SELECT COMMITTEE ON SOCIAL AND FAMILY AFFAIRS debate -
Tuesday, 2 Mar 2004

Social Welfare (Miscellaneous Provisions) Bill 2004: Committee Stage.

Chairman

This meeting has been convened for the purpose of considering the Social Welfare (Miscellaneous Provisions) Bill 2004. I welcome the Minister for Social and Family Affairs, Deputy Coughlan, and her officials. I remind committee members, officials and anybody else present to ensure their mobile phones are turned off. As I am the biggest culprit, mine will probably go off in the next couple of minutes.

Some of the amendments being brought forward by the Minister relating to welfare benefits will not be considered today. We will not consider them until next Tuesday because members need time to study them and perhaps propose amendments. I propose, therefore, to recommence consideration of the Bill next Tuesday. Is that agreed? Agreed. The committee room is available until 8 p.m. but we may reach a stage where we will have to stop our deliberations because we will not be in a position to consider further amendments. We will need an opportunity to peruse them and perhaps submit amendments. That is only fair to members.

Mr. Boyle

I realise I am not a member of the committee but will Members of the House have an opportunity to peruse those further amendments rather than having to read them in the media beforehand?

Chairman

I will allow the Minister to reply.

Minister for Social and Family Affairs (Mary Coughlan)

I thank members for facilitating my request but there is a degree of reciprocity in allowing them at least one week to consider the amendments which were agreed by the Cabinet. I am getting them printed with a background information note which will shortly be brought to the committee room. As some of the amendments are technical, it would be unrealistic to discuss them in a vacuum and that is why there are background notes to them. They will be circulated to the committee first and then to the House.

Chairman

When we reach the end of today's business, the next meeting will on 9 March.

Section 1 agreed to.

NEW SECTION.

Mr. S. Ryan

I move amendment No. 1:

In page 4, before section 2, to insert the following new section:

2. "The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the operation of the rent supplement scheme.".

In the context of this social welfare legislation, this is the most important amendment. I understand there are other more complex ones to be debated next week. I am disappointed and appalled by the attitude taken by the Minister for Social and Family Affairs and her officials towards the rent supplement scheme. In time, it will be considered the most draconian of all the cutbacks in the history of the social welfare budget. It surpasses the dirty dozen cutbacks introduced by Deputy McCreevy when he was Minister for Social Welfare.

Denial of a rent supplement to a person or persons who have not already been renting for six months and asking community welfare officers to adjudicate on particular circumstances that might warrant special dispensations will cause only hardship and promote homelessness. At previous committee meetings, I acknowledged that the original scheme in operation until 31 December 2003 was flawed and needed to be reassessed. I also believe there were abuses in the system and that the Minister and her officials were of the same mind. What appals me is that the Minister is not prepared to reassess the old system and has refused to remove those abuses. Instead, on the basis of the directives from the Department of Finance she has brought in a new system that has worsened the situation. If only the Minister and her Department had the guts to flush out the abusers rather than targeting everyone on the scheme with this new system that will bring nothing but hardship and homelessness. I am not the only Deputy who asked for a review of the system.

It is not often that groups directly involved in homelessness come together to speak as one. However, the following have come together on this issue: the director of Threshold, Mr. Patrick Burke, Mr. Conor Hickey, director of Simon Communities of Ireland, Mr. John Monaghan, vice-president of the Society of St. Vincent de Paul, Mr. Declan Jones of Focus Ireland, Mr. Francis Byrne, director of One Parent Exchange Network, Fr. Peter McVerry, Jesuit Centre for Faith and Justice, Mr. Peter O'Mahony, chief executive of the Irish Refugee Council, Ms Mary Cunningham, director of the National Youth Council of Ireland, Mr. Eric Conroy, general secretary of the Irish National Organisation of the Unemployed, Mr. Robin Webster, chief executive of Age Action, Mr. Raymond Dooley, chief executive of Children's Rights Alliance, and Ms Karen Kiernan, director of Cherish. All met the Minister and explained that the new system would bring nothing but hardship.

The new directive was issued on 24 December 2003 to the chief executive officers, the programme managers, appeals officers, superintendent community welfare officers and community welfare officers to see through the implementation of the scheme. How this scheme will work can be best shown through example. If a worker is let go from a job with tied accommodation, should they go on the street? Is there a provision in the scheme to accommodate a person in such circumstances? If workers who have been renting for less than six months lose their jobs, they also lose their homes. If a woman becomes a lone parent, should she continue to share a bedroom with her sisters? Every Member knows of the crisis that exists in local authority housing where gross overcrowding exists. There are cases of five people residing in a box room and other family members living in sitting rooms because of the housing crisis. When a girl in such a family situation becomes a lone parent, is she expected to continue sharing a bedroom with her sisters in the sitting room? Is she expected to maintain the child in the sitting room, waiting for her parents to finish watching television and go to their bedroom?

This scheme is depriving these people of the opportunity to have the aspiration to rent their own houses on the rent supplement scheme. If an asylum seeker obtains refugee status and leaves direct provision accommodation, where can he or she live? Has the Minister other special arrangements for this category of people? If a low income couple of any age splits up and one must leave the family home, must he or she queue for a bed in a hostel for the homeless to qualify for help? I can continue giving examples of where the Minister's provisions are making people homeless. The Minister says there is a programme in the Department of the Environment, Heritage and Local Government to deal with this. In this context, it is important to look at this directive because, irrespective of what she says here, this is the directive with which the community welfare officers will have to work.

On previous occasions the Minister stated this will not make people homeless. We all are aware of many cases of couples in full-time low income employment who are on the housing list, which has increased by more than 100% since the Fianna Fáil-Progressive Democrats Government first came into office. In the past if they could not come up with the income from their own resources and if one of them was working on a very low income, he or she could go down to the community welfare officer, who, under section 179 of the Social Welfare Consolidation Act 1993, could make provisions for weekly or monthly payments. These would be small payments to keep those persons in work and with a roof over their heads. The Minister is now saying to such people that no supplement will be ordinarily paid to a household in full-time employment. I understand the employment criterion is 30 hours a week. Is the Minister now saying to people working up to 40 hours a week in full-time employment, irrespective of their income, that they are not entitled to anything and that they must go back to their employer to ask for a job with less than 30 hours a week so that they will qualify for rent supplement to keep a roof over the heads of their family? Alternatively they will separate in order to keep a roof over the children and that is scandalous.

There is a complete contradiction in this directive. The Minister acknowledges there are always special circumstances and says she will not stand over anybody losing out. She then states that these new provisions do not restrict the discretion given to health boards to award a supplement in any case where it appears to the board that the circumstances of the case warrant it. The next paragraph states that nevertheless it is expected that the type of cases referred to in paragraph 2.5 should, by their nature, be exceptional. The Minister is saying there are provisions but she is now giving a diktat to the community welfare officer that the cases should be exceptional. Consequently the Minister expects that the number of such cases should be minimal. She further states that any such cases where rent supplement is awarded should be noted. If the community welfare officer decides to give a rent supplement in exceptional cases, he or she must mark it up in red and sign it. This is the diktat. This is scandalous.

Mary Coughlan

Deputy Ryan is not being fair. That is a part of a very large book.

Mr. S. Ryan

This is the directive given to the community welfare officers on 24 December 2003 to operate this scheme. This was an ill-thought out scheme. The Minister's objective was to save €58 million rather than deal with any abuses that might be in the system. As a result, those worst off and disadvantaged are in a position where they will become homeless. That is why we are asking that this be reviewed after six months.

Mr. Ring

I agree with Deputy Seán Ryan. With 50,000 people awaiting housing and 3,700 homeless, this was an ill-judged decision by the Government and the Minister. For example, a young girl, who was run from Billy to Jack in recent weeks in the case of rent allowance, came to my constituency office yesterday. She was told by the community welfare officer to get accommodation and that she would qualify. When she came back, she had to deal with a different community welfare officer from another area of the town who had a different view and stated that she would not qualify. I contacted the superintendent yesterday and a meeting for tomorrow morning has been arranged for her.

That woman is now living at home with her mother, father, brother and sister. They are living in a three-bedroom house and she has a baby. Her sister is doing the leaving certificate and there is a deal of tension and pressure in that house. To be fair to the girl who is doing the leaving certificate, she needs that room to herself to study to get points to get into college.

There is total confusion on this. There must be a common line in whatever instructions the Minister sends out to the social welfare offices. Two people in the same town in the same county cannot take different lines on this. This confusion must be dealt with quickly. Staff are concerned about what has happened and the Minister of State with responsibility for housing stated that he was not consulted. The change in the rent supplement is dangerous and was ill-timed. After six months, if there are many complaints, the Minister will have to look again at this scheme.

The committee has heard presentations from numbers of 12 or 13 groups. They all spoke passionately against what was happening. Recently I heard a man state on radio that he went around this city from door to door every night picking up homeless people and trying to get accommodation for them. That is sad in itself. It should not happen in a society where there is so much wealth.

