SELECT COMMITTEE ON SOCIAL PROTECTION debate -
Tuesday, 30 Nov 2010

Vote 38 - Department of Social Protection (Supplementary)

Vice Chairman

We are meeting to consider the 2010 Supplementary Estimate for the Department of Social Protection - Vote 38. On behalf of the select committee I welcome the Minister for Social Protection, Deputy Éamon Ó Cuív, and his officials to the meeting. If it is in order, I am substituting for our colleague, Deputy Jackie Healy-Rae.

A draft timetable has been circulated. I understand there is agreement to take an opening statement by the Minister and proceed to questions on the Vote. I will invite the main spokespersons to speak first. I invite the Minister to make his opening statement.

Minister for Social Protection (Deputy Éamon Ó Cuív)

Go raibh míle maith agaibh. I welcome this opportunity to appear before the select committee to present a Supplementary Estimate for my Department.

I am seeking a Supplementary Estimate of €350 million for Vote 38. This is necessary as the social insurance fund from PRSI contributions will be less than estimated. Overall expenditure on Vote 38 schemes, services and administration in 2010 will be €57 million lower than provided for in-----

Deputy Róisín Shortall

Is the Minister's speech available?

Vice Chairman

Perhaps the spokespersons could be given a copy.

Deputy Éamon Ó Cuív

Overall expenditure from Vote 38 schemes, services and administration in 2010 will be €57 million lower than provided for in the Revised Estimates. However, Vote 38 also provides for an Exchequer subvention to the Social Insurance Fund. This subvention was required in order to fund that part of the expenditure on social insurance benefits and pensions in 2010 which is in excess of the sum of PRSI income in 2010, and the amount of the surplus carried over from 2009. The main reason for the Supplementary Estimate is the requirement for a higher than expected Exchequer subvention to the fund. While the Supplementary Estimate provides for an increased allocation for a small number of schemes operated by my Department, the increased allocation is more than offset by underspends on other schemes.

Expenditure on schemes, services and administration provided by the Department of Social Protection is expected to be just under €20.84 billion this year. This is made up of €11.34 billion on Vote 38 and €9.5 billion on the Social Insurance Fund. Overall, this is €124 million, or 0.6%, lower than provided for in the 2010 Estimate but is still €400 million, or 2%, higher than was spent in 2009.

The Supplementary Estimate of €350 million is made up as follows: a higher Exchequer subvention to the Social Insurance Fund of €417 million, due to lower than expected PRSI receipts, offset by a lower expenditure of €57 million on Vote 38 schemes, services and administration; and the higher than expected receipts of €10 million from appropriations-in-aid.

The increased Exchequer subvention to the Social Insurance Fund is made up as follows: lower Social Insurance Fund income amounting to €441 million arising from lower receipts of €241 million, which is in line with the fall off in tax revenues generally, and a transfer of €200 million to the HSE to reflect the full year effect of the increases in the health contribution in the 2009 Supplementary budget; and a lower than expected surplus amounting to €42.7 million carried forward from 2009 into 2010. The above excesses will be partly offset by lower expenditure on SIF schemes, services and administration.

Apart from the Exchequer subvention to the Social Insurance Fund, additional funding is being sought on a number of schemes on Vote 38 including: State pension - non-contributory, €13 million; jobseeker's allowance, €74 million; farm assist, €15 million; employment support services, €34.4 million; pre-retirement allowance, €3.5 million; one-parent family payment, €8 million; and widower's non-contributory pension, €1.1 million. These additional requirements are due mainly to higher than expected recipient numbers. I expect that the excess expenditure which I have highlighted regarding jobseeker's allowance and certain Vote 38 schemes, will be fully offset by savings arising on a number of subheads, including administration. I would also point out that the jobseeker's allowance must be seen in the context of an underspend of €200 million on jobseeker's benefit, giving a net underspend of just under €130 million on jobseeker's expenditure. This is because the live register is expected to be, on average, at 441,000 for the year as a whole compared with an average of 458,000 provided for in the Estimate.

In addition to the excess on the Exchequer subvention to the Social Insurance Fund and excess on a number of schemes, two token Estimates are being sought to enable the Department of Social Protection to assume financial responsibility for FÁS community employment and other employment services from early 2011. The committee will be asked to consider the full Estimate for these services when it examines the 2011 Revised Estimate for my Department.

The overall objective is to fully integrate employment and community services of FÁS with the Department's existing services to provide an end-to-end service to our customers. This will allow a transformational overhaul of service provision for people of working age. As well as income support, we will now focus our interventions on assisting them to find employment and prepare themselves for entry into the labour market by accessing training, career advice, work experience and job placement.

The integration of FÁS employment and community services with the Department marks an important step away from a passive model of income support to a proactive model that is clearly focused on progressing people to participation in the workforce. Such an approach not only makes economic sense but also allows our services to be tailored to meet the individual needs of each customer and to respect and enhance their dignity as individuals.

Ba mhaith liom a mholadh don choiste go nglacfar leis an Meastachán Forlíontach de €350 milliúin.

Vice Chairman

I thank the Minister. I propose that we take contributions, beginning with party spokespersons, and I call Deputy Michael Ring.

Deputy Michael Ring

I will not make a speech but will ask a few questions because our time is valuable.

Vice Chairman

I thank the Deputy.

Deputy Michael Ring

Why was the Department's funding forecast for the Social Insurance Fund incorrect? What is the Minister's view of the fund being part of the deal for Europe?

I shall now pose my more important questions and ask the Minister to note them. There has been an increase of 16% in funding for farm assist. The Minister seems to be expecting more people to join the scheme and he might give us his logic on that issue. The Minister also mentioned increased funding of 1% in travel and subsistence, 75% in incidental expenses, 6% in postage and telecommunication services and 2% in office machinery and office supplies. Will the Minister explain these increases? Funding for consultancy services increased by 13% but I hope we will not have more reports. These are serious economic times. How can we justify these increases when every other sector, such as travel, is being cut back? How can these increases be justified? With regard to rent supplement, we have over-----

Deputy Éamon Ó Cuív

The Deputy spoke rather fast and I ask him to repeat his question on increased funding so that I can take notes.

