Written Answers Nos. 1-67
41. Deputy Niamh Smyth asked the Minister for Employment Affairs and Social Protection the number of visual artists and writers to date that have availed of the pilot jobseeker's exemption scheme that was announced on 12 June 2017; and if she will make a statement on the matter. [8395/18]
View answerPeriods of unemployment can be a typical feature of their professions for writers and artists. They can go through fallow periods while, for example, they are building up their work and trying to establish themselves. A pilot initiative targeted at self-employed visual artists and writers was launched in June 2017. These professions can qualify for a jobseeker’s payment when they are unemployed in the normal way. The pilot is intended to assist those who apply to the Department for jobseeker’s allowance. A key feature of the initiative is that it acknowledges their status as self-employed artists or writers and gives them a 12 month window to focus on building up their work before they become subject to activation.
This initiative was a collaboration between my Department and what is now the Department of Culture, Heritage and the Gaeltacht, with the support and advice of the Arts Council. We also consulted with the artists and writers professional bodies. Naturally there are safeguards in place to ensure that claimants are professional visual artists and writers. Applicants must satisfy all of the usual qualifying conditions for jobseeker’s allowance.
At the beginning of February 2018, there were 32 people in receipt of jobseeker’s allowance availing of the pilot initiative. The total numbers who have applied to date are not available. There are a number of reasons why any applicant might not qualify for jobseeker’s allowance, such as not satisfying the means test.
This also does not mean that there are only 32 professional visual artists or writers in receipt of jobseeker’s allowance. It simply means that there are 32 recipients of the payment who are availing of the pilot arrangements and therefore not party to the activation process for 12 months. The general population of jobseeker’s allowance recipients is not classified as to their occupation or profession so it is not possible to say how many writers or visual artists are in receipt of the payment.
The arrangements will be reviewed after 12 months and this review will take place later this year.
42. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection the legislative proposals she plans to introduce to address abuses of workers' rights in relation to bogus self employment, especially in the construction industry; and if she will make a statement on the matter. [8439/18]
View answer53. Deputy Mick Barry asked the Minister for Employment Affairs and Social Protection her views on a report (details supplied) published by her Department in January 2018; and if she will make a statement on the matter. [8446/18]
View answer57. Deputy Mick Barry asked the Minister for Employment Affairs and Social Protection her plans to introduce legislation on foot of a report (details supplied) recently published by her Department. [8447/18]
View answerI propose to take Questions Nos. 42, 53 and 57 together.
Bogus self-employment arises where an employer wrongly treats a worker as an independent contractor in order to avoid tax and social insurance contributions. There are robust arrangements in place for dealing with complaints of bogus self-employment. Social welfare inspectors inspect a wide range of businesses, as part of their on-going compliance operations. Inspections are also undertaken jointly with other agencies including the Revenue Commissioners and Workplace Relations Commission. Where evidence of non-compliance is detected, this will be pursued.
Officials also investigate specific cases referred to my Department’s Scope section. This section determines employment status and the correct class of pay-related social insurance (PRSI). Where misclassification of workers as self-employed is detected, the correct status and class is determined and social insurance arrears are collected as required. Under the Social Welfare Consolidation Act, there are specific offences in relation to employment contributions. On conviction, fines and or imprisonment can ultimately be imposed.
Any worker who has concerns about their employment and PRSI status should contact my Department and the matter will be investigated. This can only happen with the cooperation of the worker.
The classification of a worker for PRSI purposes can be complicated by the use of intermediary employment structures referred to by the Deputy. Revenue estimates that there are some 15,000 people employed using such structures.
My Department has concerns that such mechanisms may be used to reduce the amount of PRSI and tax being paid, with a subsequent loss to the exchequer and the Social Insurance Fund. A report on the issue prepared by officials from my Department, the Department of Finance and the Revenue Commissioners and informed by a public consultation with a wide range of stakeholders, was published at the end of January.
The report finds that the available data does not indicate that self-employment is accounting for any significant increased share of the labour force, and accordingly the perception of the level of disguised employment may be overstated. While the report indicates that intermediary arrangements can be abused to the detriment of workers and can distort the transparent and efficient operation of the labour market, it also notes that contract for service arrangements can provide flexibility, in many instances, for both businesses and workers, where they are freely chosen by both parties.
The report also contains an analysis of issues raised in the public consultation specifically pertaining to the construction sector. It looks at the administration of tax and social insurance in the sector, including 'relevant contracts tax' (RCT) and compliance activities. The report finds no evidence that the system facilitates the mis-characterisation of workers as self-employed as there are safeguards for workers who may have been incorrectly classified. For example, Revenue informs the sub-contractor after receiving the relevant contract from the principal contractor and will investigate if the sub-contractor is of the view that they are incorrectly classified. They can also engage with the Scope insurability section in my Department.
The recommendations of the Report are being examined in the context of the overall development and sustainability of social insurance and the supports available for both the self-employed and vulnerable workers. This Report and the recent Actuarial Review of Social Insurance provide a timely and evidence-led opportunity to undertake a full review of our social insurance system and to consult with stakeholders.