I disagree with Deputy Ryan on the issue of fraud. The Minister and the Department have also spoken about this. If there is fraud in the system, why is the Department of Social and Family Affairs not prosecuting people? I compliment the Department on saving the taxpayers more than €300 million last year. The Minister has put the resources at its feet. If a person is drawing rent supplement and should not, he or she should be prosecuted or at least should have the rent supplement withdrawn. In recent years there have been no prosecutions for rent supplement fraud and it is not fair to say there was abuse of the system. Perhaps there is over use of the system because there is not enough housing. I agree with Deputy Seán Ryan that this scheme will have to be looked at again. After six months I hope the Minister will lay a report before us so we will know what is happening.

Mary Coughlan

It is important that I set out a few facts. What is rent supplement? Rent supplement is a short-term emergency payment. It is not for a long-term housing need. When I introduced a number of changes within the supplementary welfare scheme - I indicated several - I met a number of the social partners, all the NGOs outside the partnership process and members of the committee, and I discussed them within my parliamentary party and my Department. Arising from a number of those issues the views of everyone were taken into consideration.

The CWOs apply the regulations on behalf of my Department. They are employed by the Department of Health and Children, normally through the health boards. The CWOs are, perhaps, the only group of people with a huge amount of personal discretion. That is the nature of the scheme. The guidelines issued by me arising out of the changes took up several pages and are available to CWOs in a massive book. They are very comprehensive and cannot be taken in isolation. They have to be taken in tandem with any changes implemented.

Members spoke about abuse of the system and said I am not doing anything about it. I answered a parliamentary questioned tabled by Deputy Ring on the matter last week or the week before. One of the issues arising out of the SWA Vote, administered on my behalf by another Department, is that it does not have direct accesss to the Chief State Solicitor's office. Therefore, we cannot prosecute on behalf of the State. I am about to change that and I am taking advice on the legalities of the issue and its implementation. There is a section within the existing guidelines which gives that discretion to CWOs. They do not have to write in a book, make notes or do anything like that. What they do is their business. They advise the Department of their decisions in a quarterly review that is forwarded through the boards to my Department, where they indicate what decisions were made by them under exceptional needs and supplementary welfare from a statistical point of view. It is important for us to ascertain the kind of issues involved.

Last year I changed the SWA and we looked at rent capping. It was said to me that people would be homeless as a consequence of it, but that is incorrect. The CWOs, through their superintendents, contacted my Department where there were particular cases outside the parameters of the regulations and guidelines. Those were sanctioned by my Department. In particular cases, everybody appreciates people have particular difficulties. Therefore, the flexibilities are not only within the ambit of the CWO but also within my Department in sanctioning those changes.

Let us get down to a few basics. People talk about the homeless and rent supplement. People who are determined to be homeless, under the Department of the Environment, Heritage and Local Government, are entitled to rent supplement. Members should stop talking about homeless people because they are supported within this scheme. Those over 65 years of age are exempt from the changes of the six-month rule. Those on a housing list are exempt from the six-month rule. I bet that the majority of those about whom Deputy Ryan spoke are on a housing list or have made an application to their local authority if there is a case of over-crowding in the home or of dysfunction, or a difficulty within the home. For example, Deputy Seán Ryan spoke of people in, perhaps, a difficult marital/partnership relationship. That is an emergency. Under section 31, the CWO is, more than likely, allowed - if not, I would question it - to facilitate someone in that difficulty. Those who are vulnerable, those in danger and those who have difficult relationships will be facilitated outside the ambit of the six-month rule.

Let us talk about people who are employed. Those in full-time employment were never entitled to rent supplement. What happened was the wife who was not working made an application and this circumvented the scheme. One cannot circumvent the scheme. I applaud some people who will do their level best to get around every regulation and all legislation. We all know about that, and that is life.

On the issue of the housing lists, I agree there were some teething problems. A number of county councils, CWOs, and health boards have come together and worked out a practical way of dealing with these issues on the ground. One of the issues is that a universal application form is favoured for rent supplement for local authority housing. That is a practical idea which came from the housing officers and the CWOs and it started in Cork. The health board in my area is now looking at that. Those practical issues are being addressed on the ground where there is real interaction between the housing authorities and the CWOs. That interaction is important. I appreciate that there are teething difficulties and there may be blips, but on the basis of good co-operation the matter is progressing.

Those on invalidity pension and those on disability allowance are exempt from the six-month rule. Given the number exempted from the six-month rule, the Department of Finance might question why I introduced the rule in the first place. I have considered many difficulties that may arise in the rolling out of the scheme. The scheme was rolled out about four weeks ago and people are interacting at local level, which is the best way forward.

There are other issues involved. Where does one go from here? One cannot reform in isolation, and I will not do so. On the one hand, I am asked to deal with the existing difficulties of abuse, which we all know about but find it very difficult to deal with. I have indicated to members what I propose to do. I have indicated the flexibilities and the exemptions within the six-month rule. This cannot be done in isolation on the basis that I am not a housing authority. I am dealing with a housing need but that is being done in splendid isolation, often from the housing authorities. We have all agreed that should not happen. We are working with the Department of the Environment, Heritage and Local Government.

Members may have read in the newspapers that the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, was not consulted. I met the Minister of State, Deputy Noel Ahern, ad infinitum in a personal capacity and there were meetings between our officials who have been working on this issue since 1996, before the Minister of State, Deputy Noel Ahern, was appointed. Equated to that, the Minister of State is not at the Cabinet but the Minister for the Environment, Heritage, and Local Government, Deputy Cullen, is and he has been more than acquainted——

Mr. Ring

He is more concerned about electronic voting.

Mary Coughlan

——with the issues. It is easy to write in the newspaper about some young press officer in the Department of the Environment, Heritage, and Local Government. What is read in the papers is not always correct. The truth of the matter is that there has been interaction between my Department and the Department of the Environment, Heritage and Local Government since 1996, between several Ministers and Ministers of State. Of all people, the Minister of State, Deputy Noel Ahern, is most vociferous in putting his views across on housing policy. I hope, with the Minister for the Environment, Heritage and Local Government, Deputy Cullen, and the Minister of State, Deputy Noel Ahern, to put forward a real action plan on developing the issues that have arisen as a consequence of people's long-term reliance on a short-term payment whereby we have to interact properly in addressing their housing needs.

We all believe, rightly or wrongly, that people are being militated against as a consequence of getting rent supplement. I read in the newspapers at the weekend an article by CORI to the effect that many people are buying second homes on the basis that my Department will pay the mortgage. That is unfair——

Mr. S. Ryan

Where is it being taken up?

Mary Coughlan

As the Deputy knows, that is unfair to people who are looking for more permanent accommodation. The graph shows a big increase of over €350 million in the investment that has been made in recent years in supplementary welfare allowances. If I give €350 million to county councils they might be able to provide a long-term solution, but that is not to say that I will not challenge the county councils on that basis. I will introduce an action plan, however, and we are reaching finality on the issues. We are trying to push the agenda as best we can in co-operation with the local authorities, although some councillors' views might reflect how to get re-elected rather than how to deal with housing issues. This is not being done in isolation and I guarantee that the matter will be reviewed on an ongoing basis. I gave a commitment to the social partners that we would review its implementation, with the particular difficulties that may arise professionally through the CWOs and their superintendents, and when Members of the Oireachtas write to me outlining difficulties.

If there is a necessity to change or re-evaluate the system we will do so. However, if homeless people are in a position to get accommodation they will receive rent supplement, but that is not necessarily the reason they are homeless. Other issues arise which require a more holistic approach to the problem of homelessness, including alcoholism, relationship difficulties, psychiatric illness and disease. Many homeless people often find it difficult to achieve stability in their lives to obtain permanent accommodation and, thus, obtain rent supplement. It is, therefore, erroneous to say that we are making people homeless or having a negative impact on homelessness. The basis of that argument is nonsensical. Taking a holistic approach to housing, I would like to see my Department dealing with this matter through interventionist, emergency, short-term measures. I will re-evaluate the overall roll-out of the programme in less than six months.

Mr. S. Ryan

I am at one with the Minister in trying to regularise the situation. I do not want to see, and never have recommended, that €350 million annually should go into landlords' coffers. Many of them are not even registered, is that not correct?

Mary Coughlan

Yes.

Mr. S. Ryan

They have not even met the accommodation requirements of people in those circumstances. The Minister, however, cannot do this in isolation. Much of that money could be used to provide additional local authority housing if the necessary structures were in place. The Minister is intent on going ahead but our concern is that she is not working in tandem with everyone involved. I will take note of everything that has been stated and I will bring it to the attention of every community welfare officer in my constituency.

I want the Minister to clarify one issue because she stated that the requirement to have been renting for 183 days does not apply to persons regarded as being homeless. Is the Minister saying that any person, or persons, on a local authority housing list today is eligible for rent supplement?

Mary Coughlan

Yes, that is what it says in that guideline - if they are on the housing list.

Mr. S. Ryan

There is a difference between being on the housing list and having a housing need.

Mary Coughlan

People should not be on the housing list who have not got a housing need.

