me to complain about the length of time it takes to have appeals deliberated on and the difficulty of getting oral hearings. Reducing the number of people dealing with social welfare appeals does not fit in with the increase of staff in the Minister's own office.

On the short-term programmes, there seems to be an increase of 76 — from 752 to 828. Can we have an explanation for that?

There has been a reduction of 14 people in regional structure. Dole offices are being closed in many areas, including Castletownbere in my own constituency. Has this reduction in the regional structure anything to do with the closure of those offices?

As regards incidental expenses, under subhead A.3.4 — Recoupment to Health Boards for expenses incurred on project to integrate short term schemes — it seems there has been a doubling of expenditure from £574,000 to a 1996 estimate of £1,140,000. Perhaps we can get some clarification on that.

I now want to deal with subhead 8 — payments for Agency Services. Payments to An Post in respect of encashment of social assistance pensions and allowances seem to have gone up from £19,582,000 to £21,136,000. As regards security for the elderly, is there an increase in the amount of payments being made directly through the electronic system? In the interests of security that should be encouraged. Is the use of the electronic payments system being increased?

To return to subhead A.2, I note that in the brief it says the subhead provides for the cost of travel and subsistence for civil servants of the Department, mainly investigation staff and those engaged in control and anti-fraud activities. I received a reply from the Department of Social Welfare earlier this year saying that the amount of fraud detected last year totalled £10 million. Have we succeeded in reducing that amount of fraud because £10 million is a considerable amount of money?

Proinsias De Rossa

We are conscious of the range of means tests in the Department. These means tests emerged as new schemes were created. It would be easier from a departmental point of view if we had a single means test but when introducing changes in means testing one has to ensure that nobody loses out as a result. In cost terms, it is not straightforward to eliminate all of them but the numbers have been reduced.

In relation to the Comptroller and Auditor General's report on the matter, my recollection is that the bulk of costs for means testing arise outside the Department of Social Welfare. I do not have the specific figures here but I recollect that the overall costs were estimated at around £15 million while the costs attributable to the Department of Social Welfare for means testing were about £5 million. Given that we administer funds to the tune of £2.3 billion in means tested payments, that is not a very high cost to ensure those who need the support get it and those who do not need it do not.

The intention is to reduce the numbers of means tests a person must undergo. We are due to receive a report shortly from the integrated social services group, an interdepartmental group which has been sitting for the last number of years to examine the question of how we can better integrate the social services and that will include an examination of means tests. A report from that group is due within a few months; I cannot be more precise than that. In short, the question of means testing is being actively examined and it is hoped we can make progress in reducing the numbers of means tests people have to pass through.

In relation to the increase in staff numbers in the ministerial office, the 1995 figure of 32 is a figure for 1 January 1995. I came into office around that time — in later December/early January. That increase relates in the first instance to the fact that, late in 1995, I appointed a research unit of five staff. In addition, as the leader of a party, I am entitled to a political adviser and all Ministers have a programme manager. The numbers also include staff for the Minister of State. That accounts for the numbers to which the Deputy referred. The staff I have are working very well and have made it possible for me to carry out the fairly major programme of reform which I have undertaken since coming into the Department of Social Welfare.

In 1995 the average time for dealing with appeals was about 14 weeks. This compares favourably with similar agencies in other countries. Bearing in mind that the appeals office is independent of the Department of Social Welfare, we do everything we can to ensure that appeals are carried out expeditiously. In any event we must ensure that the decisions are good. By and large, the appeals office is working well.

The EFT was also raised by the Deputy. Some 86,000 payments are made out of a total of 1.3 million, which is about 6 per cent. Some child benefits are paid through this system as are some types of pensions. There has been an increase of 22 per cent over the 1995 figure. It is picking up slowly but not everybody is happy to have their money disappear into a bank account and never actually feel the notes in their hands. They prefer to go to the post office and collect their money. For a variety of reasons we would prefer if more people accepted payment through this system and we are encouraging it. However, we can only encourage it, we cannot force people to take it on.

I am not sure what point the Deputy was making with regard to regional structure. The regional structure has been in place for some time and is now working well, although it took a little time for it to get going effectively and efficiently. It has no bearing on what offices are opened or closed as it is there to bring services closer to the people. The question of whether offices are closed or extended depends on how our services are developing and the best way to deliver the service to our customers.

As I have explained on numerous occasions both to deputations and Deputies, my primary criterion for the opening or closing of offices is how to deliver the best service to those who are dependent on the Department of Social Welfare. I am not greatly interested in ensuring that the local pub or supermarket has a good or bad turnover. My concern is that the person can receive the payments to which they are entitled in the most efficient way on the day they are entitled to them. That is the basis on which I will continue to approach these matters.

Chairman

Will we move to the next set of subheads?

Mr. J. Walsh

Subhead A9 is not in the main revised Estimate but it is included in the brief. It relates to the EU Presidency and provides a sum of £300,000 for hosting and co-hosting a number of events. I would like a breakdown of that expenditure by the Department during the Presidency. What events are planned and in what locations will they be held?

Another item is the amount for overtime. Staff should be paid their salaries and the minimum amount of overtime should be paid to individuals. To what extent were individuals paid overtime and what was the maximum amount paid?

Proinsias De Rossa

With regard to the EU Presidency, the provision covers the cost of the Department of Social Welfare's involvement in Ireland's Presidency of the European Union. We will hold the Presidency from 1 July to 31 December and £300,000 has been allocated for hosting and co-hosting a number of events in Ireland and for travel by the Minister to other member states to discuss Ireland's Presidency work. I will outline the Department of Social Welfare Presidency related events which will be held in Ireland.

The European anti-poverty network conference will be held on 5 and 6 July. The provisional title of this conference is Putting Poverty on the Agenda of the Intergovernmental Conference. It will be located in Dublin Castle and will examine national and international policies to combat exclusion and particularly the role of the Intergovernmental Conference in advancing the work of NGOs in this area. I have been asked to formally open the conference on Friday, 5 July, and follow this with an address to the participants on our national anti-poverty strategy.

There will be an informal social affairs council on 10 and 11 July. It will be held in Dublin Castle. Ministers from all member states will attend as well as the EU Social Affairs Commissioner. This council meeting will address in a positive framework the relationship between social protection systems and employment and unemployment. We will also co-host a meeting with the European Commission and with the involvement of the Commission's network of experts on the implementation of equality directives. It will be held on 10 and 12 October. The aim is to provide a forum for discussion for key policy makers and national experts within the EU on a number of issues arising from the implementation of equal treatment in social security systems. Approximately 200 participants will be invited from the public, private and voluntary sectors across the European Union.

The Union's information system on social protection holds biannual meetings which rotate with the Presidency. It consists of representatives from the Ministry responsible for social protection in each of the member states plus a delegate from DG5 of the European Commission. This will be held in Cork from 17 to 20 October.

