Written Answers Nos. 41-66
41. Deputy Thomas P. Broughan asked the Minister for Social Protection the cost of reversing the changes to PRSI pension bands from 2012; the cost of backdating this change to the 36,000 plus recipients of the State pension; and if he will make a statement on the matter. [8370/17]
View answer45. Deputy Catherine Murphy asked the Minister for Social Protection if consideration has been given to a request by an organisation (details supplied) for the changes made to the pension system in budget 2012 to be rolled back and for those persons affected to have their payments backdated to 2012; and if he will make a statement on the matter. [8450/17]
View answerI propose to take Questions Nos. 41 and 45 together.
The overall concern in recent years has been to protect the value of weekly social welfare rates. Expenditure on pensions is approximately €7 billion per annum. Due to demographic changes, my Department’s spending on older people is increasing year on year at an approximate rate of €1 billion every 5 years. Maintaining the rate of the State pension and other payments is critical in protecting people from poverty.
It is estimated that reverting the contributory pension rate bands, to the percentages effective from 2000-2012, would cost €60 million next year, and this annual cost would rise at a rate of approximately €10 million per annum. If such a change was introduced, it would mainly benefit pensioners with additional income above the State pension, and not those solely dependent upon it. It would also significantly reduce the funds available for across-the-board pension increases, which were instead introduced in the 2016 and 2017 Budgets, and which benefit all pensioners, including the most vulnerable.
Reforms and increases in the pension age have safeguarded the pension system and its core rates, despite huge demographic pressures and the economic crisis. By achieving this, even in such difficult circumstances, the Government has shown its commitment to supporting older people, as evidenced by CSO figures which show pensioners far less likely to experience consistent poverty than the general population.
Where someone does not qualify for a full rate contributory pension, they may qualify for an alternative payment. If their spouse has a contributory pension, they may qualify for an Increase for a Qualified Adult amounting up to 90% of a full rate pension. Alternatively, they may qualify for a means-tested State pension (non-contributory), which amounts up to 95% of the maximum contributory rate.
I hope this clarifies the matter for the Deputies.
42. Deputy Bernard J. Durkan asked the Minister for Social Protection if he will take steps to ensure that persons applying for means-tested social protection payments following family law settlement in respect of the family home are not forced to spend the entire proceeds of their settlement before being awarded rent support; and if he will make a statement on the matter. [8408/17]
View answerThe rent supplement scheme is supporting 47,000 tenants for which the Government has provided €253 million in 2017. The scheme is generally available to people whose means are insufficient to meet their accommodation costs and do not have alternative accommodation available. Rent supplement is subject to a means test which is normally calculated to ensure that a person, after the payment of rent, has an income equal to the rate of supplementary welfare allowance (SWA) appropriate to their family circumstances less a minimum contribution which recipients are required to pay. The standard weekly minimum contribution is €30 for a single adult household and €40 for coupled households. Many recipients pay more than this amount because recipients are required, subject to income disregards, to contribute any additional assessable means that they have over and above the appropriate SWA rate towards their accommodation costs. As part of the means test, a capital assessment is completed which includes savings, investments, property and any monies realised following a settlement as outlined by the Deputy. The combination of the means test and awarding differentiated rates of payment is premised on ensuring that social welfare payments are paid to those most in need and reflects the position that persons with reasonable amounts of capital and property are in a position to use that resource to support themselves. I have no plans to amend these conditions at this time.
The Deputy will be aware that the strategic policy direction of the Department is to return rent supplement to its original purpose of being a short-term income support with the introduction of the Housing Assistance Payment (HAP) scheme, which will be available nationally from 1st March 2017.
I trust this clarifies the matter.
46. Deputy Willie Penrose asked the Minister for Social Protection his plans to reduce funding for labour activation schemes as recently reported in the context of the review of Government expenditure; his plans to close the Tús and gateway schemes; and if he plans to reduce funding for community employment schemes. [8422/17]
View answer74. Deputy Robert Troy asked the Minister for Social Protection his views on recent reports that activation programmes may be discontinued; if an impact assessment will be undertaken before any closures take place; and if he will make a statement on the matter. [8411/17]
View answerI propose to take Questions Nos. 46 and 74 together.
As Deputies will be aware, my colleague Paschal Donohoe T.D. Minister for Public Expenditure and Reform, recently announced a new approach that will be taken to reviewing current Departmental expenditure in advance of Budget 2018. The purpose of this review is to ensure the best value for money for the taxpayer. It is quite distinct from the ‘savings’ reviews in Departmental funding levels that took place during the economic crisis.
It is recognised by Government that activation schemes are positive initiatives that enable people who are long-term unemployed to make a contribution to their communities whilst up-skilling themselves for prospective future employment. It is also recognised that long-term unemployment and joblessness remain critical issues. The removal of barriers to employment for those furthest from the labour market continues to be a challenge, even in periods of economic growth.
With the ongoing welcome reductions in the live register and the growth in job opportunities, it is necessary to ensure that the number and nature of activation schemes, as well as the conditions governing participation on these schemes continues to be appropriate. I will be bringing a Memorandum to Government on the operation of these programmes in the coming weeks. If there are changes to be made, consultations with stakeholders will be facilitated.
I hope this clarifies the matter for the Deputies.
