Social Welfare Code

Dáil Éireann Debate, Thursday - 26 January 2012

Thursday, 26 January 2012

Questions (11, 12, 13, 14, 15, 16, 17, 18, 19)

Seán Crowe

Question:

10 Deputy Seán Crowe asked the Minister for Social Protection the number of persons who will suffer financial loss as a result of the budget 2012 cut providing that income from employment by the Health Service Executive as a home help will no longer be disregarded in assessment for certain social assistance payments; if her attention has been drawn to the fact that income from home help hours can be insecure and sporadic; and if she will reverse the budget cut. [4351/12]

Written answers

Minister for Social Protection (Deputy Joan Burton)

As part of Budget 2012, the Government has decided that income from employment as a home help funded by the Health Service Executive (HSE) is to be assessed in means tests for social assistance schemes, in the same way as income from any other type of employment income. Up to the end of 2011 a home help employed by the HSE could earn up to approximately €29,000 per annum and still qualify for a full social welfare payment as none of this income was taken into account when calculating their means. This exemption had initially been introduced to encourage people to take up employment as a home help at a time when such employment was very low paid. This is no longer the case as the status and salary levels have been formalised since 2000. As the salary scale is now well ahead of the national minimum wage, there is no longer a basis for this special exemption.

I recognise that income from home help hours can be insecure and sporadic in many cases. People working as home helps will, of course, benefit from the standard earnings disregards in line with all other employees and if their home help income is low, the measure announced in the Budget has little or no impact on them:

One-Parent Family Payment: first €130 disregarded in full, amounts between €130 and €425 assessed at 50%

Jobseeker's Allowance: up to €60 per week disregarded in full and just 60% of the balance is assessed.

Similarly, a person on Jobseeker's Allowance whose partner is working as a home help, or a person working part-time as a home help and claiming Jobseeker's Allowance in respect of part of the week, will benefit from the standard Jobseeker's Allowance income disregards. In these cases, up to €60 per week is disregarded and just 60% of the balance is assessed.

Up to now, no account was taken of home help income when assessing means for certain social welfare payments. This measure will reduce the payments of approximately 2,000 recipients whose means assessments had previously excluded all of their earned income from home help. It advances the objective of treating all income in the same way for means testing purposes with no special arrangements depending on the type of employment. Given that background, I do not propose to withdraw the measure.

Sean Fleming

Question:

11 Deputy Sean Fleming asked the Minister for Social Protection the number of families that will be affected by the inclusion of carer’s allowance in calculating eligibility for the family income supplement; the estimated savings she anticipates from the measures; and if she will make a statement on the matter. [4380/12]

Brian Stanley

Question:

29 Deputy Brian Stanley asked the Minister for Social Protection the weekly financial impact on the affected households of her decision to include carer’s allowance in the assessment of income when calculating family income supplement; if she will reverse the decision considering the hardship it will undoubtedly cause; and if she will make a statement on the matter. [4342/12]

Minister for Social Protection (Deputy Joan Burton)

I propose to take Questions Nos. 11 and 29 together.

As part of Budget 2012, the Government decided that income from Carer's Allowance and Carer's Benefit is to be assessed in the means test for Family Income Supplement, from January 2012 for new applicants and upon renewal for existing claimants. The measure will be implemented over three years, with one third of the income from carer's allowance and carer's benefit payments assessed in 2012, two thirds in 2013 and full assessment in 2014.

Up to now, entitlement to FIS had been based on the level of a family's income including net income from employment and the value of any social welfare payments they might have, with the exception of carer's allowance and carer's benefit. For example, in the case of a lone parent in receipt of One-Parent Family Payment, the FIS means test has always taken full account of the value of the One-Parent Family Payment and treats it in the same way as income from employment. This measure will bring the treatment of Carer's Allowance and Carer's Benefit into line with the treatment of other social welfare payments in the FIS means test. The reform reduces a person's secondary payment, FIS, without affecting their primary payment, therefore targeting available scarce resources at those in most need.

The savings in 2012 from this measure will be less than €1m. and the number of recipients affected is approximately 500. The extent of the loss in any individual case depends on a number of factors, including the level of employment income which of course varies considerably from case to case. While the measure will affect a relatively small number of people, I recognise that this will mean a significant reduction in the level of FIS payable in some instances. However, the people concerned will still receive a higher level of FIS in 2012 and again in 2013 than people with the exact same level of other income where that other income includes a social welfare payment other than Carer's Allowance or Carer's Benefit.

Deputies will appreciate that it gives me no satisfaction to cut the level of payment to any household. However, given the scale of the fiscal crisis the Government inherited and given that spending on social protection accounts for nearly 40% of current Government expenditure, savings have to be found in the social welfare system. The Government has endeavoured insofar as it could to limit cuts in social welfare to households where there is some additional income over and above the basic social welfare payment. In this case, the measure will bring in a modest level of savings while at the same time bringing more equitable treatment of all income for social welfare purposes.

Barry Cowen

Question:

12 Deputy Barry Cowen asked the Minister for Social Protection if the pause on the disability allowance cuts announced in budget 2012 is permanent or open to future review; the impact the pause has had on her budget projections for 2012; if other schemes have been affected by the financial implications of the pause; and if she will make a statement on the matter. [4360/12]

Peadar Tóibín

Question:

21 Deputy Peadar Tóibín asked the Minister for Social Protection if she will offer a commitment that she will not re-table or proceed with the cuts she intended making to disability allowance announced in budget 2012 and on which she pressed pause. [4347/12]

Minister for Social Protection (Deputy Joan Burton)

I propose to take Questions Nos. 12 and 21 together.