A conference on new directions in social welfare will be held. This conference is being co-hosted by the Department of Social Welfare and the European foundation for the improvement of living and working conditions. Approximately 80 to 100 participants will be invited and the aim is to support a debate at European level on the challenges facing the welfare state.

The £300,000 will be spent on those events. As I said earlier, it also covers the travel I will undertake to meet with my counterparts in other member states and to promote the Irish Presidency and our agenda with them.

With regard to overtime, the details of staff who worked overtime in 1995 and the numbers who received over £5,000 are as follows: two administrative officers worked overtime; 179 higher executive officers worked overtime and five of them received over £5,000; 451 executive officers worked overtime and 11 received over £5,000; one social welfare officer worked overtime and did not receive over £5,000; 428 staff officers worked overtime and 15 received over £5,000; 1,309 clerical officers worked overtime and 14 received over £5,000; 762 clerical assistants worked overtime and none received over £5,000; one key punch operator worked overtime and did not receive over £5,000; 25 paperkeepers worked overtime and none received over £5,000; one head services officer worked overtime and received over £5,000; 86 services officers worked over-time and 16 received over £5,000; 14 services attendants worked overtime, five full-time cleaners worked overtime, one personal assistant, one personal assistant to the Minister and one personal secretary to the Minister of State worked overtime and none received more than £5,000.

The total number who worked overtime was 3,267; the number of individuals who earned more than £5,000 for that overtime was 62.

Mr. J. Walsh

Even though £300,000 is a considerable amount of money for the Presidency, I understand its purpose. I welcome the fact that some of it will be spent in County Cork.

Proinsias De Rossa

I may have difficulty competing with the jazz festival.

Chairman

We will now deal with subheads B1 and B2 — Social Insurance.

Mr. J. Walsh

I am aware that there are contributions to the social insurance fund and there is a detailed breakdown on page 7 of the briefing document in this regard. Could the Minister explain the reason for the substantial increases in respect of invalidity pension, £10.6 million; retirement pension, £23.2 million and survivor's pension, £15.2 million?

Proinsias De Rossa

With regard to invalidity pension, the increase of £10.6 million is due to the cost of 1996 budget improvements, £3 million, the additional cost in 1996 of the 1995 budget improvements, £1.6 million, provision in 1996 for a net increase of 1,800 in the average number of pensioners, £7 million and once-off savings in 1995 from the transfer of recipients to EFT payment methods, £600,000. All this is partially offset by the payment in 1995 of a bonus equal to 70 per cent of one week's payment which has not been provided for in the 1995 Estimate of £2.4 million.

On survivor's pension, the increase of £15.2 million in 1996 over 1995 is due to the cost in the 1996 budget of improvements, £6.8 million, the additional cost in 1996 of the 1995 budget increase of £3.4 million —£10.2 million is accounted for by rate increases — and an increase of 2,600 in the average number of recipients which will cost approximately £9.6 million. This is partially offset by the payment in 1995 of a bonus equal to 70 per cent of one week's payment which has not been provided for in the 1996 Estimate of £4.6 million.

Deputies will be aware that, traditionally, Christmas bonus payments are never included in the Estimates or in budget figures. They are given towards the end of each year to certain categories of recipients. The figure for this is included in the Estimates for the following year. That is the reason for these increases.

Kathleen Lynch

With regard to survivor's pension, are there any plans to investigate the additional living expenses of people who have lost their partners? These people usually have developed a certain lifestyle, including sending their children to particular schools, around having an income which is not their own, otherwise they would not receive survivor's pension. Their lifestyle is built on the income provided by another person. When that person dies, their income is lost. I have received many complaints from widows and widowers who must maintain a lifestyle which was dependent upon a particular income. I believe the tax system must be addressed and there must be a recognition of their being obliged to maintain a certain lifestyle. Will investigations be made into this area?

It appears that the figures relating to the old widow's non-contributory pension are very small. I do not know if recipients have been transferred to survivor's pension or how we can account for the decrease in the figures to which I referred. This problem has not been tackled and has been neglected and ignored for the past 20 years. In light of the fact that inroads are being made into how we deal with children who, in many ways, are not responsible for their own security, we should begin to consider this area. Major improvements have been made to the area of lone parent's benefits, such as the provision of allowances for people returning to work or entering training schemes or educational courses. This does not seem to apply to women or men who lose a partner and find themselves in the same position as other groups, but are, in fact, greatly disadvantaged.

This section of society has been neglected for many years. It must be considered in great depth because these people experience different circumstances to other sectors of the community. The people to whom I refer may receive the same weekly payments as other social welfare recipients, but they cannot cater for their greater needs because of their circumstances.

Proinsias De Rossa

Everyone is sympathetic to people who have lost a spouse or partner and, because of this, the widow's pension scheme was one of the first introduced in the State. The tax system provides special allowances for widows and widowers. I am aware that the representative association for widows is unhappy with that provision, but it is better than that provided for people who are not widows who may be rearing children on their own. Not all widows or widowers are dependent on their late spouses or partners. In many cases they have independent incomes as members of the workforce. This is where the special tax arrangements come into play.

In terms of the Deputy's specific inquiry about whether any study is being undertaken in relation to this matter, I expect it is one of the topics that the Commission on the Family, which will be reporting to the Government by the middle of 1997, will examine. Clearly widows or widowers with children will come within the remit of the commission in terms of its examination of how the State supports families of various kinds. The commission is the forum at which that issue will be addressed. In the context of this budget, the changes and improvements being put in place in all other categories will apply to widows in the same way as they apply to other recipients.

Miss Flaherty

With regard to social insurance for the self-employed, what is the net situation in terms of contributions and outgoings? I take it that this remains a net gain to the Exchequer. What are the levels of claims? Has there been any serious discussion of the possibility of extending disability and invalidity benefit to this category? Where have public service contributions gone?

One of my pet issues — it has been sorted out to a large degree — is the extension of the taxation of benefit to people on disability benefit. There has been a big reduction in those numbers because a number of them have finally gone on to pensions. With all benefits being taxable now, there is no disincentive to go on to a pension in the long term. However, I have always been concerned about the small number of people who at Christmas time, depend on disability benefit and are excluded from the Christmas bonus scheme. Are they to be included in future years? Were they included last year? The number has gone down dramatically largely as a result of transfers to invalidity pensions.

Proinsias De Rossa

Compulsory insurance for the self-employed was introduced in 1988; it is based on one's income for the year of the contribution. Those in the system know that no pension accrues to them for ten years. The pensions based on these contributions will come into effect in 1998.

Miss Flaherty

Does the widows' entitlement not come into effect after five years?

Proinsias De Rossa

It is three years.

Miss Flaherty

What will be the take up rate?

