This meeting has been convened for the purpose of consideration by the select committee of the Revised Estimates for 2005 — Vote 38 — for the Department of Social and Family Affairs. I welcome the Minister for Social and Family Affairs and his officials. With the agreement of members, we will operate according to the timetable circulated, unless we make greater progress. Is that agreed? Agreed. I call on the Minister to make his opening statement.
Vote 38 — Social and Family Affairs (Revised).
I thank the Chairman and the Select Committee on Social and Family Affairs for considering the Estimates. I would appreciate the opportunity, before addressing the details of the Estimates, to outline to members my views on the central role of my Department in delivering an efficient and effective payments system and also its importance as a vehicle for reform of our social security system.
My Department is the biggest spending Department in the State, with a budget this year of over €12.2 billion. This means that for every €3 spent by the State this year, €1 will go on vital welfare supports, payments and entitlements. Each week the Department delivers payments to more than 970,000 people. When dependants are taken into account, this means that more than 1.5 million men, women and children in a population of 4 million directly benefit. For hundreds of thousands of our most vulnerable and deserving people, the supports from my Department form an important safety net which keeps them out of the grip of poverty and exploitation, gives most pensioners a decent State income, supports lone parents as they struggle to bring up their children and helps carers to continue their valued and valuable work.
I am also increasingly of the view, however, that my Department has a more important and influential contribution to make to the Ireland of the 21st century. Funding and income support are the main responsibilities of the Department. However, this responsibility must go further and deeper. I am strongly of the view which I have shared with the committee and the Dáil that my Department has a responsibility to use the generous funding for income and other supports to help tackle and try to solve the social problems behind the payments being made. It is not sufficient to salve our collective conscience to have schemes for child poverty, lone parents, pensioners, those on disability payments and the unemployed on the basis that if we pay the bill and sign the cheque, the problem will go away. We have a deeper responsibility to deal with the social issues behind the payments. These issues are the reasons we must make the payments.
It behoves all of us to work towards a time when there will no longer be a need for a particular payment scheme because the social problem behind it has been confronted and solved. It is not sufficient in this vibrant economy to institutionalise our problems, lock people into poverty traps, pay the bill, brag about the amount we spend on social welfare and then convince ourselves that this is truly progressive and enlightened social policy. Social reform must go deeper; social policy must penetrate the layers of payments and reach the heart of the problem.
I am committed to exploring solutions to our social problems. I am engaged in examining many of the social issues which blight modern Ireland and must be tackled in a pragmatic and practical way, while at the same time maintaining and increasing the supports and entitlements that are the lifeline for many of our customers. In this regard, I welcome the committee's constructive views, suggestions and proposals in order that together we can improve the lives of many who today feel marginalised and are facing uncertain futures for themselves and their children.
I will now outline the main aspects of the Estimates. Total spending on social welfare included in the Revised Estimates Volume has increased by €1 billion or 9% from a figure of €11.3 billion in 2004 to reach its highest ever level of €12.3 billion this year. This corresponds to approximately 28% of total gross current Government expenditure and over 9% of GNP. This level of expenditure is highly significant, not only in terms of overall Government expenditure but, more importantly, in its direct impact on the daily life of almost everyone in the country.
Each week payments are made to approximately 970,000 persons, while a further 545,000 families receive child benefit each month. When administrative costs are excluded, the Department spends nearly €12 billion in supporting the elderly, children, those who are ill or have lost their jobs, carers and others. This represents approximately €250 million every week, considerable expenditure by the taxpayer. It clearly demonstrates that we are seeking to live up to our commitments to protect the least well-off in society. I look forward to building on this progress in the years ahead.
Last October, just over one week after I became Minister for Social Affairs, I had the pleasure of attending our annual pre-budget forum which involved a wide range of welfare organisations. In my address I indicated that it was important that we spread the fruits of economic growth around and that the resources of the Department were targeted at those most in need. We moved on these objectives in the complementary Estimates and budget processes for 2005 by securing an additional €1 billion to tackle disadvantage by substantially boosting the levels of welfare payments for those who depend on them. The budget set out to reduce the gap between those at the bottom and those higher up the income ladder and to assist the most vulnerable.
In the budget we announced a €14 per week special increase for those in receipt of the lowest rates of payment. This represented an increase of 10% or more than four times the projected rate of inflation for this year. We announced a €12 weekly increase in pensions resulting in new rates of between €166 and €179, increases ranging from €7.90 to €10 in the rates of qualified adult allowance and child benefit increases of €10 and €12 which increased the rates to €141.60 and €177.30. This means child benefit has increased fourfold in ten years. We also introduced the highest ever increase in the threshold for family income supplement with a rise of €39 per week while there was an increase in the rate of maternity benefit from 70% to 75% of reckonable earnings.
There are commitments in the national anti-poverty strategy and the programme for Government to bridge the gaps, on which we are continuing to work. I remain committed to increasing the basic State pension to €200 per week by 2007. The underlying objectives of the budget were to make significant progress towards the achievement of these commitments; to make a real difference to those living in poverty, the unemployed and the disabled and to recognise the contribution made by carers.
To that end the budget package provides for an increase of €165 to €1,000 in the respite care grant and its extension, with effect from the beginning of this month and subject to certain employment conditions, to persons providing full-time care and attention. It also provides for substantial increases in the income disregard for carer's allowance which now stands at €540 per week for a couple, thereby making real progress towards the Government's objective of raising the disregard to the level of the average industrial wage. An increase of €120 is provided for in the earnings limit for entitlement to carer's benefit, from €150 to €270 per week, as well as an easing of the capital assessment arrangements for welfare recipients. From the beginning of this month the first €20,000 of savings is disregarded, meaning an old age pensioner with no other means can now have almost €28,000 and still qualify for the maximum old age pension. This figure is doubled for a couple. There is also substantial additional funding for family resource centres, marriage and family counselling, the family mediation service and Comhairle.
Members will recall that last year I gave a commitment to the House to review the measures introduced as part of the 2004 Estimates. As a result of that review, I concluded it was appropriate to reverse some of them and ease others. These changes were introduced as part of the budget and Estimates package. The key changes included the amendment of the six month rule and other conditions for entitlement to rent supplement, including an increase in the income disregard in the means test. The Estimates also make provision for the transfer of €19 million from the rent supplement scheme to the Department of the Environment, Heritage and Local Government for the new rental accommodation scheme which is being progressively implemented over a three year timeframe. It is anticipated that some 5,000 recipients will have transferred to the scheme by the end of the year. Other changes I have introduced relate to MABS, crèche and diet supplements, the back to education allowance, the transitional half-rate payment to recipients of one parent family payment and half-rate child dependant allowances to certain recipients of unemployment and other benefits.
It is worth noting the analysis of independent commentators on budget 2005. In its post-budget commentary the ESRI stated "A systematic analysis, using SWITCH, the ESRI tax-benefit model, reveals that the direct tax and welfare provisions in Budget 2005 were indeed quite progressively structured". The Combat Poverty Agency made similar comments in its analysis. Other comments from the foremost independent social and economic experts supported this view.
When we took office in 1997, the level of spending on social welfare was €5.7 billion per annum. It now stands at €12.3 billion. This is all the more remarkable when one takes account of the reduction of 104,000 in the number unemployed from June 1997 to date. As I stated, total social welfare expenditure in 2005 will be over €12 billion. For the committee's information, I will provide a brief overview of the areas to which this money goes.
The largest amount goes to old age pensioners who account for 24% of total expenditure. Widows, widowers and one parent families account for 16%. Child related payments, mainly child benefit, take up a further 17%. Payments related to illness, disability and caring account for 17% while unemployment payments now account for just over 9% and employment supports a further 2%. A range of other supports such as the free schemes, supplementary welfare allowance, bereavement grants and family supports take up 11%. The remaining 4% is spent on administrative expenses such as staff pay, accommodation and IT expenses.
Members will be aware that the Exchequer still makes the most significant contribution in terms of resources as it funds all assistance based schemes and universal schemes such as child benefit. However, employees, employers and the self-employed also make a significant and valued contribution to the social welfare system through the operation of the social insurance fund.
Exchequer funding is expected to amount to nearly €6.6 billion in 2005. At nearly €2 billion, the largest single category is child benefit. This represents an increase of over 400% compared to the level of expenditure in 1997. The second largest category is one parent family payments, at nearly €770 million, an increase of 11% over the figure for last year. Supplementary welfare allowance comes third, at nearly €702 million, an increase of 9% over the figure for last year, followed by unemployment assistance, at €690 million which will provide for payments to an estimated weekly average of 77,500 recipients this year. The fifth largest category is disability allowance, at a cost of €636 million, an increase of 17% over the figure for 2004, reflecting the budget increases in rates as well as an expected increase of 4,600 in the number of recipients.