Mr. S. Ryan

This is the relevant point and I am delighted the Minister has clarified it. Anyone who is classified as being on the housing list has a housing need, as far as I am concerned.

Mary Coughlan

That should be the way it is, unless they are multi-millionaires.

Mr. S. Ryan

Then they would not be on the housing list. The criterion being used at the moment is basically——

Mary Coughlan

They would be exempt from the six-month rule.

Mr. S. Ryan

——that the six-month rule would not apply.

Mary Coughlan

They cannot be in full-time employment, and that was always the case.

Mr. S. Ryan

I know that but they would be exempt from the six-month rule?

Mary Coughlan

Yes. If county councils or corporations say to me - which I doubt and I hope to God they will not do so - "ram them in and we will not evaluate a housing need", it would make a sham of both the county council list and my approach. When people are adjudged to have a housing need they are sorted out. The Deputy also mentioned people in institutions.

Mr. S. Ryan

Including prisons.

Mary Coughlan

Those in hospitals, convalescent homes, prisons and hostels for the homeless are reckonable as well. We want to facilitate people to move out of hostels and seek long-term, permanent accommodation. Their period of time in hostels will also be taken into consideration for the six-month rule. The same would apply to asylum seekers in direct provision. If the State has decided they are entitled to stay and their asylum request has been granted, the direct provision period will also be considered within the six-month rule. It is more than likely they will have been in direct provision for over six months in this country.

Mr. S. Ryan

It is important to raise those issues.

Mary Coughlan

If there is a problem in Fingal County Council's area we will talk to the people involved.

Mr. S. Ryan

Concerning that particular need?

Mary Coughlan

Yes.

Mr. S. Ryan

I welcome the Minister's commitment to carry out a review before the six months are up so we can re-examine the matter at that stage.

Mary Coughlan

I will be reviewing it. I would prefer to see housing officers and CWOs working together to examine the issues. The universal implementation of the programme will be important. Why should one set of rules apply to somebody in Cork while another set applies to somebody in Mayo? We do not want to see that happening. That is why we are considering an all-inclusive application form so that people will know what they are doing. We have met the CWOs and have spoken to the Department of the Environment, Heritage and Local Government. We will be speaking further to the housing authorities with regard to rolling out this programme but if there is a particular concern in Fingal about implementation, we will discuss it with the CWO superintendent.

Mr. Crawford

I apologise for being late but I heard most of the debate on the monitor. I have two questions to put to the Minister. One concerns a case involving a young woman who has suffered a recurrence of cancer. She had to give up a good job last December and sought rent allowance from the CWO in February. She was told that she was not entitled to the allowance because she "did not look sick". That 24-year-old woman was due to go for a very serious operation for cancer the following day.

Mary Coughlan

I could not answer that individual point but the allowance is not an illness payment. Where was the woman living before that?

Mr. Crawford

She simply found herself on disability benefit.

Mary Coughlan

That is short term, not long term.

Mr. Crawford

Where can she turn for help?

Mary Coughlan

Where was she living beforehand?

Mr. Crawford

She was living in a part of Monaghan and wanted to remain there. She wanted to remain in the house she was in.

Mary Coughlan

I am afraid we cannot deal with this case because the woman's rent was probably beyond the allowances given.

Chairman

In fairness to the Minister, the Deputy will have to take up that matter elsewhere.

Mary Coughlan

She is getting disability benefit.

Mr. Crawford

The second example is of a teenager who was in a difficult family situation. She is now in bed and breakfast accommodation, is pregnant and must leave the accommodation when she is becomes 18. Would she be eligible for rent allowance?

Mary Coughlan

She would have to be assessed as having a housing need.

Mr. Crawford

She has applied for a house.

Mary Coughlan

If she is assessed as having a housing need she is grand.

Mr. Crawford

Can she get rent allowance?

Mary Coughlan

Yes. As long as Monaghan County Council makes a determination that she is entitled to apply for the house she can take that acknowledgement to the community welfare officer and apply for rent allowance as a temporary measure.

Chairman

I am sure my colleagues know of people who, for example, go from having 29 hours employment to having 30 hours. Years ago when I was an agricultural consultant I was convinced it would be better to bring all farmers into the tax net at once rather than bringing farmers with different poor law valuations into the tax net by degrees. Subdividing people who do 29 hours work and those who do 30 hours work causes problems. I pointed out this problem during the debate on second stage in the Dáil. I hope the Minister studied my speech. I wonder if any of her officials bothered to read my second stage speech.

Mary Coughlan

Do you not know, Chairman, that I have your speeches photocopied and framed and hang them above my bed. I say goodnight to your photograph every night, Chairman.

Chairman

I hope you say good morning to the people I am worried about. I am worried about people who lose everything when they go from working 29 hours a week to working 30 hours. Something like the marginal relief system should be put in place so that if the extra hour brings a person €10 over the limit he or she should get some help rather than being cut off. I am sure my colleagues often meet this problem.

Much of what we are currently debating should be brought together under an umbrella group in the context of joined up government. Such an arrangement could involve housing officers, community welfare officers and officials of the Departments of Social and Family Affairs and the Environment, Heritage and Local Government and local authorities meeting in an integrated group to ensure uniformity of service. I am aware the application process is to be synchronised so that the right to rent allowance is uniform throughout the country. Deputies Seán Ryan and Ring spoke about anomalies which arise and which cause difficulties. The interpretation of the social welfare code should be clear.

Deputy Ryan and I propose that the rent allowance be reviewed. The Minister has indicated her intention to review it on an ongoing basis and I accept her commitment in that regard. I am sure Deputy Ryan does too. No one should be deprived, particularly those who are deserving, vulnerable, marginalised and trying to put their best foot forward and make their way in life. We must ensure that those people are protected. We, as taxpayers, must provide for people who are vulnerable.

I accept the Minister's undertaking and today's exchange has been useful.

Amendment, by leave, withdrawn.

Chairman

Amendments Nos. 2 and 7 are related and may be discussed together, by agreement. Is that agreed? Agreed.

We have debated this matter extensively and have written a report on it. I ask members to be brief in their comments on the amendment. The Minister has established a review group to examine this matter.

Mr. S. Ryan

I move amendment No. 2:

In page 4, before section 2, to insert the following new section:

2. --The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of abolishing the means test for carer's allowance.".

The purpose of this amendment is to highlight to the Minister and her officials the importance this committee gave to the position of full-time carers in its report on this matter. Many reports have been produced on this question. When we presented our report to the Minister I asked that it not gather dust on a desk in her Department.

This committee has made this a priority issue. We recommended that we should work towards the abolition of the means test for carer's allowance. Having discussed the issue and having listened to the various groups throughout the country who have made submissions, it was clear that carers feel they are saving the State millions of pounds per year by providing care for their loved ones at home rather than sending them to an institution, hospital or nursing home. They feel their role in society is not being adequately acknowledged, particularly by the Department of Social and Family Affairs.

While there are approximately 150,000 carers in the country, only approximately 23,000 of those are in receipt of carer's allowance. This is a small percentage. This matter must be put on the national agenda and kept there. I acknowledge the commitments given by the Minister in setting up an internal group in her Department. Nevertheless, the joint committee wants to see progress on this issue. The Labour Party is committed to abolishing the means test for carer's allowance, we have unanimity on this committee and I ask the Minister to keep this objective on the Government's agenda and work towards achieving it. This is why I have tabled this amendment for consideration.

Mr. Ring

You are right, Chairman, when you say we have exhausted this topic. I ask the Minister to ensure, perhaps in the next budget, that some of this committee's recommendations regarding carers will be acted upon. The means test for carers is a big issue. There must be some recognition of the people who are providing an excellent service and saving the State millions of euros.

Widows and widowers who are carers cannot draw a second social welfare payment. This committee recommended that they receive 50% of carer's allowance on top of their social welfare payment. I ask the Minister to look at that recommendation. The respite grant for carers should also be looked at.

There are 170,000 carers in the country. Of the 21,000 people in receipt of carer's allowance, 14,000 receive full carer's allowance and the rest receive a portion of it. This joint committee has prepared an excellent report. The recommendations in it do not come from the committee but from the thousands of carers about whose problems the joint committee has been informed. I hope the Department and the Minister can see fit to do something for these people. We could talk forever about carers and we have taken every opportunity to do so in recent years. I ask the Minister to adopt as much as possible of the report.

Mr. Crawford

I support Deputy Ring on the issue of widows and those on social welfare who cannot get any benefit. On the issue of how people in agriculture are assessed I was informed of a case yesterday where a man was in a position to take up lucrative employment and his aged mother was being brought home from a nursing home. He agreed to care for her because there was nobody else to do it and he applied for carer's allowance. He is being assessed as working many hours on the farm. There is no question about the need for his mother to have care and no question that her son is providing that care but it has been made clear that the carer's allowance will not be given under any circumstances. Those regulations were not being adhered to a few years ago but now they are being strenuously applied by social welfare officers. I voice my abhorrence of this practice. If this man had not agreed to give up his job, his mother would have remained in full-time care. He cannot afford not to be in employment or not to get some help.