Proinsias De Rossa

I do not know. In any event, there is obviously more money being contributed by the self-employed than there is being paid out. However, once the self-employed pensions begin to be paid out, more money will be going out than coming in. That is one of the false arguments I hear at the moment about the contributions made by the self-employed.

There is an underlying requirement in relation to social welfare pensions of a minimum of ten years' contributions. That applies across the board to all categories. People who argue that, because they paid contributions for five years before 1996 they should be paid a pro rata pension, are not facing the reality of the costs that would involve. I suspect that any self-employed person conducting their business on that basis would not stay in business for very long. The resources are not there to pay such pensions.

Various reviews are taking place at the moment based on the report of the Pensions Board on the future development of the social welfare pensions system. I hope to be in a position to bring forward some proposals in next year's Social Welfare Bill to make improvements in that area, particularly in the area of pro rata pensions. However, I have made it clear in the Dáil at all times in answer to questions on self-employed pensions that I will not be changing the underlying ten year requirement for contributions. It would be grossly unfair to everybody else who has spent a lifetime making contributions to breach that minimum requirement.

Miss Flaherty

Do we expect a large number to qualify in 1998? Clearly, they will have to have been in the workforce for that ten years and be of the relevant age. Presumably, there will not suddenly be huge numbers. What are the actuarial estimates of how long we will be benefiting from this contribution? Are we always going to be winners?

Proinsias De Rossa

If we start disaggregating the various sectors of society which make contributions to the social welfare pensions system and separate the self-employed, why not separate men from women or those who started under 30 years of age from those who were over 30 years when they started? If we start arguing about this issue on the basis of particular sectors making a particular contribution we will undermine the solidarity of the system where everybody makes a contribution and the minimum requirement is a ten year contribution. There is nowhere in the private sector where one could qualify for an old age pension after ten years' contributions. It is not available unless one wants to pay 60 or 70 per cent of one's annual income to an insurance company. There is a lot of special pleading going on in relation to the self-employed.

We have to bear in mind that the shape of the population is shifting to the point where, in the next 30 years or so, we will face a 100 per cent increase in social welfare pension payments. We have to look at how our social welfare system is going to adjust to cater for that and start planning for it now. If we start responding to every demand from every sector which feels it should get special treatment because it has started making contributions to the social welfare system in the last few years, we will head into very choppy waters.

Miss Flaherty

The Minister is being very sensitive. I have not made any——

Proinsias De Rossa

I am not being very sensitive.

Miss Flaherty

He is because of how he has taken a specific line of argument. I am interested in getting some information simply because it is my ambition to be in his place some day. I watched the process from the other side of the House when this was introduced by another Minister, and I am fascinated at how it is working its way through the system. The old age pension is valuable and will be of particular value for the first cohort who will receive it, one of whom will be my husband — actually, he will not be in the first cohort but he will not be too far behind, I am afraid to say.

I am interested in the expansion of the fund by the inclusion of a new group. We are discussing the inclusion of other groups, which was the second half of my question. It is not a simple matter to expand a fund by bringing in a new group. I am interested in how it will be provided for in the future. Will it become self-sustaining at some point or will it go into debt? I am only interested in getting some information; I am not arguing a case. I am interested in it, having watched its progress over many years, and I am not pursuing at the moment the other issues which have arisen.

Proinsias De Rossa

I regret if I took the point of the Deputy's question wrongly. Nevertheless, the points I made are valid. There are people who have been making contributions to the social welfare system for 40 and 50 years, and some of those who have been in the system for less than ten years are demanding a pension now. That does not stand up when looked at from the point of view of equity.

In relation to the question of whether the contributions are actuarially assessed, the answer is no. We are looking at the Pensions Board's report which makes various proposals to reform the pensions and contributions system and guarantee that those who spend most of their lives contributing to a pension will get it when they retire. This may require increased contributions and some obligation to buy into occupational pensions outside of the social welfare system. These are all policy issues which we will be presenting to the House in the course of the next year. We can then have a real debate on where our pensions system is going. At the moment, there is a particular element of the self-employed who are demanding payment for something for which they have not paid.

Miss Flaherty

What about the public service?

Proinsias De Rossa

The income from PRSI from new public servants as paid into the social welfare fund is estimated at £3 million in 1996.

Miss Flaherty

Can the Minister give me that figure for the self-employed? He has obviously got the figures desegregated in some form.

Proinsias De Rossa

The figures for the self-employed are available in relation to payment of pensions. I am not refusing to give the Deputy the figure of how much they paid in; that figure is £87 million from the self-employed. Against that we have income from employers and employees of £1.633 billion. We cannot base our policy in developing social welfare pensions on a group of people demanding pensions who have only recently come into the system.

Miss Flaherty

I am looking for information and I am interested in what number we anticipate qualifying in 1998. Will it be a small number — a couple of hundred, ten, 20?

Proinsias De Rossa

It will be hundreds.

Miss Flaherty

Not straightaway; it will grow.

Proinsias De Rossa

I will try to get that information for you. New entrants to the public service have paid full PRSI since 6 April 1995. That amounts to roughly £3 million this year.

Those on disability benefit for more than 12 months are not entitled to the Christmas bonus. This is because DB is regarded as a short-term benefit. If the recipient transfers to invalidity pension, they qualify for the Christmas bonus.

Miss Flaherty

They do not get it after 12 months?

Proinsias De Rossa

Those who are more than 12 months on DB are entitled to apply for invalidity pension. If they can show they are unlikely to be able to return to work, they can qualify for invalidity pension and the Christmas bonus. If they are on disability benefit they do not qualify because disability and unemployment benefit are classified as short-term benefits.

Miss Flaherty

I make my usual plea to reconsider this situation in the context of this year. The problem is that recipients can sometimes be in receipt of other incomes and benefits. There should be means of identifying those on DB alone. They are living on a very low income, probably having been affected by illness and need the benefit as much as, or more than, any other group.

Proinsias De Rossa

The Deputy's plea is not falling on deaf ears.

Mr. J. Walsh

Was £87 million the precise amount paid by the self-employed?

Proinsias De Rossa

Yes, income from the self-employed was £87 million.

Mr. J. Walsh

That is not an inconsiderable amount of money. The Ombudsman pointed out the inequity in one of his annual reports and suggested that a pro rata payment be made to those who have paid in £87 million and will gain nothing other than a refund of their contributions. This matter should be looked at again because there are 50,000 people involved. If they have had to make the payments, they should be entitled to consideration for a pro ratapension.

Proinsias De Rossa

This scheme was introduced in 1988 when Deputy Walsh's party was in Government. The terms that apply to it today are precisely the terms that applied when his party introduced the scheme. If it was right then, the circumstances have not changed to such an extent that they are wrong now. For anybody to qualify for a pension, they have to make a contribution. There has to be some kind of floor contribution.