Of the €12.3 billion expenditure figure, almost €5.7 billion is provided by way of contributions to the social insurance fund. The social insurance system has been significantly enhanced in the past 20 years and is now truly comprehensive. Coverage has been extended to self-employed and part-time workers as well as public servants recruited since 1995.
A key principle underlying the Estimates before the select committee is that the Government is committed to protecting the less well off in our society and ensuring the rising tide of economic growth benefits everyone. Significant challenges await us in such areas as child poverty, ensuring adequate pension provisions for the future and supporting young families, to list just a few of the issues with which I am grappling, as is the committee. However, I am confident that there is now the determination to tackle these issues and build a fair and inclusive society where people will have the resources and opportunities to live life with dignity and make a full and valued contribution to their communities.
It is worth reminding ourselves that we stand in the doorway of the 21st century. This is a good time to consider how the generations that will follow will look back and assess the contribution we have made to the shaping of modern Ireland. I hold strong personal views on this issue and do not believe for one moment that future generations will base their judgments on how many millionaires, or even billionaires, we created in Ireland's exceptional economic surges. I believe they will judge all of us in the Dáil, Seanad and elsewhere on how we honestly and sympathetically harnessed the fruits of that economic buoyancy to reach out to people and reach down to help lift those who feared they were being left behind in the rising tide of economic growth. I earnestly believe we have a unique opportunity. In fact, it is more than an opportunity — it is a responsibility. We are the people who can shape the Ireland the next generations will inherit. The eradication of social injustice will be an important part of that legacy.
I commend the Estimates to the select committee.
I welcome the Minister and his hardworking officials to discuss the Estimates. It is hard to quibble with the underlying philosophy he has outlined on the need to reduce the level of poverty, namely, that it is not sufficient just to hand out money. The causes of poverty and other social problems must be examined and funds allocated towards their alleviation for the benefit of all our citizens. Everybody here is at one with the Minister.
The Minister used the words "we stand in the doorway of the 21st century", evoking shades of John Fitzgerald Kennedy's oratory. They are visionary and forward looking in their attention to the legacy for future generations. The Minister is right to say future generations will judge us, not on the number of millionaires and billionaires we have created, of which there are reportedly many, but on the way we have looked after those in greatest need at this time of plenty in the economy.
Are we to discuss subhead A.1?
I will not hold the Deputy to it as I have never succeeded in doing so before. I am sure we will cover the Estimates in our own unique way.
Indeed. I will stick to the script for the moment.
That might help.
I shall ask a few questions and perhaps we will deal with the other matters when we come to them.
One question concerns benchmarking — the reason for the increase in subhead A.1, salaries, wages and allowances. It would be useful if the Minister could tell us what impact benchmarking had on the workings of his Department, giving concrete examples of what exactly the taxpayer is getting in return for the increase in wages. I am sure his officials are working extremely hard and that he will tell us exactly what benefits people have received and how benchmarking has impacted on the workings of his Department and the way it is organised. Perhaps he will give us a breakdown. Some €6.7 million went on the general round of pay increases under Sustaining Progress, with €2.2 million for the final phase of benchmarking.
The other issue concerns subhead A.7, consultancy services. There is a substantial increase, with over €5 million going on such services. It would be helpful if the Minister could give us an idea of which consultants were used, how much they received, for what they were used and the consultancy assistance provided in other areas, including policy development. I know he has been telling us in the Dáil and elsewhere that there are a great many reviews being undertaken in his Department. Such reviews are always welcome. We know that some of them cost money, while others do not. Perhaps he will give us some idea of the work involved.
The service delivery modernisation programme is costing €4.9 million. It is intended to introduce on a phased basis radical improvements to service delivery. It would be of use to know exactly what is happening. An integrated service card has been discussed. I believe it will be introduced at some stage. The Minister could tell us what progress has been made on it. The idea is that when people make an application to the Department or submit information to a State agency, they would need not do so again and again.
The figures for the information society,e-government and REACH show a decrease, indicating that progress has been made and that spending is now levelling off. What impact is this having on the Department of Social and Family Affairs and its modernisation? I do not think there are any other major issues of concern in respect of subhead A.1.
What impact has the Official Languages Act had on the Department and what extra costs have been incurred? It might be useful to know what extra work, if any, has been generated for the Department and what extra costs it is producing, given the fact that this week we have seen that the European Union has decided that Irish can be an official language.
I will allow the Minister to reflect as there might be cross-over questions.
I, too, welcome the Minister and his officials. I apologise for being slightly late but having read and listened to the Minister's contribution, it is appropriate to make a few comments.
Many of the issues we will debate this afternoon in Vote 38, particularly subheads A.1 to A.10, relate to increases provided for in the 2005 budget with which I do not disagree. In many areas the Minister had scope for even larger increases, especially regarding carers. Notwithstanding the excellent report presented by this committee under the chairpersonship of Deputy Penrose, Ireland's carers remain neglected and forgotten under the Fianna Fáil-Progressive Democrats Government. The Labour Party has long called for the abolition of the means test for carer's allowance as a first step in acknowledging the role played by carers. The increases in the respite care grant in this year's budget affected approximately 9,000 new recipients. However, there are still approximately 150,000 carers with no respite support payments.
Having listened to the Minister, I intend to examine critically and question the various areas listed. One of the main objectives of the Labour Party is the achievement of a fair society. This is a rich country, one of the richest in Europe. However, the question must be posed of whether it is inclusive. The test is how we include the most vulnerable in society. It is a source of great concern that an ever-increasing number still lack the basic necessities of daily life.
Statistics for 2003 published by the Central Statistics Office show that poverty remains a serious problem. As a practising politician like everyone around this table, this comes as no surprise to me. Almost 900,000 people, 22% of the population, are living on less than €185 per week, which works out at less than €10,000 per year. We should never forget that each statistic is a person. Some 350,000 people, 9.4% of the population, are living in constant poverty. This means that people living on less than €185 per week are deprived of basic necessities such as heating, clothing and food. We can say anything we like about this country of ours and where we are going but that is the reality in Ireland today. It is time we accorded priority to dealing with it. That there are so many living in poverty, despite the unprecedented prosperity of this country in the past ten years, is a national scandal.
One parent families face a significantly higher risk and rate of poverty than their two parent counterparts. A survey of income and living conditions released earlier this year showed that 33% of such families lived in constant poverty, in comparison with 23% of the overall population. I will skip through what I intended to say to expedite matters. Access to education is vitally important if we are serious about tackling poverty, especially as lone parents are more than twice as likely as their two parent counterparts to have no educational qualifications.
I was waiting for the Minister, perhaps with bated breath, to make reference to one of the "savage 16" cuts introduced by his predecessor, Deputy Coughlan, in 2004, namely, the back to education allowance. The qualifying period for the allowance was increased by Deputy Coughlan to 15 months for the third level option. The Minister proposed to reduce this to 12 months. Time and again in the Dáil and at this committee the Opposition parties hounded the Minister and made the case for it to be reduced further to nine months. As the Minister said he would do it, I wonder if I have missed something. Was a directive issued that I did not pick up? Has this promise been implemented? If not, why not? When will it be done?
Older people find it harder to maintain a constant body temperature. Keeping warm is essential to avoiding hypothermia in the winter months. I am the Labour Party's spokesperson on older people's issues. It is documented that 200,000 households are affected by fuel poverty which has a significant impact on health and leads to unnecessary winter deaths. It is estimated that between 1,500 and 2,000 winter deaths are due to poor housing standards.
The free fuel scheme is available to pensioners based on a means test. The weekly rate is €9 for a 29 week period between October and April. Several organisations have raised this issue and recommended an increase to at least €12 per week to take account of increases in the cost of fuel. Do we know how much a bag of turf or coal costs or how much one would get for €9 in bad winter months?
In its presentation to the Minister the Irish Senior Citizens Parliament requested a progress report on the steps taken to implement the commitment to the action and research programme to improve the fuel efficiency of dwellings occupied by fuel allowance recipients contained in budget 2003. What progress has been made on this commitment? I recommend that a grants scheme be introduced to enable proper windows, doors and central systems to be installed in houses occupied by older people where necessary. This is imperative in the context of the loss of life to which I have referred.
I was very disappointed but not surprised that the Minister and the Minister for the Environment, Heritage and Local Government decided not to recommend to the Government the introduction of a national waiver scheme for refuse collections. Many older people, welfare recipients and low income earners had to bear substantial increases in refuse charges this year. These charges are unfair and impose severe hardship on those in these categories and have a serious impact on their disposable incomes. They are also inequitable in so far as local authorities which continue to collect refuse operate a waiver system but where the system has been privatised, there is no such waiver.