Chairman

The Minister will be aware that this committee considered that report over a period of seven or more months. It was unanimously adopted and there were more than 80 submissions and many hours of work were invested in it. The committee wrote the report and it reflects the thinking on the ground and the input made by various groups such as the people we meet in our clinics and the various organisations. There were some heart rending submissions by people who described the practical realities they encounter.

The committee put forward a number of proposals. The Minister indicated that the removal of the means test would cost approximately €185 million. In the interim the committee promoted the home-based subvention. As the Minister is aware, many people prefer to stay in their own homes. I am aware of the case of a middle aged person caring for a father of 92 or 93 years. She owns a house with a mortgage. She returned to her father's home to care for him full time, she had no other job. As soon as the regulations and assessments were in place, the payment of €520 a month which she earned from renting the property was taken into account. There is no allowance made in the computation for the fact that she has a mortgage. To add insult to injury, they want to value the property as being in the heart of Mullingar. This is nonsense. This person and those like her are saving the State hundreds of millions of euros and yet the value of her house is being investigated even though she has a mortgage to pay on it. The rent on the property is paying the mortgage and yet the Department does not wish to give her €140 approximately a week to look after her 93 year old father. I wonder what would happen if he had to go into an institution.

Mr. Crawford

That has to be coming from above.

Chairman

That is the point. It is like the rent allowance. The Minister has clarified many issues for the committee today and that is helpful but there should be a directive issued that such things do not happen. This case is subject to appeal and I will fight it with all the power I have. That person is looking after a parent in his 90s and is saving the State millions.

What Deputy Finneran said about the carer's benefit is correct. I am aware that the Minister must deal with employers and that is another issue. We recommend that carers such as widows and widowers who are providing care should be given 50% of the payment which would amount to €70.

Last December at my clinic in Mullingar, a woman came in with her eyes popping with excitement. She said, "Willie, I will get something won't I?" I said, "Well, hold on now. It is a recommendation that we are making. I know the Minister for Finance is sympathetic but I am also looking across at the lily white county and I want to make sure he is sympathetic". That is exactly what I said. I ask the Minister to consider what the sum of €70 would mean to that woman. It would mean a great deal and it would be a recognition of her work for the person for whom she is caring and for society.

I wish to alert the Minister from one friend to another that the indication is that the Minister for Finance, Deputy McCreevy, will not know what to do with his money come next December. The indication from people in the area of economics is that he will not know what to do with it.

Mr. Finneran

That is great credit to him.

Chairman

Many people suffered for him to arrive at that point. In any event, if that is the position——

Mr. Finneran

That is not what the Deputy was saying six months ago.

Chairman

——the projected position, we know where we can spend a couple of hundred million of it, not in any profligate fashion but in a fashion that would be very——

Mr. Crawford

Not at Punchestown.

Chairman

——well recognised across society, aimed at fellow members of our society, the 150,000 people who are carrying a burden silently over the years. The committee pledged to put carers on the agenda and to act as their mouth, eyes and ears. In the context of amendments Nos. 2 and 7, we appeal to the Minister. We promised the people who came to make submissions that the committee would not lose focus and I know the Minister will not lose focus. The members of this committee will help the Minister in any way they can.

Mary Coughlan

I thank the Chairman. It is right that the issue is on the agenda and it should remain there until such time as we come to some complete solution of the issue. The two reports are there and I hope to issue the results of some work on that within the next fortnight. There has been so much legislation to be dealt with in the recent past that there has not been a great deal of time to consider many other issues. We hope to have broken the back of much of the legislation within the next fortnight. On that basis my view is that we should examine the issue of long-term care. Most of us agree that home subvention is the best way forward. The interaction between my Department and the Department of Health and Children will be very supportive. I am briefed on the pilot home subvention scheme which has been very helpful, progressive and is value for money. The roll out and expansion of that service including the carer's allowance is what we need.

The Chairman is correct in stating that €180 million is the cost of abolishing the means test on the basis of the existing parameters of full time care and attention. The statistics show that there are quite a deal more people who would describe themselves as carers but perhaps in a part-time capacity.

The Deputy referred to a certain lady and it is very difficult to talk about a client's issues. In the main, when one seeks to ascertain the capital value of a property, a mortgage must be taken into consideration. I do not know if the lady in question was working or not. Perhaps, she would have been better off on carer's benefit. If not, she would have been transferred to some other benefit. As the Deputy said, the case is under appeal. Given the Deputy's vociferousness, I expect he will putting forward the case quite cogently on the lady's behalf. If a mistake has been made, the appeals system will deal with it on the basis of the assessment of capital.

When it comes to the issues of double payments and widows, the statistics indicate that we have a growing elderly population and that quite a number of carers are over 65. They were often termed elderly in the past, though that is not the case anymore with greater longevity. If I had a great deal of money, carers would be a priority. Even based on the resources which were available to me, I was able to do something relatively substantial by increasing the threshold to provide carer's allowance to more people. There are about 21,500 people on the carer's allowance scheme now. Regardless of the resources available, it is my intention to continue to support carers and to continue to provide the very important respite grant.

I have taken into consideration the recommendations of the committee. They will be examined fully during my preparations for next year's budget. I hope, given the stable progression of the economy, that we will have additional resources to address issues in this area and to prioritise people who have given great service, time and benefit to society. This issue will not go away until we deal with it in a satisfactory manner.

Mr. S. Ryan

We have had a worthwhile debate. The Minister did not have much time and she had decisions to make in the context of limited resources. The report was published before the budget was announced. As she has outlined this afternoon, the Minister will examine the report and the committee looks forward to interim discussions following the adjudication of her inner committee. Hopefully, we can work together to implement the recommendations.

Mary Coughlan

I will involve the committee in some of the deliberations.

Mr. S. Ryan

On that basis, I withdraw my amendment.

Amendment, by leave, withdrawn.

NEW SECTIONS.

Chairman

Amendments Nos. 3 and 15 are related and may be discussed together, by agreement.

Mr. S. Ryan

I move amendment No. 3:

In page 4, before section 2, insert the following new section:

2.---The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of extending the social welfare free schemes to widows and widowers who do not currently qualify in that regard.".

This is another issue which we have discussed with the Minister in the past. As a politician meeting people throughout my constituency, I hear clearly from widows and widowers, particularly those under 65, that they are being discriminated against. They are not getting a proper crack of the whip in terms of the money available for reallocation from our taxes within the Department of Social and Family Affairs. This is another area which must be addressed and I support fully these widows and widowers in their plea for a proper response from the Minister.

Mr. Ring

Widows and widowers are the forgotten people in this State. Widows, particularly those left with young families, would benefit greatly from access to the free schemes. I made this point in the Dáil on Second Stage. The Minister should examine this issue. It is time we addressed the problems of widows and widowers.

I would like the Minister to consider extending the free travel scheme, particularly North and South. I would like to see the introduction of Europe-wide travel. There is no legitimate reason people with the right to free travel cannot travel to Northern Ireland and that people from Northern Ireland cannot travel to the South. An arrangement should be put in place by the Governments. I would like the Minister to consider the matter at European level to extend the free travel scheme to all member states. Elderly people are the ones who made this State what it is. Deputy Finneran has spoken about what is happening with the Minister for Finance, none of which would be possible had it not been for the great sacrifices of the people who went before us. The least we can do is look after them by making their lives comfortable in the few years they have left. If these people are at an age when they can travel, they should be able to venture all over Europe on the free travel pass. Certainly, they should be able to travel into Northern Ireland.

There was a report on free travel a number of years ago which I have asked the Minister's Department about before. Free travel passes are provided to people in rural areas where there is no public transport. The time has come to put a voucher scheme in place to allow people to use taxis to obtain their pensions on a Friday. It is a reasonable request which it is not beyond the bounds of possibility to meet. There are some very bright sparks in the Department even if some of them cannot add. We will get over that. There is no reason they could not draw up a scheme. The time has come in this new era in which taxis are used by everyone. It is something that people would not have dreamed about ten years ago.

I raised with the Minister recently the fact that there are a number of rural organisations which have established their own schemes of transport provision. While some have run into difficulty with funding from the Department of Community, Rural and Gaeltacht Affairs, I hope they will move from a trial to a permanent basis. The schemes have worked, particularly in Achill and Kiltimagh.

Mr. Crawford

I support the amendment. Widows, especially those left with family dependants, find themselves in severe difficulties. While circumstances are not so bad if they can work, if they have to continue to rear a family it can be very tough. I have met too many families to name recently which face these difficult circumstances. There are a number of young widows who find themselves in very serious difficulties. To explain to them that a person over 65 is in receipt of entitlements they cannot obtain is very difficult. I understand the Minister's problems with single parents, etc., but there is a group of people, which cannot be very large, who deserve something extra.

I support Deputy Ring in the comments he made about rural transport. I heard on the radio of the problems of some of the pilot rural transport schemes. They have received the same money for 12 months this year that they received for nine months last year. While it may not be the Minister's specific responsibility, the matter is one which must be examined seriously.