45. Deputy Richard Boyd Barrett asked the Minister for Employment Affairs and Social Protection if she will report on investigations into errors in changes to PRSI stamp payments for persons (details supplied); and if she will make a statement on the matter. [8430/18]
View answerThe people referred to by the Deputy were public servants who were employed in a permanent and pensionable capacity and who were determined to be paying the wrong class of PRSI. In the first case, the person concerned was made permanent and formally admitted to the superannuation scheme by her employer on 1 September 2006. In 2013, following a request by the employer for an insurability decision, Scope Section determined that the correct class of contribution effective from 1 September 2006 was PRSI Class D. Prior to that, the employee was correctly insured at PSRI Class A. In the second case, the person concerned became permanent and pensionable from 1 July 2006, the date from which the employer should have applied PRSI Class D. The employer in this case sought a decision on 26 June 2012.
As the incorrect class of contribution was paid in both cases, there is no entitlement to any social welfare schemes covered by PSRI Class A contributions. The social welfare payments that both individuals had been in receipt of based on the PRSI Class A contributions incorrectly returned ceased to be paid following the Scope decisions.
In the first case, illness benefit and partial capacity benefit of approximately €15,000 were paid during the period February 2010 and October 2013. Due to the overpayment of PRSI, arrears of €8,000 were due to the employer. These arrears were held against benefits paid. The Department did not pursue any overpayment for the balance of €7,000.
The second person had been in receipt of invalidity pension based on her PRSI Class A contributions. The pension was terminated with effect from 27 February 2013. The Department confirmed with the HSE in relation to the person’s occupational pension that the HSE occupational pension had increased before termination of the invalidity pension.
The Department did not pursue any overpayment of illness benefit and invalidity pension paid from April 2009 to February 2013.
I trust that this clarifies the Department’s role in dealing with these cases.
48. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection the measures she plans to take on foot of the recent ERSI report which shows increased poverty among lone parents and those with disabilities. [8438/18]
View answerThe research report referred to is “Poverty Dynamics of Social Risk Groups in the EU” produced by the ESRI, funded by my Department and published last month. It analysed the significance of different systems of welfare regimes and their effectiveness in protecting vulnerable groups in eleven EU countries, including Ireland, over a 10 year period. That ten year period was from 2004 to 2014, and so it covered the end of the boom period, the recession and the start of the recovery. The report showed that, across the eleven countries, lone parents and their families and working-age adults with a disability and their families are more at risk of material deprivation and income poverty than other groups. Given the sustained economic recovery since 2014, and with unemployment down from 11.3% in 2014 to 6.2% at present, I expect that the CSO Survey on Income and Living Conditions data for 2017 will continue the recent trend of reductions in poverty for all sectors of society. But it remains the case that lone parent households and those of working people with a disability continue to experience deprivation and consistent poverty rates which are higher than those of the general population and we cannot contemplate any reduction in our commitment to support those most in need.
My Department, as well as providing income supports to people with disabilities, offers a range of employment support programmes, including the wage subsidy scheme and the EmployAbility service as well as the partial capacity benefit scheme. The Intreo service is also available to provide employment support services for people with disabilities who wish to engage with the service on a voluntary basis. This year expenditure on these programmes will amount to some €50 million. Last September, the Ability programme, supported by the European Social Fund was launched. This is a new pre-activation programme which recognises the critical importance of engaging with young people with disabilities at a time when their disability threatens to keep them out of the workforce.
It is accepted that for lone parents, the best way to tackle poverty is through employment. The recently published Indecon report echoed this view and found that the changes to the one-parent family payment scheme made over the last number of years increased employment and reduced welfare dependency. It also found that the changes increased the probability of employment and higher employment income for lone parents. The report concluded that assisting lone parents to enhance skills also needs to be seen as a key objective as low paid employment will not, on its own, ensure a reduction in the risk of poverty.
The Budget 2018 measures - increases in the income disregard, the primary rate and the increase for qualified child rate – come into effect next month. The effect of these measures will see a lone parent on the one-parent family payment or jobseeker’s transitional payment, who is working 15 hours a week on the National Minimum Wage, being better off by nearly €1,000 per year.
I should mention finally that my Department is currently developing the new National Action Plan for Social Inclusion. Like its predecessor, it will have a ‘whole of Government’ approach that will aim to improve outcomes for the vulnerable and marginalised in our society.
50. Deputy Joe Carey asked the Minister for Employment Affairs and Social Protection her plans to enhance the JobsPlus scheme to target older unemployed and long-term unemployed persons; and if she will make a statement on the matter. [8413/18]
View answerThe JobsPlus scheme, since its introduction in 2013, has provided a direct monthly financial incentive to employers who recruit employees who are long term on the live register and those transitioning into employment. My Department pays the incentive to employers monthly in arrears over a two-year period. It provides employers with two levels of payment, €7,500 and €10,000, depending on the length of time the recruited employee has been unemployed. The Scheme has proved to be effective in meeting its initial objectives. I was keen, however, to ensure that the JobsPlus scheme would have a particular focus on addressing the position of older unemployed people and the very long-term unemployed. In this regard, I was struck by the findings of a recent review of JobsPlus, conducted by my Department, which showed that workers over 50 years of age were under-represented on the scheme. Consequently, as part of budget 2018, I announced key new measures which came into effect on the 1st January 2018 and which provide a new focus for the scheme. Firstly, jobseekers aged over 50 years will qualify for the higher €10,000 incentive rate after 12 months on the live register, down from 24 months.