47. Deputy Margaret Murphy O'Mahony asked the Minister for Social Protection his plans to charge an annual fee to persons who avail of the free travel pass; and if he will make a statement on the matter. [8362/17]
View answerThere are no plans to introduce a surcharge on the free travel pass and I am fully committed to its retention as a service provided without charge to passholders.
The free travel scheme provides free travel for those with eligibility on the main public and private transport services which includes road, rail and ferry services provided by companies such as Bus Átha Cliath, Bus Éireann, Iarnród Éireann, Luas and services provided by over 80 private transport operators. There are currently approximately 874,000 customers with direct eligibility with an annual allocation of €80 million. I am aware that the free travel pass is a valuable support for older people and people with disabilities, and that it has a significant role in promoting social inclusion and preventing their isolation.
In order to maintain service at existing levels, and to facilitate new entrants/services to the scheme, funding to the free travel scheme was increased by €3 million in budget 2016.
I hope this clarifies the matter for the Deputy.
48. Deputy Charlie McConalogue asked the Minister for Social Protection his plans to allow the Tús scheme and the community employment schemes to retain current participants even if their term is complete, in view of the fact that community groups are finding it difficult to recruit participants as there are fewer participants available and as a result community groups are suffering and finding it difficult to carry out their work; and if he will make a statement on the matter. [8447/17]
View answer52. Deputy John Brady asked the Minister for Social Protection the reason for reviewing the community employment schemes; his plans for the future of the scheme including any planned changes to the eligibility for the scheme; and if he will make a statement on the matter. [8414/17]
View answer56. Deputy Gino Kenny asked the Minister for Social Protection his plans for community employment and the impacts any changes to these schemes would have in communities around the country; and if he will make a statement on the matter. [8438/17]
View answer63. Deputy Charlie McConalogue asked the Minister for Social Protection the status of his Department's plans for the Tús scheme and the community employment schemes, in view of the fact that many community groups are finding it difficult to recruit participants and as a result community groups are suffering and finding it difficult to carry out their work; and if he will make a statement on the matter. [8446/17]
View answer76. Deputy Brendan Griffin asked the Minister for Social Protection his future plans for the Tús scheme; and if he will make a statement on the matter. [8409/17]
View answerI propose to take Questions Nos. 48, 52, 56, 63 and 76 together.
As the Deputies will be aware, my Department provides a range of activation supports catering for long-term unemployed jobseekers and those most distant from the labour market. These supports include employment schemes such as Community Employment (CE) and Tús. These schemes provide part-time temporary work in local communities, as a stepping stone back to employment. The objective of these schemes is to break the cycle of unemployment and maintain work readiness, thereby improving a person’s opportunities in returning to the labour market.
Deputies on all sides of the House are fully aware of the positive benefits derived from these schemes. Communities benefit from the skills and talents of participants and, in addition, participants are provided with the opportunity to improve existing skills, or develop new skills, while performing valuable work in their local communities.
All participants and community groups are aware of the time limits for participation on these schemes. The participation limits aim to ensure the benefit of participation on a work scheme is available to the widest possible number of jobseekers. In addition, it is generally recognised that there is a greater likelihood of a ‘lock–in’ effect where a scheme is of a longer duration.
My Department’s Intreo offices and staff co-ordinate the recruitment process for work schemes at a local level and will be happy to assist in relation to any local recruitment issues to ensure the maximum utilisation of places. If any scheme is experiencing particular difficulties filling vacancies, they should contact their local Intreo office as soon as possible.
With the ongoing welcome reductions in the Live Register and the increasing number of job opportunities, the Deputies will appreciate that issues such as the appropriate level of expenditure, the number of places and the criteria for participation on employment schemes all need to be considered. I plan on bringing a Memo to Government in the coming weeks about these matters. If there are changes to be made, consultations with stakeholders will be facilitated.
I trust this clarifies the matter for the Deputies.
49. Deputy Mick Barry asked the Minister for Social Protection if his Department will consider the institution of a unified State-wide defined benefit occupational pension scheme as a means of addressing the diminution on defined benefit schemes by employers. [8455/17]
View answerInternationally as well as in Ireland, Defined Benefit (DB) schemes have been facing an increasing headwind over the last two decades. This has been due to volatility in the stock markets, increasing liabilities arising from the demographic pressures of increasing life expectancy, low interest rates, and regulatory requirements. Essentially the cost of providing benefits has increased at a rate that has not been covered by the level of employer and employee contributions to pension schemes and the investment returns earned. In addition, accountancy standards, which make pensions liabilities very apparent on a company's balance sheet, contribute to the pressures under which DB schemes are operating. During the financial crisis the decline of such schemes accelerated to the extent that the whole sector was at risk. At that stage a series of legislative amendments was brought forward to alleviate the situation. Whilst a very significant number of DB schemes have closed in recent years, in most cases they are replaced by Defined Contribution (DC) schemes, generally by agreement between employer and employee representatives. However, and for those in the workforce more generally who may find themselves without supplementary pension coverage, I have highlighted my support for the introduction of a new auto-enrolment based retirement savings system. I believe such a system is necessary because the rate of supplementary pension coverage in Ireland, estimated at just 35% of private sector workers, has, for considerable time now, been lower than is needed. If measures are not taken to address this low rate of coverage, many future retirees will suffer unwanted and potentially significant reductions in their living standards on reaching retirement. Pensions reform will continue to be a key priority for my Department. To this end, earlier this year, I confirmed an intention to develop, publish and commence the implementation of an Action Plan for the reform of pensions during 2017. This Action Plan will include a road map for the reform of the State pension, reforms to improve the current Defined Benefit and Defined Contribution pension landscape, transposition of the EU ‘IORP’ Pensions Directive and the development of an auto-enrolment supplementary pension system for working people without coverage.