Mr. J. Walsh

But £87 million is not a bad contribution.

Proinsias De Rossa

Everybody else in the system has to make a contribution for ten years or more. Why should we make it different for a particular category who only recently started to pay anything into the social welfare system?

Mr. J. Walsh

They have paid in £87 million and they are now entitled to something. Introducing the matter as a political argument does not stand up. The scheme was introduced at a particular time and we were promised some change. Having looked at these schemes over a period of seven or eight years, it would be worthwhile examining the inequity problem. The Ombudsman, who could hardly be accused of making a false argument, referred to this matter and the unfairness of it.

Proinsias De Rossa

I am not aware of the Ombudsman making any such recommendation but I will check it.

Mr. N. Ahern

I agree with the Minister on the issue of equity. The system is full of anomalies which are difficult to sort out because there are winners and losers. Whether people are self-employed, if they pay for five years they should get five-fortieths, and for 30 years maybe they should get thirty-fortieths. There is an argument that one should get a pro rata payment. That would be equity. I do not know how the system can be changed without establishing a new set of rules from today. If it is changed, the winners will clap the Minister on the back and the losers will scream.

Deputies mentioned the Christmas bonus. I may have raised this matter with the Minister at Question Time. I had a case during the year of a person in a nursing home who did not get his Christmas bonus — he was looking forward to it so that he could give his nephews and nieces a few pounds. The Christmas bonus is a fabulous scheme, but I wonder how much of it goes as a grant from the Minister's Department into the Department of Health or the health boards. In this particular case that is where it ended up — the Eastern Health Board home gave him an extra £5. He saw the Minister, Deputy De Rossa, giving him £62, £72, or whatever the sum was, which he wanted to divide between his nephews, he did not get it; He never got what he expected so he could not give out his little Christmas boxes. Maybe the people in nursing and county homes are only a fraction of those who do not get the bonus.

Proinsias De Rossa

I do not know how many there would be. We pay pensions and bonuses when they arise directly to the pensioner. If, however, the pensioner decides to sign over the pension to the nursing home in which they are staying in return for some pocket money, that is their decision and we cannot override it.

It may be that when the person made the arrangement with the nursing home they did not realise it included the bonus which is included in the payment we make. It is a matter for that person to contact the manager of the nursing home to sort out the matter. Strictly speaking, it is not our responsibility. If that person wishes to inform us the arrangement no longer stands we will pay the pension directly to them.

Mr. N. Ahern

I do not know how voluntary the arrangements are in nursing homes.

The Minister talked about the social welfare fund. Have the reductions in PRSI payments for the low paid over the past few years made much of a difference to the fund? Some people, especially those who wish to abolish it, consider PRSI as part of taxation. People who are on unemployment benefit or short-term disability benefit are collecting their payments from an insurance fund to which they have contributed. They would make a distinction between those on benefit and assistance in that they are getting back what they have paid. Have the reductions in payments had to be compensated for with top up payments? Will future Ministers have to explain at Cabinet that this is a fund from which people who have contributed may get payments and have to stress difference between benefit and allowance?

Proinsias De Rossa

How we fund our social welfare payments in the future is a key issue. A person who pays into the fund is entitled in law to payments to a certain amount for certain contingencies. In law the difference between the amount of money available from contributions and the amount of money which one is obliged to pay out is made up by the Exchequer. The amount for this year is estimated at over £80 million. In addition, £55 million is being paid for equality arrears. There is a requirement in law to make up the difference.

There has been a lot of pressure for a restructuring of the PRSI system, particularly from certain areas of industry and services. The Progressive Democrats spokesperson at the committee made an erroneous case in relation to Packard Electric, for example, that PRSI is a burden which the employer and the employee cannot afford. However, the reverse is the case.

The PRSI system provides redundancy cover for the employer -the Packard Electric workers will get redundancy payments which would otherwise have to be paid by the employer. Legislation would have be brought in to oblige employers to pay redundancy if the social welfare provision was not in place. Employers are also covered for sick benefit. In the Netherlands the law obliges each employer to take out insurance to provide a benefit scheme for employees who may become sick. There is a range of benefits which an employer derives from the PRSI contributions they make.

I will produce a discussion document on the social insurance system in the next month or so and I will be happy to attend the committee to discuss the issue further. The Government is committed to the defence of the social insurance system. The Progressive Democrats have proposed that the employer's contribution to social insurance, which amounts to in excess of £1 billion a year, should be abolished. If we were to do that we would have to cut the benefits or increase taxation. The effect of increasing taxation would be to increase the lower rate from 27 per cent to 33 per cent and the higher rate from 48 per cent to 52 per cent.

It would, in effect, be a huge shift of £1 billion from the employer to the employee which would be a totally unfair way to make provision for contingencies such as old age, sickness and bereavement.

Miss Flaherty

As an employer of one I consider all the changes made for lower paid employment are helpful. Would the Minister consider the provision of a ready reckoner similar to that provided by the Revenue Commissioners so that one could do one's sums more easily? I find nothing more difficult than calculating 12.2 per cent and 8.5 per cent on different amounts. One gets instructions from the Revenue Commissioners which simplify matters.

How much of the £55 million provided for equal treatment payments in 1996 has already been paid out? How much is left to be paid next year?

Proinsias De Rossa

A total of £198 million was paid in 1995 and the £55 million, which includes some provision for legal costs, will be the bulk of what remains to be paid. There may be a carry over of anything up to £6 million to £7 million for 1997. However, the bulk of the payments will be made towards the end of the year.

Miss Flaherty

Has none of it been paid out yet?

Proinsias De Rossa

It is estimated that £216 million in total will have been paid out, give or take a few million pounds. The bulk of the £198 million paid up to the end of last year was paid on account pending calculation of the actual entitlements. This £55 million will comprise the balance due based on calculations, some compensatory amounts arising from the ten year delay in payments and some transitional payments which were due from 1986 to 1992.

Mr. J. Walsh

Under subhead B1, when was the death grant last increased? A considerable degree of hardship is created for many people now because funeral expenses are quite high. I know the death grant is only a contribution towards the expenses but it should be increased in line with other payments. It has remained static for a considerable time.

Health and safety benefit also comes under subhead B1. Even though the figure there has quadrupled to £200,000, it is still a very small amount and is based on a "guesstimate". It seems to be a useful and beneficial scheme. Is there a record of how it is working? Why is such a small amount paid under it?

Chairman

I have to leave at this stage and I propose that Deputy Flaherty take the chair. Is that agreed? Agreed.

Mr. J. Walsh

I asked a question earlier under subhead A2 about the degree of fraud and what gives rise to the figure of £10 million. Under what schemes does fraud occur and what steps are being taken to avoid it? I cannot recall an answer to those questions.