Secondly, for jobseekers aged less than 50 years, the qualifying period for receipt of the higher incentive rate of €10,000 has been increased from 24 months on the live register to 36 months. For this cohort, the qualifying period for the €7,500 incentive rate remains at 12 months.
As I say, I have introduced these measures to encourage employers to focus their recruitment efforts on older workers and on those who are long-term unemployed.
For those under the age of 25, the qualifying period for the €7,500 incentive rate remains at 4 months.
The incentive will continue to be paid in monthly instalments over a two year period provided the employment is maintained.
51. Deputy Bernard J. Durkan asked the Minister for Employment Affairs and Social Protection the steps she will take to speed up the manner in which various social welfare payments are being dealt with, with particular reference to exceptional needs payments and appeals and delays surrounding same which cause severe hardship; and if she will make a statement on the matter. [8418/18]
View answerI can assure the Deputy that prompt processing of claims is a priority for me. Scheme areas are monitored and reviewed to ensure customers are responded to and claims are processed as expeditiously as possible. As part of its programme of service delivery modernisation, a range of initiatives aimed at streamlining the processing of claims, supported by modern technology, have been implemented by my Department in recent years. Operational processes, procedures and the organisation of work are continually reviewed to ensure that processing capability is maximised. Staffing levels are also kept under review to ensure the best use of available resources. Under the Supplementary Welfare Allowance (SWA) scheme my Department may make a single exceptional needs payment – an ENP - to help meet essential, once-off expenditure which a person could not reasonably be expected to meet out of their weekly income.
Provision of a prompt service is a major objective for the Department’s staff, especially for the SWA scheme which is the safety net within the social welfare system. The ENP scheme is demand led and payments are made at the discretion of the officers administering the scheme taking into account the requirements of the legislation and all the relevant circumstances of the case in order to ensure that the payments target those most in need of assistance. Reviews of ENP cases are carried out by review officers within the community welfare service. ENP applications and requests for reviews are examined promptly by the Department given the nature and sometimes urgency of the need presented, for example travel required for urgent medical or family circumstances may be examined immediately.
If the Deputy has concerns in respect of a particular case he should bring it to the attention of the Department.
54. Deputy Thomas P. Broughan asked the Minister for Employment Affairs and Social Protection the status of the restructuring of the Citizen Information services and MABS companies; when this decision was made; the person or body that will make the decision; and if she will make a statement on the matter. [8301/18]
View answerThe Citizens Information Board (CIB) is a statutory body established by the Oireachtas. In addition to its own statutory responsibilities in relation to information and advocacy service provision, it has statutory responsibility for the countrywide networks of Citizens Information Services (CIS) and the Money Advice and Budgeting Service (MABS). The decision to restructure the governance arrangements of the CIS and MABS companies was taken by the statutory Board of the Citizens Information Board. In November 2014, the CIB Board decided to restructure the local CIS and MABS networks. In October 2016, the Board decided that the new structure should be regionally based. On 15 February 2017, the Board adopted a recommendation that the current structure of ninety three individual local companies would be changed to a sixteen regional company model, comprising eight CIS and eight MABS companies. The CIB Executive is currently implementing the decision taken by the Board, as it is required to do. An Implementation Group, with cross sectoral representation, has been set up to assist with the transition to the new governance model. CIB has, and will continue to, provide the necessary information and support to each of the local companies and their Chairpersons and Boards, throughout the transitional period.
Information sessions have already been held for chairpersons of the 38 companies transitioning to the regional companies in Phase 1. This month, consultation sessions were held with CIS Development Managers and MABS Money Advice Co-ordinators regarding the preparations needed to transfer to the new companies and to address any queries they had.
Further information sessions will be held for the companies transitioning in the remaining phases. It is expected that the full transition to the 16 new companies will take up to two years to complete.
I hope this clarifies the matter for the Deputy.
56. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection if proposed legislation on pension schemes will benefit persons in CIÉ or a company (details supplied) that faces threats to its pensions; and if she will make a statement on the matter. [8436/18]
View answerThe Deputy will appreciate that I cannot comment on issues relating to particular pension schemes. However, generally speaking, trustees of pension schemes have duties and responsibilities under the Pensions Act, under trust law, and under other relevant legislation. They must administer the trust in accordance with the law and the terms of the trust deed and rules. The provisions of the Pensions Act are enforced by the Pensions Authority so any issues or complaints in relation to a particular scheme should be notified to the Authority for action. The Pensions Authority will assess if there has been a breach of any legal obligations and take any necessary action if such a breach is found.