Deputy Michael Ring

Funding for travel and subsistence increased by 1%, incidental expenses increased by 75% - the Minister might explain what that is about - postage and telecommunication services increased by 6%, office supplies increased by 2% and consultancy services by 13%. All of those categories should have their funding decreased considering our economic climate. Will the Minister explain the increases? There was €65 million spent on the exceptional needs payment which was a massive increase in funding. Can the Minister explain why? I know these are bad times but that is still a lot of money.

I am also worried about the respite grant where savings of €24 million were made last year. Why are so many people unable to draw down that grant?

Vice Chairman

I call Deputy Róisín Shortall.

Deputy Róisín Shortall

Will the Minister answer Deputy Ring's questions first?

Vice Chairman

Shall we do that?

Deputy Michael Ring

Yes, I would like that and it would speed up the process.

Vice Chairman

Is that agreed? Agreed.

Deputy Éamon Ó Cuív

I shall start with the question on the large sums of money. The Social Insurance Fund is short by about €241 million. That figure is also linked to income tax predictions. As the Deputy will know, the tax return from income tax has fallen behind target whereas other taxes are ahead of target. We are about the same amount behind our target as income tax is behind its target. The Deputy will also appreciate that PRSI and income tax are linked. We expect to come in within this figure. In other words, this is a contingency and I must ensure that we do not run out of money before the end of the year. If the November figures come in slightly better for self-employed PRSI, etc., I might not use all of this money we are providing. However, I must state the outer limit now otherwise one could find that there was no money left at Christmas.

The second issue that arose is purely an internal transfer of €200 million. We analysed the allocation of moneys between the health levy and insurance money. Both levies arrive together and are broken down by a formula. When the sum was revised during the year because of the change in the health levy it was decided that health was owed €200 million more. It has simply been taken out of one pocket and put in another. That sum is still in the system and is Exchequer neutral.

The third small issue was the carryover sum being slightly less. This relates to encashments at Christmas and post offices carrying floats, etc. It was €42 million less than we had anticipated. In other words, there was more encashment of the money we had given to the post offices at the end of the year than we had anticipated. We will not know until the very end of the year how much of that extra provision we will use, but we will need the bulk of it.

There are more applicants for farm assist than was anticipated. One must take farm assist as being, essentially, an unemployment payment. There are many farmers who have become unemployed in construction or other businesses and whose jobseeker's benefit entitlement has run out. Rather than going on jobseeker's allowance many of them go on farm assist. We are seeing an increase in jobseeker's allowance and farm assist payments but a decrease in payments of jobseeker's benefit. The decrease in jobseeker's benefit more than offsets the increase in the other two payments so the total live register figure is less than anticipated. That is the effect we are seeing there. I have a strong view that there should be more activation placements for self-employed people, and we announced this in the four year plan for national recovery. It is important that we look at that issue.

Deputy Ring asked a question about social insurance. Social insurance income is down by 6.2%. The income tax revenue is down 6.4% on that predicted. We are taking in more taxes this year than we predicted. Income tax is down but revenue from other taxes is up. That is the explanation. When income tax goes down it is logical to presume that PRSI will go down.

The increase in incidental expenses is to fund increased staffing costs associated with the management of the live register. The extra staff in my Department have mainly come from other Departments. They have come off the payroll of other Departments and on to our payroll.

Deputy Michael Ring

Would funding not come with them from other Departments? The other Departments will not hold their budgets if their staff has decreased.

Deputy Éamon Ó Cuív

That is exactly the case. Other Departments will have a saving at the end of this year and we will have an extra cost. The figures will be adjusted all over again at the start of next year. There are ups and downs here. Spending on jobseeker's benefit is down and that on jobseeker's allowance is up. All of these adjustments will be taken into account next year when we estimate each cost.

Increased travel costs result from more outdoor visits connected with controlling and checking the live register. The increase in postal costs is largely accounted for by the €100 million savings we will make on child benefit. A large number of letters had to be written to people about child benefit. I do not have the exact amount. Spending 1% of our postal bill to save €100 million is a good trade-off. It is legitimate to spend a small amount of money to make a big saving.

Consultancy in our Department normally relates to new information technology. I wish I could visit every labour exchange in the country. It is very instructive to go into the various social welfare offices. Having visited many of them, my perception is that there are some very good systems in my Department. However, some are quite antiquated and some are purely manual. Application forms for benefit are, largely, completed by hand. All of this has to be put on screen and that will all cost money. We do not employ consultants for consultancy sake. This spending is investment in information technology. Many manual jobs could be automated and some IT systems need to be updated. This would give better customer service and involve fewer staff. There will be a big pay-off from this spending. This is not the usual consultancy that people worry about where one asks people what one should do next. Most of our consultancy is investment in information technology.

Deputy Ring asked about the respite care grant. The outturn in 2009 was €99 million. We put an Estimate in for 2010 of €153 million. We are now estimating it to come out at €128 million. It is still up considerably from the 2009 outturn. Last year, we estimated, as a contingency, that the number of recipients of respite grant care would go up to 90,000 from 53,000 and that would mean an expenditure of €153 million. The number of recipients actually went from 53,000 to 75,000 and spending went from €99 million to €128 million, rather than to €153 million. Spending has gone up considerably but we provided for a contingency of more than was required.

Deputy Michael Ring

The Minister's Department expected 90,00 recipients. He should have been able to judge the number more accurately from the previous year. Some 14,000 represents a large number of people. It is minus 16%. Is there a particular reason so many people who were expected to receive the respite grant did not do so? Some people who receive the respite grant also receive carer's allowance. Is the Minister cutting off people who have other income?

Deputy Éamon Ó Cuív

The respite care grant is strictly demand led. No one is refused. One applies for it and gets it. I cannot remember anyone complaining that they were wrongly refused a respite grant. I do not know if that is the experience of other Deputies, but this is not a scheme that I have found to be in any way contentious. It is better to make an over provision than an under provision. One of the issues that might have effected this change was the expectation that more people in receipt of the domiciliary care payment might have applied for the respite grant. That did not materialise. If the money is not spent it stays in the Exchequer. It is not lost. We have the money and it will be used for other purposes.