Two measures will be considered by the Advisory Group: increasing the minimum age for new claimants from 16 to 18 years of age with a corresponding extension in the age of entitlement for domiciliary care allowance from 16 to 18 years of age, and introducing lower age-related payments for new disability allowance claimants aged from 18 to 24 years.

The review of the disability allowance scheme, published in November 2010, recommended increasing the qualifying age to 18 years. The review noted that the payment of disability allowance at age 16 carries with it the risk of creating a dependency on social welfare from a very young age. Similarly, the purpose of the proposal to align disability allowance rates for new claimants aged 18-24 with jobseeker allowance rates was to discourage the development of welfare dependence at an early age and to avoid the creation of disincentives to young people to taking up opportunities for education, training and employment.

I am conscious that these measures gave rise to concerns about the impact on families of people with disabilities, most notably in the case of families of children and young adults with profound disabilities and these very real concerns will be considered by the independent Advisory Group. It is envisaged that the review will be completed by September 2012 and, at that stage, together with my Government colleagues, I will reflect carefully on the findings of the Advisory Group. Other schemes are not affected by the withdrawal of the budget proposals.

Aengus Ó Snodaigh

Question:

13 Deputy Aengus Ó Snodaigh asked the Minister for Social Protection if she conducted an assessment of the likely impact of the cuts made to child benefit on demand in the local economy; and if she will reverse the cuts. [4353/12]

Minister for Social Protection (Deputy Joan Burton)

Child benefit assists parents with the cost of raising children and it contributes towards alleviating child poverty. The estimated expenditure on child benefit for 2012 is just under €2 billion in respect of some 1.16 million children. The Government recognises that welfare expenditure plays a vital role in protecting the most vulnerable people in Irish society, as well as stabilising the economy at both a national and at a local level. Unfortunately, it has not been possible to exempt income support to families from the general budgetary strategy, given the level of adjustments required. The budgetary measures that directly affect child-related payments are designed to ensure that payments genuinely address the needs of families and balance the need to ensure some support for all families with greater additional support for families on low income.

The standardisation of child benefit rates over the next two years is an important component of introducing a more appropriate system of child income supports. While it is recognised that this measure will have implications for some families, the payments that provide additional support to families on low incomes, such as child-related increases on other social welfare payments and the family income supplement, remain unchanged.

While my Department conducts extensive analysis of the impacts of budgetary decisions in determining child benefit payment rates, the issue of effects on the local economy is not specifically taken into account as the scheme is national. The Department did undertake analysis using the ESRI developed SWITCH model, which was used to determine the likely impact on poverty outcomes. The financial impact of the change on various family types was also examined. Furthermore, a progress report on the issue of family and child income supports, which was received from the Advisory Group on Tax and Social Welfare, was also considered in the budgetary process.

The Advisory Group was established in June 2011 to consider a number of specific issues relating to the tax and social protection systems and to make cost-effective proposals for improving employment incentives and achieving better poverty outcomes, particularly child poverty outcomes. The Group is prioritising the issue of family and child income supports and I hope to revisit the broader structural reform agenda when I receive the Group's report on this issue.

Richard Boyd Barrett

Question:

14 Deputy Richard Boyd Barrett asked the Minister for Social Protection if she has assessed the impact cuts to rent allowance will have on property levels if landlords insist on passing this cut on to tenants; and if she will make a statement on the matter. [4476/12]

Richard Boyd Barrett

Question:

28 Deputy Richard Boyd Barrett asked the Minister for Social Protection the way she will ensure that the cuts to rent allowance will not be passed on to the tenant; the way she will ensure there will not be a crisis in accommodation for tenants who find themselves having to seek new accommodation because landlords will not accept the changes; and if she will make a statement on the matter. [4475/12]

Catherine Murphy

Question:

38 Deputy Catherine Murphy asked the Minister for Social Protection the exact methodology by which she calculates the appropriate maximum rent levels at which rent supplement may be awarded; if she has any plans to differentiate these rates to take into account a sub-county analysis in view of the large differences in average rents which exist within some counties; if she considers a county-level analysis to be an appropriate basic unit to base such a benefit upon; and if she will make a statement on the matter. [4331/12]

Minister for Social Protection (Deputy Joan Burton)

I propose to take Questions Nos. 14, 28 and 38 together.

Rent supplement provides short-term support to eligible people living in private rented accommodation, whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. Since 2005, rent supplement expenditure has increased from €369 million to a provisional outturn of €503 million in 2011. The number of persons claiming the allowance increased from almost 60,200 persons in 2005 to over 96,800 as at end 2011, a 61% increase.

The focus of the rent limits review was to ensure that in the region of 40% of suitable private rented housing accommodation within each county or administrative area will be available to rent supplement tenants. Departmental staff administering rent supplement have the authority to set levels lower than those provided for in the regulations, in respect of sub-divisions of their functional areas, where this is appropriate. This allows for lower rent levels to apply in certain locations within counties reflecting local market conditions.

The new limits are in line with the most up to date market data available. The Department used publicly available data sources to ascertain both the market trends and the current asking prices for one, two and three bedroom properties throughout Ireland on a county by county basis. The Department also used data provided by the Private Residential Tenancies Board in respect of tenancies registered. The emphasis of the rent limit review was to ensure that value for money is achieved whilst at the same time ensuring that people on rent supplement are not priced out of the market for private rented accommodation. It is expected that the new limits will achieve €22m in savings this year.

The new maximum rent limits will not change the after accommodation costs income of persons receiving rent supplement. Rent supplement is subject to a means test which is normally calculated to ensure that, after payment of rent, an eligible person has income equal to the rate of basic supplementary welfare allowance appropriate to their family circumstances, less a minimum contribution, which each recipient is required to pay from his or her own resources. The impact of the change in the rent limits will be on the rents received and expected by landlords.