I hope this clarifies the matter for the Deputy.
50. Deputy John Brady asked the Minister for Social Protection the refusal rates for those applying for carer’s allowance and disability allowance; and if he will make a statement on the matter. [8417/17]
View answerCarer's Allowance (CA) is a social assistance payment made to carers who are providing full-time care and attention to someone who has a disability such that they require that level of care. As well as providing full-time care and attention, applicants must satisfy a means test and be habitually resident in the State.
In order to qualify for disability allowance (DA), a person must be aged between 16 and 66, satisfy a medical and a means test and be habitually resident in the State.
In January 2017, the latest month for which figures are available, 2,703 applications for CA were decided on. Of these, 964 were disallowed by a deciding officer as the qualifying criteria were not satisfied.
In the same period 2,756 applications for DA were decided on. Of these, 1,318 were disallowed by a deciding officer as the qualifying criteria were not satisfied.
An application for CA or DA can be disallowed because one or more of the qualifying conditions are not satisfied or because the means of the applicant was not below the statutory limit or, in the case of CA applications, insufficient evidence is provided at application stage to establish the need for full-time care and attention.
Applicants are advised of their right to review or appeal when a decision is made on their application and in many cases further evidence is subsequently submitted, leading to a revised decision to award.
I hope this clarifies the matter for the deputy.
51. Deputy Willie O'Dea asked the Minister for Social Protection his plans to make any changes to the free travel pass; and if he will make a statement on the matter. [8361/17]
View answerThe free travel scheme provides free travel on the main public and private transport services for those eligible under the scheme. These include road, rail and ferry services provided by companies such as Bus Átha Cliath, Bus Éireann and Iarnród Éireann, as well as Luas and services provided by over 80 private transport operators. There are currently approx. 873,000 customers with direct eligibility with an annual allocation of €80 million. The scheme is available to all people aged over 66 living permanently in the State. To qualify for the scheme, applicants who are under age 66 must be in receipt of a qualifying payment. These are invalidity pension, blind pension, disability allowance, carer’s allowance or an equivalent social security payment from a country covered by EC Regulations or one with which Ireland has a Bilateral Social Security Agreement. I am aware that the free travel pass is a valuable support for older people and people with disabilities, and that it has a significant role in promoting social inclusion and preventing their isolation. In order to maintain service at existing levels, and to facilitate new entrants/services to the scheme, funding to the free travel scheme was increased by €3 million in budget 2016. I have no plans to introduce any measures which would reduce the benefit of the pass to beneficiaries, or to reduce the number of people who qualify.
I hope this clarifies the matter for the Deputy.
53. Deputy Willie O'Dea asked the Minister for Social Protection his plans to recognise the additional costs faced by those persons with a disability; and if he will make a statement on the matter. [8358/17]
View answerThe various illness and disability payments administered by my Department provide income support for persons who cannot earn a living because of sickness and/or disability. The schemes also provide a range of supports to encourage and assist people on long-term illness and disability payments to identify and take up available employment, training, educational and other self-development opportunities, where this is appropriate to their circumstances and wishes. These supports, therefore, make a significant contribution to the Government’s broader social inclusion goal. It is not the function of the income support system to address the additional costs associated with a disability and there are no plans to establish a cost of disability payment within the social protection system. People with disabilities are not a homogeneous group and, as such, have widely differing needs with the result that any additional costs of disability would not therefore arise to the same extent in all cases. Moreover, some costs associated with disability are addressed across schemes provided by a number of agencies such as the health service and also the Revenue Commissioners through certain tax reliefs and other supports.
I trust this clarifies the matter for the Deputy.
54. Deputy Willie Penrose asked the Minister for Social Protection if he will be proceeding with plans to abolish the local boards of 51 Money Advice & Budgeting Service, MABS, companies and 42 citizens information services. [8424/17]
View answer65. Deputy Willie Penrose asked the Minister for Social Protection the projected costs for the new regional governance structure he plans to introduce for local MABS and citizens information services; and the current costs of the present local structure. [8425/17]
View answerI propose to take Questions Nos. 54 and 65 together.
At the outset it is important to note that The Citizens Information Board (CIB) assures me that there will be no job losses, no closure of services, no change to service delivery locations and no change to the terms and conditions of serving staff during the lifetime of the restructuring programme. Most importantly, there will be no disruption to CIS and MABS services for those who use them.
The Citizens Information Board (CIB), which has statutory responsibility for the Money Advice and Budgeting Service (MABS) and the Citizens Information Services (CIS), decided on 15th February 2017, to restructure the governance arrangements of these services.
The decision comes after a lengthy and extensive analysis of options and a detailed consultation period with all stakeholders on the need for a more streamlined governance model. The decision was communicated by the Board to all CIS and MABS Boards and to all staff on 15th February 2017.
Under the new governance arrangements, the number of individual local CIS and MABS company boards will reduce from ninety three (93) to sixteen (16). The new regional board structure will comprise eight (8) CIS boards and eight (8) MABS boards.