I intend to introduce a number of amendments to the Social Welfare, Pensions and Civil Registration Bill at Committee Stage which will ensure that a sponsoring employer cannot “walk away” at short notice from the company pension scheme. The amendments will provide for a 12 month notification period where an employer is seeking to cease making contributions to a scheme. They will also provide that, where a scheme is in deficit and a funding proposal is not been put in place in a timely manner, the Pensions Authority may direct steps to be taken to ensure that the scheme meets the funding standard .
I hope this clarifies the matter for the Deputy.
58. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection her plans to continue with the roll-out of the public services card; the number of services for which it is necessary in view of the fact that an investigation is under way by the Data Protection Commissioner in relation to the card; and if she will make a statement on the matter. [8310/18]
View answer74. Deputy John Curran asked the Minister for Employment Affairs and Social Protection the decisions that were made to underpin the policing position to expand the range of uses for which there now is in relation to the public services card; if there will be a mandatory requirement to have a card in the future; and if she will make a statement on the matter. [8406/18]
View answerI propose to take Questions Nos. 58 and 74 together.
It is not mandatory for any resident in Ireland to have a Public Services Card.
However it has always been necessary for people using high value or personalised public services to prove their identity. In order to ensure services are provided to the right person and to support efficient service delivery, a growing number of public service providers, including my Department, are requiring that proof of identity is underpinned by the SAFE 2 identity verification standard. This standard verifies identity to a substantial level of assurance and is the most robust identity verification in Ireland today.
The requirement for this level of identity verification is provided for at Section 247C of the Social Welfare Consolidation Act 2005 (as amended) in respect of customers of my Department.
My Department needs to verify the identity of customers to a substantial level of assurance to ensure that they are who they claim to be, to ensure that they are not being impersonated, to ensure that they are not claiming services or payment in another identity, to minimise the need for them to prove their identity over and over again, and to provide them with access to an increasing range of online public services.
For the most part, the SAFE2 registration process is very easy and straightforward and simply verifies the identity information the public service already has for a person. A Public Services Card may then be issued as a physical token of proof of having successfully completed that SAFE2 identity verification.
While the roll out of the SAFE identity verification requirement to other public services is a matter for the relevant Departments and public bodies providing those services, the Department of Public Expenditure and Reform published the eGovernment Strategy 2017 – 2020 last year which lists a number of public services for which SAFE 2 identity verification will be required and highlights how others are likely to be listed in the future. The list is available at http://egovstrategy.gov.ie/annex-b/.
My Department’s schemes and services are audited and adjudicated on by a number of regulatory and judicial bodies at various times. Normal business is continued while these audits are carried out. Accordingly, I do not believe that it would be appropriate to suspend the SAFE identity verification programme due to the ongoing audit by the Office of the Data Protection Commissioner.
I hope this clarifies matters for the Deputies.
59. Deputy John Brady asked the Minister for Employment Affairs and Social Protection her views on the 18% of full-time employment sourced by JobPath providers (details supplied) for persons based on data for those engaged in the service from July 2015 to June 2016; and if she will make a statement on the matter. [8343/18]
View answerAs the Deputy will be aware, JobPath is a service that supports people who are long-term unemployed to obtain and sustain paid employment. The service was launched in 2015 on a ‘rolling basis’ with referral numbers gradually increasing over time. There are two phases to the service. During the first phase, of 12 months duration, a personal advisor (PA) provides practical assistance in searching, preparing for, securing and sustaining employment. The second phase starts if the jobseeker is successful in finding work. During this phase the PA continues to work with the jobseeker for a further period of at least three months, and up to 12 months. In addition to the two phases jobseekers may also undertake training while with the service and this may extend the period the jobseeker is supported through the service for up to a further 6 months. My Department has published an (updated) cohort based report on the performance of the service, in January 2018. This report detailed employment outcomes on a quarterly cohort basis, i.e. customers referred in Quarter 3 and 4 in 2015 and those referred in Quarter 1 and 2 in 2016.
Of the 39,603 jobseekers referred to the service during this period, 58% were over three years unemployed and a further 17% were over two years unemployed. These groups face significant barriers when seeking to enter or return to employment in the open labour market.
The total employment outcome across all four cohorts at the time of publishing was 25%: 18% of Jobseekers who engaged with the service during this period obtained full-time employment, in addition a further 4% of clients entered part-time employment and a further 3% became self-employed.
It is important to note, that the latter two cohorts (Q1 and Q2 2016), represent 80% of the 39,603 jobseekers referred between July 2015 and June 2016, and the employment outcomes are expected to improve over time as more jobseekers from these cohorts complete their full engagement period with the service.
Given the extended time a customer may engage with the programme and the increase in referral numbers over the reported timeframe the results are very positive. These initial reports are subject to review and are based on a relatively small sample size. With this in mind, the department is undertaking an econometric review of this strand of its activation services. Completion of the review is provisionally scheduled for the end of Q3 2018, following which more detailed and robust statistics will be available.