In its pre-budget submission to the Government the Irish Senior Citizens Parliament highlighted these anomalies and also urged the introduction of a national waiver scheme. A fair scheme could be best introduced and operated through the Department of Social and Family Affairs. Every day I deal with older people who must put up with the scourge of repeated increases in refuse charges. On the basis of the powers of the county manager, local councillors will have no control over this problem and the same vulnerable people will be hit time and again. It is up to the Minister to do something about this.
In the context of subhead A.7, consultancy services, will the Minister give a break down of the expenditure on and the number of consultancy projects put out to tender last year? What tendering process was put in place and why could this work not be done by the excellent officials in the Department? The message is being sent that the Government which has lost contact with ordinary workers and people does not want to do any work itself. Instead, it commissions consultancy reports which gather dust until they meet its requirements.
This is the first opportunity I have had to meet the Minister since I raised an issue peculiar to people living in the Border region. I thank him for dealing so speedily with it. Someone living in Northern Ireland could not receive carer's benefit, although providing care in the South. I am glad that problem was resolved. This is an example of the difficulties people experience in Border areas. Other difficulties arise in regard to nursing homes and so on. We should be more aware of the effect of regulations when we draw them up.
It is disturbing to think that one in three is in receipt of social welfare payments. The Minister said:
It is not sufficient to salve our collective conscience to have schemes for child poverty, lone parents, pensioners, those on disability payments and the unemployed on the basis that if we pay the bill and sign the cheque, the problem will go away. We have a deeper responsibility to deal with the social issues behind the payments.
This sentiment has been expressed three times this morning. The Minister continued:
It is not sufficient in this vibrant economy to institutionalise our problems, lock people into poverty traps, pay the bill, brag about the amount we spend on social welfare and then convince ourselves that this is truly progressive and enlightened social policy.
This does not put any meat on the bone. It identifies a problem but does not go a step further. The Minister concluded:
However, I am confident that there is the determination to tackle social exclusion and poverty and build a fair and inclusive society where people will have the resources and opportunities to live life with dignity and make a full and valued contribution to their communities.
That is the right language but it is not backed up by an action plan. What action plan is being put in place to deal with this issue and take it a step further than the flowery language?
On subhead A.1, from the point of view of staff, I hope benchmarking payments will be made. The benchmarking body was asked to make scientific findings on the issue. As public servants, we all benefit from benchmarking. I was disappointed that recently there was a suggestion that the benchmarking payment for nurses should not be made from 1 June. There was no need for such scaremongering and I would like to hear the Minister's views on the matter.
On subhead A.3, the Minister referred to "additional advertising and translation costs". Will he expand on these costs? Why is there a need for additional advertising? As the cost is connected to implementation of the Official Languages Act, I take it it relates to translation into Irish. If so, what level of demand is there for this service? We may be providing a service that is not needed.
On subhead A.4, it appears the cost of postal services is dropping by €748,000, a substantial sum. Has the cost been transferred to the cost of telecommunications which has increased by €1.238 million? Will the Minister expand on these costs and why the cost of postal services is going down?
In 2004 the Department spent €8 million and in 2005 will spend €10 million on computer equipment, hardware, software, telecommunications and related supplies. These sums would buy a great deal of equipment. Will there come a time when we will have sufficient technology? What does the Department do with old equipment? Are costs defrayed by selling on equipment? Is the Department leasing social welfare offices? Such offices will be in place for a long time. They should be purchased in order that we do not continue to throw good money after bad in rental payments year after year without anything to show for it. The cost of a system whereby offices would be purchased after a given period would be similar to the amount expended in rent but it would mean we had valuable assets. It is an issue we should examine and on which I ask the Minister to comment.
On the payment for the encashment of social assistance payments, will such payments be made on a cheque by cheque basis? Under the payment arrangements for agency services, An Post will receive some €29 million in 2005. How does this payment arise?
I wish to make a number of points regarding subhead A.4. An announcement was made earlier this year about moves to an electronic funds transfer system. Opposition Members and some of the Minister's own parliamentary colleagues have communicated their concerns about the impact of such a development on the post office network, particularly in rural areas. I am sure the Minister reads the Sunday newspapers, perhaps even more assiduously than I do. He will be aware that Mr. Donal Curtin, chief executive of An Post, has proposed that one of the options for the company — something that may even be vital to secure its future — is to begin offering banking services. There is certainly some merit in this suggestion in terms of ensuring the survival of the post office network, especially in rural areas where it is seen as an essential component of infrastructure.
I am opposed, however, to a system which facilitates electronic funds transfers to the benefit of financial institutions only. Some of the banks may draw in elderly customers on the pretext that no charges will be payable. However, any of us who has dealt with a bank knows that once in their claws, one is caught. There will be withdrawal and standing charges and charges for simply saying "hello". Moreover, electronic funds transfer is not a system that suits everyone because it eliminates the element of regular social and interpersonal contact which is important to many recipients.
I appreciate that an electronic system would be of great operational benefit to the Department which handles payments of some €12 billion and provides an essential service. Moreover, I applaud the Minister for having the wherewithal and knowledge to tackle problems within his Department and initiating fundamental root and branch evaluations of a number of issues. He will bring his own stamp to the role. However, it is no great achievement that he should impose the electronic transfer of payments on those whom such a system does not suit.
I received a significant amount of correspondence when this announcement was made, as did the Minister's party colleagues who raised the matter at a meeting of this committee. We should never introduce any measure, of which the main beneficiaries are the financial institutions. They have gained enough and will take every opportunity to gain more. In addition, this development will have a negative social impact and a negative aspect for the post office network, especially in rural areas. There is a long stretch of road from Mullingar to Castlepollard on which there were previously three or four post offices but now there is none. That is a worry.
The Minister comes from a rural area and will recall the mobile facility which the banks provided in the past. These travelling facilities were withdrawn as soon as the banks' profits dropped by an infinitesimal percentage. I do not trust the banks. People should have the opportunity to receive their money in their own hands. I realise there is a security issue involved but we should tackle it in some other way. People must have the choice to receive the money in their own hands, regardless of whether they subsequently decide to deposit it in a financial institution.
This is an issue of great concern to me and not one I raise simply because I am an Opposition Member. I would probably be more vociferous if the Labour Party was in government. This proposal does not have my support and I make my case from a general understanding of rural thinking. It does not enjoy broad support among the public.
There will be costs involved in preserving the post office network. We should not delude ourselves in that regard. However, it is better that we use some of the benefits of the buoyancy in tax revenues which we currently enjoy to ensure the fabric and infrastructure of rural Ireland are protected and preserved rather than abandoned, particularly where the major beneficiaries of the latter approach may be the financial institutions. That would be a sad day.
To answer Deputy Stanton's question about benchmarking, the relevant figure in the Vote is €157.45 million, up from €140 million last year, an increase of 6%. Specifically, the Deputy asked whether we would get some return from the outlay. There have been ongoing developments in this regard in terms of lunchtime openings and localising the lone parents scheme. We have negotiated more flexibility from staff in return for benchmarking. We have been negotiating a variety of working arrangements for inspectors while more control initiatives have been put in place in regard to fraud. There has also been progress on competitive promotion systems. Under each of these headings, progress has been made.
Deputy Stanton also asked about consultancy services. The figure provided for in the Estimates for 2005 in this regard is €8 million while the provisional outturn for last year is €2.9 million. The Deputy is correct that this increase of €5 million seems considerable. The bulk arises in respect of the service delivery model which should not come under this heading. It is more accurately described as the implementation of information technology systems. Given the large numbers with whom we deal on a weekly basis, it is vital that we have the best technology systems available.
I make no apologies for investing heavily in technology in order to provide customers with a better service. More than 1 million payments are transacted every week and we require the most effective technology to facilitate this operational challenge. The service delivery model is a fancy name for information technology but is broader than this. It also allows us to establish new management systems which will deliver better service to customers.
Deputy Stanton asked for the names of some of the consultancy companies the Department has contracted. I could give a more detailed response by way of a parliamentary question. However, I can list some of the main payments for the Deputy. They include €72,000 to Fujitsu Consulting, €389,000 to Hewlett Packard, €36,000 to IBM Consulting, €1.7 million to BearingPoint and €3,500 to Richard Tawson. These represent phase 1 supports for financial systems and service delivery models.
