Written Answers Nos. 84-93
86. Deputy Damien English asked the Minister for Social Protection the annual cost to the State of providing a travel pass to a person in receipt of the carer's allowance irrespective of whether the carer uses the travel pass or not; and if she will make a statement on the matter. [26426/14]
View answerThe free travel scheme is currently available to all people living in the State aged 66 years or over, to carers and to customers under 66 who are in receipt of certain disability type payments. There are currently over 780,000 customers in receipt of free travel.
The scheme permits customers to travel for free on most CIE public transport services, LUAS and a range of services offered by up to 90 private operators in various parts of the country. Free travel is also available on cross border journeys to and from Northern Ireland. Customers aged 66 years and over can travel for free on journeys within Northern Ireland.
The cost to the Department for each free travel pass normally depends on how much the pass is used by the pass holder. If a person does not use their free travel pass there is no cost to the Department apart from the administrative cost of issuing the pass and maintaining records.
Transport companies are paid on the basis of fares foregone. The Department pays the CIE Group centrally in respect of transport services provided under the free travel scheme. The apportionment of payment between the three constituent companies, Bus Eireann, Iarnród Éireann and Dublin Bus, is determined by CIE based on passenger numbers.
The private operators are paid on the basis of fares forgone based on surveys carried out before they join the free travel scheme and subject to review by subsequent surveys.
The free travel scheme was frozen by the previous Government at €77 million as outlined in the National Recovery Plan 2011-2014 and Budget 2011. This cap remains in place. Prior to the freeze the rate of payment to companies was reviewed annually and adjusted on the basis of changes in rates of fares and numbers of eligible customers. However, it has not been possible to increase the level of funding provided to existing operators or to accept additional routes or providers within the scheme since the introduction of the cap.
87. Deputy Ruth Coppinger asked the Minister for Social Protection if she will re-examine the home-maker's scheme for those who had homemaking responsibilities prior to 1994 in order that those persons are not disadvantaged in getting the State pension compared to those with caring responsibilities after 1994 (details supplied). [26429/14]
View answerThe rate of State pension (contributory) a person qualifies for on reaching the age of 66 depends upon, among other conditions, the average number of contributions paid or credited each year, from the time they enter insurable employment.
The homemaker's scheme was introduced in 1994 to make qualification for State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme allows up to 20 years spent caring for children under 12 years of age or incapacitated people to be disregarded when a person's social insurance record is being averaged for pension purposes.
To be eligible for the homemaker’s scheme, a person must:
- Permanently live in the State (exception may be made where EU regulations apply),
- Be aged under 66,
- Have started insurable employment or self-employment before the age of 56,
- Not work full-time, although for the purposes of this scheme, a person can work and earn less than €38 gross per week,
- Care for a child (under 12) or an incapacitated person on a full-time basis.
It is important to note that the homemaker's scheme will not, of itself, qualify a person for a pension. The standard qualifying conditions must also be satisfied. These require a person to enter insurance ten years before pension age, pay a minimum of 520 contributions at the correct rate and achieve a yearly average of at least 10 contributions on their record from the time they enter insurance until they reach pension age.
The homemaker's scheme was introduced from 1994, and as with most schemes, this was without retrospective effect. The possibility of backdating was considered in the context of the Green Paper on Pensions. This found that that backdating it to 1953 would cost approximately €160 million in additional spending annually. The amount reduces to €150 million if backdated to 1973/74. However, this remains a very significant additional cost that would have to be met from either cuts in Exchequer spending, or increases in taxation. Consequently, the Government has no plans to backdate this scheme prior to 1994.
Persons who have insufficient contributions to qualify for a full State pension (contributory), may qualify for a means tested State pension (non-contributory). Furthermore, some affected persons may be entitled to a qualified adult increase on their spouse’s/partner’s pension payment. This increase is paid directly to the qualified adult.