Chairman

We raised this issue with the Minister on Second Stage. A widow or widower with a young family who loses someone while in his or her mid-30s is very vulnerable. For that reason, we sought the extension by the Minister of the free schemes to act as a crutch for people during a difficult time. Some of these widows and widowers may live in isolated rural areas and they feel there is nothing in place for them. It is a significant drop for a partner to have to depend on one income which is a social welfare payment. While the Minister says the payments are increasing, the sums are never enough where there are two or three young children. We recognised this and asked the Minister to examine extending the schemes for a year or two to see how much it would cost and the average projections. Perhaps the Minister would examine this in that context.

Deputy Ring is correct. For many people who get the free travel pass, it is their first point of contact with the Department. However, these passes are often left to gather dust and cobwebs, particularly in rural areas in which there is no transport. It is good to be eligible for it but it is often unclaimed because it is of little use when no public transport is available. We want to extend the type of transport which would be facilitated by the use of the free travel pass, whether that is the local private bus or taxi which could bring people into town to do their business with solicitors, doctors or chemists. People love their independence and like to carry out such private activities by themselves. It would be commendable to allow such people to use the travel pass. The Minister examined and supported some transport initiatives and she and I debated their relative value on a radio programme while we were miles away from one another, which demonstrates how far technology has advanced. It is interesting to note where the free travel pass started and where it is going in the context of the availability of a wider range of transport initiatives.

Mr. Finneran

It might be possible for a visit to the doctor to be free, but a visit to the solicitor would not be.

Chairman

One would hope they would all be free.

Mr. Ring

I would be very conscious of that.

Chairman

I will not ask Deputy Ring to comment on costs. In case the Minister is drawn into that debate, I ask her to concentrate on items 3 and 7 on the agenda.

Mary Coughlan

It might be a better idea to stick to those.

Mr. S. Ryan

The Minister's party was in a bit of trouble over the weekend in getting the right person for the job.

Mary Coughlan

We have the right team now.

Mr. Ring

All the Ministers of State are gone.

Chairman

I remind Members to concentrate on the agenda. Any extra political matters can be debated elsewhere.

Mary Coughlan

We can discuss them over a cup of tea.

I appreciate that issues in regard to widows and so on were raised on Second Stage. There were some changes which reduced the age bracket to 60 years. If a person who was in receipt of payments heretofore was between the ages of 60 and 65, he or she could continue receiving entitlements under the household benefit package. We have now come to concentrate more on younger widows, given that we had a number of things to do in regard to payments to widows over 66. That final tranche was completed in the last Social Welfare Bill.

Deputy Crawford is correct that one of the problems with anything in social welfare is that when one makes a decision, it is consequential on about 30 other schemes. It is difficult to change one without changing it for everyone. I appreciate that anyone who is left widowed with a young family finds it difficult - not only because of the emotional trauma but the financial changes, changes of role and other traumatic situations. We will look at issues affecting widows and widowers and see how we can better support them. Free schemes are being considered.

In recent years, the household package has been evolving for a number of schemes, for example, the carer's allowance. There has been a greater evolution of the schemes and their availability. This is one of the issues we will examine with the overall objective of evaluating all the free schemes. Added to that is the issue of the travel scheme. The Deputy is correct that there is a proposal to look at an all-Ireland travel scheme. In the EU, consideration has been given to an all-European scheme but they are at an initial stage. Getting agreement among all member states might be difficult. Nevertheless, it is on the agenda for consideration. I hope that we can get the all-Ireland travel scheme set up as soon as possible. As Deputies know, people can go into Northern Ireland but only if their journeys commences in the Republic. It works both ways.

Two years ago, we introduced funding through ADM for the free travel people under the rural transport initiative, which has been very successful. This type of initiative will support and address the issue of not having personal value for money from the free travel pass. We looked at vouchers but they are very much open to abuse. They are open to transport providers putting pressure on people who are in receipt of vouchers to use them or use up the money. Older people are vulnerable and could feel under duress in this circumstance. However, it is under consideration.

On the expansion of the scheme, I gave a commitment and we are in negotiations in regard to the free travel scheme on the Luas and private bus operators, to which Deputy Ryan as well as many of the other Dublin Deputies have referred. When one opens the transport system to more private operators, they are entitled to apply to my Department for consideration to carry free travel passengers. Transport policy is evolving and we will have to determine where we can best target many of the people who are entitled to the free travel scheme.

It is unfortunate that if one lives in Donegal, for example, one cannot avail of the train. It is quite a walk to Sligo to get to the nearest station. God love Monaghan and Cavan. Donegal has mainline bus services but getting to the other bus service is quite difficult. The rural transport initiative has addressed a number of those concerns and an expansion of that scheme under ADM would perhaps be very fulfilling for people in rural communities. The manner in which we address this issue will always be down to financial imperatives. However, I am well disposed towards examining and evaluating how we can best get value for people.

Many people up to now were ashamed to get the free travel pass but now they are delighted. Older people like to travel, to come to Dublin and other places. That is important as we are trying to encourage active ageing. I cannot, with a wave of a wand, address this issue this afternoon. However, it is being considered and we will have to evaluate the best way forward. The rural transport initiative is already in place and an expansion and evaluation thereof has indicated its worth to people in rural communities.

Chairman

How stands the amendment?

Mr. S. Ryan

We have made it clear where our priority lies in regard to trying to deal with widows and widowers under 65 and we look forward to further progress on the issue. On the basis of the Minister's response, I will not press the amendment.

Mr. Ring

The Minister announced last December that she would be extending free schemes on mobile telephones, about which I recently tabled a parliamentary question. However, nothing has happened in that regard.

Mary Coughlan

We have that more or less finalised now. We had introduced a new computerised system to allow for other operators, not just mobile telephone operators, but ESAT and others——

Mr. Ring

Will they have a choice of one or the other?

Mary Coughlan

It is a choice.

Mr. Ring

That is fine.

Chairman

Elderly people who have a mobile telephone——

Mary Coughlan

If people decided they did not want free rental on their ordinary telephone but would rather it on their mobile telephone, they can get that. Many older people are getting mobile telephones as gifts and so on.

Chairman

When does the Minister anticipate that will happen?

Mary Coughlan

The computer system is nearly sorted out.

Chairman

Will it be in April?

Mary Coughlan

It will be before the election.

Mr. Ring

Will the Minister be using it at the Ard-Fheis?

Mary Coughlan

For that I will have other little gems.

Amendment, by leave, withdrawn.

Chairman

Amendments Nos. 4 and 11, inclusive, are related and may be discussed together.

Mr. S. Ryan

I move amendment No. 4:

In page 4, before section 2, to insert the following new section:

2.--The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the operation of the social insurance system insofar as it affects persons whose entitlement is determined by reference to historic rather than recent contributions.".

I look forward to hearing the Minister's view on this amendment which relates to the historic operation of the social insurance system. There are two elements to the amendment, of which the first deals with pre-1953 contributions. I know progress has been made on this issue but people are still not receiving the full benefit of their contributions. The number in this category who are still alive is dropping significantly but it is still unfair that they are not receiving the full benefit of their contributions. The amendment also tries to ensure more recent contributors would obtain their full benefits.

Mr. Ring

I raised this issue with the Minister last week, telling her about the woman I had met who had worked for a number of years, left to raise her family and then returned to the workplace. Her pension was calculated over the years since she had started in employment, which at that point was 48 years ago. Those who come from America or Britain, participate in a few FÁS schemes and perhaps do a little work will qualify for a contributory pension, while the woman I met was barred from receiving her full pension because she had worked for two years in 1953 and 1954. She only received a portion of it.

I know the Minister and the Department are considering these anomalies. This is a serious one. Somebody who worked for two years, left to raise her family and returned to the workplace is not entitled to her full pension. The Chairman and Deputy McGrath have come across others in this situation. They are being debarred from receiving their full pensions simply because they have worked in previous years. This is a matter the Minister must investigate. I know it could open a can of worms but an injustice is being done and we must investigate it seriously. A number of people are caught in this category. Without opening a can of worms, I hope the Minister can deal with genuine claimants who worked for a few years before giving up employment to raise their families. They should not be penalised for leaving to look after their children.

Chairman

I have given the Minister the example of a man who worked in the old Board of Works from 1957, when he was 17 years old, and paid social insurance contributions for a year. He then left, not of his own volition but because of economic circumstances, and worked in the United Kingdom from 1960 to 1985. In 1986 he returned to Ireland and resumed employment. He has been working and contributing for 18 years. However, when he sought his pension, the Department assessed him from 1958. This means the record shows that he has been in the contribution system for 40 years and only paid social insurance contributions for 19 or 20 years. There is, therefore, a large dilution of his pension. Those who work for 18 years continuously and are told they paid contributions for one year back in 1957 are now finding the value of their contributions is well diluted, particularly if they have recently been working for 18 or 19 years consecutively.