Rent subsidy is also demand led and is going up. We cut average rents in line with market rents. This scheme needs constant revision and I have started on that in the Bill I introduced this week. This should not become a long-term scheme but should go back to its original purpose of being a short-term scheme. Primary responsibility for housing should rest with local authorities. We had estimated that there would be 98,000 recipients in 2010. The estimated outturn is 96,000. However, the higher average monthly payment is offset by the lower number of recipients. The money went up fractionally from our estimate but the number of recipients is lower than anticipated. The average monthly payment went up from €432 to €445. We did not get anything like the full year advantage of the adjustments made in rent allowances in June because that was subject to change on review of existing applicants or for new applicants. It did not drop for everyone immediately. It will have a much bigger effect in 2011.

Deputy Michael Ring

I raised the question of rent supplement on Question Time last week. The Minister's officials are here again today. I would like the Minister, the Minister of State with responsibility for housing and their officials to address this issue. We must look at the vacant houses in NAMA and use them for housing. The State is paying twice for these houses. Whether they are under the control of local authorities is a matter for the two Departments to deal with. People in receipt of rent allowance are living next door to vacant houses while the State is paying for rent allowance and paying NAMA for the empty houses. This is something we need to look at. There is great concern about the payments from community welfare officers. Some of them are badly needed and well used but there are questions as to whether the scheme is being abused. We all hear about people throwing away buggies and we all get e-mails about free hairdos and so on. I know that is not all true. Any time I get such an e-mail, I send it on to the community welfare officer and I get a reply back, so I know that much of it is just talk but I want to be sure that the money is being spent on those who need it most.

Deputy Éamon Ó Cuív

I have made it my business to sit down with community welfare officers from various parts of the country to discuss the operation on the ground. It is fair to say that some of the stories we hear are not quite the way they are painted when we look into them. I am wary when I hear the exact same version of the same story with the same circumstances from ten different places.

It is important that we reach the fine line between being careful with the money while making sure those who need money get it. We all know of cases where a person is in dire need and that is a structural issue that I am interested in. It is important that the community welfare officers know the people they serve and have good intelligence about what is going on. It might not be in any book but if the community welfare officer is familiar with an area, he can often make a better value judgment. The big difference between a community welfare officer and a scheme administered centrally is that the community welfare officer must have much greater discretion for emergencies than the central systems that are hidebound by law and could leave a person with nothing to live on. As one person said to me, they do it according to need while the Department does it according to rule. I am conscious of that.

Deputy Michael Ring

I completely agree. The discretion must be in place and 99.9% of decisions are right and we must support those people. Discretion must be left with the community welfare officer. There cannot be a situation where people do not have their needs met as a result of rules.

Deputy Éamon Ó Cuív

The NAMA issue is worthy of examination. We had a meeting with the local authority in Galway and there was a good discussion about the local authority being allowed to access the houses that were mentioned and why the local authority was not availing of these houses under the RAS scheme. We were told they were the wrong houses in the wrong places that were available. There is a policy not to move someone from somewhere like Clifden to Ballinasloe or Tuam to Gort, 40 or 50 miles away; they try to locate people in the communities from which they come and there is long-term sense in that. There is potential, however, and the first port of call for those properties should be local authorities instead of central Government.

The problem for the Department is that it is not the lessee for rent allowance purposes, the lessee rents the property. We do not look for properties. If we go the NAMA route, the obvious people to do it, those with the engineers and the property evaluation system, and who have the right to pick the properties, are the local authorities. After a short period, people should move from our scheme on to local authority care and be transferred then in a systematic way where they have the infrastructure to examine these options. I suspect, although I have no proof, that we are paying rent subsidy for many NAMA properties by one remove but since we have no direct relationship with the landlord, I cannot be sure of that.

The other issue we must be careful of is that while the State must look after the value for money issue, we must put people in housing near to their work, and under our scheme the tenant picks the house while the Department purposely avoids becoming the tenant. The best approach is to look at those with two or more years on rent supplement and ask why they have not been picked up by the local authority, then look at those who have been on it for 18 months, eventually moving back to a maximum of one year on rent supplement before the local authority would then take the case over and see where housing might be available and where they could buy up half finished estates or fully finished estates subject to the buildings being suitable. Many local authorities tell me, however, that some of the properties available are in places where there is no demand for housing or that the properties are not suitable for their schemes.

Deputy Michael Ring

Local authorities need to be guided by the Minister and the Department. They have moved away from the role they were given. For the past ten years, they thought they were above dealing with houses. The problem with the local authorities is that they have thousands of houses all over the country that they have not completed, houses people could live in at a saving to the taxpayer, but they did not bother to do them up and allocate them. In my county and every other county, there are houses that should be given out for rent allowance and the people could then be taken over by the local authority. We need new guidelines from the Department to put pressure on the local authorities. It has not operated the RAS scheme well and I worry that is where the problem is.

Deputy Éamon Ó Cuív

I completely concur with the Deputy; local authorities must take responsibility for housing.

Deputy Róisín Shortall

The Minister could make that happen if he transferred the budget.

Deputy Éamon Ó Cuív

I am willing to transfer all the money I am paying for rental. If they agreed that everyone who has been on RAS for 18 months is taken off payment from the Department, I would transfer the money to the local authorities.

Deputy Róisín Shortall

Could the Minister sort that out?

Deputy Éamon Ó Cuív

I am sorting it out. I am dealing with the Minister of State at the Department of the Environment, Heritage and Local Government. One of the problems Deputy Ring alluded to is that we can bring the horse to water but it has been hard to get the local authority horse to drink.

Deputy Bernard J. Durkan

If the Minister drags him by the ears, he will find it more difficult to even bring him to the water.

Deputy Éamon Ó Cuív

That may be but there are 84 housing authorities in the country and the issue is being addressed proactively.

The other issue arises of how often a tenant on RAS should be allowed to refuse local authority housing. I understand a large number of tenants on the rental subsidy scheme refuse local authority housing and I am bringing in another reform to deal with that. I have been at the Department for eight months and I have been moving these issues as fast as I can through the system because radical reform is needed.

Deputy Róisín Shortall

The Minister is seeking this Supplementary Estimate because of a shortfall in the Social Insurance Fund. How much is owed to the fund by employers and what is the Department's strategy for collecting that?