I hope this clarifies the matter for the Deputy.
60. Deputy Frank O'Rourke asked the Minister for Employment Affairs and Social Protection when the expansion of Tús and community employment schemes to adapt employment programmes to the changing circumstances and the needs of jobseekers (details supplied) are due to come into effect; and if she will make a statement on the matter. [8426/18]
View answerTús is one of a range of supports provided by my Department to cater for long-term unemployed jobseekers and those most distant from the labour market. It provides part-time temporary work in local communities, as a stepping-stone back to employment. However, it is important to note that these placements are not full-time sustainable jobs and are designed to break the cycle of unemployment and maintain work readiness, thereby improving a person’s opportunities of returning to the labour market or getting a job for the first time. The Deputy will appreciate that the welcome reduction in the unemployment rate is a factor in recruitment to all programmes. Long-term unemployment is expected to fall further this year in line with the continuing forecasted fall in overall unemployment. Currently, participants can remain on Tús for one year and I have no plans to change this. However, changes were introduced recently to the selection criteria for Tús which should broaden the availability of Tús to a greater number of people on the live register. This includes an increase in the percentage of assisted referrals from 20% to 30%, as well as permitting someone who has had a break of up to 30 days on the Live Register in the past 12 months to be considered eligible for Tús selection.
The Department keeps all aspects of its activation programmes under review to ensure the best outcomes for participants and communities. The Government is very mindful of the large number of work programme places involved in service delivery and other valuable services around the country.
I hope this clarifies the matter for the Deputy.
61. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection the amount of funding she sought from the Dormant Accounts Fund; the criteria for the selection of projects to receive funding; the number of projects that sought funding from her Department; if there was a public request for submissions; and the details of projects that sought funding. [8350/18]
View answerThe DAF is managed through a series of annual action plans. The Department of Employment Affairs and Social Protection (DEASP) is the lead Department for one of the 2016 Dormant Accounts Action Plan measures which provided €0.5m for training and supports for family carers at the end of their full-time caring role. The 2016 DAF Action Plan for carers has now been fully implemented. Pobal administered the measure on behalf of the DEASP, in accordance with their service agreement with the Department of Rural and Community Development (DRCD).For the 2016 Action Plan, Pobal made a competitive call in early 2017 for proposals from national organisations that provide services to carers. A pre-application information meeting for the measure “Life after caring” took place in Dublin on Thursday 29th June.
Applicants for funding were required to demonstrate how the proposal meets the measure priorities. They were required to provide evidence of need for the proposal, how this will be addressed, demonstrate value for money additionality and demonstrate the capacity of the organisation in relation to their governance and financial controls, experience in management of public funding; achievements, management and delivery of projects.
The 2016 measure closed for applications on 26th July 2017. Three organisations applied, and following evaluation by Pobal were subsequently approved for project funding under the measure by my Department: Family Carers Ireland (€338,464), the Irish Foster Care Association (€89,593) and the Galway Hospice Foundation (€97,568).
Discussions with the DCRD, on the 2017 Action Plan, which provides up to €1 million for training and supports for family carers have commenced. I look forward to seeing how the 2017 Action Plan can provide further supports for carers.
62. Deputy Peter Burke asked the Minister for Employment Affairs and Social Protection the value of the social insurance fund; the challenges she anticipates in the future in relation to funding same; and if she will make a statement on the matter. [8398/18]
View answerThe Actuarial Review of the Social Insurance fund (SIF) as at 31 December, 2015, which I published in October 2017, was carried out by independent consultants, KPMG. This is a review required by legislation. It examines the projected income and expenditure of the SIF over the course of the 55 year period from 2016 to 2071. The review found that the fund currently has a modest surplus of income over expenditure. In 2016 there was a surplus of €0.4 billion on expenditure of €8.8 billion and receipts of €9.2 billion. However, this will reduce over the next two years and will return to a small shortfall in 2020. The annual shortfalls are projected to increase from 2021 onwards as the ageing of the population impacts. Projections indicate that, in the absence of further action to tackle the shortfall, the excess of expenditure over income of the fund will increase significantly over the medium to long term. The shortfall in expenditure over income is projected to increase from €0.2 billion in 2020 to €3.3 billion by 2030 and to €22.2 billion by 2071. As part of the review the independent consultants were required to project the additional PRSI expenditure if invalidity pension and illness, jobseeker’s and carer’s benefits were extended to Class S self-employed workers and the PRSI contribution rates required to provide these benefits on a revenue neutral basis.
The review found that the combined cost of introducing the invalidity, illness, jobseeker’s and carer’s benefits for class S contributions is estimated to be €118 million in 2018, rising steadily to €223 million in 2020. By 2025 the projected cost is €413 million and, over the period of the review the cost would rise to €1.3 billion in 2071.
These costs assume that the cost of extending invalidity pension to the self-employed builds up steeply for the first 10 years after introduction after which time the scheme is almost at maturity or a steady state.