Phase 2 supports for organisational change and service delivery model technical projects include: €4.4 million paid to BearingPoint for a service delivery model phase 2 technical project; €520,000 to IBM Consulting for phase 2 organisational change; and €25,000 to Microsoft Consulting for a technical review. The former set of figures relates to 2004, while the latter relates to 2005. If it so desired, I can provide a more detailed breakdown of these figures.
This year, €1 million will be spent to improve document management. The quantity of documents which is handled by the Department may be imagined. The customer service delivery model will be allocated €100,000.
Work is ongoing in the area of medical referees. The Estimates indicate that a large sum of money is being spent on this area and we are conducting reviews to ensure value for money. The following sums will also be allocated: the employment action plan €41,000; family strategy €40,000; back to work strategy €45,000; equality review of social welfare codes €50,000; planning small projects €30,000; and review of health and safety unit €40,000. These represent the general theme of the Department's spending. The majority of its expenditure on consultancy projects is in the area of technology. I have not commissioned any major policy consultancy projects, apart from some research conducted by the ESRI and similar bodies.
Deputy Stanton inquired about cards. A variety of cards are in existence and I think it important that a consistent standard is maintained. The Minister for Finance and I established a group to develop a standards framework. This group will report to Government in the near future. We do not necessarily want one particular card but there should be consistency. It should be remembered that their purpose is the access of public services.
The Deputy also inquired about the cost of the Official Languages Act. The implications are significant. The Act requires us to have a plan for the provision of services through Irish. We are at the point of sending our plan to the Department of Community, Rural and Gaeltacht Affairs. We will be required to make more literature in Irish available and to state our commitment to a certain level of service through Irish at local offices. Additional translation and advertising costs in 2005 arose from legal obligations under the Official Languages Act. The cost of this may be seen in the Estimates. This year, €500,000 above and beyond the amount we normally spend on translation services was spent in order to comply with our legal obligations under the Act.
Deputy Seán Ryan inquired about the back to education allowance. People have until September to make any further changes to this. He acknowledged that I reduced the period from 15 to 12 months and that I considered restricting it to nine months. I have not yet completed my consideration but will shortly take action because September is not far away. I have yet to discuss the matter with my Cabinet colleagues.
While I acknowledge the arguments made in terms of fuel allowances, I made a decision to put any money I had this year into the €14 and €12 main rates. I have tried not to dissipate this money. If money is given on rates, people will have the choice to use it for fuel or other purposes. It is better that limited funds are channelled into rates. I took this view after seeing from the figures that a healthy direct rate of €14 and €12 could be given to people. Many of the funds could either be dissipated over various schemes or could be concentrated at the main rate. I took the decision to do that latter on this occasion.
I have sympathy with Deputy Seán Ryan's concerns over refuse collection. The Minister for the Environment, Heritage and Local Government and I have discussed this issue at length and the Government has considered it. A Labour Party motion has sought a national waiver scheme. It is complicated because some local authorities already have schemes in operation. Many have been privatising or contracting out this work. It is not easy to attach waivers to the private sector. We will keep this issue under review but we do not have an easy solution. I acknowledge that, while some pensioners received a waiver last year, they received a bill this year for a couple of hundred euro in circumstances where waste collection is in private hands. We have not yet resolved this issue. Local authorities have special responsibility in this area and they must explore how they can continue to provide waivers to their customers. The Minister of the Environment, Heritage and Local Government and I are available to discuss this issue with the local authorities and to help them by any means possible.
The Chairman asked about post office services. Approximately 31% of our customers have opted for electronic funds transfer, 11% have opted to be paid by cheque and 58% wish to be paid through the post office. The reverse situation applies in the UK, where almost 80% are paid by means of electronic funds transfer. The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, and I conducted a series of meetings with the Irish Postmasters' Union and the board of An Post. We informed them that the forms issued from my Department would indicate the different ways by which payments can be made, such as through the post office, into bank accounts, directly by cheque and, in the future, through credit unions. The choice will remain with the person concerned.
We discussed with post offices their involvement in banking. I particularly emphasised the fact that money must be lodged in savings accounts for seven days before it may be withdrawn. I asked the post office to consider the possibility of withdrawals on demand. Conclusions have been reached on this matter, which I will address in the near future. If money is transferred to a post office, it is important that our customers can withdraw it immediately rather than being obliged to wait seven days. If that change is made, more people will use post office savings accounts and this will result in extra business for post offices.
The Government can take a number of steps to protect post offices in the short term. I have undertaken to give them time and space to make changes. However, they know as well as I that, in the medium to long term, the only protection is to be up to speed in electronic terms and to possess the software and hardware required to receive payments and provide better services than banks in every village throughout Ireland. I have undertaken to provide a temporary respite by not heavily marketing the electronic funds transfer at present but this cannot continue indefinitely.
The Minister referred to medical referees. I am concerned about the number of people called to see medical referees who feel that their cases are not dealt with satisfactorily. A person is in and out of the referee's office extremely quickly and, inevitably, he or she will appeal. This prolongs the entire process. It would be preferable if someone who had an illness felt that they were dealt with in a proper manner as part of a proper process.
Will the Minister clarify the point made by the Chairman on payments through post offices? As I understand it — I am open to correction in this regard — when payment is made directly to the post office, the money is paid in advance. I have met people who felt that the Department was encouraging them to transfer to the banking system but they were afraid they would lose out on a week's payment if they did so.
I will deal with the last point quickly. Changes have been made so that nobody will lose out by transferring to electronic fund transfer.
Well done.
Whatever about putting 53 weeks in a year, I ask the Minister not to reduce the number to 51.
What is the position in respect of medical referees?
Claims must be independently assessed and there is no other way to do it. I am informed that it is being examined and the Estimates allow for €100,000 for consultants to evaluate the situation regarding medical referees.
I ask the Minister to take on board the fact that many people feel that they do not receive a proper examination.
We will move on to subhead B.5, which deals with social insurance. I know Deputy Callanan wishes to speak and we will allow him some flexibility.
The real meat of the Estimates is in this and subsequent subheads. The Minister spoke about the increases, and they are welcome. The employment situation and the fact that we have a buoyant economy means a great deal of money is available — long may it last — but we also have one of the highest cost economies in Europe. It is only right that the pressures on people because of the high cost economy are reflected with increases in payments to the vulnerable people who need them.
The Minister referred to the increase of 1,900 recipients of unemployment assistance as a trend increase. I recently heard commentators discussing the economy generally and I wish to hear the Minister's views on one issue that arose. Many people now work in the building industry. This is fine when there is a need for housing but it has been suggested that this need cannot continue. What will happen if and when the building industry slows down? Many people have come here from abroad to work in that industry. Is there a need for a contingency plan to cater for a slowdown in the building industry or is this scaremongering by some economists? I am not being critical of the Government but I am genuinely concerned about this issue.
The number of recipients of the back to education allowance under subhead G decreased by 10% between 2004 and 2005 according to the figures in my possession. Could the Minister give a breakdown of the numbers of people in 2003 and 2004 in second level and third level education who were in receipt of the allowance? I know the total number is 7,648 but I do not have the breakdown. The figures for 2005 and 2006 still have not reached the levels of 2003 and 2004. It appears that the cutback instigated by the Minister's predecessor is still having an impact. If the Minister intends to make a change, I urge him to do so as quickly as possible because people need to plan their lives.
The Minister's opening statement referred to dealing with underlying causes. I have previously stated, and no one can disagree, that one of the best ways of dealing with social deprivation is through education and supporting people who need education. The reduced number of recipients signifies a reversal in trend since the so-called cutbacks were introduced. Perhaps it is time to reduce the qualifying period to nine months before the summer so that people can make plans to start courses in September. The Minister must decide quickly on this as it is almost time for people to make decisions and examine courses.
What is the figure for child dependant allowance, CDA? I cannot find it. Has any progress been made on targeted and tiered payments and bringing CDA, the family income supplement and the back to school clothing and footwear allowance together? The Minister has stated for quite some time that he is examining it.
Does the Minister know how many children in this country live in consistent poverty? He stated that between 60,000 and 120,000 are affected by poverty but how many live in consistent poverty? Is it 60,000 or 120,000 or a number in between? Could the Minister be more specific as the figures are large. It is his duty to discover how many there are, where they are and how they can be helped. The Minister has dismissed the figure of 230,000 for children living in relative income poverty but it is the method used to measure poverty across Europe. Can the Minister comment on that figure and tell us how he intends to address the issue?
The one parent family payment is an issue which has arisen on many occasions. The Minister has issued numerous press releases about action he intends to take in this area. I note an increase in the number of recipients by 2,900, from 79,900 in 2004 to 82,800 in 2005. Can this trend continue? The Minister is on record as stating that a great deal of money is being saved and that many of these payments have been stopped because inspectors from the Department discovered that recipients were cohabiting. Perhaps he might give some indication of the current position.