Deputy Éamon Ó Cuív

The social insurance fund is collected by Revenue. We do not collect it. It is transferred from Revenue but I get the information from Revenue on that.

Deputy Róisín Shortall

I thought the Minister would have that.

We are all agreed that job creation is the key to encouraging people to move from welfare to work. There are three schemes in existence that incentivise employment for potential employees or for employers. Those three schemes could do a considerable amount to make employment more attractive for people on welfare but the difficulty is that they are not being promoted. The Minister has spoken frequently about the PRSI incentive scheme. How many people are on that scheme and what was the Department's target for the year because it seems to be falling short of the targets under all these schemes? There are only 150 people on the part-time job incentive scheme, which is not being promoted at all and in my experience nobody knows about it. Does the Department have a target for that and why have so few people taken it up? The third scheme is the Revenue job assist, with only 500 employees according to the latest figures. Why is that figure so low and what is the target for the scheme?

Deputy Éamon Ó Cuív

The amount owed on the PRSI, according to Revenue, is €236 million for all years. By its nature, owing to liquidations and so on, money will always be owing, but the collection of it is an issue.

Deputy Róisín Shortall

So, it is very close to the amount by which the Department is short.

Deputy Éamon Ó Cuív

No, it is not, because as with any company every year there would be debtors. That figure is the amount owing for all years and one would have that every year because, obviously, people fall behind with payments to Revenue.

Deputy Róisín Shortall

What was the figure this time last year?

Deputy Éamon Ó Cuív

I do not have that, but I will get the Deputy the figure.

I believe between 1,100 and 1,200 people are on the PRSI exemption scheme where the target was 10,000. I accept the uptake has not been as big as we thought. The problem might relate to many employers employing people who have not been on the live register for six months.

Deputy Róisín Shortall

What about the six months the Minister lost in promoting it? It was announced in last year's budget and did not start until June.

Deputy Éamon Ó Cuív

If that is the problem, it is good news because we have announced-----

Deputy Róisín Shortall

It is not good news; the Minister's performance has been abysmal. Money was provided in the budget for 10,000 new jobs and only 1,200 have been filled, which is an abysmal performance by any standards.

Deputy Éamon Ó Cuív

We have already announced that rather than finish the scheme this year it will run for 2011. The scheme will run for another year and therefore will be an 18-month scheme rather than what was initially envisaged - one year. When I came to the Department regulations needed to be drawn up, which happened as speedily as possible and the scheme commenced in June.

I do not believe I have figures for the Revenue job assist scheme.

Deputy Róisín Shortall

What about the part time-job incentive scheme?

Deputy Éamon Ó Cuív

The problem with the part-time job incentive scheme is that a person gets it for as long as his or her jobseeker's benefit lasts. Many people who start on jobseeker's allowance get the back-to-work allowance because it is a two-year scheme so there is a much bigger uptake on that than there is on part-time-----

Deputy Róisín Shortall

My question is whether the Minister has a target for that scheme.

Deputy Éamon Ó Cuív

The big one we are focusing on is the back-to-work allowance, which took over from it.

Deputy Róisín Shortall

I am asking about the part-time job incentive scheme. Does the Minister have a target?

Deputy Éamon Ó Cuív

No, I do not.

Deputy Róisín Shortall

It is not possible to measure performance without a target.

Deputy Éamon Ó Cuív

I know that.

Deputy Róisín Shortall

An uptake of only 150 people is pretty poor.

Deputy Éamon Ó Cuív

I would not see that as a big player. The Deputy highlights a good point that a scheme that only attracts 150 might not be the way to go.

Deputy Róisín Shortall

It might be a good idea to promote it.

Deputy Éamon Ó Cuív

I am not sure that promotion is the problem because I presume that through national employment action programme and the job facilitation, my departmental officials are telling the clients about all these schemes. However, if a scheme is not attractive, it is not attractive and all the promotion in the world will not make it attractive.

Deputy Róisín Shortall

It is attractive for certain categories, but if people do not know about it-----

Deputy Éamon Ó Cuív

We need to look at the scheme rather than its promotion. How is it that the schemes that are attractive are being taken up with the same promotion as the ones that are not attractive?

Deputy Róisín Shortall

I do not agree with the Minister. That scheme is attractive for people, especially couples who do not qualify for family income supplement, but little or nothing is being done by the Department or the Minister to promote it.

Deputy Éamon Ó Cuív

I hear what the Deputy is saying.

Deputy Róisín Shortall

An average of 27,260 people are getting family income supplement. Traditionally the uptake of that scheme has been very low. Does the Minister have an estimate of the level of impact of the scheme? What percentage of people, who come within the income guidelines to qualify for family income supplement, actually claim it?

Deputy Éamon Ó Cuív

I understand a report that was done indicated that approximately three quarters of those eligible were taking it up. It is a very complicated issue to calculate because in some cases I suspect there are ancillary incomes in houses. In other words in what appears to be a single-income house someone quite legitimately is doing a bit of part time work, which results in the family income not being just the one income in the house. The schemes are open and people need to decide whether the scheme suits them and whether they wish to apply. This scheme has been fairly well highlighted over the years. It is not a new scheme; it has existed for a long time and people are aware of it.

Deputy Róisín Shortall

In our experience, people are not aware of it and one of the difficulties is that it is not being promoted.

Deputy Éamon Ó Cuív

I am interested in what the Deputy says about promotion. While I agree with her in much of what she says about promoting schemes, I hope when we put in a subhead for advertising all these schemes that we get full support from her.

Deputy Róisín Shortall

I wish to move on.

Deputy Éamon Ó Cuív

Normally when we put the advertising budget in, it gets slashed and we get criticism for throwing away money on advertising and promotional work.

Deputy Róisín Shortall

I wish to move on.

Deputy Éamon Ó Cuív

I hope there will be some consistency there.

Vice Chairman

Allow Deputy Shortall to continue.

Deputy Róisín Shortall

Is it not the case that there will be a very big increase in the expenditure on family income supplement if the Government proceeds to cut the minimum wage because people who will suffer a cut of €1 in the minimum wage, as proposed, will then be entitled to make up that shortfall through family income supplement? What is the Government's rationale for cutting the minimum wage?