The restructured governance arrangements are being implemented at local company board level only. The forthcoming changes in the service delivery partner company governance structure will bring the CIS and MABS organisations more into line with modern public service governance guidelines and requirements where significant State funding is involved.
A more streamlined governance structure will result in a more targeted use of valuable staff resources, re-directed to increased front line service delivery, made possible by reduction in the current significant administrative burden associated with maintaining ninety three (93) individual companies nationwide.
In 2017, CIB is set to receive State funding of €54 million, of which €15 million is allocated to CIS services, and €24 million is allocated to the network of MABS services.
Following on from the decision of the Board, a Restructuring Implementation Group is being set up to examine all aspects of implementing the new sixteen (16) board model. This work will include examination of the establishment costs of the new structure and the potential for future savings derived from the reduction in the administrative burden associated with ninety three (93) individual local companies. Current costs are an aggregate of the costs incurred by each of the ninety three (93) local companies on items such as audit fees, profession fees (including legal services), payroll administration and board of director expenses. While cost is not the driver of the restructuring project, some efficiencies are likely to result from moving to a reduced sixteen (16) company model. The main aim of the project is to improve existing governance arrangements and optimise the benefits from operating a more modern, streamlined and customer focused service delivery model.
I hope this clarifies the matter for the Deputy.
55. Deputy Bernard J. Durkan asked the Minister for Social Protection if he remains satisfied regarding the adequacy of resources available to his Department to deal with the fallout from the housing crisis, with particular reference to homelessness arising from increasing pressure from lenders on home owners who may be in arrears; if he has calculated the likely number of extra supports required in the course of 2017; and if he will make a statement on the matter. [8407/17]
View answerThe most appropriate way for homeowners experiencing mortgage difficulties is through on-going engagement with their lender, exploring sustainable solutions within the Mortgage Arrears Resolution Process (MARP). The Money Advice and Budgeting Service (MABS), under the aegis of the Citizens Information Board, assists people who are over-indebted and need help and advice in coping with debt problems, in particular those on low incomes or living on social welfare payments. As part of its free services, MABS provides help and advice to those in mortgage arrears.
The role of MABS was expanded in 2015 with the establishment of a Dedicated Mortgage Arrears MABS service (DMA MABS) across the MABS network, to help people specifically with home mortgage arrears. There are now 32 specialist DMA advisors working across 27 locations countrywide, assisting borrowers to assess the options available to them and, where required, negotiating with lenders on their behalf. To date, the DMA service has helped almost 3,000 such borrowers.
Additionally, MABS provides a national network of court mentors who attend each listed repossession Court hearing countrywide. The mentors provide support to distressed borrowers who are facing the loss of their home and signpost them to the appropriate services. To date, over 1,300 borrowers have been referred onward to MABS advisors through the court mentor service.
In 2016, an additional initiative was announced by Government. The scheme, known as Abhaile, further extends the free services already available to borrowers through the DMA MABS service and the court mentor service. The new voucher based scheme, for which MABS is the gateway, provides access for people, who are insolvent and in home mortgage arrears, to defined levels of independent expert financial and/or legal advice and assistance, free of charge. Qualification for help under the scheme is based on the borrower being (a) in mortgage arrears on their home; (b) insolvent; (c) at risk of losing their home because of their mortgage arrears; and (d) reasonably accommodated.
The new services are provided by professionals drawn from one or more panels of solicitors, personal insolvency practitioners or accountants. Professional panels consisting of qualified and regulated solicitors and personal insolvency practitioners are already in place, and my Department is working in consultation with the professional accountancy bodies to finalise the terms and conditions for a panel of accountants.
The scheme which has been in operation since 22 July 2016, was formally launched on 3 October 2016. To date, 4,399 vouchers for services have been issued, in respect of 2,822 principle private residences. Of the vouchers issued to date, 3,490 relate to the provision of personal insolvency practitioner services, 788 for legal advice services on issues related to mortgage arrears, and 121 for legal aid services relating to Section 115A Appeals, as defined under the Personal Insolvency (Amendment) Act 2015.
The scheme is being put in place for a period of three years, at an expected total cost of €15 million, to include a communication campaign to highlight the availability of the new services, which is due to commence in the coming weeks.
In 2017, the Money Advice and Budgeting Service, which is funded by the Citizens Information Board is set to receive State funding of €24 million, including €3.5m for the Abhaile services and €3.26 m for DMA MABS.
In addition to the services targeted at homeowners in mortgage arrears set out above, my Department administers the Mortgage Interest Supplement (MIS) scheme which is currently supporting approximately 2,000 recipients who were availing of this support prior to the closure of the scheme to new claimants. Customers availing of this support prior to 1st January 2014 have been able to retain entitlement to the scheme up to 1st January 2018. The budget estimate for the scheme in 2017 is €4.1 million.
MIS recipient numbers were already in decline prior its cessation to new entrants. It is expected that existing MIS customers will continue to exit the scheme through sustainable solutions being put in place with their lenders; securing employment; or exit strategies sponsored by the Department of Housing, Planning, Community and Local Government, such as the Mortgage to Rent Scheme.
I am continuing to monitor the supports and services which the Government has now put in place to assist homeowners in serious mortgage arrears.
I hope this clarifies the matter for the Deputy.