88. Deputy Clare Daly asked the Minister for Social Protection in view of her comments on a radio programme (details supplied) in respect of the restriction and means testing to the one-parent family payment introduced by her in budget 2013 if she accepts that her actions are the direct opposite of those of her predecessor which she sought to praise. [26464/14]
View answerUntil the early 1970s, the only category of lone parent families to receive support under the social welfare system, were widows through the contributory and non-contributory schemes introduced for them in 1935. Schemes for other types of lone parent families began to be introduced in 1970 when the first scheme for deserted wives was announced, followed by provision for unmarried mothers in 1973 and provision for prisoners' wives in 1974. Following the Report of the Commission on Social Welfare (1986), a unified social assistance scheme for lone parents was introduced in 1990, known as the lone parent's allowance (LPA) to provide support for all lone parents, whether a man or a woman, and regardless of the circumstances which originally gave rise to their lone parenthood. The one-parent family payment (OFP) scheme, which was introduced in 1997, builds on the LPA scheme.
The number of OFP recipients stood at 77,400 in April, 2014. The cost of the OFP scheme was €935 million in 2013 and is estimated to be €863 million in 2014. Both the OFP maximum personal rate for the parent (€188 per week) and the increase for each additional qualified child (€29.80) remain untouched since 2011. An OFP recipient can also earn up to an average of €425 per week and still receive the OFP payment.
The OFP scheme has played an important role in providing income support to lone parents since its introduction. However, in the past, this income support was passive in nature, with little systematic engagement being made by the State with recipients. This engendered long-term social welfare dependency and associated poverty among one-parent families.
Despite significant levels of State spending on OFP the results have been poor in terms of tackling poverty and social exclusion rates among lone parent families who continue to experience higher rates of 'consistent poverty' in comparison to the population generally.
The reforms to the OFP scheme that were introduced in Budgets 2011, 2012, and 2013, aim to address these issues. They aim to provide the necessary supports to lone parents to help them to escape poverty and joblessness, to participate in education and training and by entering the workforce to attain financial independence for both themselves and their families.
The reforms to the OFP scheme also aim to bring Ireland's support for lone parents in line with international provisions – where there is a general movement away from long-term and passive income support.
The Social Welfare and Pensions Act, 2012, introduced changes to the OFP scheme, including the phased reduction of the maximum age limit of the youngest child at which a recipient's payment ceases to 7 years from 2014 for new entrants and from 2015 for existing recipients.
Special Provisions exist for customers who are in receipt of the Domiciliary Care Allowance (DCA) and, also, for those who are recently bereaved. These savers can extend payment of the OFP beyond the maximum age limit threshold for these customers.
OFP recipients affected by these changes are supported to transition to other social welfare income support payments as appropriate, including family income supplement (FIS), carer's allowance (CA) and jobseeker's allowance (JA) including the JA transitional arrangement.
Previous OFP recipients who avail of a jobseeker's payment are required to engage with the Department’s activation service, where they are provided with access to a range of educational and employment supports to increase their skills and assist them in securing employment. This is a significant reform for lone parents as it is the first time that this cohort has access to the Department's full activation process. Lone parents, in receipt of a jobseeker's payment, who do not engage in the activation process, will be subjected to the same penalty rates and disallowances as every other jobseeker.
The income disregard of the OFP scheme is also being reduced on a phased basis for new and existing recipients of the payment. It is currently €90 per week and will reduce to €60 per week by 2016. The OFP earnings disregard does seem to have played a role in facilitating lone parents to enter the workforce but it may also have had the effect of trapping lone parents in low-paid part-time employment in order to keep their earnings below the disregard. The result is that, despite the fact that 36% of OFP recipients are in employment, relatively small numbers are moving off the OFP scheme because their earnings exceed the upper limit.
The reforms to the OFP scheme aim to provide affected lone parents with access to a wide range of supports and services. These supports are designed to enable lone parents' secure improved outcomes for themselves and their families by enhancing their prospects of securing long term financial independence.
91. Deputy Terence Flanagan asked the Minister for Social Protection her plans to lobby for change in social welfare rules in order that company directors whose businesses fail receive social welfare payments before a wait of 18 months; and if she will make a statement on the matter. [26504/14]
View answerSelf-employed persons are liable for PRSI at the Class S rate of 4% which entitles them to access long-term benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory). Ordinary employees who have access to the full range of social insurance benefits pay Class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI Class A.
Any person of working age who does not qualify for jobseeker's benefit may claim means tested jobseeker's allowance. Subject to means and other qualifying conditions, self-employed persons may claim jobseeker's allowance if their business ceases or there is reduced demand for their services.