Deputy Éamon Ó Cuív

Not everybody who will get a payment under the minimum wage will be entitled to social welfare and not all of those entitled to social welfare would have children, so it is not a one-for-one connection.

Deputy Róisín Shortall

Does the Minister have an estimate?

Deputy Éamon Ó Cuív

In many cases young people might work for the minimum wage. In many cases there would be a family income in the house and the home-maker might work ten hours a week, for example in the catering industry, on the minimum wage and therefore would not be entitled to social welfare in his or her own right.

Deputy Róisín Shortall

Does the Minister have an estimate of the compensatory payments that will be made through family income supplement as a result of the proposed cut?

Deputy Éamon Ó Cuív

No, I do not have it here.

Deputy Róisín Shortall

Can the Minister get it and give it to us?

Deputy Éamon Ó Cuív

I can, but I would not expect it to be that significant.

Deputy Róisín Shortall

I ask the Minister to supply it to us.

Deputy Éamon Ó Cuív

Only 4% of the workforce are on the minimum wage. It is then necessary to distil out of that the people who have children and distil further the people-----

Deputy Róisín Shortall

I am asking the Minister to supply that figure.

Deputy Éamon Ó Cuív

We will get the Estimate for anything the Deputy wants.

Deputy Róisín Shortall

The Minister is not well prepared for an Estimates meeting. I would have thought he would be able to answer some of these questions.

Deputy Éamon Ó Cuív

The minimum wage announcement has no impact on the 2010 Estimates and I thought that was what we are discussing. If we were discussing the 2011 Estimates, I would have brought in the back-up data for those Estimates. This is a 2010 Estimates meeting.

Deputy Róisín Shortall

The Minister is not well equipped.

Deputy Éamon Ó Cuív

I am well equipped.

Deputy Róisín Shortall

Could we have straight answers instead of blather from the Minister?

Deputy Éamon Ó Cuív

Maybe it is my mathematical training, but one thing I often find is that people are always looking for definitive figures where there are large numbers of variables. In that case, by definition, there will be a rough estimate that some people then take as being 100% accurate when that is not possible.

Deputy Róisín Shortall

Could the Minister stop the blather?

Deputy Éamon Ó Cuív

One of the problems with forecasting in general is that if there are too many assumptions, those must be included in the plus or minus.

Deputy Róisín Shortall

Can we continue? In regard to subhead N, on exceptional needs payments, will the Minister explain why there was a reduction of 28% in exceptional needs payments this year when the Society of St. Vincent de Paul cannot keep up with the demands on its funds? Why are the CWOs paying out less than estimated for exceptional needs payments? This would indicate a crackdown in the Department.

Deputy Éamon Ó Cuív

There is not any crackdown by the Department, the scheme is demand led. The only thing we crackdown on is the issue raised by Deputy Ring, the new buggy every week syndrome. I do not believe that is happening to any great extent.

Deputy Róisín Shortall

That is an appalling statement by the Minister for Social Protection. It is a cheap shot. He is being asked questions when we have never seen such enormous need in society and he comes out with cheap shots. I asked the Minister a question about why the exceptional needs payments are less than was predicted given the level of need in society.

Deputy Éamon Ó Cuív

What I am saying is that there has been instruction on the exceptional needs payment in the Department.

Deputy Róisín Shortall

How does the Minister explain the 28% reduction?

Deputy Éamon Ó Cuív

We paid out €75 million in 2009 and, therefore, €90 million was a contingency provision for this year. The Deputy asked a question but it is amazing how people want it two ways all the time. We hear perennially from Opposition spokesmen that the schemes are too easy and are being abused. All I said was that those who need, get. I am also clear that those who do not have a genuine need, and where there are abuses, will not be allowed by the CWOs, and I have said from the start that I do not believe the scale of abuse was anything like the level suggested around the country.

Deputy Róisín Shortall

Nobody suggests that the Minister should allow abuse.

Deputy Éamon Ó Cuív

The Deputy seems to suggest it. When I said the only thing there might have been a crackdown on was abuse, the Deputy attacked me.

Deputy Róisín Shortall

No, sorry, the Minister's official has given him an explanation about the reduction. If he had listened or prepared for the meeting-----

Deputy Éamon Ó Cuív

I am well prepared.

Deputy Róisín Shortall

-----the Minister would have been able to give a straight answer instead of the cheap shots he engaged in.

Deputy Éamon Ó Cuív

The Deputy is the one engaging in cheap shots. She can dish it out but she cannot take it.

Deputy Róisín Shortall

The Minister has already taken up a great deal of time with waffle earlier. Can we have straight answers to straight questions now?

I want to move on to subhead Q on free schemes. There is an extraordinary €25 million saving on free schemes and I find that hard to understand. Can the Minister explain this, particularly in the context of his reneging on the promise to provide payments to offset the cost of the carbon levy for those on low incomes? Those savings could have been used to provide an additional payment for fuel allowance. The Minister promised to introduce a vouched fuel scheme to offset the additional cost of the carbon levy. Will the Minister explain the €25 million saving and, given it was achieved, why he did not honour the undertaking he and other Ministers gave to introduce some sort of payments scheme to offset the cost of the carbon levy?

Deputy Éamon Ó Cuív

The second part of the question was addressed at a previous meeting so we need not go back into that. The major saving is on the electricity allowance because the average price of electricity was less this year than anticipated.

Deputy Róisín Shortall

My question is why were those savings not used?

Deputy Éamon Ó Cuív

We have already debated that.

Deputy Róisín Shortall

No, we talked about the Minister reneging on his promise but, given there were savings in the free schemes of €25 million, there was a fund to use.

Deputy Éamon Ó Cuív

There was not.

Deputy Róisín Shortall

There were savings of €25 million.

Deputy Éamon Ó Cuív

When I add up all of the savings and expenditure, I need an extra €350 million today. We cannot have it every way. We are looking for more money for the Department today and when we add up all of the expenditure of the Department across all of the schemes, because of the size of the Department, there is overspending and underspending. In this case, because of the shortfall in RSI, even if we leave out the €200 million, we are still talking about €150 million net extra to run the Department this year over and above the Estimate. The Deputy simply wants to add to that.