Proinsias De Rossa

Deputy Flaherty asked about a ready reckoner. We send out details of the new PRSI rates to 135,000 employers before the start of the new tax year and we will look at the question of a ready reckoner. Since a large number of employers have computerised payroll systems the new rates are relatively easy to operate.

One of the issues which will be addressed in the discussion document is the degree of complexity resulting from the introduction of different rates. We have about 14 subcategories because of the different rates which apply in different circumstances and one then adds another 20 or more subcategories which relate to other levies, such as employment levies and health levies. While these levies have nothing in particular to do with PRSI, they are collected in the same way and using the same system. That area needs to be examined. It may be that for an employer, particularly one with a large number of employees, a reduction in the cost of PRSI may be eaten up by the complexity of the change and having to deal with so many subcategories.

The health and safety benefit was introduced in October 1994. As with most new schemes the numbers have not yet reached the expected levels. The 1996 Estimate provides for expenditure of £200,000 which would cover a weekly average of 60 cases at a value of £65. As of mid-May there are 23 people in receipt of the benefit.

The Estimate provides £1 million for death grants. The provisional outturn for 1995 was £930,000 so we are providing an increase of around £70,000. The 1996 Estimate assumes that 10,000 grants will be paid in the year at an average grant value of £99. Death grant rates were last increased in 1982, it is a long time ago. There have been many Ministers for Social Welfare since then.

Mr. J. Walsh

I understand that undertakers in Dublin charge between £1,200 and £1,500 for a funeral. In west Cork it would not be that amount but they have an old custom there of producing a bottle of whiskey in the graveyard.

Proinsias De Rossa

It would want to be a very special vintage to cost £99. The death grant is one of the benefits associated with paying PRSI.

Mr. N. Ahern

Under the current system if one is paying PRSI one gets £100, but if one is not paying it, one goes to the clinic and gets £500. There is no equity. I will leave that thought with the Minister.

Proinsias De Rossa

The person who gets the £99 benefit is not precluded from going to the clinic and indicating that they need assistance. The fact that one qualifies for a death grant on PRSI benefit does not preclude one from benefiting from the supplementary welfare allowance scheme.

Mr. Connor

There is another scheme which is not necessarily a death grant but is relevant at the time of a death. If a couple are in receipt of non-contributory old age pensions and one dies, the survivor receives the deceased spouse's pension for six weeks after the death. The money usually goes towards funeral expenses. However, if the couple are in receipt of a contributory pension that concession of a six week payment of the deceased spouse's pension is not made. That should be examined. I know there is a cost implication but it is an anomaly.

Proinsias De Rossa

We will certainly look into that. I do not know whether we can give the Deputy that information before we conclude.

Mr. Connor

The Minister may write to me.

Proinsias De Rossa

Deputy Walsh asked about fraud. The note I have here states that it is difficult to estimate the full value of the Department's control activities but a conservative estimate would put it in the region of 2.7 per cent of total expenditure, or £124 million, in 1995. The total saved since 1991 is £483 million. This effectively is the minimum level by which social welfare expenditure would increase if current control activity ceased, i.e. the minimum value of current control activity.

In addition, there are control measures at the take on stage of a claim which have a definite effect but are difficult to quantify. It is probable that not all post payment control measures have been quantified. This would relate to situations where overpayments would be made which are not fraudulent. Payments simply continue to be made when people have died and cheques continue to appear in their account. The surviving spouse, son or daughter, is asked to refund it and that is where the control exists.

Deputy Walsh referred to a figure of £10 million. I am not sure from where he has drawn the figure but I do not have the information he seeks at the moment. One can compare the numbers of claims made and paid by the Department and the amount of money involved. We pay out in the region of £4,000 million in a year. A fraud level of £10 million would be a tiny proportion of the total amount spent. I do not know if anyone can work out the mathematics but it would be a fraction of 1 per cent. I do not have the figures for fraud but that might give the Deputy an indication of the savings and the areas in which they occur. In 1995 savings in relation to unemployment amounted to £48 million, £25 million in relation to illness, £30 million in relation to pensions, £2.5 million in relation to child benefit, £2.5 million in relation to pre-retirement and FIS and £16 million in relation to PAYE and PRSI. The total amount saved was £124 million. More than £100 million is accounted for by unemployment, illness and pensions. I presume the same proportions would apply to fraud.

Mr. J. Walsh

On 23 January 1996 I received a letter which stated that so far in 1995, 10,123 cases of detected fraud had been recorded. Much of that resulted from overpayments. Fraud costing £10 million is still a considerable amount. What steps are being taken to reduce that?

Proinsias De Rossa

The control starts immediately a person makes a claim. Identity, circumstances, means, previous claim history and compliance with the conditions for receipt of social welfare payments are checked before any payment is made. In the case of customers coming on to the live register directly from employment, a check is made as to the circumstances in which the employment came to an end. Control is also maintained during the life of a claim and means tested payments are revived when there are indications that changes in circumstances have not been reported to the Department. Customers in receipt of unemployment payments are also examined on an ongoing basis to verify continued compliance with such requirements as being available for and genuinely seeking employment.

In addition to the need to implement controls in relation to its customers, the Department also recognises the requirement to ensure that employers comply with their PRSI obligations. Control in this area has the added benefit that as more and more employers become compliant, there is a greater risk of detection for claimants who work and concurrently claim social welfare benefits. That activity resulted in savings of £124 million to the Department in 1995.

Given the claim load, I would still argue that the figure to which the Deputy referred is minuscule. However, that is not to say we are not conscious of the fact that we must continue to use every means available to prevent fraud. It is not to our advantage to close our eyes to fraud because it means there is less money available for those who genuinely need it and who are entitled to it. As far as I am concerned, we are not soft on fraud.

Acting Chairman (Miss Flaherty)

As regards the fund for equal treatment payments, is money being taken from the insurance fund?

Proinsias De Rossa

It is paid largely through the insurance fund which is topped up by a transfer from the Exchequer. Moneys are largely paid on the basis of entitlements to benefits or pensions. In a small number of cases people may have been entitled to money under unemployment assistance which would not be a social fund payment. If, in any one year, there is a gap between the money in the account and the amount which must be paid, the Exchequer makes up the difference. We estimate the Exchequer will pay £55 million into the fund this year.

Acting Chairman

That does not specifically relate to equal treatment payments.

Proinsias De Rossa

It does. There is a gap of £80 million in relation to general claims.

Acting Chairman

The fund which was originally earmarked was paid into the Exchequer.

Proinsias De Rossa

Yes.