In assessing means from self-employment, income from the previous twelve months is used as an indicator of likely future earnings. Given the variety of self-employment situations, the means assessment procedures are applied in a flexible manner to ensure that any circumstances that would be likely to lead to a significant variation, either upward or downward, in the level of a person's income from one year to the next are taken into consideration.
In September 2013, I published the report of the Advisory Group on Tax and Social Welfare on Extending Social Insurance Coverage for the self-employed. The Group was asked to examine and report on issues involved in extending social insurance coverage for self-employed people in order to establish whether or not such cover is technically feasible and financially sustainable, with the requirement that any proposals for change must be cost neutral.
The Group found that the current system of means tested jobseeker's allowance payments adequately provides cover to self-employed people for the risks associated with unemployment. In this context, the Group noted that almost 9 out of every 10 self-employed people who claimed the means tested jobseeker's allowance during the three-year period from 2009 to 2011 received payment. Consequently, the Group was not convinced that there was a need for the extension of social insurance for the self-employed to provide cover for jobseeker's benefit.
92. Deputy Terence Flanagan asked the Minister for Social Protection her plans to change social welfare rules for self-employed people in order that they receive social welfare payments, like employed people; and if she will make a statement on the matter. [26505/14]
View answer93. Deputy Terence Flanagan asked the Minister for Social Protection if it is possible for self-employed persons to pay a PRSI stamp in order that they receive social welfare payments, like employed people if their business fails; and if she will make a statement on the matter. [26506/14]
View answerI propose to take Questions Nos. 92 and 93 together.
Self-employed persons are liable for PRSI at the class S rate of 4% which entitles them to access long-term benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory). Ordinary employees who have access to the full range of social insurance benefits pay class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI class A. (For employees earning less than €356 per week, the rate of employer’s PRSI is 8.5%).
Self-employed workers may access social welfare supports by establishing eligibility to assistance-based payments such as jobseeker's allowance and disability allowance. In the case of jobseeker's allowance they can apply for the means-tested jobseeker's allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services. In assessing means from self-employment, income from the previous twelve months is used as an indicator of likely future earnings. Given the variety of self-employment situations, the means assessment procedures are applied in a flexible manner to ensure that any circumstances that would be likely to lead to a significant variation, either upward or downward, in the level of a person's income from one year to the next are taken into consideration.
It is recognised that the downturn in the economy had an impact on many self-employed persons and the consequent reduction in their income and activity levels. This may be reflected in any assessment of their means from self-employment for jobseeker's allowance purposes. As in the case of a non-self-employed claimant for jobseeker's allowance or disability allowance, the means of husband/wife, civil partner or co-habitant will be taken into account in deciding on entitlement to a payment.
In September 2013, I published the report of the Advisory Group on Tax and Social Welfare on Extending Social Insurance Coverage for the self-employed. The Group was asked to examine and report on issues involved in extending social insurance coverage for self-employed people in order to establish whether or not such cover is technically feasible and financially sustainable, with the requirement that any proposals for change must be cost neutral.
The Group found that the current system of means tested jobseeker's allowance payments adequately provides cover to self-employed people for the risks associated with unemployment. In this context, the Group noted that almost 9 out of every 10 self-employed people who claimed the means tested jobseeker's allowance during the three-year period from 2009 to 2011 received payment. Consequently, the Group was not convinced that there was a need for the extension of social insurance for the self-employed to provide cover for jobseeker's benefit.
The Group found that extending social insurance for the self-employed was warranted in cases related to long term sickness or injuries. To this end, the Group recommended that class S benefits should be extended to provide cover for people who are permanently incapable of work, because of a long-term illness or incapacity, through the invalidity pension and the partial capacity benefit schemes. The Group further recommended that the extension of social insurance in this regard should be on a compulsory basis and that the rate of contribution for class S should be increased by at least 1.5 percentage points.
This recommendation will require further consideration in conjunction with the findings of the most recent Actuarial Review of the Social Insurance Fund which indicated that the self-employed achieve better value for money compared to the employed when the comparison includes both employer and employee contributions in respect of the employed person.
My colleagues in Government and I will reflect on the findings of the Advisory Group on this issue and will further consider the recommendations contained in the report taking into account future developments in terms of the budgetary and fiscal situation.