Mr. D. Wallace

On the same point, those who worked before 1953 were excluded from receiving a pension because their contributions were not taken into consideration. However, after a long campaign, the Minister's predecessors acknowledged and recognised that many here and abroad, particularly in the United Kingdom, were being deprived of a pension because they were not receiving recognition for the years they worked here. If there is a precedent, there is an opportunity to investigate whether we can give the same benefit to those affected by the issue dealt with in the amendment. It must be easy to remove the anomaly. Many anomalies have been removed over the years only because of meetings such as this in which the information is brought to the attention of the Minister and his or her officials. There is an opportunity to consider this issue.

Mary Coughlan

We are debating about the man mentioned by the Chairman. Was he working in the United Kingdom for 18 or 19 years? If so, his pension should be protected.

Chairman

He would receive a pro rata pension. My point is that if somebody returns to start working in this country——

Mary Coughlan

No, his entitlement would continue. We have bilateral agreements with all European countries, South Africa, Australia, New Zealand and Canada. Contributions made in any of these countries are carried over through the EU or international side. The people concerned should be fully protected. Sometimes those who worked in the United Kingdom might not receive a full pension and apply to us for a top-up from the non-contributory side because, contrary to popular opinion, the British pension is often not as good as the Irish one. That is why most of the people concerned are entitled to a small top-up. If more than 50 cent per week is received, this slots into the household benefits package which is used by many.

With our bilateral agreements, pension contributions are protected. We have bilateral agreements with a number of peculiar parts of the world where Irish people go to work. We have one with Uzbekistan where members of ESBI used to work. The Chairman is talking about the historical amalgam of pension rights. I would need about 200 lawyers at my back before attempting to discuss the issue.

Chairman

I understand.

Mary Coughlan

Deputy Ring is right. Once we start tinkering with contributions we experience problems. We have introduced a self-employed contributory pension. No more than myself, we have all been demented trying to figure things out. The number of years' contributions one must have paid to be entitled to draw down one's pension has been reduced considerably - it could not have been reduced any further - and still people were unhappy. They were caught in a difficult position. Things will change from now on because the majority are now making a contribution towards their pension requirements from a social welfare point of view. We need to impress upon them the need for additional pension support but that is another argument.

To be eligible for a contributory pension, one must first pay 260 contributions at the appropriate rate. The appropriate rate is an important factor. One enters the insurance system ten years before one reaches pension age. Some might have been caught out on this, if this is their 56th birthday. One achieves a yearly average of at least ten contributions paid or credited on the social insurance record from 1953 or the date of entry into the insurance system, if later. A yearly average of 48 contributions is required for a full rate pension, with a reduced rate payable to those with a yearly average of between ten and 47 contributions. In a retirement pension a yearly average of 24 contributions is the minimum requirement. Provision is also made for the payment of pro rata pensions in cases where people have a mix of contributions from different classes on their record or insurance contributions from other EU countries or countries with which Ireland has a bilateral agreement.

In general, all contributions paid or credited on a person's record up to the end of the last complete tax year before he or she reaches pension age may be counted when his or her entitlement to a pension is being examined. However, only contributions paid under the unified social insurance scheme introduced in 1953 can be used to satisfy the average contribution test. The conditions are intended to ensure persons qualifying for pensions have had a reasonable association with the social insurance scheme over their working lives.

Further developments in the qualifying conditions for pensions will be considered in the context of the phase two review of the qualifying conditions for old age contributory and retirement pensions. The first phase report was published in 2000 and the second is at an advanced stage. I expect to publish it in the next few months. Among other matters, it will examine in detail the operation of the average contribution test and outline options for a system based on total contribution as suggested in the first phase report. We will evaluate this strictly before we make any decisions because we could make a decision on a total contribution framework that could be less favourable to some.

There are issues related to amalgamations and historical attributes of the system. The only Fine Gael member who is disgruntled about pre-1953 pensions is the Chairman of the Committee of Public Accounts. Departments were perhaps unhappy about this pension but it was a good political decision as I am sure Deputy Ring agrees, knowing the number from County Mayo supported by the scheme. We could not evaluate the number involved at the time because so many went to Britain but it was warmly welcomed by those who had come home and those who felt they had received no recognition for the contribution they had made to the State, even though they did not live here. In the phase two review we are looking at the contribution requirements for access to a pension. We will then make a decision.

Mr. S. Ryan

We look forward to that. It is only through raising these issues that we come to a resolution. The mother who stays at home is discriminated against by the taxation system introduced by the Government. Here we have a situation in social welfare where a mother who stays at home for 15 years to raise her children loses out. The person who decides to stay at home to look after his or her children is getting a bad deal and I hope the points made this afternoon will be taken on board.

Mary Coughlan

There is a homemaker's scheme which helps a person to qualify for an old age contributory pension at 66 years. Before 6 April 1994, a person who left the workforce to provide full-time care for children or an incapacitated adult could have had gaps in his or her social insurance record that would have affected his or her entitlements. From 6 April 1994, a person who left or had previously left the workforce to care for children or an incapacitated person may have these years disregarded when the yearly average number of PSI contributions for old age contributory pension is being calculated. This will benefit many women who made the decision to leave work and who would otherwise have lost out.

Amendment, by leave, withdrawn.

Section 2 agreed to.

NEW SECTION.

Mr. Ring

I move amendment No. 5:

In page 4, before section 3, to insert the following new section:

"3.-- The Minister shall, as soon as may be, after the passing of this Act prepare and lay before both Houses of the Oireachtas a report:

(a) contrasting the increase in 2003 of the Consumer Price Index with the increases paid to the entitled persons under the Act of 2003;

(b) evaluating the suitability and appropriateness of the items and weightings used by the Central Statistics Office in computing the rates of increase in the Consumer Price Index to the needs of the principal categories of entitled persons under the Principal Act;

(c) setting out the Department’s assessment of those groups potentially most seriously affected by significant inflationary pressures which may arise because of internal and external factors in 2004.”.

I have raised the issue of the consumer price index before and ask the Minister and the Department to be more honest. There is no point having this basket of package holidays, luxury goods, second cars and fur coats. I want a basket that takes food, bus fares and health care into account, basic goods, not luxury items. Very few on social welfare will be going on package holidays. We should take food, ESB and phone charges into account. If that happened, the Minister would not be claiming that inflation is running at 2.5%, it is running at 12% for the people concerned. ESB charges went up three times last year, a total increase of 25%. Instead of using the existing scheme, would the Department count household goods used on a day-to-day basis? That would be more realistic for those on low incomes.

Mary Coughlan

This is an old horse that we have often flogged. I thought it would have keeled over by now but unfortunately it has not. I am delighted that Fine Gael has reduced inflation by 1%. It was 3.5% last year.

Mr. Ring

If we are being honest, it was more like 10%.

Mary Coughlan

I hope the Deputy's forecast is correct.

Mr. Ring

Deputy Finneran got it wrong on Sunday. We all get it wrong.

Mary Coughlan

This method is used extensively. It takes into account 55,000 prices covering 1,000 items. This is how we evaluate the basket and the best guide to price inflation in the economy. I do not see any added value for social welfare customers in issuing separate reports since there is no typical social welfare household; every one has different needs and financial circumstances that can fluctuate from day to day. Some household essentials have increased such as ESB and telephone charges but no one ever mentions that the price of clothing and footwear has fallen by 4% this year. There are checks and balances.

Mr. Ring

Did the Minister buy shoes recently?

Mary Coughlan

I did, I bought several pairs.

Mr. Ring

By God, I would like to go to that shop.

Mary Coughlan

It is in Mayo. I am, therefore, keeping the people of Mayo in work.

Mr. Ring

The Minister must get a discount.

Mary Coughlan

The CPI is the most competent, professional analysis in determining the rate of inflation. I was asked last year if my Department would introduce an inflation-measuring basket but saw no purpose being served by it. We evaluate prices, the natural consequence of which is that we determine how much above inflation the values of our social welfare schemes are. The increases granted this year have been well above inflation, some considerably. The information available from the CSO and CPI provides the best, most professional and acceptable methodology for ascertaining the inflation rate. On the basis of its acceptance across a wide community, I would not be anxious to change this in any way.

Mr. Ring

I disagree with the Minister. We should live in the real world. I withdraw the amendment on the basis that there is no point in promoting it.

Amendment, by leave, withdrawn.

SECTION 3.

Mr. Ring

I move amendment No. 6:

In page 4, between lines 20 and 21, to insert the following subsection:

"(3) The Minister shall establish an internal departmental committee to assess the extent to which the amounts provided for in subsection (1) adequately meets or assists in meeting the costs of maintaining a child in the State.”.

This relates to the recent increases in child benefit. All of the various groups such as the Children's Rights Alliance have commented on this issue in recent years. As I said in the Dáil, 99.9% of the amount paid in child benefit is paid to women and spent on children. The Government gave a commitment in 2001 which has been broken every year since. I hope that in next year's budget the Minister will honour the commitment given by the Government to bring child benefit into line with what women were promised, a matter about which I spoke in the Dáil recently.

The figures indicating the number of children living in poverty are disturbing, although I know that the Minister and her Department will deny them. They do not come from me but from the various groups which deal on a day-to-day basis with the weakest in society, those living in poverty. In next year's budget I ask the Minister to honour the agreement she entered into in the programme for Government and in partnership with the trade unions. As a woman, she will have no difficulty in honouring her commitment to women if she gets the finance.