Mr. Connor

The amount available for the student summer jobs scheme has increased by £100,000 on the 1995 figure. This is the third year of the scheme's operation. Students who have now completed a two year certificate course in a regional technical college, for example, and who were eligible to participate in the student summer jobs scheme for that past two years, are now supposed to be eligible for unemployment assistance because they are deemed to have finished their course. However, many of them will go on to do a diploma or a degree course but find themselves debarred from the scheme because of section 123 of the Social Welfare (Consolidation) Act, 1993, which set up the scheme. While I appreciate the cost implication, 3,000 students have been refused participation in the scheme for a third year. They will continue to be students but this section states that they are eligible until they have completed their course. We all know a certificate course is the shortest a person can take at third level and that it usually leads to a diploma or degree. Thousands of students have found themselves in a bind this year. They are willing to participate and have found sponsors who will hire them. Obviously, the extra £100,000 which the Minister has to fund the scheme would have to be enhanced if we are to deal with all the students.

Mr. J. Walsh

As regards social assistance, a number of dependency terms are still being used like deserted wife's and prisoner's wife's allowance. I understood a number of these terms would be changed during the year. The physically and mentally handicapped are mentioned in the brief we received. Many parents find it offensive to have their children referred to as mentally handicapped. The term "disabled" should be used to a greater extent. It will probably be June or July before we know how we are bearing up in relation to the Estimate.

There is a tremendous variation between health boards and the amount of rent supplement they pay. The Western Health Board pays £100 per week, while the Eastern Health Board pays £50 per week. Is anything being done about that variation?

As regards subhead T — Appropriations-in-Aid — the amount of £360,000 under Receipts under "Liability to Maintain a Family" is very small. Is anything being done to find those who walk away from their responsibilities? I know a small number in the Department have sought to get a greater contribution from those people. Has anything been done in that regard?

Proinsias De Rossa

On the Estimates, the expenditure is broadly in line with expectations. PRSI inflows are very satisfactory but it is too early to predict the final outcome on the Vote, but matters are more or less on track.

On the question of liable relatives, the Department has been concentrating up to now on seeking to ensure that spouses who desert or separate are obliged to maintain their spouse where there is a requirement to do so. We have not been concentrating, for instance, on lone parents, the fathers of lone parents or the fathers of children born to lone parents up to now but we are anxious to have the system working well before extending it. The Deputy can rest assured that we will seek to ensure that this support is forthcoming.

Pursuing partners, spouses, fathers, etc., for support of this kind can also have a negative effect. In some cases, the pursuit of what might be a minor amount of support for a parent could result in the person, who is not willing to pay in the first place, leaving or going to a different part of the country and losing contact completely with his child or children. I am not particularly keen to push this system to the point where one effectively breaks up a family, although they may be living under different roofs. Common sense must be used in applying these rules and the Department is attempting to do that.

In 1991, receipts in relation to liable relatives legislation came to £422 and savings to £11,568; those figures rose to receipts of £355,000 and savings of £106,000 in 1995. The benefits of implementing this legislation has resulted in a gross savings and receipts figure of around £460,000. It is working but we need to be careful how we apply it.

We published a major report on the rent supplement system in January this year. I am not sure if Deputies received copies of it but it was an interesting report. Arising from it, the Department of the Environment and the Department of Social Welfare are looking at how we can bring housing subsidies into the ambit of local authorities. There are many anomalies in it. The supplementary welfare rent supplement system evolved out of an original intention to support people by way of income maintenance into a rent subsidy system and we are now paying out in excess of £60 million in this area.

I am not sure of the precise examples given by Deputy Walsh on the different health boards but they tend to relate their support to the rents applying in their area. In Dublin, depending on the part of the city or county one lives, they will apply different supports because rents vary from one district to another.

The student summer job scheme was introduced in 1993 to bridge the gap for those students deprived of unemployment assistance. This involved third level students continuing their education. We introduced a range of improvements last year to such an extent that the numbers participating increased from 9,000 to 16,000 students; it is clearly a popular scheme. We had an allocation of £6 million last year and we had to add £4 million to make up for the increased numbers. This year we received roughly the same amount we spent last year — around £10.2 million. We also had to introduce a number of changes to ensure the scheme was targeted at those for whom it was originally established. That meant refusing students who had an underlying right to unemployment assistance. regional technical college students, who may have studied two years, have effectively finished their courses. Although they may take on another years' course, etc., they have an underlying entitlement to unemployment assistance and that is why they have been refused.

Mr. Connor

That has a cost too.

Proinsias De Rossa

Of course.

Mr. Connor

It is a pity we could not deal with them under the summer jobs scheme for the duration of their studies. They are usually working and this often gives students a work discipline that they might not have experienced before.

Proinsias De Rossa

I have tried to be as flexible as I can on this scheme because it has done a lot of good work. However, I must ensure that those who need the money get it; that is the bottom line. For instance, I have varied the requirement where a person needed to be 18 years of age on 1 June to qualify. People who reach 18 years of age during the course of the scheme can now come under it.

On the basis of the current criteria, it looks as if we will spend all the money allocated in the scheme. To take on the people referred to by the Deputy, we would need more money from the Department of Finance and he knows how many chances there are of that happening.

Mr. Connor

Could the Minister make a case for it? From sources within his Department — I have inquired about it because I have received a number of representations — the Minister has turned away up to 3,000 students.

Proinsias De Rossa

Not all for that reason.

Mr. Connor

Students who undertook a four year degree course can continue in the summer jobs scheme until they have completed it. The shortest third level course is a certificate course in an regional technical college.

Proinsias De Rossa

The person in the four year course has no right to unemployment assistance. A person could then go on the summer jobs scheme, work for six weeks, get £600 and then go on to unemployment assistance. One would then be giving double help to one set of students.

Mr. Connor

There should be some sort of clawback if that was the case. Some 70 per cent of students on certificate courses go on to do at least a diploma course, which could take another year or maybe two. If they can prove to the Department that they have irrevocably signed up to continue their studies or do a further course, they should be considered for the summer jobs scheme.

Proinsias De Rossa

We will look into it.

Mr. Connor

Please do.

Mr. M. Brennan

Some young people have been rejected because both parents are working and their income is too high and they will not qualify for unemployment assistance because they are living at home. Their income might appear good, but other children may be away at school and the applicant is deprived of unemployment assistance and partaking in the summer jobs scheme. This aspect should be examined because they will not qualify for either and it may be difficult for them to find a job, particularly if they are living in a small town. This means the parents must continue to support them during the summer.

Last year, a girl who qualified to go UCG decided not to go and to take a course in north Connacht college. This year she applied for the summer jobs scheme but her application was rejected because the college she attended is not a recognised university. She intends to go to UCG this year; her parents decided she was too young last year and kept her at home. I have raised this case with the Department and there is probably a vacancy for her on the scheme which it may not be possible to fill.

Proinsias De Rossa

I appreciate individual difficulties arise but no scheme will ever meet everybody's requirements.

Mr. M. Brennan

I appreciate that.