The Minister stated he will introduce initiatives to deal with the overall one parent family issue and the cohabitation rule. Has he made any progress in that regard or what are his plans at this stage? In other countries, various initiatives have been tried. In some instances, these have backfired and matters have become worse. I acknowledge that it is a difficult issue but I ask the Minister to tell us his plans in this regard. With such an underlying social issue, my own contention is that we should try to encourage both parents, where possible, to live in the same house with their children. The system, in some cases, discourages that because if they live together, the one-parent family payment is lost. The Minister has all the expertise and consultants at his disposal. This is one area on which he needs to focus to see if he can assist people to live as families, while not penalising those who are doing so at present.
Under subhead J, there is a decrease in the number of widows or widowers receiving pensions. Is that because there are fewer widows and widowers? If so, that is probably good.
Under subhead L, the estimates provide for an average of 15,000 pre-Budget 2005 recipients of family income supplement. I suppose one could use the new term "the working poor" to identify people in this category. In a way, it is an awful term but it is increasingly being used by commentators. FIS provides weekly supplements to families on low pay. The major issue here is the take-up of FIS. Is the Minister satisfied that the take-up is as high as possible? We have spoken about initiatives to increase the take-up and the Minister promised in the Dáil on a few occasions that he would bring forward initiatives to increase FIS. If he has done so, he might tell us what these are?
Increasing numbers of people are being obliged to rely on FIS. This, in a way, reflects the fact that while many more people are working, their incomes from employment are quite low and they need to rely on FIS. In my area, I have met quite a number of people in this position who, without FIS, would be in serious difficulty. With it, they can barely survive. It is an area on which the Minister should focus as much as possible.
Reference has already been made to the means test for the carer's allowance. Has the Minister made any progress in looking at people who are in receipt of the carer's allowance and who then become old age pensioners? This is an issue which arises repeatedly, where a person in receipt of the carer's allowance who becomes an old age pensioner must take one payment or the other while he or she continues to look after an adult with a disability. It is a matter at which the Minister must look. Many people think, as I do, that it is unfair that such people must take one payment or the other. Just because they get older, they seem to not receive any more support at a time when they should do so. We welcome the respite grant but it does not go anywhere near what they would get even if they got half the allowance. I urge the Minister to revisit the matter and see if he can make progress there, especially at that level.
The Minister's predecessor launched the new initiative — under subhead N, supplementary welfare — to meet the long-term housing needs of rent supplement recipients in July 2003. The process was to start in September 2003 but — the Minister may correct me if I am wrong — not one person has yet been accommodated under the scheme. The Minister stated that he hoped to have 5,000 accommodated by the end of this year. How many are accommodated under this scheme at present? The Minister referred earlier to solving social problems. Could this scheme result in the creation of ghettos? It might be used to reduce the social housing lists, massage the figures and let the Government off the hook in terms of its commitments to social and affordable housing. It is a major issue.
The housing crisis is getting worse, not better. The lists are getting longer. While the number of those in receipt of the rent supplement has been reduced by over 2,000, the position is getting worse and, as far as we know, nobody has been moved across yet. There is also a clear reduction in the number of recipients of rent supplement. How many are receiving this supplement at present? As a matter of interest, the number fell from 59,000 to 57,000.
My issue with the disability allowance, under subhead O, is that the income disregard of €120 has not been raised in over five years. Has the Minister any plans to increase it? What are his thoughts on the matter? Why has the disregard not been raised?
An issue has been brought to my attention about the use of the free travel pass, which comes under subhead Q. Why do such passes not include photographs? Has the Department of Transport asked the Department of Social and Family Affairs to put photographs on free travel passes? Has any research been conducted into doing so and have costings been produced? Have any decisions been made on the matter? Is it a good idea? Would it prevent the travel pass from being abused? Has the Minister any plans to put photographs on travel passes? I ask him to comment on that issue.
The next matter is the money advice and budgeting service, MABS. The Minister spoke recently about having discussions with the banks on bringing in low interest loans for people on social welfare. Is he in a position to report progress on that serious issue? How many people avail of the money advice and budgeting service each year? Has there been evaluation of its effectiveness? How is it operating? Is it having a good impact or what is the nature of that impact?
What is the position vis-à-vis the relationship between the Department and credit unions? Can social welfare payments be paid into credit unions? That is a matter about which I am not sure. I understand the Family Support Agency is new. Approximately how many centres are there at present? In light of the number of one parent families, the agency should probably be asked to come before the committee at some stage.
There is a grant-in-aid of in excess of €3 million for the Combat Poverty Agency. In addition, there is a sum of €178 million under the heading of sources of other income. Where does that originate?
In respect of Comhairle, the allocation for advocacy services has been increased substantially, by €1 million. Perhaps the Minister might comment on that increase. Here again there is other income for Comhairle — €581,000 for activities, conferences and so on. From where did that come?
On the miscellaneous services subhead, particularly in respect of school meals, the outturn in 2004 was €3.567 million. Was all of the money that was made available in 2004 spent? In other years money was made available but was handed back because it was not spent. What is the family services project, also under miscellaneous services, to which €2 million is allocated? There is €10 million for the UN Year of the Family tenth anniversary. What projects were initiated under that?
I have three questions for the Minister. The first relates to a problem with the rent supplement and whether anything can be done about it. The most important aspect of the Department's effort is to encourage people back into the workforce. For people in private rented accommodation who are in receipt of a rent supplement, however, there is a disincentive to return to education or to go, for example, on a community employment scheme. Many of the people in this category are in the older age group. Given the numbers involved, between 5,000 and 10,000, perhaps the Minister would consider examining that area with a view to do doing something about it.
I am seeking as much information as possible about the supplementary welfare allowance and rent supplement schemes. It seems that agreement has been reached between the Department of Social and Family Affairs, the Department of the Environment, Heritage and Local Government and certain local authorities to introduce a scheme to be rolled out through groupings of local authorities in three phases, that this is currently being implemented in seven lead local authorities and that the long-term need for housing assistance is being targeted. People who have been in receipt of rent supplement for more than 18 months will be offered housing accommodation under the scheme. I need more information about this. I do not know whether even councillors in local authorities know much about it. In my local authority, need is based on the length of time one has been on the housing list. Does this new scheme mean that somebody who has been in receipt of a rent supplement for more than 18 months will be given priority over people who have been on the housing list for two, three or four years?
It seems the arrangement will involve a grouping of local authorities. Are we saying that people who are currently in receipt of a rent supplement in the Fingal area would lose it if they did not avail of an offer in, for example, the South Dublin County Council or Dublin City Council areas? There may be many implications of which we are not aware. The Minister should, therefore, provide full details of this new scheme.
My third question relates to the deserted wife's benefit. The Minister has been asked on a number of occasions — and at least once by me — to report on the income eligibility for deserted wife's benefit. There is an anomaly here that needs to be addressed. In 2004, Deputy Michael D. Higgins raised the issue of anomalies in the treatment of claimants depending on when they made their claim. In reply the Minister stated that the schemes for deserted wives under social insurance have been retained to the extent that entitlements already acquired in August 1992, when the earnings limits were introduced for new claimants, and in 1997, when the one parent family payment scheme was introduced, have been preserved.
My concern relates to people who claimed in 1995. There are not many of them at present but they would argue that their entitlements have not been preserved. If, in 1992, one earned less than £10,000, one was entitled to a full payment of £60 plus domiciliary care allowance. The current full rate of deserted wife's benefit is €154.30. Because the earnings bands were never adjusted, each time a person crosses into a different threshold more deserted wife's benefit is lost than is gained in earnings. A person can have earnings of €12,697 and still get the full rate plus €17 per week per child. If, however, they earn in excess of €17,776.33, they are completely disqualified. I do not know how many people are affected by this earnings limit but the numbers cannot be great.
I have been asked to raise with the Minister the question of abolishing the limit set in 1992 for existing claimants who claimed between 31 August 1992 and 31 December 1996. That is the only category affected in this regard. It is a small number. I ask the Minister to examine this issue to see whether anything can be done to deal with this anomaly. I have raised the issue today and I will give the Minister further details later.
I congratulate the Minister on the increases he has given in respect of all social welfare payments.
I wish to speak on a couple of issues that are dear to my heart, one of which is carer's allowance. When I was a county councillor, I received many requests for information from people applying for this allowance and I often had to tell them discreetly that they were wasting their time because, until a few years ago, there was little or no disregard. The current disregard for a couple is €540 a week. This substantial amount is almost twice the minimum wage. It has been of enormous assistance to those applying for a carer's allowance and I compliment the Minister on introducing it. I also welcome the 87% increase in the respite grant — also available to carers — and the fact that carers will now be allowed to work up to ten hours per week and to earn up to €270 per week. While we would all like to see the day when means testing for carer's allowance is abolished, the package put together by the Minister acknowledges the great work being done by carers.