Deputy Róisín Shortall

What I am saying is-----

Deputy Éamon Ó Cuív

The Deputy's mathematics is not very good if she thinks it can be done any other way.

Deputy Róisín Shortall

The Minister and his colleagues gave firm undertakings to people suffering from fuel poverty that in pursuing the Government policy of introducing carbon levies, a scheme would be put in place to offset the cost of that for low income households but he did not do that. Given that there were savings of €25 million on the free schemes as a result of the reduction in the cost of electricity, why did the Minister not use those savings to do what he promised, to help people who are dependent on oil to heat their homes? That might have avoided the fears that groups working with older people have about potential deaths from the cold.

Deputy Éamon Ó Cuív

We have debated this in detail before. The carbon tax is not being introduced on solid fuel.

Deputy Róisín Shortall

I asked about home heating oil.

Deputy Éamon Ó Cuív

If we had introduced the scheme as the Deputy suggests, taking the savings on the electricity allowance into account, I would have had to add to the Supplementary Estimate; that is a mathematical certainty.

Deputy Róisín Shortall

So promises count for nothing?

Deputy Éamon Ó Cuív

I am already looking for, even allowing for the €200 million transfer to the Department of Health and Children, another €150 million this year.

Deputy Róisín Shortall

The Minister is saying that budget promises count for nothing and it is too bad for low income households that are hit by the carbon levy and that cannot afford to heat their homes. The Minister is just shrugging his shoulders and saying "too bad".

Deputy Éamon Ó Cuív

I am not shrugging my shoulders, I am very concerned about these issues and they will be addressed in due course.

Deputy Róisín Shortall

Looking through the Estimate, it is hard to identify where the savings from fraud are recorded. Can we get information on that?

Deputy Éamon Ó Cuív

We have a system where we try to calculate the savings from fraud where we detect it and then calculate what would have happened if the fraud had continued into the future. The last figure we gave was €500 million. That will not be found in a clearly identifiable form in the format of Estimate we have in front of us because that shows actual expenditure in every scheme. It will not give the expenditure there might have been if there had been a higher level of fraud. Because fraud savings include an imputed saving into the future, it could not be incorporated into an Estimate. However, regarding fraud savings, we know that if we save, for example, €200 million, on the outturn we would expect to be €200 million better off than we would be without the saving. Given that prevention and therefore stopping people defrauding the system in the first place is the best fraud control, it is hard to estimate what might have happened if we had not had the fraud control. Some people allege that people are using various identities and that there is abuse of free travel cards and so on. When we introduce the card next year it should ensure savings, but it will be very hard to determine in a mathematical sense how large those savings will be.

Deputy Róisín Shortall

I thought we were talking about the current year.

Deputy Éamon Ó Cuív

I am just explaining how fraud systems work in general.

Deputy Róisín Shortall

What is the target in the current year for savings as a result of fraud and overpayment reduction?

Deputy Éamon Ó Cuív

It is €530 million.

Deputy Róisín Shortall

What is the performance to date?

Deputy Éamon Ó Cuív

There was an issue in recording in the early part of the year, but in real terms, allowing for that, I believe we will be on target.

Deputy Róisín Shortall

Does the Minister have a figure?

Deputy Éamon Ó Cuív

No, because the year has not ended yet, but I believe we will be on target for €530 million.

Deputy Róisín Shortall

What was the last figure the Minister had?

Deputy Éamon Ó Cuív

The figure will be lower because it was not recorded for a fair part of the year. That did not mean that the control savings were not taking place; it just meant recording of the control savings was not taking place. To calculate the control savings for this year, the best thing to do is to take the period for which the recording was taking place, divide that by the number of months and multiply it by 12. That would give a much more realistic figure.

Deputy Róisín Shortall

Does the Minister have a mid-year figure?

Deputy Éamon Ó Cuív

We had a figure for September which we gave the Deputy already. If she has not got it or did not keep it, I will get it for her again.

Vice Chairman

Is Deputy Durkan indicating?

Deputy Bernard J. Durkan

I am always willing to be encouraged.

Vice Chairman

I am not encouraging him. He is very welcome.

Deputy Bernard J. Durkan

Thank you, Chairman. Having given me that small amount of encouragement, with his permission I will proceed.

The situation can be summed up best by Laurel and Hardy; it is another fine mess. Several speakers spoke about rent support and while I do not want to go over the same ground again, they referred to an area that used to be looked after by local authorities. Deputy Ring outlined how we can utilise the available housing stock in the country instead of wailing about it and talking about demolishing houses while up to 100,000 people are on housing waiting lists. The rent support system is slow and while it has improved somewhat, it was appalling. In some cases it took from six to ten months to process an application. The real problem is that in the past ten years the local authorities under Government policy direction opted out of the housing market completely and handed it over to the private sector. Somebody will need to accept responsibility for that because what is now unfolding before us is really serious.

I seek clarification on the area of consultancy. Why is it called consultancy and not IT upgrades? What part of that budget consists of advice as opposed to upgrading of IT? All Departments have access to a particular programme and ongoing consultancy work could be done within a Department of its own volition if the IT people are upskilled with the knowledge required. I seek further clarification on the matter.

The National Pensions Reserve Fund is about to be raided and all funds will be raided by raiders on all sides in the future. Is the Minister sure he has told us all about the origins of and reasons for the under funding of €441 million? Is there anything else he would like to tell us about why that has a gap in its structure at this stage?

Colleagues on both sides have referred to the exceptional needs payments. Somebody has given a directive in this regard and if it is not the Minister directly, it is by implication or otherwise, resulting in people on the ground operating to that order at present. We have all heard of individual constituents being told: "Sorry; go away. We're not going to deal with that anymore." The exceptional needs payments were introduced for a purpose. A number of people who may be at work or otherwise at present may find it totally impossible for their families to get by at a particular time without recourse to these payments. The lack of available money from the budget is not an answer to their problem. The lack of money in the budget is a matter for the Minister, his predecessor and whoever his successor may be. It is the Minister's job to provide the money in the budget and to anticipate the likely need as we proceed into the future. I am not using that horrible phrase "going forward"; I will deliberately leave that out of it. The Vice Chairman will be glad to know that.