57. Deputy Catherine Murphy asked the Minister for Social Protection the number of casual part-time employees in receipt of social welfare payments, such as jobseeker's allowance, jobseeker's benefit and family income supplement, grouped by the 20 largest private sector employers and occupation type; and if he will make a statement on the matter. [8369/17]
View answerAt the end of January 2017, there were 59,480 casual workers on the Live Register. Equivalent figures for all months from May 2002 to January 2017 are published by the Central Statistics Office (CSO), based on returns made to them by my Department, in Table 7 of the Live Register statistical release (available at http://www.cso.ie/en/releasesandpublications/er/lr/liveregisterjanuary2017/).
A tabular statement giving a breakdown of this total by last held occupation prior to commencement of Jobseeker claim follows. This occupational breakdown for casual workers on the Live Register is fully consistent with the occupational breakdown for the Live Register as a whole published in Table 5 of the CSO’s Live Register statistical release. I note, however, that this table may not reflect the current occupational status of casual workers where this is different from their stated last held occupation at claim commencement.
Meanwhile, I regret that the breakdown requested by 20 largest employers is not available in my Department.
In relation to other benefits payable by my Department, I note the CSO’s definition of ‘casual and part time workers’: People who work for part of a week may be eligible for Jobseeker’s Benefit or Jobseeker’s Allowance and may also be included on the Live Register, if the Department of Social Protection is satisfied that they are not in full-time employment, are available for work and are looking for full-time employment.
This definition excludes Systematic Short Time workers in receipt of Jobseeker’s Benefit (there were 663 such people at the end of January 2017), as well as all those who are in receipt of benefits which allow the recipient to work or study full-time while retaining benefit eligibility, such as Back to Work Enterprise Allowance, Back to Education Allowance or One-Parent Family Payment.
In particular, only people who work 38 or more hours per fortnight in a job which is likely to last at least 3 months are eligible to receive Family Income Supplement, so that it is not possible for a casual worker to be in receipt of this benefit.
Table 1 - Casual Workers on the Live Register by Last Held Occupation and payment type,
January 2017
|
Broad occupational group prior to start of claim (CSO categorisation) |
Jobseeker's Allowance |
Jobseeker's Benefit |
Total |
|
Associate Professional And Technical Occupations |
929 |
351 |
1,280 |
|
Clerical And Secretarial Occupations |
3,686 |
2,048 |
5,734 |
|
Craft and Related Occupations |
9,885 |
1,998 |
11,883 |
|
Managers and Administrators |
907 |
582 |
1,489 |
|
Other Occupations |
4,516 |
712 |
5,228 |
|
Personal And Protective Service Occupations |
9,364 |
2,806 |
12,170 |
|
Plant And Machine Operatives |
7,523 |
1,942 |
9,465 |
|
Professional Occupations |
1,815 |
1,192 |
3,007 |
|
Sales And Customer Service Occupations |
6,255 |
1,646 |
7,901 |
|
Unknown, no stated occupation or never worked |
1,251 |
72 |
1,323 |
|
Total Casual Workers on Live Register |
46,131 |
13,349 |
59,480 |
58. Deputy Thomas Pringle asked the Minister for Social Protection if the cost of backdating the homemaker’s scheme to encompass periods before 1994 has been estimated by his Department at €290 million; the basis for the increased figure in view of the fact that the cost was previously estimated in the 2007 Green Paper on Pensions to be approximately €150 million to €160 million; and if he will make a statement on the matter. [8445/17]
View answerSince 1961, when contributory pensions were introduced, the average contributions test has been used in calculating the rate of pension entitlement. Entitlement is banded, with the maximum rate payable to those with a yearly average of 48-52 contributions, and the minimum rate payable to those with a yearly average in the range of 10-14 contributions per year. Even if someone has only 10 years (520 weeks) of paid reckonable contributions between their 16th and 66th birthdays, they would generally qualify for a State pension (contributory), although the rate payable would vary depending on their circumstances, and it will not always be their most advantageous payment to claim, particularly if they qualify for a full-rate State pension (non-contributory).
The homemaker’s scheme was introduced in 1994 to make qualification for State pension contributory (SPC) 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 calculated for pension purposes. The effect of this is to reduce the number of years by which the person’s contributions are divided, thereby increasing their yearly average, making it easier for them to qualify for a maximum rate SPC. It does not involve the award of credits. My Department reviews these and other provisions on an ongoing basis and has estimated that the cost of extending the Homemakers scheme to allow people to avail of the full 20 years currently allowed under the scheme, encompassing periods prior to 1994, could cost €290m in 2017. This figure would increase in subsequent years.
When the Green Paper was published in 2007, the expenditure on the State pension (contributory) amounted to €2.75 billion. The authors were asked to estimate the cost of backdating Homemakers at that point, and in doing so, noted that
“it is extremely difficult to estimate with any degree of certainty what the likely impact of backdating will be. Accordingly, the following estimates are extremely tentative”.
While there are a number of challenges involved, perhaps most notable are (a) estimating the level of take-up by fathers, and (b) the likely movements from one scheme to another, e.g. current non-contributory pensioners who would as a result have a higher contributory pension entitlement instead, and the net cost to the State in such cases.
The estimate arrived at in 2007 was €160 million (with reduced costs where the backdating was limited), which amounted to 5.8% of State pension contributory expenditure. The scheme did not apply to the State pension (transition), and has no impact upon the State pension (non-contributory).
