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Select Committee on Social Affairs debate -
Tuesday, 11 Mar 1997

SECTION 3.

Amendment No. 1 not moved.
Question proposed: "That section 3 stand part of the Bill."

This important question deals with social insurance and covers a big area of expenditure.

I tabled an amendment which was ruled out of order because it would impose a charge on the Exchequer. As most measures in social welfare result in charges on the Exchequer it could be said we have very little to talk about. I tabled the amendment which proposed that the section shall come into operation in so far as it relates to each of the social insurance pensions and benefits on the relevant date in April, 1997.

A few years ago, the Fine Gael-Labour Government of the day, being under pressure to make the budget balance, decided to obtain a once-off benefit by putting back the payment date for unemployment benefit to October. Subsequently Fianna Fáil put the date back to July. This was a big improvement and brought it nearer the original date of April.

In its first year in office, the present Government put the date back to June. Can the Minister tell us the cost of bringing the date back to April? It is a shift in the payment date and only occurs in the year in which it is made. It is a once-off expense just as it was a once-off saving in the year the shift was made and helped the accounting in that year which helped international investment. I can understand why the Government were in difficulty at the time but I did not agree with putting back the date.

There have been major changes this year. The budget has to be introduced later in the year and the House is changing its accounting procedures. Cash has been flowing freely. We have been told that economic buoyancy will be greater than predicted. Social assistance applies to both sections 3 and 4 where big expenditure is involved. This year is the right time to move the social insurance payment date back to the original time. Further progress could be made by bringing it forward to May.

The Minister may have been anxious to do that although the Government has decided not to. I propose that perhaps on Report Stage the Government would reconsider this issue and bring the payment date back at least to May and preferably to April. The payments should be in line with deductions for PRSI which start on 6 April. We often speak about integrating tax and social insurance. This cannot be done unless the payments and deductions are made on the same date.

Perhaps the Minister can tell us the cost of bringing the date back to May and what it would be for April? Why has the Government decided not to bring forward the payment date for pensions and other payments? Pensioners expected that this year, when the economy was doing well, the date would be brought forward.

Much of what Deputy Woods said was tongue in cheek, given his knowledge of the Department and the financial perimeters within which every Government must work.

As announced in the budget, section 3 provides an increase of £3 per week in all personal rates of social insurance benefits and £1.50 in all rates payable in respect of an adult dependant. These increases will take effect from mid-June 1997. Following on these increases, an old age contributory pensioner will receive £78 per week and a couple on an old age contributory or retirement pension will receive £129 per week where the dependent spouse or partner is under 66 and £133.40 where the spouse or partner is over 66.

The personal rate of widow and widower's contributory pension will be increased to £71.10p. A widow or widower with two dependent children will receive £105.10p. The personal rate of invalidity pension will be increased to £69.20p per week. A couple on invalidity pension with two children will receive £144.70p per week.

The personal rate of unemployment and disability benefit will be increased to £67.50 per week. The weekly rate payable to a couple with two children will be £133.90 per week. The personal rate of pension payable to a widow or widower under the occupational injury benefit scheme will be £89.40 per week plus £17 per week for each child dependant. On section 14 we will discuss the significant relaxation of the qualifying conditions for the pensions I propose to introduce.

There is a commitment in the new national agreement, Partnership 2000, to implement the minimum payment rate recommended by the Commission on Social Welfare, before the end of the programme. The increases provided for in this Bill represent significant progress towards achieving this rate. For example, the rate of old age contributory and retirement pensions will now be at 113 per cent of the CSW rate. Widow's and widower's pensions will be at 103 per cent, carer's allowance at 102 per cent, invalidity pension will have reached 100 per cent and short term insurance payments such as unemployment and disability benefit will have reached 98 per cent of the CSW rate.

Deputy Woods' amendment was ruled out of order, but nevertheless it is important to address his point. I took the opportunity in the 1995 budget to bring forward the dates for increases in social welfare payments by six weeks. That represented significant progress in having social welfare increases take effect from early April in line with income tax improvements. The position adopted by Fianna Fáil while in Government was to implement increases from the end of July but, following on the changes I made in 1995, the increases now take place from early to mid-June. I should make the point that those dates were pushed back or forward depending on how you look at it; they were certainly pushed from the end of May to late July by Fianna Fáil Administrations. Whatever the Deputy may say about prehistory, the fact is that in recent times that was the practice of Fianna Fáil Administrations.

The resources allocated for improvements in social welfare this year are the largest ever. An additional £114 million has been made available in 1997 for increased rates and other significant improvements. The full year cost of these measures is about £215 million. While it is my intention to have increases take effect from early April over time, I decided not to make this change this year in the light of other priorities. I promise Deputy Woods that I will do it next year, however, and thereafter.