Vice Chairman

I am.

Deputy Bernard J. Durkan

He is ad idem with me on that.

Deputy Shortall has already referred to the fairly substantial alleged savings on the individual free schemes; how did they come about in the present climate? While there is no change in free travel, there are savings in the fuel allowance, electricity allowance and telephone allowance. Does that mean that people who previously had recourse to the free schemes will not have them? Does it mean that those who avail of the free schemes will experience a cut? Does it mean that the budget for the Department last year was insufficient to meet needs and requirements and as a result we need to bring about a reduction in this fashion? While I do not know whether the Minister is aware of it, there is serious concern about people on fixed incomes who cannot control the bills they receive, including bills for electricity and fuel, partly owing to the carbon tax. People in that category are faced with increased costs in the current year and those will increase further in the next two or three years. It is about time we addressed those issues.

There are cuts in the area of domiciliary care allowance and it appears that the number of recipients has been reduced, which is clearly a decision taken on the basis of meeting the requirements. No other single payment has had greater demand in the past 12 months, particularly from mothers of children with special needs above and beyond care and attention - it may be a multiplicity of needs. The number of cases that have gone to appeal in the past 12 months is unprecedented as is the number of cases pending and refused. I do not know whether the Department or the Minister has had due regard for that, but it impacts very severely on many people to a greater extent than before simply because of the economic downturn and the fact that they may happen to be unemployed. In addition they may also be in mortgage arrears. Consider the plight of a family with mortgage arrears, in negative equity, who are unemployed and who have an application for domiciliary care or similar support pending or refused. The inability of the system to deal in a personal way with the impact it has on individuals and families aggrieves me; it is truly appalling.

Deputy Éamon Ó Cuív

IT external service provision costs about €10 million, under subhead A5, with most of it going to purchase new systems. These are complicated and expensive to develop but there is a certain degree of maintenance done internally.

Deputy Bernard J. Durkan

Can all that be provided in-house?

Deputy Éamon Ó Cuív

No, not the development of the systems. I would like to show Deputies the magnificent work going on in the Department.

Deputy Bernard J. Durkan

That used to be done in-house.

Deputy Éamon Ó Cuív

Not development, there must be outside consultants for that.

Deputy Bernard J. Durkan

The Department of Social Welfare, as it was then, developed IT systems that were second to none and staff were innovators in the field. They were an example for all other Departments.

Deputy Éamon Ó Cuív

That is still going on. There are 240 people in the IT division but expertise must also be bought in and we will continue to do that. If anything, we should expedite the development of systems because they lead to huge long-term savings. We must be careful not to become penny wise and pound foolish. Again, the more I visit local offices, the more I see where further savings could be made if we continue to expedite the upgrading of systems. There was a good system there but what is now possible is radically different from what was possible many years ago.

Other than that we are talking about consultancies involving bodies like the ESRI. Those amount to €1 million per year and in a Department that spends €21 billion, there will always be a certain degree of outside consultancy. Since I entered the Department, I have not been asked to approve any expensive consultancies like those the Deputy mentioned although a certain amount is spent on consultancy every year.

Exceptional needs payments are totally at the discretion of CWOs. The scheme is demand led and if people feel they have been wrongly refused assistance under the scheme, they should bring them to our attention. It is not acceptable that someone with a genuine exceptional need under the terms of the scheme would not be assisted. I can assure the Deputy that I have never issued an instruction to cut back on exceptional needs payments for those who need them.

Deputy Róisín Shortall

How can the Minister explain the reduction in the payments? We know the level of need is far greater.

Deputy Éamon Ó Cuív

We can go back and ask the community welfare officers.

Deputy Róisín Shortall

Does the Minister not think it is strange that less is being paid out?

Deputy Bernard J. Durkan

Does the Minister think the community welfare officers have gone off on a solo run?

Deputy Éamon Ó Cuív

It certainly did not come from me.

Deputy Bernard J. Durkan

The Minister did not even give a hint?

Deputy Éamon Ó Cuív

Not a hint. I have often had to contact community welfare officers for people in dire need and I have always found them fair and amenable. One of the issues that was raised with me by CWOs when I came into the Department was the concern that if they were brought under the direct aegis of the Department their discretion would be removed. I told them that would not happen because if there is no discretionary element to the payment system, it cannot operate.

Deputy Bernard J. Durkan

With no disrespect, if the Minister suggests that there is less need for exceptional needs payments now, based on whatever criteria the Minister wants to choose, I do not believe him.

Deputy Michael Ring

I know some community welfare officers who have taken it upon themselves, thinking they are the guardians of the State and that they must save the State money. I know of some community welfare officers people will refuse to see. We have made complaints about them but they have not been dealt with. They treat people like dirt and that is not acceptable. People are under extreme pressure. They do not want to go to the community welfare officer but they must so the least the community welfare officer can do is treat them with respect.

Deputy Éamon Ó Cuív

I also know community welfare officers who are very helpful to those in need.

Deputy Bernard J. Durkan

We know them as well.

Deputy Éamon Ó Cuív

One of the reasons I have been very anxious to complete the transfer of the community welfare officers into the Department is that it will be easier to deal with the issue of uniform practice. We can then operate the totality, including the delivery of the schemes, as a seamless whole. The community welfare officer is currently an employee of the HSE. When they come into the Department, if these allegations are true, and if there is a non-uniform application of the rules for exceptional needs payments, we will be in a much better position to respond.

Deputy Bernard J. Durkan

Either the Minister is confused or he is trying to confuse us. Many community welfare officers are caring, considerate and anxious to respond to people's needs. We also know of cases where those in dire need have gone before particular community welfare officers and have not been well treated. I do not mind whose guidelines they use, the Department of Social Protection or the HSE, but people are entitled to be treated courteously, particularly in the present climate. I am not concerned about how the Minister interprets the rules but this is happening. The Minister might want to lick up to those who were doing his bidding for whatever purpose but someone needs to realise that what we are saying should be investigated.

Deputy Éamon Ó Cuív

I do not lick up to anyone and I do not expect anyone to do my bidding. Like the rest of us, if there is an issue, I raise it with the appropriate authorities.