There are now significantly more pensioners than there were in 2007, and the rate of payment has also increased significantly, and so the cost of both the pension, and of awarding higher percentage payments to former homemakers, is more substantial. The State pension contributory has a provision for €4.844 billion in 2017. A recent exercise by the Department, based on up-to-date data, estimated that cost of backdating the Homemakers scheme in 2017 would be approximately €290 million, with similar caveats about the degree to which it could be estimated. This amounts to just under 6% of state pension (contributory) expenditure.
There are a number of reasons which would be expected to increase the relative cost of backdating the homemakers scheme, but the main one is that the PRSI records of those retiring is evolving over time. Women qualifying for a pension today were less than 22 years old when the ‘marriage bar’ was ended, and were more likely to return to work following a few years out of the workforce than those who started families a decade earlier. Indeed, many of the earlier cohort would have little or no PRSI contribution record at all, if they started their families when relatively young. While many, in both cohorts, would qualify for an Increase for a Qualified Adult (IQA) or a non-contributory pension, an increasing number, particularly those who had significant personal means such as a private or occupational pension, now qualify instead for a reduced rate contributory pension, of say 85% of the maximum rate. Such women would benefit very significantly from backdating of the scheme, whereas women with no means who continued to receive an IQA or a non-contributory pension would receive no benefit were such backdating to be introduced. It would be expected that this would continue to increase the annual cost of such a measure, were it to be introduced, over the coming years.
I hope this clarifies the matter for the Deputy.
59. Deputy Willie O'Dea asked the Minister for Social Protection his plans to address child poverty; and if he will make a statement on the matter. [8357/17]
View answerThe CSO Survey on Income and Living Conditions (SILC) for 2015 shows that 11.5 per cent of children were in consistent poverty. This is the first reduction in the number of children in consistent poverty since 2008. Compared to 2014, in 2015 there was a 13,000 or approximately 9 per cent decrease in the number of children in consistent poverty. The full impact of the recovery is not yet reflected in these figures. Ireland has returned to strong economic and employment growth.
The monthly unemployment rate in January 2017 announced by the CSO was 7.1%, down from a peak of 15% in 2012. As unemployment is strongly linked to poverty, we can expect further decreases in poverty as the figures for 2016 and 2017 become available. The Government continues to focus on activation, to help people back into the workforce.
Better Outcomes, Brighter Futures: The national policy framework for children and young people, published by the Minister for Children and Youth Affairs in 2014, includes a target to reduce child poverty by two-thirds by 2020. Meeting this target means lifting 102,000 children out of poverty. Under this Framework, the Department of Children and Youth Affairs in collaboration with my Department and other relevant Departments is taking a whole-of-government approach to tackling child poverty.
Social transfers play a crucial role in alleviating poverty and inequality and Ireland is among the best in the EU for reducing poverty through social transfers.
Budget 2017 increased the weekly rates of payment for working age schemes and also raised the income disregard for one-parent family payment and jobseeker’s transition payment recipients. These measures will help to tackle child poverty.
However, reducing child poverty is not just about income supports and welfare. Rather it is also about supporting parents to make the transition into employment and assisting families through the provision of quality services in areas such as childcare, education and health.
That is why one of the most important measures contained in Budget 2017 for tackling child poverty was the announcement that the Department of Children and Youth Affairs will implement next year the new Single Affordable Childcare Scheme. This scheme is a step change in State support for childcare in Ireland. It is an important scheme as it will reduce the cost of childcare for low income parents and will provide further substantial support for families to lift themselves out of poverty by taking up employment.
60. Deputy Brendan Griffin asked the Minister for Social Protection the take up of the paid paternity scheme and if the scheme is operating as planned; and if he will make a statement on the matter. [8410/17]
View answerThe paternity benefit scheme was introduced on 1st September 2016 to enable fathers take time off work to care for their new born babies. The scheme provides payment for up to two weeks leave at the rate of €230 per week. Since its introduction, some 7,000 fathers have availed of the leave and the benefit payment.
Details on the paternity benefit claims received in the period from 1st September 2016 to 31st January 2017 are set out in the following table:
|
- |
Received |
Awarded |
|
2016 |
6,471 |
5,013 |
|
Jan 2017 |
1,713 |
1,838 |
|
TOTAL |
8,184 |
6,851 |
When the paternity benefit scheme was introduced, it was estimated that the Department could receive between 20,000 and 30,000 claims per annum. The number of claims received to date is broadly in line with this estimate and indicates that the scheme is operating to plan. My Department is engaged in ongoing communications to publicise the scheme and, in particular, the availability of this benefit as an online service. If you require specific details on uptake in your area please don’t hesitate to contact my office.
I hope this clarifies the matter for the Deputy.
61. Deputy John Brady asked the Minister for Social Protection if his attention has been drawn to the fact that almost 36,000 new applicants for the State pension (contributory) have received smaller pensions than they would have if they had retired before 2012, as a consequence of the 2012 pension eligibility changes; and if he will make a statement on the matter. [8416/17]
View answer68. Deputy Catherine Murphy asked the Minister for Social Protection his plans to review the eligibility system for the State pension, in view of the fact that a recent report (details supplied) reveals that as a result of the changes to eligibility that 35,000 persons had their pensions reduced; his further plans to address the pension gap between genders; and if he will make a statement on the matter. [8448/17]
View answerI propose to take Questions Nos. 61 and 68 together.