The Minister only has to do it once, he does not have to keep doing it.

Yes, and once it is introduced I will continue to do it — that is the point — each year for the next four to five years, for the duration of the next Administration. To put the matter in context, the cost of bringing forward the date of increases is about £28.5 million whereas the cost of the improvements which I am making in child benefit, for instance, this year is about £25 million. The improvement in child benefit will provide a family with four children with an extra £12 per month now and into the future, and will add considerably to our efforts in tackling disincentives. On the other hand, bringing forward payment dates by eight weeks provides a once-off gain of £24 for a person without dependants, or £36.40 for a couple. I have no doubt whatsoever that, given the choice, people would opt for the permanent improvement in child benefit I am making rather than having a once off gain from receiving the increased rates eight weeks earlier. Nonetheless, I intend to keep the issue of bringing forward the dates of increases under consideration having regard to my other priorities for improvements in the system.

I thank the Minister for his reply. He did not tell me what the cost would be in May. I presume it will be in the region of £14 million.

Yes. I thought that as the Deputy's amendment referred to April, that was the figure he meant.

No, the amendment was just to raise the point at issue. That was for eight weeks, so I presume the other will be roughly £14 million in round terms.

Pro rata, yes.

The Minister started off on an antagonistic political line. That is fair enough, I do not mind that.

The Deputy is not listening. He should stick to the facts.

The Minister said the wonderful £3 and £1 increases were applied across the board. However, the Minister of State, speaking in the House on 5 March when the Minister was away — and I thank the Minister for his note saying he would not be able to attend — said this had to be seen in the context of three years of improvements. This was the third budget and third set of improvements to social welfare from the Rainbow Coalition.

It is particularly striking if one takes together the improvements to the basic rates for an old age pensioner over the three years. The Minister referred to that at the end of his contribution. He came back to the 113 per cent figure for old age contributory pensions in relation to the 1997 terms of the Commission on Social Welfare, but, in fact, the actual increase for an old age pensioner was £2.33 per week per year on average for the three years; the average for a widow was £2.20 per week per year and a person on disability or on long-term unemployment assistance would receive £2.17 per week per year. I think the Minister will agree that these are not great increases. Pensioners are aware of the reality — three years of the Rainbow Coalition have not seen good basic increases in pensions.

The Minister says the figures have increased in global terms but he neglects to say the disabled person's maintenance allowance — which is now the DA or disability allowance — has been transferred to social welfare and accounts for approximately £140 million. It can be quite confusing to talk in global figures because of the changes that have taken place. The Christmas bonus is now included in the figures at the beginning of the year whereas in previous years it was not included in the budget. That means a further £40 million approximately is included at the beginning of the year. People should be given such figures to compare like with like.

In comparing like with like one finds — and the Minister might also find this, to his horror and amazement — that the Minister has not really done as well as he thinks. This is especially so when one considers the actual increase for the person involved. What does it mean for an old age pensioner? The Minister say he is happy because the rate of the old age contributory pension now is 113 per cent of that recommended by the Commission on Social Welfare. That sounds very good compared to the 1996 rate of 111 per cent, but if we look back to 1994 we find the old age pension was actually at 116 per cent compared to 113 per cent in 1997 under the Rainbow Coalition.

What pensioners are telling us is clearly borne out by the figures. First and foremost, it is borne out by the low level of increase which results in an average weekly increase of £2.33 per week for an old age contributory pension over the three years. That is a meagre sum for pensioners who constitute a large group of people. It represents the bread and butter of social welfare. Pensioners depend on the Government to ensure they are looked after and that their pensions keep pace with developments.

The reality, borne out by the figures, is that the percentage increases in pensions have gone backwards since 1994. In 1994 the percentage was 116, in 1996 it had fallen back to 111 per cent, while the amount in June 1997 will represent 113 per cent. So, increases have gone backwards, even when measured against the consumer price index. That is bad news from the pensioners' viewpoint.

In most cases an old age contributory pension is for a male pensioner with a dependent spouse. The Minister mentioned an increase for such dependent spouses of £1.50. There are 120,000 adult dependants, most of whom are women. The increase for an adult dependant was on average, £1.17 per year for each of the past three years. A dependant over 66 but under 80 years of age on a non-contributory pension will receive £40 per week. The Minister of State boasted about this figure but people are now worse off. Democratic Left or the Labour Party did not promise people an increase of £1.17 per year. The partners in Government have succeeded in pulling the wool over people's eyes.

