Dáil Éireann Debate, Wednesday - 15 December 2004
25 Mr. Penrose asked the Minister for Social and Family Affairs if he will report on the conclusions of his review of the social welfare cutbacks announced in 2003; the estimated cost to his Department in one year of these changes; the likely impact on social welfare recipients of the recent amendments; and if he will make a statement on the matter. [33545/04]
View answerAs Members of the House will already be aware, I began a review of the measures announced in November 2003 to assess their impact. During the course of the review to date, I listened carefully to the views expressed by Members of the House, the social partners, voluntary groups and others I have met since becoming Minister for Social and Family Affairs.
The new arrangements are as follows. The transitional payment for recipients of one parent family payment is being restored and will now be available for a period of six months where a recipient's income exceeds €293 per week. The qualifying period for the back to education allowance is being reduced from 15 months to 12 months and, in addition, the cost of education allowance is being increased by €254 to €400. The income limit for entitlement to half-rate child dependent increases for unemployment, disability and related schemes will be increased by €50 per week, to €350.
The saving of €700,000 arising from last year's money advice and budgeting service supplement measure is being redirected to the MABS service to enable it to further improve its services. A sum of €2.3 million, an amount equivalent to the savings achieved by the discontinuation of crèche supplements, is now being made available to ensure that vulnerable families can continue to have access to crèche supports, for example, in cases where a social worker or public health nurse deems this necessary as part of his or her work with the family. I am consulting my colleagues, the Tánaiste and Minister for Health and Children and the Minister for Justice, Equality and Law Reform about the most appropriate way to channel this funding.
The diet supplement has been restored and €2 million is being made available to improve the diet supplement arrangements. Some €19 million in funding from the rent supplement scheme is being transferred to the local authorities as an initial measure to enable them to put long-term housing solutions in place. The six-month rule for entitlement to rent supplement has been abolished and has been replaced by new measures to ensure that bona fide tenants who experience a change of circumstances are not disadvantaged. Rent supplement will now remain in payment unless a third offer, as distinct from a second offer, of local authority accommodation has been refused. I am not raising the minimum contribution for rent supplement this year.
In addition, the measure relating to half rate payments for widows and widowers and allied payments has already been amended. These measures, combined with the remaining measures, will continue to be the subject of specific reviews in the coming months. Given the demand-led nature of the schemes involved, it is not possible to be definitive on cost but the full year estimate for all the measures I have detailed above is estimated at approximately €36 million.
A sum of €55 million was taken away last year but €90 million has yet to be found to deal with the imposition of the savage 16 cutbacks, which were visited last year upon the people who could least afford them, namely, the marginalised and those with no resources. In that context, I thank the Minister for his reply and for what he has done. It would be churlish not to recognise the efforts he has made. The Minister has our support in trying to ensure the cutbacks will be reversed in full.
The Minister announced that the qualifying period for the back to education allowance is being reduced from 15 months to 12 months. He gave an undertaking or a commitment that he would try to ensure that period would be further reduced to nine months. Will he confirm that this is the case as it is very important and would be welcomed by many people?
In 1994, one-parent families or lone parents accounted for one in 20 households in consistent poverty but, by 2001, they accounted for one in five. This group forms the largest proportion of those in consistent poverty of all welfare categories. One of the cuts has been fully rescinded, ten have been amended and five have remained unchanged. Of the five which have remained unchanged, is it not the case that four of them relate to PRSI contributions and access to social insurance payments? Does the Minister agree that these changes will impact negatively on those who are made redundant and seek a social insurance payment? These obstacles to obtain a full rate of payment devalue the worth of the PRSI contribution.
Does the Minister agree with the recent assessment of the Irish National Organisation of the Unemployed that the PRSI system is a misnomer because not only is the amount one receives from the social insurance fund system no longer pay-related, it is difficult to obtain a full rate of payment? Does the Minister agree that one must earn more and be in employment longer to get the full benefit which impacts negatively on those involved in part-time work or seasonal employment? I am surprised that the social partners have not focused on this important area. What review will take place in respect of those cuts to try to ensure they are rescinded or brought back into line because they placed severe impositions, hardships and restrictions on people who have already paid their PRSI contributions?
I confirm what I stated last night to Deputy Penrose. I am examining the back to education allowance with a view to seeing if I can identify the funding to bring the period back to nine months from 12 months. As the Deputy knows, I reduced the period from 15 to 12 months. Overnight, I made some calculations in preparation for today and the additional cost of reducing the period from 12 months to nine months is €1.4 million. That is the amount for a full year although that sum rolls on for the number of years spent in college. I have undertaken to identify that sum conscious we have time to do so given the academic year begins in September. I am not in a position to confirm the sum to the House today but undertake to report back on the matter as soon as possible.
The remaining changes are PRSI related. I want to ensure all the schemes are structured in a way that makes the transition from unemployment to full-time and part-time work or to education straightforward. While the system has improved in the past decade, it previously locked people into a situation which prevented them from getting out of the welfare system because to do so cost them too much money. It is important our schemes are transition-based to enable people to move seamlessly from unemployment to work or education. That is the principle I am trying to apply. Any review of the PRSI system will be informed by decisions taken in that regard.
The Deputy referred to PRSI as a misnomer. It is a social fund and is not operated in the same manner as an ordinary pension fund whereby moneys are invested by trustees and people live from profits made from the fund. PRSI is not a commercial fund. The State makes decisions in terms of moving around the levels of benefit from that fund based on considerations other than the size of the fund. While size is a major consideration, it is not a major one as would be the case were it a commercial fund. While the system may need to be reviewed, its basic principles are fairly sound.
Does the Minister agree the money advice and budgeting service supplement is important in the context of its assisting people to get out from under the grip of moneylenders and thereby enabling them to reorganise their financial affairs in such a way as to ensure they do not fall prey to such people? How does he see the €700,000 additional funding being spent by MABS? Of what benefit will it be to those who lost the mortgage supplement payment which was critical to ensuring they planned their way out of debt?
MABS does a superb job in providing financial advice and support to people under financial pressure. Rather than indicate how it should spend the additional €700,000 — the amount lost by it last year — I have allowed MABS to decide where the money could best be focused. There was some indication that the €700,000 previously granted was being used to top-up money paid to financial institutions rather than on removing pressure from clients. Given money was available, the financial institutions were being more aggressive in their claims. The money is now better directed and will be used wisely by MABS. The sum of €700,000 is in addition to MABS's normal budget of €12 million. Also, a further €300,000 is provided for other purposes. I am confident MABS will spend that money as best it can.