Proinsias De Rossa

The only scheme which would meet everybody's requirements is if every student had a right to a place. However, this would involve expenditure in the region of £50 million or £60 million and that is unrealistic. If I had that amount, I would not put it into that scheme but into many other areas. This also covers the point about income. The criteria are that one does not qualify for unemployment assistance, one is attending third level and the household income is below a certain level. The means test is almost equivalent to the test for unemployment assistance. The people rejected on means would be rejected in any event if unemployment assistance was still available to them. They are not being discriminated against in that sense.

I understand absolutely rigid means assessments are not being applied by the Department. People are not ruled out because they are £1 or £2 out; it is not that tight. I do not know if the case to which the Deputy referred is the one brought to my attention which involved a household with a substantial income. I examined one case recently where both parents were in relatively well paid, secure and pensionable jobs. There could be no claim that there was poverty in the household. It would be unfair of me to displace somebody who qualifies on means to allow somebody from those circumstances on the scheme.

Rigid assessments are not being applied and not every case will be rejected. If Deputies bring particular cases to my attention, I will be more than happy to examine them. If there is space for flexibility, it will be applied. However, I cannot guarantee to pass them all.

Mr. Connor

The people I mentioned have an underlying entitlement to unemployment assistance. They will be a cost to the State because most of them will qualify for assistance. It is not just a question of trying to find funding to put 3,000 students on the summer jobs scheme who will lose the benefit for the first time this year. This is its third year of operation and this only happened this year.

Proinsias De Rossa

I appreciate the scheme is attractive. It has been made very attractive with £3 an hour, no tax and no insurance.

Mr. N. Ahern

They do some work.

Proinsias De Rossa

That is the point. In many cases they will work in an area which enhances their college studies, etc. It is a good scheme. I am the first to admit that, when I was in Opposition, I criticised it, but it is working well. If one looks at last year's statistics, thousands of students were given job certificates but they did not use them because they went away to work or they got other jobs.

Mr. Connor

The cost to the Department would have been much greater if they had used them.

Proinsias De Rossa

In terms of cost, the pragmatic reality is that I have £10 million to cover the scheme and the cost of the live register is paid automatically. If I could persuade the powers that be to add another £5 million to the students summer scheme——

Mr. Connor

The Minister did that last year when he got a further £4.5 million. He did well.

Proinsias De Rossa

I did well last year, but I will not do as well this year.

Mr. Connor

The same plea is being made to the Minister this year.

Mr. N. Ahern

It is a great scheme and I am glad the Minister agrees. The idea of getting people to work for their social assistance payments is great. Are there any plans to expand this idea in terms of overall social assistance or particular categories? If my son was unemployed and living at home, he would not receive social welfare because of my salary. Under the present rules, if one qualifies for £5 one receives £25. In such cases, young people move to a private flat, go on the dole and qualify for the rent allowance. This costs the State a fortune. Has the Minister any thoughts on designing a scheme for those under 25 years of age where people would be given the opportunity to do some work for social welfare payments? The Minister can answer this point in terms of applying such a move to everybody or targeting it at those under 25 years.

Proinsias De Rossa

Approximately 10,000 people between the ages of 18 and 25 years are in receipt of unemployment assistance. In the recent jobs scheme proposal, which developed from the budget, an option for young people aged between 18 and 20 years to take up training has been put in place. Under the system a person will be offered a place on a training scheme and if they refuse it for no good reason, the Department will be obliged to review their entitlements.

Mr. N. Ahern

What about people who have no entitlements, such as my son?

Proinsias De Rossa

Does the Deputy mean people who have no entitlements, who do not qualify for unemployment assistance?

Mr. N. Ahern

Yes; people such as Deputies' children. These people are costing the State a fortune because they leave home and get flats. They get a rent allowance and receive £62 social welfare a week. Would it not be better to offer them, say, £50 and get a bit of work out of them because they are all leaving home and they are costing the State a fortune?

Proinsias De Rossa

I have sons and I am afraid there is no way I can persuade them to stay at home. When they decide to go, they go. It is not a simple question of them entitled to x amount of money if they leave home. It may be so in a small number of cases but I would refer to the report on the supplementary rent allowance scheme. The popular myth is that the £60 million is largely going to young people who leave home because they get unemployment assistance and rent but when you look at the report you find that is not the case. A very tiny proportion of the rent allowance is going to people in those circumstances. The largest single proportion of the rent allowance goes to single male men over 25 and, in many cases, men who are separated from their spouse. It is that area that is being supported to a significant extent by the supplementary rent allowance system. The fact that a person has an entitlement to £5 or whatever and automatically gets £25 is intended to be an incentive for people to stay in the home. It works to some extent but decisions to leave home are more complex than whether you can get unemployment assistance.

Mr. N. Ahern

Yes, but it is a factor in some cases. When is the budgeting system where you can pay your local authority rent and ESB bill direct from your payments likely to be extended to other categories? It is there for those in receipt of unemployment benefit. When is it likely to go to lone parents? I had a case lately where a man and a woman were on unemployment assistance but were on separate payments. He got £70 or £80 and that was for the pub. She got £80 and had to do her budgeting, etc., so she ended up with £40 or £50 to live on. The budgeting system is voluntary, but where people are on separate payments could it not be laid down that when one agrees the other must also agree? This was a case where one separate payment was paying everything. You might ask why did she not boot him out, but that was never going to happen. Even if the other person did not agree the budgeting should be forced on them.

Proinsias De Rossa

I do not know if there is any way we could do that. The budgeting service is voluntary. It is a service provided by the Department for people who want to budget and it is available at the moment to the unemployed. It will be extended to lone parents towards the end of October. There have been some logistical complications on how you deduct money from books which has delayed it. The intention is to make it as available as widely as we can because it is working effectively. The local authorities, the ESB and the gas companies are very pleased it. There is no constitutional way we can deduct money for payment to someone else. We can deduct money where it is owed to us but we cannot deduct it for payment without the approval of the individual concerned. The person might be as well off looking at whether they are gaining their full entitlements from social welfare. It sounds like they should be on some other payment.

Mr. N. Ahern

Earlier in the year the Minister passed a Bill under which widows or widowers would retain their payment even if remarried. Is that correct?

Proinsias De Rossa

There is a misunderstanding there. The Social Welfare (No. 2) Bill, 1995, ensured that, where a person was widowed and divorced they would still have an entitlement to a widow's pension but if they remarried they would lose it.

Mr. N. Ahern

The Minister mentioned that there are sickness schemes in Holland——

Proinsias De Rossa

Yes, privately funded.

Mr. N. Ahern

——and I know the context in which we did away with pay related, etc., a few years ago but I have a lot of sympathy now for people. Is anybody looking at that situation where somebody who has not been sick for a couple of years but is genuinely sick now and their payments go down? It was said recently that we were going to pass legislation making the employer responsible for the first three or four weeks payments. However, that seems to have drifted into the background. Is there anything being worked on in that case? A person who is genuinely sick, or is sick once in the blue moon, does not seem to get anything when their payments go down.