The overall concern in recent years has been to protect the value of weekly social welfare rates. Expenditure on pensions, at approximately €7 billion, is the largest block of expenditure in my Department in the Estimate for 2017, representing approximately 35% of overall expenditure. Due to demographic changes, my Department’s spending on older people is increasing year on year. Maintaining the rate of the State pension and other payments is critical in protecting people from poverty.
As a result of this demographic change, the number of State pension recipients is increasing by approximately 17,000 annually. This has significant implications for the future costs of State pension provision which are currently increasing by close to €1 billion every 5 years. The purpose of changes to the State pension age is to make the pension system more sustainable in the context of increasing life expectancy. The conditions for the State pension (contributory) are reviewed on an ongoing basis, and there have been a number of changes over the years which impact upon whether someone qualifies or not.
One of the conditions of the State pension (contributory) is that a person needs a minimum of 520 weekly contributions (i.e. 10 years) paid since entering insurable employment. If a person does not have this minimum number of contributions paid, they will not generally have an entitlement to this particular pension, either at a full or reduced rate. Since 1961, when contributory pensions were introduced, the average contributions test has been used in calculating the rate of pension entitlement.
As provided for in Budget 2012, from September 2012, new rate bands for State pension (contributory) were introduced. These bands replaced the previous structure, introduced in 2000. These bands more accurately reflect the social insurance history of a person, and ensure that those who contribute more during a working life benefit more in retirement than those with lesser contributions, subject to the safety nets in place for those with no other means. Prior to the change in rate bands a person reaching retirement age with a yearly average of 47 contributions qualified for the same rate of payment (98% of the maximum rate) as someone with a yearly average of 20 contributions, despite generally their much more significant PRSI record, and regardless of their means. A person with an average of 48-52 PRSI contributions per year over their working life received a weekly State pension of only €4.50 more than someone with a yearly average of 20 PRSI contributions.
Entitlement is banded, with the maximum rate payable to those with a yearly average of 48-52 contributions, and the minimum rate payable to those with a yearly average in the range of 10-14 contributions per year. Even if someone has only 10 years (520 weeks) of paid reckonable contributions between their 16th and 66th birthdays, they would generally qualify for a State pension (contributory), although the rate payable would vary depending on their circumstances, and it will not always be their most advantageous payment to claim.
Reversing the rates of these bands to the same percentages as were in place during the period 2000-2012 in the next Budget would carry a cost of at least €60 million in 2018, and this would rise at a rate of €10 million per annum. Rather than use those funds in this manner, which would generally benefit pensioners with other means over and above the state pension itself, and who contributed less into the Social Insurance Fund, it was decided that the increases in pension rates in 2016 and 2017 would be across the board, pro-rata, to the benefit of every pensioner. This positively impacted upon many more people than a reversal of the rate-bands, and unlike that approach, it was to the benefit of those pensioners with no other means. Any policy change, which saw the rate-bands reverting to 2000-2012 percentages, would result in significantly less money being available to increase the general rate of the pension.
The home-makers scheme makes qualification for a higher rate of State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme, which was introduced in and took effect from 1994, allows up to 20 years after that date spent caring for children under 12 years of age (or caring for incapacitated people over that age) to be disregarded when a person’s social insurance record is being averaged for pension purposes, subject to the standard qualifying conditions for State pension contributory also being satisfied. This has the effect of increasing the yearly average of the pensioner, which is used to set the rate of their pension.
Where people who were unattached to the labour market during most of their adult lives cannot qualify for a contributory pension in their own right as they have paid few or no contributions, or cannot qualify for a full rate as a result of an intermittent PRSI record, the social protection system provides alternative methods of supporting such pensioners in old age. Therefore, if their spouse has a contributory pension, they may qualify for an Increase for a Qualified Adult amounting up to 90% of a full rate pension, which by default is paid directly to them. Alternatively, they may qualify for a means-tested State Pension (non-contributory), amounting up to 95% of the maximum contributory pension rate.
The National Pensions Framework (2010) proposed that a “Total Contribution Approach” (TCA) should replace the yearly average approach, for new pensioners from 2020. The aim of this approach is to make the rate of contributory pension more closely match contributions made by a person. Officials of my Department are currently working on the detailed development of the TCA. This is a very significant reform with considerable legal, administrative, and technical elements in its implementation. An important element in the final design of the scheme the position of gender and gaps in contribution records will be considered very carefully in developing these proposals. The forthcoming independent Actuarial review of the Social Insurance Fund will provide data that will allow officials to accurately cost and project various options under the TCA reform. Following the analysis of that data, it is intended to have a public consultation later this year. Once that is completed, proposals on the final details of the scheme will be made by the Government to the Oireachtas before the end of the year.
I hope this clarifies the matter for the Deputy.
62. Deputy Catherine Murphy asked the Minister for Social Protection if consideration has been given to implementing an anti-poverty strategy with a specific focus on children (details supplied); and if he will make a statement on the matter. [8451/17]
View answerGovernment policy around tackling poverty for children and families is articulated in Better Outcomes, Brighter Futures (BOBF): The national policy framework for children & young people 2014-2020, published by the Minister for Children and Youth Affairs in 2014. BOBF includes a target to reduce child poverty by two-thirds by 2020. Meeting this target means lifting 102,000 children out of poverty. Under this Framework, the Department of Children and Youth Affairs in collaboration with my Department and other relevant Departments is taking a whole-of-government approach to tackling child poverty building on the lifecycle approach in National Action Plan for Social Inclusion (NAPinclusion) and informed by the European Commission Recommendation on ‘Investing in children: Breaking the cycle of disadvantage’.