The Government claims to have made improvements in other areas of social welfare. Old age pensioners account for approximately 25 per cent of the total budget; unemployed people also represent 25 per cent and a great deal of work must be done to reduce this figure. Old age pensioners depend on us for their bread and butter. These figures are the cumulative effect of three budgets and three Social Welfare Bills. My predecessor, Deputy Joe Walsh, complained last year about how little was given to such people, although more was given to them this year.

It is important to bear in mind that since most pensioners do not have another income they are in a vulnerable position. They depend on us to ensure they get a share of the profits generated by the growth in the economy. Over the past few years increases have kept pace with or exceeded inflation. Our economy is booming and people are doing well.

The Buckley report recommended that salaries for department secretaries and assistant secretaries and the higher levels of the public service and semi-State bodies should be increased substantially because of the extra wealth being created. There was also a recommendation to increase Members' salaries by 3 per cent, with which I do not agree. Members are the main element of our democratic process and should be treated better. Gross domestic product in 1995 and 1996 and the forecast for this year is 10.1 per cent, 7.4 per cent and 6.5 per cent, respectively. This has been achieved because of the work done under the social partnership and the fact that workers have contained their demands and increased productivity.

When the country is doing well, old age pensioners should also do well and their payments should not just keep pace with inflation, which is a pre-Maastricht concept. Part of the Maastricht Treaty was that interest rates and inflation should be low and growth should be high. We must ensure that pensioners share in that growth. Pensioners, widows and people on disability payments should be given more. That is why I tabled amendment No. 4, which will probably be ruled out of order. We depend on the Government to ensure that such people get a slice of the cake. Amendment No. 4 states that the "recommendation of the Commission on Social Welfare in relation to a common basic payment or minimally adequate payment shall be reviewed in the context of the projected growth in the economy to ensure that payments are adequate for the needs of pensioners". We argued with the Government over the past two years that more should be done because growth was good.

Something has already been done.

We now know that growth was better than suggested.

What the Deputy is recommending in his amendment has already been done.

A minimum amount has been done. People are now worse off.

That is not true. The Deputy is misrepresenting the position.

Old age contributory pensions have decreased from 116 per cent to 113 per cent since 1994.

That is not true.

It is true. The Minister will have a chance to respond to my comments.

The Deputy should not put such information on the record because it is not true.

The Minister is saying the figures are not accurate. However, they are accurate because they are official figures.

The Deputy is misrepresenting the figures.

I am not. I am using the figures in the same way the Minister used them in his speech. He referred to the percentage against the current rate recommended by the Commission on Social Welfare. The rate for an old age contributory pensioner in 1994 was 116 per cent.

That is not true.

It is true. I can get the quotation from the document that was circulated to the committee for that year which contains the 1994 figures.

Then that document is wrong. The figure for that year is 109 per cent.

It is not. The Minister is saying the official figures given to the House were incorrect.

I am saying the figure for 1994 is 109 per cent.

The Minister must be changing the method of calculation.

The Deputy is changing it.

I am not.

The Deputy is making up his own figures.

I am not. They are given in the figures for 1994 which were circulated to the committee.

The Deputy is misquoting figures. He spent 15 minutes talking about the wrong figures.

I am not. The average for the three years is £2.33. Is the Minister trying to say that is wrong?

I will reply to the debate.

I look forward to that. With regard to the basic rates, the problem is in the lack of growth and the fact that pension rates do not reflect the growth in the economy. That is where we have greatest difficulty with the Minister. He ignored these considerations in his contribution. He only referred to the total level of payments but they were little short——

I was talking about section 3 and amendment No.1 which was out of order. The Deputy is talking about future sections of the Bill when we are supposed to deal with section 3. When we reach amendment No. 4, to which the Deputy is referring, I will discuss it. However, I was staying within the parameters of the debate on amendment No. 1, which has been ruled out of order, and section 3.

Can we have a list of the amendments which have been ruled out of order? I have only been informed about amendment No. 1.

I understand a letter was sent to the Deputy.

Are the first three out of order?

The first five amendments.

Amendment No. 4 states: "The recommendation of the Commission on Social Welfare in relation to a common basic payment or minimally adequate payment shall be reviewed in the context of the projected growth in the economy to ensure that payments are adequate for the needs of pensioners." Has that been ruled out of order because the purpose of the review is to ensure that at some time in the future the payments will be adequate? That is stretching the rules.

The implication in the amendment is that the payments to pensioners are inadequate and that ensuring payments will subsequently become adequate would involve an increase in the rates of payment.

We are asking for a review.

The implications of the review would increase payments.