For the shorter term schemes, illness and jobseeker’s benefits, it is estimated that they will reach maturity after 2 years. Projected expenditure on jobseeker’s benefit assumes the same incidence rate as prevail in the employed (PRSI Class A) population.
The review indicates that, where these benefits are extended to the self-employed, the class S rate of PRSI contribution would need to increase substantially in order to ensure that the benefits are delivered in a revenue neutral manner. It estimates that when expenditure on the additional benefits is considered over the entire projection period, PRSI rates would need to increase by 94% under a scenario of no subvention from the exchequer. This is equivalent to an increase of the Class S contribution rate from the current 4% rate to 7.8%.
This increased contribution is attributable to the costs of extending these additional benefits to PRSI Class S contributors. It does not take account of the value to PRSI Class S contributors of access to the range of existing benefits, and in particular state pension contributory.
The consultants estimated that the typical cost of State pension (contributory) on its own is of the order of 10% to 15%, depending on other factors including rate of average earnings and date of commencing paying PRSI. Adding in the other benefits referenced the total Class S rate of contribution to ensure revenue neutrality would be of the order of 20% per annum.
The findings of the Review will play an important role in informing the overall debate on policy developments in relation to the SIF in the years ahead including the financial sustainability of the Fund given the expected demographic challenges and consideration of extending the scope of benefits for workers generally, including the self-employed. The Actuarial Review provides government with a timely and evidence-led opportunity to undertake a full review of our social insurance system and to consult with stakeholders.
63. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection her plans to ensure that those that are the first to receive a pension under the total contributions approach will not be significantly financially disadvantaged and suddenly faced with a lower pension than they otherwise would have received under the yearly average approach; and if she will make a statement on the matter. [8307/18]
View answer75. Deputy Martin Heydon asked the Minister for Employment Affairs and Social Protection the process that is being undertaken regarding the recent changes announced to the contributory pension system; when reviews will commence; and if she will make a statement on the matter. [8416/18]
View answer86. Deputy Niamh Smyth asked the Minister for Employment Affairs and Social Protection her plans to reform the pension system which is perceived to discriminate against persons, mainly women, that took time out of the workforce prior to 1994 to care for children or elderly relatives; and if she will make a statement on the matter. [8403/18]
View answerI propose to take Questions Nos. 63, 75 and 86 together.
A policy to introduce the Total Contributions Approach (TCA) to pensions calculation was adopted by the then Government in the National Pensions Framework in 2010, as was the decision to base the entitlements of all new pensioners on this approach from 2020.
On the 23rd January, the Government agreed to a proposal that will allow pensioners affected by the 2012 changes in rate bands to have their pension entitlement calculated under a total contributions approach which will include up to 20 years of a new HomeCaring credit.
The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines their final pension outcome. In particular it will benefit people whose work history includes an extended period of time outside the paid workplace, while raising families or in a full-time caring role. Crucially, unlike the proposed Homemaking Credits which was proposed in 2010 as part of the National Pensions Framework, the HomeCaring Credit will apply to periods both before and after 1994, as for most people reaching pension age between 2012 and 2019, such periods, where they had them, occurred before 1994, and provisions restricted to periods after then are of little or no benefit to them.
This approach will make it easier for many post-2012 pensioners affected by the 2012 rate band changes who are currently assessed under the yearly average model, to qualify for a higher rate of the State Pension (contributory). A person who reached pension age after 1st September 2012 and has a 40 year record of paid and credited social insurance contributions, subject to a maximum of 20 years of the new HomeCaring credits, will qualify for a maximum contributory pension where they satisfy the other qualifying conditions for the scheme. Up to 10 years of other credits, for example, awarded when on Jobseekers or Illness Benefit, may also be used, subject to the total credits not exceeding 20 years.
So, for example, a person might receive a maximum pension based on 20 years paid PRSI contributions, 5 years jobseeker credits, and 15 years HomeCaring Credits (before or after 1994), over a 50 year period and qualify for a maximum rate pension, despite additional gaps of up to 10 years. Those with fewer contributions will have a pro-rata entitlement. For example, someone with 18 years PRSI contributions and 18 years homecaring may qualify for a 90% contributory pension.
Legislation has to be drafted and enacted to enable implementation of these arrangements and IT solutions in line with this legislation must be developed. Accordingly, it is planned that the reviews will commence at the start of Q4 of this year, with the first payments being made in Q1 2019.
Under the arrangements, post 2012 pensioners will not see their pension reduced by this change. If their rate is improved by the TCA calculation option they will benefit, but if their TCA calculation entitlement is lower, they will remain on their existing rate. Everyone on reduced rates will also continue to have access to the State pension (non-contributory), which provides a pension of up to 95% of the maximum contributory pension rate and includes generous income disregards.
As was understood by the then Government in 2010 when adopting the National Pensions Framework, there are those who are less likely to benefit from the TCA model, notably people with lower numbers of paid social insurance contributions, who have no significant homemaking/caring periods.