Proinsias De Rossa

I did not say anything about the employer taking responsibility for the first three weeks. It must have been somebody else. In certain circumstances it can be difficult for someone who is in a reasonably good job and suddenly falls sick and is in receipt of disability benefit, particularly if the job does not provide a sickness scheme. In some of the better jobs they provide a top up of the social welfare benefit for the employee who is sick for a specific period but even in those jobs that benefit can run out long before the disability benefit runs out or before the person is well enough to come back to work. This is an area which needs to be looked at. There is nothing being done about this at the moment.

The other issue that has been raised is the person who gets sick and needs a medical card but because of the existing process, you could be back in work before all your medical bills are paid out of your disability benefit or even before your application is dealt with. That is another area that needs to be looked at. It is not something that is being looked at actively in relation to disability benefit. I can certainly take it up and come back to the Deputy on it.

Mr. N. Ahern

Must dependants be of the opposite sex?

Proinsias De Rossa

Adult dependants?

Mr. N. Ahern

Yes. The Minister has an image of being a liberal man and some would regard him as an enlightened man. I had a case where it appeared homosexuals or lesbians were being discriminated against. If a homosexual signed on for unemployment assistance and said my name is x and this is my partner, Joe Murphy, he could not be treated as a dependant and because they were two men they would have to be on individual full rate payments whereas if one was of the opposite sex they would be deemed to be common law partners, whether they were or not. Why would the Department——

Proinsias De Rossa

I will have to take advice on that.

Mr. N. Ahern

Why is the Minister discriminating against people with these tendencies? Why not allow them to openly profess and claim accordingly?

Proinsias De Rossa

You could look at it the other way; all the adult dependants who are currently on a reduced rate are being discriminated against and gay couples have achieved equality. That is another way of looking at it.

Mr. N. Ahern

If they openly wish to express themselves the Minister should facilitate them and save a few bob in the process.

Proinsias De Rossa

I am not aware of any gender requirement.

Mr. N. Ahern

I am just throwing out this suggestion.

Proinsias De Rossa

I will have to look at it and come back to the Deputy on it.

Mr. N. Ahern

I was interested in Deputy Lynch's question about widows. The Minister seemed to indicate that he would extend the one parent family payment scheme. The one parent family payment is enlightened and generous to people who are working part-time and still get a social welfare benefit. All these schemes are grand and if we are extending them to widows that is better again, but how about going all the way by having a homemaker's payment? Would that come under the Department or would the philosophy be to pick off other categories?

I recently raised the issue of somebody whose marriage had broken up. They obtained a judicial separation, sold their house and got £40,000 for it. They were on unemployment assistance but have now been taken off it because they have been means assessed for £40,000. She is trying to buy a house but prices are going up. Social Welfare told her she would need to have signed a contract for a house before they would allow her to stay on unemployment assistance. The Minister is saying that with divorce around the corner there may be many such cases. If somebody on unemployment assistance gets a lump sum perhaps the Minister could allow them a six or 12 months stay whereby the payment could be frozen rather than cutting them off immediately and assessing them on a means basis. Since that question might still be in the pipeline of parliamentary questions, perhaps it should not be answered.

Acting Chairman

I could go through many of the local community development services but as we agreed to conclude by 4.30 p.m. perhaps we could bring the meeting to a conclusion now. As regards increasing child benefit, last year we discussed the concept of a basic income for children. I am still concerned about it, although there have been efforts to encourage work opportunities through "back to work" schemes so that people would be in receipt of unemployment benefit or dependant payments for a while after returning to work.

People still face a huge problem in calculating whether they can afford to go back to work. They regularly come in to TDs' clinics explaining the problem if their wives earn over £45 or £50 a week. I discovered that the £60 disregard is not a full £60 disregard, it is a complicated system which depends on how many days one works, allowances, etc. It is not a full disregard and consequently I have been wrongly advising people that they can earn £60 and it will not affect anything, but it does to some degree.

Can the Minister comment briefly on the questions of income and a basic income for children? I do not want to start a debate on it.

Proinsias De Rossa

There is a commitment to introduce a basic income for children. The question of a basic income itself is being dealt with in the integration group's report which is due shortly, probably in the next five or six weeks or less. There is no need for us to debate it. The purpose of increasing child benefits to such an extent in the last two budgets has been to prepare the ground for the kind of basic income for children that we proposed in the Programme for Government. It is not referred to in this year's Estimates speech because we are awaiting the integration group's recommendations. We asked the group to address the issue of how best it might be implemented.

The question of capital and house sales was replied to in the Dáil. The response was to the effect that we would take a fairly pragmatic view of a situation where somebody has acquired capital through the sale of a house and, if they are moving to a new house where there is a marriage breakdown, would give them some time.

Mr. N. Ahern

The definition of "a pragmatic view" seems to be that they want to see the contract.

Proinsias De Rossa

Strictly speaking, in law we are supposed to take into account all means, regardless, but being a Department which is in the business of helping people rather than doing them down, we try to apply the rules in the most humane way possible. In that particular case, we indicated in the reply that we are prepared to look at it again. If the person can show they are in the process of buying a house then, of course, we will not assess it as means. However, it is different if they are simply banking it.

Leaving that case aside, if we do not take capital into account you could have somebody, having sold a house for £40,000, getting a rent supplement from the community welfare officer to pay for a private flat. You would have that sort of anomaly.

Mr. N. Ahern

So, it has to be short term.

Proinsias De Rossa

Yes, it has to be short term. There was also a question about after death payments. The adult dependant receives payment for six weeks if the deceased was getting one of certain payments. The payment in question is included in the adult dependant allowance. Certain payments include old age contributory and non-contributory pensions. In other words, there is no difference between the way old age contributory and non-contributory pensions are treated.

Acting Chairman

Some adults can have their own separate pensions.

Proinsias De Rossa

There is no difference whether it is a contributory or a non-contributory pension.

Acting Chairman

It is only available to dependants.

Proinsias De Rossa

The question was why contributory and non-contributory pensions were treated differently. The answer is that they are not. The Deputy may have been comparing a contributory pensioner without a dependant and a non-contributory pensioner with a dependant.

Acting Chairman

I think non-contributory pensioners receive it even if they have separate pensions.

Proinsias De Rossa

Yes.

Acting Chairman

But contributory pensioners do not receive it if they have a separate pension. Is that right? It would need a dependant in that case. He has probably come across that kind of case.

Proinsias De Rossa

Possibly, yes.

Acting Chairman

I wish to thank everybody, including the Deputies from Dublin North-West, the Minister and his officials, who contributed. We will discuss the Department of Health Estimates at our next meeting on Thursday, 13 June, at 2.30 p.m.

The Select Committee adjourned at 5.20 p.m.