There have also been substantial increases in the savings disregard for old age pensioners. For many years people have been afraid to save money for fear of losing their pension. However, the first €20,000 of savings will now be disregarded. Some may believe that is not a great deal but many people would never have such an amount and if they did, they would have been nervous about having it. I am delighted that the Minister has introduced that disregard.
I agree with the Minister's statement that his Department has a responsibility to use this generous funding for income and other supports to help to tackle and try to solve the social problems behind the pain. That is a strong statement from a Minister for Social and Family Affairs, one I have not heard from too many Ministers heretofore. An issue I raised previously with the Minister is the plight of widows who are means tested for pension purposes. The amount earned by widows who chose to work is deducted from their pension. The Minister has set a precedent in that regard for carers. If widows are to rescued from the poverty trap they must be allowed to earn a reasonable amount while retaining their entitlement to the widow's pension. Those in receipt of the widow's contributory pension are permitted to work and retain their pension. There is an anomaly in this area. Many people are widowed at a young age and a change in this area would assist in removing them from the poverty trap.
I welcome that persons over 27 years of age and still living at home will no longer be means tested when claiming unemployment assistance. Many people resorted to living in caravans at the back of their homes in order to qualify for unemployment assistance. The age should be reduced to 25 years or, if possible, 21 years, at which point many children complete their education.
I welcome the revised Estimates and compliment the Minister on the great work he is doing.
The Department's failure to increase the cut-off wage level for PRSI payments means that many minimum wage earners will not benefit from the recent increase in the minimum wage. The minimum wage has been increased from €7.35 per hour to €7.65 per hour and that is to be welcomed. Did the Department increase the cut-off wage level below which PRSI is not paid? Previously, the cut-off level was €287? Is that still the case? If so — I have no reason to doubt my research on this issue — low earners have not benefited as they should have from the small increase in the minimum wage.
A person in community employment is allowed to work 39 hours over two weeks. The gross weekly income increase for such a person rose by €11.35, from €287 to €298.35. If that person exceeds the €287 minimum level for PRSI exemption, he or she will be taxed at a rate of 60.35%.
How could the Minister do that?
The Minister for Finance receives €6.85 through the minimum wage increase, while a CE worker receives only €4.50. Like others, I am delighted to receive a salary increase. However, I will only pay 44% tax on that increase, while a person in receipt of the minimum wage will be required to pay 60%. This is the first opportunity I have had to raise this issue with the Minister. I stand corrected and apologise in advance if I am wrong on this but I do not believe that to be the case.
I received a letter on behalf of a FÁS community employment scheme participant which states that the person has become the victim of the latest scam by the Government to reduce rent allowance by more than 50%, having given him or her a miserable €14 a week increase in CE payment. This situation arose as a result of the Department's failure to raise the income limit for tapered rent allowance above €317.43 per week. This means that a single parent with one child is automatically over the limit. The conditions attached to participation in a CE scheme are quite strict. In fact, one must be in receipt of low income to be eligible for participation. Such people are now being forced to drop out of the scheme in order to qualify for rent allowance.
I received representations on this matter from a constituent. I could not believe what I was told and tried to follow it up but could not obtain an explanation for what was happening. The prospect of those on CE schemes obtaining further training and returning to full employment are being hindered by bureaucracy. Many of those on CE schemes are disadvantaged and marginalised. Deputy Seán Ryan asked whether ours is an inclusive society, a very relevant point. I do not believe it is inclusive. I am sure the Minister is not aware of what is happening. People are being dragged down at a time when they need help. If they were given the help to which I refer, people could remove themselves from the welfare system and make progress.
People may state that I am yapping again and wonder what I am talking about. However, I wish to cite a real case by referring to a document that has come to my attention:
Dear X,
Following the recent rent review carried out by this office, I wish to advise you of the following changes to your entitlements to rent supplement. Participants of CE schemes can retain their rent payments at a tapered rate for a maximum of four years, provided their overall income does not exceed €317.43 per week. You currently receive 75% of the amount you were receiving when your scheme began in 2004. It has come to my attention [that of the community welfare officer] that your overall income does exceed the limit of €317.43. You are getting one-parent family allowance at €160.60, plus a CE payment of €190 per week, which is a total of €350.60. Therefore, you cannot receive payments at the tapered rate as you do not qualify. However, following an alternative calculation of entitlement where no income limits apply, you may still qualify for lower rent supplement from this office but this involves assessing you as a client who is in part-time employment. All income is assessed but €60 per week of this can be disregarded. Based on this calculation, you will have an entitlement of X. Your new entitlement commences on 1 June. If you have any queries ...
The tapered system should be allowed to kick in——
Or it should be kicked out.
——or it should be kicked out altogether. The only reason even to examine the tapered system would be if one increased the basic €317.43 to approximately €380 or €400. Then one would be in business. People are asking about those disregards, every one of which is a way of ensuring that people are excluded.
Once we fail to index link increases, people are automatically deprived. I ask that action be taken in that regard. People have described it to me as a vicious onslaught on the standard of living of the poorest in society. A comment was made, which I will not raise again, but the social welfare system is being used not to the advantage but to the disadvantage of the most deprived individuals in the most deprived areas of our State. That is quite a strong statement. It is time we considered all the disregards, examined them carefully, ascertained where they are creating poverty traps and blockages and rooted them out. The first time that one goes through the system, it automatically comes down like a cleaver and cuts one off. It is too sudden and severe and it is extremely negative.
The Minister is aware that when one is an Opposition spokesperson, one receives a great deal of post. The matter to which I wish to refer involves builders. My father was a builder's labourer. I think that I heard the Minister say that his people also worked in the industry. People who feel that they are being discriminated against by the social welfare system pay into a farcical system the same as everyone else and yet they are hardly entitled to any benefits at all. I was surprised by this. Even during a visit to a dentist or an optician, they are told that building workers do not qualify for any benefits. They have no pension rights, although they should have redundancy and sick pay under the Construction Industry Federation schemes. It is not unusual to find workers on the sites suffering from arthritis or other ailments brought on by numerous minor injuries. There is no early retirement for such people. They pay tax at the same rate as everyone else. This is a lash to us all. Ultimately, is it the position that building workers are treated differently in the social welfare code from other workers?
Is that a C45?
It may well be and that brings us back to the problem of the C45 or C42, whichever one applies. What efforts can the Department of Social and Family Affairs make to ensure that those people get their due entitlements the same as, for example, the Minister and I who both pay A1 contributions? People used to give out about the cost but it is one's passport to future security. Whatever else we say to the Minister today, he can stand over that achievement and we cannot take it away from him. If that is what is happening to ordinary builders' labourers, who work extremely hard and feel that they have no entitlements to any benefits — be they optical, dental or whatever — I ask the Minister to investigate whether steps might be taken to ensure that those workers who feel that they are being discriminated against under that system get their due entitlements.
I agree with the Chairman that the social welfare system can be fair, unfair and, at times, cruel. People on social welfare do not have the resources to get big accountants and solicitors to represent them when they are in difficulty. They have to come to politicians who are prepared to listen. The Chairman is right in what he says. We have some good social welfare officers who are very kind, understanding and reasonable. We also have other people. There is no point in the Minister or his officials responding or in our making complaints about them.
It is a little like the Garda. If one makes a complaint about a social welfare officer or health board official, one will have employees of the social welfare or health board investigating each other. The time has come for us to have some kind of independent authority. I will be making a serious complaint on Friday to the health board and I will bring the relevant person with me. I have told the health board that I do not want it to investigate the complaint. I am not afraid to go to the High Court; I went before and I will do so again. I will bring those people with me, and if it costs me money, so be it; I will pay for them. I am not having poor people and those in unfortunate circumstances abused by individuals who occupy privileged and protected jobs from which they can never be sacked. I will take this as far as I can. I will not criticise the Minister because he has enough problems with which to deal. If he does what we ask, it might ease the problem and the people to whom I refer might not have to go to those community welfare officers who are not as understanding as others.
I wish to raise three issues. When the Minister took over this job, he gave a commitment that he would deal with widows and widowers. I hope that in the next budget they will receive a fair share of the national cake. Those people have been treated badly. They are the forgotten people of this State. I hope that in the budget this December, at a time when we never had so much money in the State, widows and widowers will be looked after once and for all. They have been forgotten by every Government since the foundation of the State. Everyone else is thought about. I want the Minister to begin by dealing with younger widows in particular. They should be granted entitlement to free schemes. That is a very small donation that the State can make to them. It is bad enough for a person to lose his or her partner but to then find themselves on widow's or widower's pension is a major setback. I ask that the free schemes be extended to these people. It would not cost a fortune to do so.