Are you suggesting the Rainbow Coalition is not prepared to review these payments and to put the review before the House so it can consider whether they are adequate? The Chairman of the committee is saying the amendment is out of order because it seeks to ensure that at some time in the future the payments will become adequate. That is stretching the point.

On a point of order, the Chairman is independent in making decisions of this kind. He does not speak for the Government.

These decisions are in line with all previous decisions regarding similar amendments. Where there is an implication of an increased charge on the Exchequer they are ruled out of order. Let us return to section 3.

I wish to be clear about which amendments will be discussed. In your letter, amendments Nos. 1 to 5, inclusive, are ruled out of order and will be just discussed during debate on the section. If the amendments are in order they will be discussed individually. Amendment No. 6 is not ruled out of order. Will that amendment be discussed separately?

We are still on section 3 and the Deputy is referring to section 4.

I want to know if it will be taken in the context of section 4.

The amendment says: "In page 6, before section 4. . . .". Will it be taken after section 3 but before section 4?

No matter what the Minister does about the basic increases, they are not good increases and people know that. The figures for the three years together show that clearly. There is no point in talking about global money because many other factors are involved. As far as basic increases for individuals are concerned, such as old age pensioners, widows and so forth, they are not good. They will not be happy and the net effect of the three successive budgets and Social Welfare Bills is a limited increase for people in those circumstances. This year there is an attempt to make up the deficiency of the past two years. However, these are good economic times and if we cannot give the old age pensioner substantially extra in good times we are not doing our duty. The Government is still not delivering for pensioners, widows or people on disability payments.

I welcome the many progressive provisions in the Bill which advance the position of the people I represent. This is the first time a Minister has brought forward the payment of social welfare increases and I am glad he has done so.

I brought forward the payment of increases by three months previously. The Minister brought it forward by six weeks. I brought payment forward from October, which was the date under the Fine Gael/Labour Government, to July and this Minister brought it forward to June.

Was that in 1926?

I am just being factual.

Credit is due to everybody. However, the Minister brought the payment date forward and that is important. I am concerned that there is a distinction between the date social welfare increases are paid and the date income tax benefits are paid. We should try to ensure there is no discrimination between people in the workplace and the unemployed. The unemployed feel disadvantaged already and anything that shows the difference between the workforce and them compounds a feeling of discrimination. Social welfare increases will be paid in June and child benefit increases will be paid in September. The increases are reasonably good considering the colossal burden on the State of the whole system, and the Minister is doing an excellent job. Anything which can bring the date of social welfare increases into line with that of other changes would give recipients parity of esteem. The shorter the period between the changes the more social welfare recipients will be inclined to feel they are part of the group. Although it cannot be done by way of amendment, I ask the Minister to consider bringing the dates forward to match the increases in income tax allowances on 6 April. He has already gone some way towards achieving this and I ask him to go further. If all changes could be fixed to that date, it would give people that parity of esteem which they need. Many social welfare recipients feel they are separate and this is one way of showing that we are concerned about that.

Most of the unemployment payments in the social welfare system were designed to facilitate the transition from one job to another. Today it has almost become a subsistance payment for the substantial part of their life. Most social welfare payments were constructed around the belief that people were insured against the loss of a job so that they could spend time looking for another, they were designed as a cushion or safety net. I am afraid we have changed the nature of the social welfare system and it now represents a form of income for many people on which they are totally dependent. As a result, they see unemployment benefit as almost a subsistence payment. That is one of the reasons I would argue that we bring forward the payment of social welfare increases. Social welfare is the only means of support for many people and the Minister can imagine the satisfaction which would be generated by a gesture in a future budget to make the payment date of social welfare increases even earlier than beyond 6 April. I am sure the Minister understands exactly how they feel and I ask him to consider it seriously for inclusion in the next budget.

I have already indicated to the committee that it is my intention to bring the payment dates forward to April and I have already given Deputy Woods a commitment that I will do it in the next budget. I will continue to maintain that goal. The payment date may not necessarily be brought forward to April in the next budget but it will reach April by the time this Rainbow Coalition goes before the electorate a second time five years from now. My commitment in that regard has been stated many times. I brought the payments forward a number of weeks in 1995.

The cost of bringing forward the date of increase is about £28.5 million whereas the cost of improvements which I am making in child benefit this year is about £25 million. The improvements in child benefit will provide a family with four children with an extra £12 per month now and in the future and will add considerably to our efforts in tackling disincentives. Bringing forward the payment dates on the other hand by eight weeks, for instance, would provide a once off gain of £24 per person without dependants or £36 for a couple.