The Minister for Finance, Deputy McCreevy, told us in the Dáil in 2001 what women would get. It was laid out in the programme for Government but he did not honour that agreement. I now call on the Minister for Social and Family Affairs to ensure that in next year's budget the increases promised in 2001 will be granted next year. I could provide her with all of the figures from the various voluntary groups but will not do so because they have been available since December. As it is early in the year she should fight her corner with the Minister for Finance who made a promise, a commitment, to women in the Dáil. He was seen to do so on RTE.

As a woman and mother, the Minister for Social and Family Affairs must ensure the Department of Finance provides the necessary funding, including the moneys owed this year and last in child benefit. This is important. Child benefit has worked and I would oppose any Government which tried to interfere with it. It is the one payment made solely to women. While some men might have a lot of money, they can be very mean. In our constituencies we see that women prefer to have their pension paid in their own name, rightly so. It is important that they are protected and that the money which they spend on their children is paid directly to them. The Minister must honour the commitment made in 2001.

Mr. S. Ryan

In supporting this amendment I seek a commitment from the Minister that she will adhere to the agreements made. The Government gained power on the basis of commitments which it has not fulfilled.

The most recent ESRI report on poverty records that in 2000 one in every four households - one in every five people - was living in poverty. Of the households living in poverty, almost two thirds, 65.7%, contain children. The report has found that almost one in every four children is living in poverty. In that context, we must consider the best way to support children. The Labour Party has always believed child benefit is the best way and is utterly appalled that the various commitments given by the Government in the last general election and Sustaining Progress have not been fulfilled. In the context of the amendment, they must be met.

Mr. Finneran

It is always important that increases are granted and that Ministers respond to those in need. However, the comments of Deputies Ring and Ryan regarding commitments given are rich. They should reflect on what was provided when their parties were in power.

Mr. S. Ryan

The Deputy should live in the real world.

Mr. Finneran

It is a long time since the Opposition parties were last in power. Given the way the Deputies are carrying on, it will be a long time before they are back in power again.

Mr. S. Ryan

The Deputy is not living in tandem with his party members.

Mr. Finneran

When the Deputy's party was in power, the then Minister for Social Welfare granted an increase in child benefit of £1.50. I remember it quite well as I was a Member of the House at the time.

Mr. S. Ryan

He was a Minister with the Fianna Fáil Party.

Mr. Finneran

He is now representing the Deputy's party in Europe and hopes to be re-elected. The Minister for Finance, the Minister for Social and Family Affairs and her predecessor were the only ones in modern times to give any reasonable increase in social welfare allowances. In previous years child benefit was almost ignored as there were only nominal increases. This and the previous Government have brought it into line with what is reasonable and offers a reasonable return to mothers. It has finally been properly recognised as the record will show. It is very easy to go back over the figures. I could indicate what they are but will not do so. Those who did not respond when they had an opportunity to do so in a positive way should not criticise the Minister for Social and Family Affairs or the Minister for Finance on their commitment to child benefit and other social welfare schemes.

Mr. D. Wallace

We could look back at many issues but I will not do so. The Government made commitments which it is honouring as is clearly shown in this legislation. Child benefit is one of the areas in which a commitment was given and the increases granted are there for all to see. I do not know how people could think otherwise. It should be recognised that there is a lot of work to be done and that the Government is doing a lot. Those in opposition had their opportunity. However, I do not want to look back but forward. We compliment the Minister on making the case that the benefits outlined in the Bill are needed and know that we have a lot more to do. Let us, at least, recognise that we are making progress.

Mary Coughlan

I have a strong weakness listening to Deputy Ring about the virtues of womanhood.

Mr. Ring

I have always defended women.

Mary Coughlan

I am not the better of it. I made the same argument on the issue of a universal payment. I know that he thinks I do not listen to him but I am delighted that some people listen to me an odd time on these issues.

We all agree that there has been a huge investment in child benefit. Let us call a spade a spade. In 1997 £500 million was spent on child benefit. This year we will spend €1.75 billion, a huge investment. We all know that some have invested the money in SSIAs but for the majority it is a very good way to clothe children, or keep things ticking over for children at school, or perhaps take them out for a treat. It is very beneficial, used in the main but not always by women. Men, if they have full-time custody of their children, are entitled to receive the payment.

Child benefit has had an impact on the issues of child poverty and child care, which is still a live issue and has been discussed in the 2003 OECD report, Babies and Bosses: Reconciling Work and Family Life, and dealt with in the EU working time directive.

One of the special initiatives in Sustaining Progress is specifically designed to tackle the issue of child poverty. I hope to meet fairly soon the group looking at the issue to try to come to some conclusions. A figure of approximately 89% has now been reached. It will cost about €250 million next year to complete the programme. I hope I will have adequate resources to do this but if I do not, my view is that we should continue to try to reach that target. On the basis of all of the submissions made in pre-budget forums and all of the issues raised by Members of the Houses, I would not have enough money in an amalgamation of the United States and Europe to provide what people want. That said, it is an issue which has been given priority.

Sometimes we have an academic discussion - I speak as a social scientist - about the issue of consistent poverty and those at risk of poverty, the levels of which have been reduced considerably. One could be in full-time employment and still at risk of poverty, given the issues which impact on one's household. It is not always a question of income deprivation; it can be a lack of ability to manage one's finances, a lack of education or school meals, all issues which can point to someone at risk of poverty. One could even have people in the considerable income bracket at high risk of poverty because of alcoholism and gambling, for example. We all know of people who are considered to be very well-off but who are up to their necks in debt and the wife does not have enough with which to feed the children. They would not be entitled to receive any payments on the basis of capital value. We have to deal with those experiencing poverty in immediate need of intervention.

Once an economy experiences extensive growth, as ours has in recent years, members will notice a changing pattern in the at risk indicator. This has to happen; it is just the way things are. The more employment that is created, the more the relative aspect of poverty changes. This is a natural economic phenomenon which cannot last forever. When one has very high employment, those in the more vulnerable bracket will be seen comparatively to be at risk. The argument about relativity is an academic one but it is also a very good indicator. It is the way in which policies are driven.

My Department and the Government have used the indicator of consistent poverty because we have to deal with people in immediate need of assistance. We can deal with frameworks, future directions and investments to increase wealth for those who are less well off. None of us would disregard this view, regardless of our philosophy. We are looking at targets and indicators set from an academic perspective while dealing with the here and now. That is the reason we are looking at completion of the investment we intend to make in child related payments. Above all, it is my intention that in the very near future, next year if possible, we will spend almost €2 billion per year on children. That is a good indication that we regard the support of children as very important.

Mr. S. Ryan

CORI has stated the gap between rich and poor has widened by €294 a week since the Government took office. In 1999 there were 2,915 people earning over €200,000 in the PAYE category. Last year this figure had risen to 9,247. In 1999 the number of self-employed persons earning more than €200,000 was 2,831. Last year this figure had risen to 6,542. There is a big gap between rich and poor as CORI and others have stated.

Amendment put and declared lost.

Section 3 agreed to.

Section 4 agreed to.

Amendment No. 7 not moved.

Section 5 agreed to.

NEW SECTION.

Mr. Ring

I move amendment No. 8:

In page 6, before section 6, to insert the following new section:

"6.--The Minister shall, as soon as may be, after the passing of this Act prepare and lay before both Houses of the Oireachtas a report which contrasts the maternity and paternity leave provisions in Ireland with other EU Member States.".

I am raising the issue of maternity and paternity leave. There is no legal obligation on an employer to allow staff to take such leave. Employers are also not legally obliged to pay staff while on such leave, the reason staff do not take it. What plans, if any, does the Government have to legislate to allow individuals to take and to be paid while on such leave?

Mary Coughlan

I do not know how this amendment sneaked in because I do not have anything to do with paternity leave. If the Deputy would like some nice bedtime reading, he could read, as laid before the House, the report of the working group on the review of the improvements in paternity protection legislation and the report of the working group on the review of the Parental Leave Act 1998. We have improved maternity and paternity leave arrangements. The Deputy is right that paternity leave is not "paid leave".

My colleague, the Minister of State at the Department of Enterprise, Trade and Employment, has looked at the issue of reconciling work and family life. Labour law and regulations from the Department of Justice, Equality and Law Reform are important. Aspects of the legislation on maternity leave reflect decisions arising from EU directives. Paternity leave will be a matter to be considered but the implementation of the working groups' recommendations cannot be done in isolation. Its impact will have to be considered in negotiations on social partnership agreements, especially the issue of the involvement of employers and how they will support a concept dear to my own heart, how one can work and have a family life at the same time. I can guarantee it will never happen when one is a politician- in this job one has hardly time to have a baby.

Changes have been made that reflect the changes in EU requirements, for example, one can take maternity leave two weeks prior to the due date as opposed to a statutory four weeks. As a consequence, the duration of maternity leave after birth has been extended. We now have parental and adoptive leave. I am all for the involvement of men in the caring and parenting of their children.