I also ask the Minister to respond regarding the back to education allowance. He reduced the waiting period from 15 months to 12 and the time has come to reduce it further. There are people who realise that they want to return to education but the opportunity is not there for them to do so. If they cannot qualify for the scheme, they cannot return to education and that is wrong. This State is supposed to want to educate its young people and give them opportunities. I want the Minister to re-examine the position. I hope that, prior to the budget, he will reduce the waiting period further. It used to be six months and it should be returned to that level. The Minister has reduced it from 15 to 12 months and I would like him to reduce it again because it is extremely important.
I will not delay the proceedings but there is another scheme to which I have referred on many occasions, namely, family income supplement, FIS. There are working people who are entitled to FIS but, for one reason or another, they either do not know about the scheme or do not know that they are entitled to avail of it. I have raised this matter on many occasions. We have seen the reports that there are thousands of people entitled to FIS who are not being notified of that fact by the State. If, however, an overpayment needs to be clawed back by the Department of Social and Family Affairs or if the tax man has to grab back his pound of flesh — particularly from an easy target — those responsible are certainly able to oblige. We have seen how, in terms of the offshore accounts and the insurance scheme, they frighten the life out of old people, some of whom deposited their money with genuine intent. The State and the Government would do better to target the banks and their officials, who obtained 3% or 4% commission to put people's money into such accounts, rather than poor elderly people. Every day people who are frightened come into my clinic, even though they probably do not owe anything because they inherited their money and some have paid tax on it. Nevertheless, they receive this letter from the Revenue Commissioners and do not like it. The Revenue Commissioners would do better to target the banks and the officials who sold these policies to elderly people. That matter should be examined urgently because it is wrong that people who are entitled to receive a social welfare payment do not draw it down.
The Minister will have to take a deep breath before responding to all the questions asked.
Some strong individual cases have been raised which I will ask the Department to consider urgently. I will respond to some of the Deputies individually, if I may.
Deputy Stanton mentioned the slow down in the building industry. It is buoyant at the moment and while there is no sign of this changing, I take his point. Many of the 2 million people working in the State are employed in the industry which provides the basis for much of our growth. We have five and ten year envelopes for capital programmes for roads and public buildings which are strong enough to maintain the public sector construction programme. However, the outlook for the private sector is not as clear. That such a high proportion of the 2 million at work are focused on one industry leads to vulnerability in the labour market.
I saw figures recently which showed that in the past 12 months 88,000 people had come here from the ten new member states of the European Union. All but 1,000 have found jobs. It is interesting that 88,000 educated young people can come here in a 12 month period, take up employment and do well, receiving the minimum wage and more. Conversely, 150,000 Irish people are signing on every week to receive various benefits and allowances. There is a mismatch. There are programmes to activate the 150,000 locals. If anyone says it is hard to find a job, one only has to point to the fact that 88,000 people have come here in the past 12 months and found jobs.
We saw how some of them were treated.
We did.
We saw how well they were treated.
They came here from the ten new member states as they were entitled to do.
I will let the Minister complete his answer and respond to him later.
I am not talking about refugees.
I am talking about people from other EU member states coming here.
Yes. The way some companies treated some of them was not acceptable.
In regard to the back to education allowance, last year the number at second level was2,190 while this year it is 3,023. Last year the number at third level was 5,458 while this year it is 4,285. That makes a total figure between second and third level of 7,648 for last year and 7,308 for this year. There is some movement in the allowance and I have commented on the making of a decision on it. We have held several meetings in the Department recently and hope to be able to act on it soon.
Deputy Stanton also asked about the child dependant allowance which has not moved for ten years. This is not an oversight but a deliberate policy on the part of successive Ministers. We favour child benefit because it is employment neutral, unlike the child dependant allowance. We are working with the National Economic and Social Council on the possibility of amalgamating the child dependant allowance and family income supplement into a low income family allowance or a second tier. I have met the NESC twice recently and we are making steady progress on the proposal, although there are serious issues to be reconciled. The number in receipt of the child dependant allowance is 263,000 at the full rate and 93,000 at the half rate. There are 1.5 million receiving child benefit.
Deputy Stanton asked a fair question which I have asked many times, namely, what is the extent of child poverty. I have received figures from two official sources: 60,000 and 120,000. I would prefer to have a more accurate figure. I am told that child poverty is prevalent among one parent families and that it is difficult to measure it with some accuracy. It is not confined to those who are unemployed, it can be found in low income families who are not receiving family income supplement, although they are entitled to it. Until we receive a better figure, we are stuck with this range. I would rather not argue about the exact number but try to put policies in place to deal with the number, whatever it is. We need a better measure of poverty in all its form, not just child poverty.
I have spoken at many conferences and seminars about consistent and relative poverty. We are all relatively poor compared to those on the rich list. It is a nice debating point but does not achieve much. Consistent poverty is another measure which has come under scrutiny. There are new theories of persistent poverty and being at risk of poverty. One can move the number from 250,000 to 40 depending on which measure one applies. Many agencies and individuals are studying this topic, from the United Nations to a Ph.D. student in UCD but I do not have enough years to wait for all these studies to be completed. The figure is between 60,000 and 120,000. We must put schemes in place. The one to which I will devote my energy is the second tier possibility, if the Government agrees to adopt it.
Deputy Stanton also asked about one parent families and for up-to-date figures on cohabitation, and so on. Expenditure in this area is constantly increasing. I hold a view of cohabitation which the Deputy probably shares. I am struggling to remove this condition or circumstance from our language and pay people on the basis of a child living in a low income family, as opposed to whether the parents live together, next door or down the street.
There is significant evidence that one parent families do not pay any attention to the regulation about cohabitation. I have broad evidence which many are checking. It is a laughing stock, as I have repeatedly said, but I do not have an easy answer. If one removes the distinction, what does one say to those who are not lone parents? The solution probably lies in trying to secure income support for children who live in low income families, whatever their circumstances, whether married, single or divorced. The estimate for lone parent family payments this year is €769 million, an increase of €75 million or 11% on the figure for last year. It has grown significantly in recent years and we provide for an average of 82,800 recipients.
In response to Deputy Stanton's question about increased numbers in 2005, an additional 2,900 will come on to the list of lone parents this year. The State's investment in this area of €769 million is substantial and reforms are undoubtedly necessary. Opposition Deputies will tell me in six months' time that I have not delivered on the promised major reforms in this regard. I am trying to make progress in this area but such changes are difficult because there are many aspects to this issue. I am making every effort to ensure that these reforms are implemented but I am not certain that I will succeed. There are significant barriers blocking the route I wish to take but that will not prevent me from doing my best in this regard.
The issue of the falling number of widows and widowers claiming welfare benefits was raised. This is because many, in a reflection of the employment situation, are moving from non-contributory to contributory pensions. The number availing of family income supplement, FIS, in 2004 was 14,700. This represents an increase of 19% over the 2003 figure of 12,300. Between 2003 and 2005, the number availing of this benefit, based on the figures for March of this year, has increased from 12,000 to 15,000. The FIS Estimate for this year is €73.8 million, an increase of 32% on last year. I am providing €18 million extra for FIS because we are trying to promote the scheme and are beginning to have some success in this regard. Members are aware that I have increased the disregard by €39 at each point of the scale, which means many more are eligible for the allowance. This increase in the disregard is the main reason for the extra numbers claiming FIS.
In 2003, the school meals scheme cost €1.7 million. In 2004, we estimated it would cost €4.9 million but the outturn was €3.5 million. I am planning a substantial expansion of the scheme to utilise this underspend.
What was the reason for the underspend?
It arose mainly because of the issues involved in locating suitable individual schools to partake in school meals projects. In short, we have additional funding for school meals projects and are open for business in this regard.
I hope proper meals will be provided.
We must identify which schools wish to take up the scheme and which satisfy the conditions for participation. We have had some difficulty in this regard but I plan to rectify the position as soon as possible.
Deputies Stanton and Callanan asked about welfare provisions for carers. The Estimate in this area for 2005 is €212 million, an increase of €21 million over the figure for 2004. This 11% increase, which incorporates the respite grant and the increase in the carer's allowance, is substantial. I am confident that the respite grant, which has come on stream only in recent weeks, will be of significant benefit to carers.