One is faced with a choice. What is one's priority? Does one provide an increase which is long term or give a once off benefit for the same cost in the first year? The reaction to bringing the payments forward to an earlier date in 1995 was mixed. There were those who felt that it was not necessarily of any great advantage to them, that they would have preferred a general increase, but that is one of those arguments in relation to priorities. It was my view in this budget that it would be better to provide general increases of a generous nature than seek to bring the dates forward a few more weeks given the cost involved.

We must also bear in mind the parameters of Government expenditure within which we must work. This is not only a self-imposed obligation but one which is imposed on us by our membership of the EU and the need to remain within Maastricht expenditure criteria. Deputy Woods knows that, regardless of how well the economy is doing in terms of revenue buoyancy, there are parameters within which we must operate with regard to public expenditure. I am proud to say that this Government has done that exceptionally well.

Deputy Woods has given misinformation with regard to the CSW rate in 1994. He has claimed that the old age contributory pension was 116 per cent of the CSW rate in 1994, it fell back to 111 per cent in 1995 and it has increased since then to 113 per cent this year. The facts are that in 1994 the old age contributory pension was 109 per cent of the CSW rate and it has been increased each year by me in the budget to the point where it is now 113 per cent of the CSW rate. I do not know from where Deputy Woods got the figure of 116 per cent but he should ask his advisers to double check their figures before they give him a bum steer——

I got the figures from these documents.

——in relation to the facts he seeks to put before the committee.

He also argued about global figures. I did not mention the global expenditure of the Department. I indicated the increased expenditure in the budget this year and next year but I did not mention global expenditure.

People who are in receipt of a pension or other income from the Department of Social Welfare are not too interested in how many thousands of millions of pounds we spend or how much is the increase in global terms. What they are interested in is the cash in their pockets. The fact is that this Government, of which I am proud to be Minister for Social Welfare, has provided real increases in the cash in everybody's pockets in the last three budgets and that cannot be disputed. We would all like to do much more than can be done at any given time and I have already indicated that in other sections of this Bill we will outline precisely the plans we have put in place to seek to do that, but there is no gainsaying the fact that old age pensioners and others on social welfare now have more cash in their pockets in real terms than they had when the last Administration left office.

It is wrong to perpetuate the myth that every old age pensioner is living in, or on the edge of, poverty. The fact is they are not. Approximately 50 per cent of pensioners are in receipt of an additional occupational pension. I do not have the figures with me but I know that a proportion of pensioners are in paid employment. It is wrong and it does old age pensioners a disservice to imply that they are all on the bread line, particularly because this State has been generous to old age pensioners. Not only does the old age contributory pension stand at 113 per cent of the CSW rate but old age pensions are at the highest level of the social welfare rate. Provision has also been made for subsidised housing, free travel, medical care and an entire range of benefits for the elderly. The vast majority of pensioners with whom I come into contact are thankful that the State recognises the contribution they made during their working lives.

What is important — we will deal with this matter later — is to ensure that all old age pensioners are not solely dependent on a social welfare pension. These people must receive cover during their working lives for occupational pensions. Their income as pensioners must be such that they will not suffer a dramatic decrease in their standard of living when retiring from work. That is my objective which I outlined in the pensions policy initiative launched last December. This initiative is currently being examined by the National Pensions Board which has received contributions about it from public interest groups. It is important that we seek to ensure that pensioners' incomes are such that their standard of living is reasonably approximate to that which they enjoyed before retirement.

I do not argue that social welfare pensions will maintain or provide the standard of living to which I referred. It is necessary to examine, particularly in the context of current demographic changes, how a good standard of living can be guaranteed for retired people during the next 20 to 30 years. In that regard, my Department initiated the first actuarial review of the cost of social welfare pensions and launched the pensions initiative to examine how adequate occupational pensions can be provided to retired people. A range of other initiatives have been put in place with which we will deal as our deliberations on the Bill progress.

Given his experience of the Department, it is erroneous for the Deputy to imply that pensioners are being neglected by the social welfare system. That is not the case and he is wrong to create that impression. Old age pensioners are now better off in real cash terms, by virtue of the past three budgets, than they were when the Administration in which the Deputy served left office. That fact cannot be denied.

I am concerned about the assessment of the means of old age pensioners who own land, live in rural areas or have savings of a few thousand pounds in a bank account.

That matter is not strictly in order. We are dealing with the actual budget increases.

I want to express my concern about people who receive small pensions because they have money in the bank. That is ridiculous. It is time that people were permitted to have £9,000 or £10,000 in a bank account and still receive a full pension. The fact that they cannot do so is the reason some people hide money under mattresses and become victims of burglary.

That is not relevant to this section.