We will have to look seriously at issues such as the reason people are not happy at work, under pressure and stressed, in spite of the fact they are earning considerable incomes. It is difficult for people to benefit from success at work and at the same time not have a sense of guilt or concern about child care arrangements. There are serious stresses and strains in rearing children, regardless of whether one works in the home, but that is beyond the realms of the Social Welfare Bill. Younger people find it very difficult to participate in the working environment and at the same time have a life at home.

Paternity leave is an issue that will have to be considered. Employers as well as employees will have to take up the mantle.

Mr. Ring

I am satisfied with the Minister's response and will withdraw the amendment on that basis.

Amendment, by leave, withdrawn.

Section 6 agreed to.

NEW SECTION.

Mr. Ring

I move amendment No. 9:

In page 6, before section 7, to insert the following new section:

"7.--The Minister shall, as soon as may be, after the passing of this Act

prepare and lay before both Houses of the Oireachtas a report:

(a) setting out the mechanisms by which family income supplement could be paid through the tax system, the estimated additional numbers of entitled persons who would benefit from such a change and the estimated cost of such additional take up;

(b) evaluating the potential numbers of beneficiaries under family income supplement if the self-employed persons were to qualify for participation.".

I have raised the issue of family income supplement before and will not dwell on it today but there is only a 30% take-up of the scheme. The Fine Gael Party believes family income supplement should be delivered through the taxation system. There are families who are entitled to it but will not take it because it is a social welfare payment. Pay related social insurance is collected through the taxation system, through which family income supplement should also be administered. Will the Minister have this examined and report to us on it?

Some people at work are on low incomes. For example, a man working in a hotel for a wage of €330 or €340 who has a wife and does not qualify for rent allowance would be better off on social welfare. He does not qualify for family income supplement because he has no family but is caught because he is working and paying for everything. When there is only a 30% take-up of a scheme, something is wrong. Will the Minister follow up on this?

Mr. D. Wallace

Deputy Ring said people will not apply for family income supplement but I believe they are not aware of the scheme. They would apply, if they were aware of it. As the Department has done in the past, it should, once again, take steps to make people aware of their entitlement to family income supplement which is a generous scheme. I appeal to the Minister to publicise it in any way she can.

Chairman

I concur with Deputy Wallace. It is very important that information on schemes is disseminated widely, be it through the post office, health centres or the Department's own offices, areas where people congregate. It might be no harm to ask the Department of Enterprise, Trade and Employment to ensure employers advertise the family income supplement scheme which is a useful income support. Various modifications have made it even more attractive. It is very important that people on low wages benefit from whatever supports are available for the family and are given family income supplement.

Mr. Finneran

The Chairman made an excellent suggestion on the employer's role in promoting the family income supplement scheme. Employers would have the opportunity to advertise it on notice boards, or even give a leaflet to staff. Notices in post offices are directed at everybody but it goes directly to the employee if it comes in an envelope from the employer. It would be a practical way of getting the relevant information across. Perhaps the Minister's officials will take up this matter.

Mr. S. Ryan

There is universal support for this scheme. However, many are not aware of its extent. For example, a family with one child could earn up to €21,000, while a family with three children could earn €23,000 and still be entitled to family income supplement. Anyone on the minimum wage or a little over would qualify. The scheme should be advertised as far as practicable. In the context of rent supplement, is family income supplement taken into consideration?

Mary Coughlan

No, I took it out.

Chairman

There seems to be universal praise for the scheme which will encompass an increasing number of employees. We suggested a number of ways in which this might happen which would be of help to the Minister.

Mary Coughlan

I agree. I am delighted committee members are agreed that family income supplement offers a good support system and, in particular, a targeted approach for those with families. Deputy Seán Ryan is correct, that, on the basis of the changes made, I removed family income supplement as a means for assessment under rent supplement. A number of other changes to rent supplement were made, including increases in the income limit and basic payment. I am very supportive of the scheme and would see the interaction between family income supplement and CVAs as important, and part of one of the special initiatives under the Programme for Prosperity and Fairness.

I accept there are reasons family income supplement is not popular, of which one is that it is not known. We accept that is the case and are evaluating the best way of getting the message across. Another reason is that there are a number of employers who would not want their employees to apply because they would feel under pressure publicly. Despite this, I am trying to turn around the value of the supplement as a positive way of supporting families, in particular. Another good point about it is that it is paid yearly and does not have to be evaluated ad infinitum. It is a real support mechanism for which people can budget within their households.

Deputy Ring raised the issue of tax credits and the interaction between tax and welfare. This was examined, including the possibility of paying family income supplement through the tax system. However, although tax and social welfare are closely related, a number of family income supplement claimants have an income below the tax exemption limits appropriate to their family size. Therefore, that interaction would not be of great benefit. In addition, as the calculation is made in regard to the preceding year, the entitlement can be difficult to assess.

The interaction does not seem to be working. Not all of the information with regard to a person's household, hours worked, duration of employment, etc., is taken into consideration as information from tax returns. The tax system would not be capable of automatically identifying households with an entitlement to family income supplement. It would be of great benefit if that was the case as it would assist my Department but, unfortunately, we are not in such a position. Family income supplement is an immediate requirement for many. It is on that basis that working the income tax or tax credit system would not be of tremendous benefit to many.

We will encourage more people to take up family income supplement. I am happy that there is public support and hope the supplement will be promoted in clinics and elsewhere as a good family benefit.

Mr. Ring

I have said it is a good scheme for those who need it. However, I would like the Minister and her Department to make a greater effort to promote it. Something is wrong if only 30% of those eligible take it up.

Amendment, by leave, withdrawn.

Section 7 agreed to.

Amendment No. 10 not moved.

Sections 8 and 9 agreed to.

Amendment No. 11 not moved.

Sections 10 to 12, inclusive, agreed to.

SECTION 13.

Question proposed: "That section 13 stand part of the Bill."

Mary Coughlan

Up to 1 January 2004 benefits-in-kind did not attract a PRSI liability for either employers or employees. The abolition of the PRSI ceiling for employers created an incentive for them to introduce remunerative packages involving fringe benefits to reduce their PRSI costs. Some sought to minimise their employer's PRSI liability by paying their employees in part by way of non-cash payments such as bonus bonds, holiday and shopping vouchers or subscription to golf and health clubs. Clearly, such practice was undesirable as it reduced the amount of contributions which should rightfully be channelled into the social insurance fund. Had the practice been allowed to continue, it would have undermined the contributory system which underpins our social insurance system.

It was apparent at an interdepartmental level that an amendment to the legislative and administrative provisions making fringe benefits liable to PRSI was required. As a result, I announced in the budget that from 1 January 2004 the application of PRSI in conjunction with PAYE would extend to existing benefits-in-kind. This action should be regarded as a further reform of the social insurance scheme. It is a progressive step which eliminates inequities in the operation of the PRSI system and assists in closing down another avenue of PRSI avoidance open to employers. The measure was also vital to protect the future viability of the social insurance fund.

Section 13 provides for technical amendments to the PRSI definitions contained in the Social Welfare (Consolidation) Act 1993, consequential on the decision in budget 2003 to charge PRSI and levies on certain benefits-in-kind. The section provides for the deletion of the definition of "emoluments" and a minor adjustment to the definition of "reckonable earnings".

Mr. Ring

I accept the Minister's point and withdraw my objection to section 13.

Question put and agreed to.

SECTION 14.

Question proposed: "That section 14 stand part of the Bill."

Mary Coughlan

This revises the charging of PRSI in circumstances where an employer reaches an agreed settlement with the Revenue Commissioners in accordance with the provisions of section 9 of the Finance Bill 2004 which amends the Taxes Consolidation Act 1997 in regard to benefits-in-kind which are irregular in nature and minor in monetary terms. The employment contributions under the specified provisions will not be regarded for the purposes of establishing entitlement to benefit under the social welfare code as, in the main, they will reflect an underpayment of PRSI for which a contribution has already been recorded. Similarly, in regard to such agreements, the Revenue Commissioners will not consider the benefits on which the tax was paid as part of the total income for employees and, as such, they will not be entitled to repayment of the tax accounted for.

Mr. Ring

I accept the Minister's point.

Question put and agreed to.

Section 15 agreed to.

Mary Coughlan

I propose to seek clarification on section 16.

Chairman

I suggest the select committee adjourns for five minutes.

Mary Coughlan

Perhaps we can adjourn on the basis of section 16 to ensure we do not conclude the debate on the Bill and not include the amendment. That seems to be the issue.

Chairman

That is fair.

Mr. Carty

Are we adjourning until next Tuesday?

Chairman

We have progressed to the point where we need to evaluate the measures being implemented and allow colleagues from all sides to bring forward appropriate amendments, if deemed necessary. I am sure the Minister will listen, as she is wont to do, to any amendments that may be valuable.

Progress reported; Committee to sit again.

The select committee adjourned at 5 p.m. until 3.30 p.m. on Tuesday, 9 March 2004.