I am still considering the issue mentioned by Deputy Stanton in regard to the provision for carers, a matter he has raised repeatedly. There is a rule which dictates that one may receive only one welfare payment and any change to this rule would have major ramifications across an entire range of areas. I am not unsympathetic to the idea that a widow, widower or pensioner may be an ideal person to undertake some caring work if time permits. Any such person who undertakes that caring work on a full-time basis will receive no extra benefit. He or she will be entitled to the respite grant but will not get any part of the carer's allowance.
I am sympathetic to the problems in this regard and also recognise that sympathy is insufficient. In this context, I have met carers' representatives and explained that deviating from the principle of one welfare payment for one person opens up a range of issues. They understand this problem.
The committee examined this matter in great detail and did not flippantly advocate the provision of 50% of the allowance. A great deal of thought went into that proposal. My colleagues and I have pointed out some anomalies to the Minister today but we are aware that he must always be wary of the knock-on effect of any changes and be alert to the next breech in the defences. We had this in mind when considering the issue. Widows, widowers and pensioners are the people who do much of the caring work in society. However, many feel they receive only that to which they would have been in entitled in any event and that there is no recognition of their work as carers. The committee tried to open up an avenue for the Minister's predecessor on this issue but we accept the restrictions under which he labours.
The committee's report on this issue was very good and I had a close look at its proposal in the context of the most recent budget. However, there are significant complications attached to the requirement to make additional payments on top of a primary benefit. Such a change would open up issues in a range of other areas. In this context, I opted instead for the respite grant. We will have a better idea of the benefits of this measure when we have a clear view of the demand for it. I am sympathetic to members' views on this issue but it is a matter which I have not yet resolved.
Deputies Stanton and Seán Ryan asked about rent supplement. The Estimate for rent supplement this year is €369 million, which represents a substantial increase of €15 million on the figure for the previous year. Expenditure on rent supplement more than doubled in the three years from 2000 to 2003. Between 2001 and 2004, the numbers rose by more than 40% to close to 60,000, having remained steady at 42,000 for a period. These trends reflect the steep rise in rents in those years and the fact that increasing numbers of people with long-term housing needs were beginning to rely on the SWA rent supplement.
For this reason, a cap on maximum rent levels was established in January 2004 because of our concern about increasing rents. The 2005 Estimate provides for an average of 58,000 recipients. At the end of April 2005, the number of rent supplements in payment was 58,407. Due to the fact that, as Deputy Seán Ryan observed, so many people continue to depend on this allowance in the long term, we transferred a sum of €19 million in the 2005 Estimates to the Department of the Environment, Heritage and Local Government.
The purpose of this allocation is to finance the roll-out of the rental accommodation scheme which will serve to meet the long-term housing needs of rent supplement recipients. The new arrangements are being rolled out in three phases by the local authorities and it was originally expected that the first eligible recipients would be transferred to the rental accommodation scheme in mid-2005. Although no recipients have been housed to date, it is proposed that 5,000 rent supplement recipients will be switched to the new scheme by the end of the year. We have transferred €19 million to achieve this strategy.
May we have further details of the scheme?
I will provide them for the Deputy. Are details of the rental allowance scheme being sought?
I am seeking information on the rented accommodation scheme and how it will work.
On the photograph required for the free travel scheme——
I asked a question about rent supplement for those in community employment. It is linked with the Chairman's question.
The Deputy asked if they could have first call.
Beyond a specified limit, there is no incentive to keep them on the community employment scheme in order to receive education.
Is the Deputy discussing one parent families?
Yes. Once they join the scheme, they experience a significant reduction in their entitlement to rent supplement. For this reason, they leave the scheme and education and employment opportunities are lost.
That is where the €317 limit becomes relevant.
The Chairman also noted this issue. If the household income of those on back to work schemes is above the €317 limit, they may still qualify for rent supplement under the standard rules. In January I introduced amended regulations to increase the income disregard from €50 to €60 per week. The current eligibility thresholds and disregards, with improvements to the standard rules, are designed to create financial incentives to avail of back-to-work opportunities.
It does not work out that way.
I accept the point made by the Deputy and will look at the effectiveness of the arrangements.
I could furnish the Minister with an example of a person who received €624 or 75% when the scheme began in 2004 which tapered downwards to 50%. Due to the increase in the disregard to €60, the amount was reduced to €350. Such persons want to leave the community employment scheme and receive the lone parent allowance instead. It is worrying that the opportunity to learn skills through participation in such schemes is being lost. The implication is that the Minister does not wish this situation to prevail. I noticed that his officials nodded in agreement when I remarked on the figure of €287.
There is no change in the cut-off point for PRSI.
The Minister can see what can happen. I am correct because I know the person who supplied this information. The figure of €287 continues to apply while the allowance for community employment schemes has been increased to €298.35. Of the increase of €11.35, €6.85 is taken back. This represents an effective tax rate of 60.35%. I am not accusing the Minister but that is daylight robbery. The Minister for Finance puts his hands into people's pockets and robs them of bell, book and candle.
Cut-off rates must apply somewhere.
The Minister's predecessor also faced this dilemma. After Members' exhortations, she returned to announce an increase of €12 in the allowance. I am sure Fianna Fáil Members achieve results when they flex their muscles. The proposal in respect of café bar licences is a small matter compared to this.
Fianna Fáil does not like wine.
This issue shall explode. When it was first brought to my attention, I did not grasp it fully. However, I arrived at my conclusion after conducting research. It is a frightening matter.
I will give it the careful examination it requires. On the surface, the circumstances described by the Chairman are not fair.
The Ministers' senior officials will quickly become aware of the problems.
They have indicated that the Chairman is largely correct.
I would not raise this issue in public if I was not correct. There is already sufficient alarm.
I said the Chairman was largely rather than completely correct.
The Minister should not lose the run of himself.
Have we completed our discussion of the social insurance fund?
A few more matters remain to be discussed.
What about the photograph?
The solution is to introduce a smartcard with a chip and photograph as part of an integrated ticketing arrangement for the whole country. I am not proud of the travel passes currently in use because they are just ordinary pieces of paper with names written on them. I wish to move towards a digital smartcard arrangement.
The social insurance fund is dealt with in an appendix to the Estimates.
On the pensions issue and the numbers availing of early retirement, the Minister discussed the possibility of allowing people to work for a longer period. There is talk of an enhanced pension arrangement, whereby people may voluntarily stay at work until the age of 70 years. Has any progress been made on this?
It is worrying that the numbers of redundancies appeared to double between 2000 and 2003. Should we be alerted to any action being taken on this matter?
Recently I met a woman who was required to sign on regularly. She was in receipt of maternity benefit but continues to sign on in order to receive credits. Is it necessary to sign on every week?
I brought forward from 2006 to this year the Pensions Board review of the adequacy of coverage. I am concerned that 900,000 out of a total of 2 million workers do not have pension arrangements other than occupational pensions. I will have a full meeting with the board within the next three weeks to ascertain how matters are progressing. Consultants have been employed and a marketing campaign has been conducted to persuade more people to take out PRSAs. Some progress has been made but not enough. This a debate for the entire country; we do not have time to conduct it today. A small number of options are available, including mandatory pension provisions, increased incentives and an examination of SSIAs with a view to continuing the saving habit.
I follow closely developments in this area in the United Kingdom and other countries, many of which are experiencing similar difficulties. Pensions were introduced more than 100 years ago for those who reached the age of 70 years. As life expectancy at the time was approximately 68 years, pensions were not expected to involve much expenditure. The position has changed dramatically since. The next important event will be presentation of the report of the Pensions Board before the end of September. It will lay out possible options and the costs involved.
The 2005 Estimates provides for a drop of 4,900 in the number of recipients of unemployment benefit. The budget for the social insurance fund is €463 million, an increase of €8 million or 2% on the figure for last year.
What is the surplus in the social insurance fund?
I will get that figure for the Chairman.
I see it.
It is projected it will be €2.2 billion at the end of this year.
I hope the Minister does not intend to raid the fund.
While I might spend the surplus, I will not raid the fund.
We used to tell the Minister's predecessor that she had.
Raiding occurs when the surplus is given to another Department.
I thank Deputies for their consideration of the Estimates. It is useful for me and my officials to have an examination of these areas. I reassure the committee that we will take away any directions on which we can work and that I look forward to continuing to work with it.
I thank the Minister and his officials for attending and allowing us to participate in an interesting discussion. A number of suggestions have been made from all sides of the House and it is hoped the Minister will examine them, particularly the anomalies highlighted by committee members. He would not want to see anomalies depriving recipients of the benefits he introduced. He made some pertinent comments. Deputy Stanton indicated that there were tones of JFK, a lofty perch on which to place the Minister whom we wish well.