The final model of TCA for those reaching pension age from 2020 will be decided upon following a public consultation later this year, and I do not wish to pre-empt that process, nor the Government decision and legislation which will follow it. However, I can state my determination that adequate provision for home-carers will be an important factor in the final design. I can also say that I will ensure that there will continue to be a strong State pension (non-contributory), which ensures those with very limited PRSI contributions and/or home-caring periods can be guaranteed a decent standard of living in old age, regardless of their contributions to the Social Insurance Fund.
If everyone received the same rate under both systems, there would be no point in such a reform, and if the result of introducing TCA was to make the State pension system more expensive, it would undermine the long-term sustainability of the pension system, which would endanger the future pensions of the existing workers who fund the system now. This will be the system in place for the decades to come, and it will not be possible to simply provide everyone with a maximum rate pension, regardless of the contributions they have made inside and outside the home, and regardless of their means. Choices will have to be made, and the planned consultation will give an opportunity for people to express their views for consideration in making the final policy decisions. The final TCA model will seek to provide the most equitable outcomes, and ensure the current success of the State pension system in providing older people with a decent standard of living continues.
I hope this clarifies matters for the Deputies.
64. Deputy Joan Collins asked the Minister for Employment Affairs and Social Protection if instructions have been forwarded to Seetec and Turas Nua to cease terminating persons benefits with immediate effect if they decline to sign a private contract with a private company whilst they are still engaging with JobPath. [8304/18]
View answerAs the Deputy is aware Seetec and Turas Nua are two companies contracted to provide the JobPath service on behalf of my Department. Participants with the JobPath service are not required to sign a contract with the JobPath companies but they are, in the same manner as all customers referred to any of the other Department’s activation services, requested to agree and sign a personal progression plan (PPP). The PPP is an agreement between the jobseeker and their personal advisor, it contains a schedule of activities; actions and job focused targets, taking into account a person’s specific qualifications and employment preferences. The contents of the PPP may change during the person’s engagement with the service as they develop new skills or experience. Failure to agree a PPP, which is an integral element of the person's commitment to engage with the activation service, may be taken into consideration by a Deciding Officer of my Department when considering a penalty rate of payment. It is important to state that all decisions regarding a person’s welfare entitlements including those customers with the JobPath service are taken only by Department officials and not by the external contractors. JobPath companies do not apply or recommend the application of a penalty rate of payment.
The process for sanctioning clients who do not engage with the JobPath activation process is exactly the same as the process for clients who fail to engage with the Department’s other activation services provided by Intreo Centres, Local Employment Services and Job Clubs.
Failure to engage without good cause may result in the jobseeker’s payment being reduced or temporarily suspended. All such decisions are based on the available evidence and the circumstances of each case. Reduced rates are only applied where a job seeker fails to engage as requested following at least two warnings. The legislation underpinning the application of reduced rates of payment is provided for in the Social Welfare Act 2010.
Jobseekers can request a Deciding Officer to review the decision or appeal the Deciding Officer’s decision to the Social Welfare Appeals Office (SWAO).
I trust this clarifies matters for the Deputy.
65. Deputy Joan Collins asked the Minister for Employment Affairs and Social Protection the amount lost to persons to date in cases in which they did not sign contracts with Seetec and Turas Nua. [8305/18]
View answerAs the Deputy is aware Seetec and Turas Nua are two companies contracted to provide the JobPath service on behalf of my Department. Participants with the JobPath service are not required to sign a contract with the JobPath companies but they are, in the same manner as all jobseekers referred to any of the other Department’s activation services, requested to agree and sign a personal progression plan (PPP). The PPP is an agreement between the jobseeker and their personal advisor, it contains a schedule of activities; actions and job focused targets, taking into account a person’s specific qualifications and employment preferences. The contents of the PPP may change during the person’s engagement with the service as they develop new skills or experience. Failure to agree a PPP, which is an integral element of the person's commitment to engage with the activation service, may be taken into consideration by a Deciding Officer of my Department when considering a penalty rate of payment.
As failure to agree a PPP is one of a number of factors that may be taken into consideration by a Deciding Officer, my Department does not currently record failure to agree a PPP solely and separately as a reason for non-engagement. It is important to state that only Departmental officials can make decisions regarding a person’s welfare entitlements including those jobseekers with the JobPath service. JobPath companies do not apply or recommend the application of a penalty rate of payment.
The process for sanctioning clients who do not engage with the JobPath activation process is exactly the same as the process for clients who fail to engage with the Department’s other activation services provided by Intreo Centres, Local Employment Services and Job Clubs. Failure to engage without good cause may result in the jobseeker’s payment being reduced or temporarily suspended. All such decisions are based on the available evidence and the circumstances of each case. Reduced rates are only applied where a job seeker fails to engage as requested following at least two warnings. The legislation underpinning the application of reduced rates of payment is provided for in the Social Welfare Act 2010.
Jobseekers can request a Deciding Officer to review the decision or appeal the Deciding Officer’s decision to the Social Welfare Appeals Office (SWAO).
I trust this clarifies matters for the Deputy.
66. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection her plans to reform the social insurance system to a system based on the contributory principle as outlined in a document (details supplied); and if she will make a statement on the matter. [8309/18]
View answerIreland has a unified system of social security whereby all contributions paid by workers (and their employers, where applicable) are paid into a single fund, the Social Insurance Fund (SIF),which is applied to pay benefits to which those workers have established entitlement. The Irish social welfares system recognises different categories or “Classes” of workers. The rate of contribution paid by these categories differs. They can therefore access different levels of social insurance benefits. For example, Class A employees, generally private sector employees and post 6 April 1995 public servants, pay a combined employer and employee PRSI rate of up to 14.85% and qualify for all social insurance benefits. In contrast, Class B public sector employees pay a much lower combined PRSI rate of up to 2.91%. Consequently, they qualify for a restricted range of social insurance benefits. They do not qualify for the State pension (contributory), relying instead on their occupational pensions. This government is committed to improving the PRSI scheme for employees and the self-employed. Entitlement to treatment benefit was extended to the self-employed in March 2017 and the treatment benefit scheme was improved for all qualified contributors in October 2017 with the optical scheme now covering the provision of glasses, either free or subsidised if an upgraded design is chosen, or provide a contribution towards contact lenses.
Repairs to glasses are also covered under the scheme. The dental scheme now includes a contribution to cleanings, either an annual scale and polish or more extensive periodontal treatment if clinically required. Even more significantly, self-employed contributors are now eligible for the invalidity pension from December 2017. For the first time, this gives the self-employed access to the safety-net of State income supports if they become permanently incapable of work as a result of an illness or disability without having to go through a means test. This is a real advance in the level of cover available to the self-employed.
On 23 January, the Government agreed to a proposal that will allow pensioners affected by the 2012 changes in rate bands to have their pension entitlement calculated by a new “Total Contributions Approach” (TCA) which will include up to 20 years of a new Home Caring credit. Unlike the current Homemakers scheme, this credit will apply to periods both before and after 1994. This approach is expected to significantly benefit many people, particularly women, whose work history includes an extended period of time outside the paid workplace, while raising families or in a caring role. It will make it easier for such pensioners to qualify for a higher rate of the State Pension (contributory). The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines a final pension outcome, and it also acknowledges, for the first time, the contribution made by home-carers in the period before 1994.
An inter-departmental working group has been established to examine and report on options for the amalgamation of USC and PRSI. It will have regard to the structures and rates of personal tax and social insurance in other countries and the macroeconomic and demographic contexts in Ireland and its work should be completed by the end of June 2018.
67. Deputy Margaret Murphy O'Mahony asked the Minister for Employment Affairs and Social Protection the status of the implementation of the making work pay recommendations. [8442/18]
View answer77. Deputy Margaret Murphy O'Mahony asked the Minister for Employment Affairs and Social Protection the status of the implementation of the making work pay recommendations. [8443/18]
View answerI propose to take Questions Nos. 67 and 77 together.
The Make Work Pay (MWP) report was published on 6th April 2017, following the deliberations of an interdepartmental group established under the Comprehensive Employment Strategy for People with Disabilities. The interdepartmental group considered a range of approaches across relevant Departments to deliver on this commitment and made 24 recommendations under the broad headings of: reconfiguring the system of supports to ensure that work pays; promoting early intervention; communicating effectively that work pays and future proofing.
The report contains a number of recommendations covering a range of Government departments. A number of the report’s recommendations related to my Department’s responsibilities have already been implemented namely:
- People with a long-term disability payment who move off the payment to get a job will retain their Free Travel Pass for a period of five years (the report recommended retention for 3 years).
- A fast–track return to Disability Allowance for people where employment does not work out.
Furthermore, a number of other actions are the subject of ongoing work:
- Development work is being undertaken on a new “Ready Reckoner”, to calculate the net benefits and financial implications of working for people on a disability type payment.
- Persons with disabilities may, on a voluntary basis, make an appointment with a case officer to explore their options and develop a personal progression plan. Strengthening the capacity of the Department’s Intreo service to support people with disabilities to get and maintain employment is an ongoing activity.
- Amending legislation dispensing with the requirement for disability allowance, blind pension and rent supplement under supplementary welfare allowance, that work must be of a rehabilitative nature has been included in the Social Welfare, Pensions and Civil Registrations Bill 2017.
On the publication of the MWP report, the Government gave a clear commitment to consult widely in relation to a number of recommendations. This has led to initial consultation with the Department’s Disability Stakeholders Group followed by the procurement of an independent facilitator and the holding of a number of facilitated focus groups. Following this, the DEASP will now engage in an extensive consultation process in the first quarter of 2018 with people with disabilities, parents of children with disabilities, and sectoral representatives, in relation to early engagement with people with disabilities on the recommendations 9 and 10 of the MWP report.
While the Government has decided to implement some of the recommendations, others require further consultation with disability service providers and other stakeholders. These include developing and extending interdepartmental and interagency protocols, including protocols with the range of State funded disability service providers; developing a proactive communications/information strategy; and future proofing to ensure that the recommendations are reviewed on a regular basis.