There has been no directive from me to tighten up on exceptional needs. I will have an analysis carried out as to where the expected spend was and why it did not reach the expected level of expenditure.

It is true in all classes of life that if there are hundreds of people working in an agency, there will be some people who are less courteous and helpful than they should be, that is a statistical certainty. I do not agree with those who do not give full support and who are not helping people in an appropriate manner. Also, it is an unfair slur on community welfare officers to imply these are the majority rather than the minority.

Deputy Bernard J. Durkan

Nobody said any such thing. I know what the Minister is doing and I say he should not go that old route, the old sleeveen attitude that the great majority of people are very fair. We know all that full well and we have said it. We are also asking if the Minister has given explicit direction.

Deputy Éamon Ó Cuív

Three times I said no. The only direction I have ever given is that those who need help get help. The Deputy should not imply that I gave any other instruction.

Deputy Bernard J. Durkan

They do it of their own accord.

Deputy Michael Ring

We will need to start investigating it further now.

Vice Chairman

Allow the Minister to conclude.

Deputy Éamon Ó Cuív

That is an absolute.

Deputy Bernard J. Durkan

Right.

Deputy Éamon Ó Cuív

I would not give an instruction to anybody not to help somebody in need.

Vice Chairman

Are there any other questions on which the Minister needs to conclude?

Deputy Éamon Ó Cuív

I have a few questions here.

Vice Chairman

I ask him to conclude.

Deputy Éamon Ó Cuív

I absolutely refute that. I have also said that it obviously would be much easier for the Department to have direct control over the delivery of the scheme to the highest standard possible for the customers of the scheme once the community welfare officers are working for the Department because then not only would the Department have control over the money, but it would also have control over the personnel issues that are so important to delivering schemes. I am proceeding with that apace because of its importance. I will defend the good name of the vast majority of community welfare officers, who in my experience of meeting them in various parts of the country are concerned caring people who try to make the best judgment. The biggest concern the community welfare officers articulated to me about coming under the auspices of the Department was whether their discretion to help people in genuine need would be taken away. I remember telling the assistant secretary that we had to have a discretionary system and that as long as I was Minister for Social Protection some part of the system had to be able to deal with need on an ad hoc basis regardless of how it occurred. It needs to remain an integral part of our social welfare system and the role of the CWO cannot be eroded. We can beef it up and have a much better system by having it within the Department.

I have already explained that the bulk of the electricity allowance savings arose because the price of electricity varies with the price of oil and it is very hard to predict it. A contingency was put in for oil price increases that did not materialise this year, which is great because the country paid less for electricity resulting in a saving. However, if the electricity prices suddenly took a hike, it would go the other way.

Deputy Bernard J. Durkan

The carbon tax was a hike.

Vice Chairman

Allow the Minister to finish.

Deputy Éamon Ó Cuív

Yes. That is all factored in here and there is still a saving. The telephone allowance has cost more on the Vote and cost less on the social insurance fund and those square off with each other.

On domiciliary care allowance-----

Vice Chairman

Will the Minister be brief? I apologise, but we need to vacate the room.

Deputy Éamon Ó Cuív

I will do my best. It is a case of marbh gan tae agus marbh gan é, because if I do not give detailed answers they complain and when I give detailed answers they say I go on too long; I just cannot win.

Vice Chairman

I am doing my best.

Deputy Éamon Ó Cuív

The domiciliary care allowance came from the HSE which inherited it from the health boards. Very different standards on the domiciliary care allowance appear to have been applied in different health boards. The Department has systemised the scheme and what we are introducing is a uniform national scheme with the same standards applying across the country.

Deputy Bernard J. Durkan

The lowest common denominator.

Vice Chairman

Allow the Minister to finish.

Deputy Éamon Ó Cuív

No. I suggest that the committee should invite the chief medical officer of the Department, who has indicated to me his willingness to come in, to explain the criteria he is using for the scheme.

Deputy Bernard J. Durkan

Will he appear before the committee?

Deputy Éamon Ó Cuív

That is what I am saying. He did it for me one day; he came in and gave a very detailed briefing. We met a group of people who had exactly the same complaint the Deputy had and he was very helpful in outlining how the system worked, how the judgments are made and the basis for the scheme. It would be useful for him to appear before the committee in the first place so that members could at least establish how the scheme is operated, its basis and how appeals are handled. Following that obviously we can have a political debate once members know the facts.

Deputy Bernard J. Durkan

We can and we will.

Vice Chairman

Is that it?

Deputy Michael Ring

It would be very unfair if the Minister got the impression that there was a problem with all community welfare officers, but there are some who are not dealing with people properly. I know people who would prefer to approach the Society of St. Vincent de Paul than to deal with a local community welfare officer. Complaints have been made against that person and they need to be addressed. Some 98% of these people are under stress and pressure as can be seen from their faces. They are working very hard and are under extreme pressure. However, some of them are acting like God and they need to be dealt with.

Deputy Éamon Ó Cuív

If the Deputy gives me the details of such people, we will deal with it.

Deputy Michael Ring

I have already done it and it was not dealt with. I brought it to the attention of the health board that had responsibility for dealing with it.

Deputy Éamon Ó Cuív

I know Deputy Ring has always supported rationalisation. Would he not agree that it will be considerably easier to deal with these issues when the community welfare officers operate as employees of this Department?

Deputy Michael Ring

Once the discretion exists.

Deputy Éamon Ó Cuív

The one issue the CWOs raised with me was whether they would have the same discretion. I outlined that as long as I was Minister for Social Protection, discretion would be needed. The CWO needs to deal with emergency cases, exceptional needs and so on, and it is vital that we all understand that if the discretion is taken from the community welfare officers, it would take the humane face of the system away and take away our ability to deal with the emergencies in people's lives that can happen literally overnight. I would certainly not condone changing that aspect of the system. They are operating our system and our Department provides the overall guide on emergency assistance. Why would we change it when the community welfare officers come under the auspices of the Department of Social Protection? It makes no logic given that we were the people who put it there in the first place.

Vice Chairman

I thank the Minister, Deputy Ó Cuív, and his officials for attending today's meeting and acknowledge the co-operation of members.