It is not relevant. If the Deputy reads my contributions on the budget and Second Stage of the Bill, he will discover that the issue to which he referred is addressed by the legislation.

I am concerned that pensioners should be treated fairly. Pensioners assets must be carefully assessed to ensure they have adequate means. The Joint Committee on the Family actively discussed the question of old age pensioners and its members were given information, which confirms the Minister's comments, that finance is not their greatest need. Resources such as appropriate housing are more important to pensioners. Many of these people have adequate means but they do not have access to the type of security or environment to ensure their welfare. Some of them may have large amounts of money but do not know how to use it to ensure they remain in proper care. I was taken aback by evidence produced at the Joint Committee on the Family which indicated that the majority of pensioners are adequately provided for and that their greatest need involves adequate accommodation.

Many pensioners require support in terms of the services we provide to ensure they are cared for properly. Finance is not the way to resolve this issue. I merely wish to confirm the Minister's assertion because a myth exists that society is backward and uncivilised if it does not care for its pensioners. For the first time it can be stated that pensioners have access to the majority of resources they need. They now only require more care and attention and the report of the Joint Committee on the Family will confirm that. The Minister is correct that we may not need to provide additional finance but we may be obliged to consider the care and services with which pensioners are provided. This might involve finance or the provision of local authority housing and home help.

I am aware that my contribution is not relevant to the section under discussion but I am glad that I could make that point. The Minister is correct and we should consider other areas in which we can help the elderly.

With regard to the figures, I quoted from the Second Stage brief on the Social Welfare Act, 1994.

The Deputy introduced that legislation.

I was referring to the figures provided by the Department.

Why then is the information quoted by the Deputy incorrect?

I am assuming that the figures provided by the Department are factual. There may be an error in the way they are presented in the document but I believe the figure of 116 per cent refers to those over 80 years of age. The first symbol in the document — > — refers to those over 80 years of age and shows that the figure increased from 100 to 109 per cent. The second symbol — < — refers to those under 80 years of age and shows an increase from 107 to 116 per cent. There may have been an unnoticed error in the use of mathematical symbols, with which I am familiar. The correct position must be that the figure for those over 80 years of age stood at 116 per cent while that for those under 80 was 109 per cent.

The figure for those over 80 years of age now stands at 120 per cent.

The Minister may find that there was an error in the way the symbols were printed.

I am not interested in anything other than the fact that the figure the Deputy quoted was incorrect.

The Minister questioned the origin of the figure. I obtained it from the Department's brief in which I believe there was an error involving symbols. The first symbol refers to those over 80 years of age while the second refers to people under 80. It is probable that the two symbols are not in the correct place. It means that those aged 80 and over were on 116 per cent in 1994. It may be a recording error in the Department but that is where I got the figure.

It was the Department's figure. The Deputy was the Minister at the time and was responsible, as I am, for what happens in the Department.

I am glad to explain where it came from. I am not trying to argue with the Minister but trying to state the factual position.

I gave the Deputy the factual position and he disagreed with me.

I was trying to find where the difference arises between us.

The Deputy was the Minister in 1994. He knows that the figure for old age contributory pensions was 109 per cent yet he insisted that it was 116 per cent.

It is for the over 80s.

It is 120 per cent for the over 80s. The Deputy was wrong but I do not wish to make a point of this.

The document distributed by the Department to the committee states that it was 116 per cent for the under 80s. There is an error there and the Minister should check it with the Department. The differences are negligible. If the Minister accepts that there is an error in the figures——

I do not accept that. I have already pointed out that it is the Deputy who is wrong.

I am entitled to speak Minister.

The Deputy is not entitled to give false information.

Deputies should address their remarks to the Chair.

I have been trying to do that.

The Deputy is not entitled to give wrong information.

I have not done so.

The Deputy said that the figure for 1994 was 116 per cent. That is wrong and the Deputy has not got the good grace to admit it.

I have done so. I said that the figures given to us——

The Deputy is blaming the Department for his mistake.

I am quoting from the document supplied by the Department.

That is not admitting that the Deputy is wrong.

The Minister asked me where I got the figure and I am telling him. If he took the trouble to look at the document he would see that is the figure.

The Minister is saying that the figure increased from 109 per cent in 1994 to 113 per sent in 1997. He is suggesting this is something of which we should be proud. I do not agree. His thinking is flawed.

Deputy Walsh says that old age pensioners are not doing badly. He says that their payments are adequate. I do not agree.

He did not say that they were adequate.