The CSO Survey on Income and Living Conditions (SILC) for 2015 shows that 11.5 per cent of children were in consistent poverty. This is the first reduction in the number of children in consistent poverty since 2008. Compared to 2014, in 2015 there was a 13,000 or approximately 9 per cent decrease in the number of children in consistent poverty. The full impact of the recovery is not yet reflected in these figures. Ireland has returned to strong economic and employment growth.
The monthly unemployment rate in January 2017 announced by the CSO was 7.1%, down from a peak of 15% in 2012. As unemployment is strongly linked to poverty, we can expect further decreases in poverty as the figures for 2016 and 2017 become available. The Government continues to focus on activation, to help people back into the workforce.
Social transfers play a crucial role in alleviating poverty and inequality and Ireland is among the best in the EU for reducing poverty through social transfers.
Budget 2017 increased the weekly rates of payment for working age schemes and also raised the income disregard for one-parent family payment and jobseeker’s transition payment recipients. These measures will help to tackle child poverty.
However, reducing child poverty is not just about income supports and welfare. Rather it is also about supporting parents to make the transition into employment and assisting families through the provision of quality services in areas such as childcare, education and health.
The new Single Affordable Childcare Scheme, to be implemented by the Department of Children and Youth Affairs this year, will reduce the cost of childcare for low income parents and will provide further substantial support for families to lift themselves out of poverty by taking up employment.
64. Deputy John Brady asked the Minister for Social Protection the review process in place for the supplementary welfare allowance scheme being issued from community welfare offices; and if he will make a statement on the matter. [8415/17]
View answerThe supplementary welfare allowance (SWA) scheme provides assistance to eligible people in the State whose means are insufficient to meet their needs and those of their dependants. The main purpose of the scheme is to provide immediate and flexible assistance for those in need who do not qualify for payment under other State schemes. Supports provided under the SWA scheme can consist of a basic primary weekly payment and/or a weekly/monthly supplement in respect of certain expenses, including rent, as well as single exceptional needs payments (ENPs) and urgent needs payments (UNPs). The Government has provided some €378 million for the SWA scheme in 2017.
Determinations made in relation to claims made under Sections 196, 197 and 198 of the Social Welfare (Consolidation Act) 2005, namely basic weekly SWA and all supplements, can be appealed to the Social Welfare Appeals Office under Section 311 of that Act.
Determinations made in relation to claims made under Sections 200, 201 and 202 of the Social Welfare (Consolidation Act) 2005, namely allowances-in-kind, ENPs and UNPs, can be reviewed by a SWA Reviewing Officer under Section 323 of that Act.
Decisions on claims are communicated to customers in writing, as well as the customer’s right to appeal or review, as appropriate.
I trust this clarifies the matter for the Deputy.
66. Deputy Willie Penrose asked the Minister for Social Protection the action he has taken on preparing for Brexit. [8426/17]
View answerA key area of concern is the impact of Brexit on the current reciprocal arrangements for social insurance and social assistance schemes and child benefit between Ireland and the UK, including Northern Ireland.
I met with the UK Secretary of State for Work and Pensions, the Right Hon. Damian Green, M.P. on 2nd February 2017. Prior to that meeting, I also met informally with Mr Damian Hinds, Minister for Employment, UK Department of Work and Pensions at the Employment, Social Policy, Health and Consumer Affairs Council [EPSCO] on 8 December 2016.
At both meetings, I emphasised that our long-term objective is to ensure that the reciprocity of civic rights and, specifically in the context of the meeting, social welfare rights and entitlements, which currently exist for Irish and UK citizens moving within Ireland and between Ireland and Britain under the Common Travel Area [CTA], are safeguarded and maintained. Both meetings were very positive and constructive.
The Department of Social Protection [DSP] has undertaken an initial assessment of the implications of Brexit on social welfare schemes and clients cohorts. This work will now be further informed by the All-Island Sectoral Dialogue that I hosted on Thursday, 16th February. The theme of this stakeholder engagement event was ‘Brexit: implications for social welfare pensions, social insurance and social welfare rights-entitlements’. The event was a citizen-centred and client-focussed forum, attended by some 40 people from civil society and representative groups, business, trade unions and academia.
Internally, within DSP, the Management Board has been fully engaged with the social protection implications of the vote by the UK to leave the EU and the earlier negotiations on the UK’s relationship with the EU. A sub-group of the Board was established, following a decision of the Management Board in November 2015, to prepare for the impact of the UK referendum. An Assistant Secretary has specific responsibility for the Department’s Brexit response and is a member of the InterDepartmental Group on EU UK affairs, chaired by the Department of the Taoiseach. Regular updates are given to the Management Board.
In addition, a cross-Divisional group covering policy, operational policy, systems and key support areas has been established to examine the detail of the implications of Brexit for clients of the Department and DSP’s operations. The Department has also strengthened its own resources by redeploying additional staff specifically to work on Brexit-related issues and internal co-ordination.
Senior DSP officials service the relevant cross-Departmental Brexit-related committees that have been established. I am a member of the Cabinet Committee on Brexit as well as being a member of the North-South Ministerial Council and the British-Irish Intergovernmental Conference.