I did not talk about poverty in relation to old age pensioners. We are discussing the section dealing with contributory pensions. The next section deals with assistance. That is where the poverty arises. On the insurance section people can have a second pension. However, unless pensioners benefit from the growth that is taking place in the economy they will fall behind. The yardsticks being used are outmoded and post Maastricht. Old age pensioners and widows must benefit from the growth in the economy. It is not sufficient to say that they are doing all right.

How many widows receiving widow's pensions are over 66 years? How many invalidity pensioners are over 66 years? After the £3 increase in the budget, an invalidity pensioner will be on £69.20 per week. The Minister and Deputy Walsh seem happy with these figures. I do not agree.

Invalidity pensioners have serious health problems. Widows and widowers over 66 years are on £71.10 per week. The Minister should not try to suggest that it is possible to maintain a house and a standard of living on such an amount even if one has another pension. The vast majority of occupational pensions are small. Hopefully this will improve in the future.

When we talk about increases in pensions, we must stop looking back at percentages in relation to 1985 and the Commission on Social Welfare. Instead, we need to assess what is an adequate pension for the new millennium. Amendment No. 2 was geared towards that. It was ruled out because it would cost too much money. The amendment stated that "in the case of widows or widowers over age 66 their personal rates of benefit shall, over the course of three years, be increased to the level of the personal rate of the old age contributory pension".

There are many widows aged over 66. These people do not have the benefit of the old age pension and yet they are regarded as old age pensioners. The difference is between £71.10 in the new rates and £78 in the Schedule to section 3. This would mean closing that gap when they are over 66. I hoped that this process would have started this year when there was so much money available. My amendment suggested that it should take place over three years. This has not happened and that is regrettable.

I did not say that I was delighted with the rates of any of the social welfare payments. There is much ground to be made up for the years of neglect under Fianna Fáil administrations. The measure which has been used since the Commission on Social Welfare is its rate of between £50 and £60. The practice has been to upgrade that rate by the consumer price index. Based on that figure, the old age contributory pension is now at 113 per cent of that rate.

The Deputy said we must stop looking back at CSW and go beyond that report. Some aspects of that report, apart from the rates, have to be addressed and we cannot ignore it. One of the first things the Government did when it took up office was to ask the ESRI to look at the recommended rates of the CSW and examine how it might be updated and what measures should be put in place to do so. I will deal with that matter later.

The Government deliberately looked to the future in terms of examining the CSW rates and finding new ways of ensuring those rates are increased not only to match inflation but also to ensure people receiving social welfare benefits are not on the bread line and their standard of living is raised.

The Deputy also mentioned the question of adequate pensions. I do not know whether he has bothered to listen to what I have said in this debate. I already said that, on behalf of the Government, I launched a pensions initiative to examine the question of how we ensure retirees receive adequate pensions to maintain their standard of living. The Department of Social Welfare and the Pensions Board published a consultation document on this recently and have invited submissions from interested parties. The intention is to have submissions examined by the end of May and to have recommendations brought to Government by the end of the year in regard to what steps should be taken to guarantee adequate income for people who retire over the coming years.

The reports are available to Deputies in the Oireachtas Library and I am happy to come back to the committee to discuss them and the consultation documents. These issues are important and need to be addressed. It can be off putting to have one's words misrepresented and even more so when a Deputy gives out categorical information which is wrong and then, when the mistake is pointed to him, he refuses to acknowledge it and seeks to blame the Department. Old age contributory pensions in 1994 were at 109 per cent of the CSW rate and have increased each year since to 113 per cent. The figure quoted by the Deputy was for old age contributory pensions for people over 80 years of age, which was at 116 per cent in 1994 and is currently at 120 per cent. I accept that the Deputy acknowledged he was wrong but it is wrong to seek to blame the Department for his mistake, particularly as he was Minister at the time of the alleged mistake.

He asked a question in regard to the number of invalidity pensioners who are over 66. The estimated figures for 1997 are 41,200 under 65 years and 2,400 over 65. In 1996 the figure for widows aged 65 and over was 63,000 and under 65 was 25,000. For widowers, the figure for those aged 65 and over was 1,800 and for under 65 it was 4,600.

I thank the Minister for those figures. Many widows over 65 years are trapped because they are stuck on widow's pensions and cannot obtain old age contributory pensions. The purpose of my amendment was to transfer them to old age contributory pensions over a three year period. It is not a big cost when spread over three years but a number of people would benefit.

The Minister said he agrees with me and wants to review the Commission on Social Welfare's approach to establishing an adequate level of income and I welcome that because it is important. He said that over the years the custom has been to have increases relative to, or just over, the CPI each year. It might not turn out that way but that was policy. I have to use departmental figures and must rely on them being correct. In 1988, long-term unemployment assistance, short — term unemployment assistance and supplementary welfare allowances were increased by 11.1 per cent as the objective was to increase them because they were so low. In 1989, long-term unemployment assistance was increased by 11.9 per cent, supplementary welfare allowance by 11.1 per cent and short term unemployment assistance by 7.7 per cent. The general increase at that stage would have been of the order of 3 per cent relative to the increase in the consumer price index. Again in 1990 there were special increases in long-term unemployment assistance, supplementary welfare allowance and disability and unemployment benefit of 10.6 per cent, 7.1 per cent and 6.7 per cent, respectively. This provided something extra to the routine increase in the budget. In 1991, long-term unemployment assistance increased by 5.8 per cent as against a 4 per cent overall increase and short-term unemployment and supplementary welfare increased by 11.1 per cent.

In putting the question, the Minister reminded me that there was a policy differentiation. He said there was a standard approach over the years but there was not. There was a basic approach guided by the increases recommended and by keeping ahead of the consumer price index. There were increases in the following years but not of the same order — they were 5.9 per cent, 4.9 per cent and 6 per cent as against increases of 3.5 per cent, 4 per cent and 3 per cent. Special increases were given to groups in each of those years, in addition to doing what the Minister said, maintaining the position against the consumer price index.

My amendment provides that when a person is in receipt of a social welfare benefit or assistance and that person or an adult dependant of that person dies, the current payment shall continue to be made in full for six months during the first year of the bereavement. This relates to social insurance. It was my intention to recognise bereavement. I appreciate we are not taking the amendment——

We are on section 3.

This relates to social insurance payments under section 3. At present one gets six weeks of social insurance payments following bereavement — the Minister's officials will advise him of what happens. I suggest that on reflection——

On a point of order, could we deal with these amendments in some sequence? We seem to be hopping back and forth.

That particular amendment is out of order so it cannot be moved.

I am not moving it, Chairman, but the issue with which it deals is relevant to this section. Currently, when a person dies——

On a point of order, could we finish section 3 and then move to this amendment?

This relates to section 3.

Section 3 refers to the new rates of social welfare benefit.

I am talking about the rates of social welfare benefit.

The discussion should be on the adequacy or inadequacy of the new rates, not on matters which are unrelated.

I am proposing that the rates should recognise bereavement. They currently do for six weeks——

On a point of order, we are jumping all over the place.

We are not.

I have given the Deputy a great deal of latitude. If we deal with this section——

On a point of order, I have been given no latitude other than discussing the adequacy of widows pensions, old age pensions and other pensions directly relevant to this section. That is what I have talked about, I have received no indulgence or latitude.

This section refers to proposed increases in existing schemes, not to other schemes. The Deputy is referring to a new scheme.

No, I am referring to an extended insurance payment which has not been increased, or, it will benefit from the increased rate of payment but——

The Deputy is referring to the payment made to an adult dependant following the death of a pensioner. The extension of that scheme is not part of this section, although the rate being paid on the scheme is. The Deputy may talk about the adequacy or inadequacy of the increase in respect of the scheme but discussion on the extension of the scheme is not in order on this section.

Since it was included in the amendment list at that point I was trying to dispose of it there. However, if we are splitting hairs, we can take it up at a later stage. This will not save us any time because it would be simpler to deal with it now. If we are not taking the issue now I will discuss the rates of increase in the contributions of the self-employed to the social insurance fund.

Currently the question is: "That section 3 stand part of the Bill."

This Government is good at blaming Fianna Fáil and this Minister has blamed us for inadequate pensions over the years. The former Minister showed that he made substantial increases to all pensions and benefit payments. We took over the country when it was on the rocks in 1987. Pensioners and social welfare recipients did not suffer under Deputy Woods, yet this Minister blames Fianna Fáil for inadequate pensions and claims to be the people's saviour. I do not agree with that.

Why not? The Deputy should break ranks.

I cannot do that. Deputy Woods did well when he was Minister. I am tired of Fine Gael, Labour and DL blaming Fianna Fáil for everything. We put this country right and the Minister is now reaping the benefits.

We have taken seats from Fianna Fáil at every election since 1977.

That does not matter, the people will realise who put the country right and why the economy is going well.

If that is so, why have they not given Fianna Fáil a majority since 1977?

That does not make any difference; I will not talk about that. The Government has made a mess of the group water schemes.

That is telling them.

You are getting into hot water, Deputy.

I do not care. I do not agree with the continuous blaming of our Minister. While I have great respect for the current Minister I will not listen to him continuously criticise Fianna Fáil.

I adjourn the meeting.

The Select Committee adjourned at 7 p.m. until 3 p.m. on Wednesday, 12 March 1997.

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