Tuesday, 19 February 2019

Questions (53, 91)

Thomas P. Broughan


53. Deputy Thomas P. Broughan asked the Minister for Employment Affairs and Social Protection her plans to move Ireland to an index-linked social welfare rates system; and if she will make a statement on the matter. [8003/19]

View answer

Willie O'Dea


91. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection if index-linking social welfare payments is being considered; the analysis she has undertaken of this approach; and if she will make a statement on the matter. [8049/19]

View answer

Oral answers (48 contributions) (Question to Employment)

I read a report where the Minister talked about index-linking welfare payments. I do not know whether she was talking about the cost of living index or average earnings index. I think that when the Taoiseach was Minister for Social Protection, he floated that idea. It has been discussed for a long time. Dr. Seán Healy of Social Justice Ireland has advocated strongly for social welfare rates to be linked to average earnings. First, we have to establish that social protection rates would be above the poverty line and that they are linked to average earnings. What is the Minister thinking on this and what kind of work has the Department done on it?

I agree with Deputy Broughan when he says that the Taoiseach started this. He is a hard act to follow. Every time I think I have come up with a new idea, I am told that he said that in 2015.

He did not bring it in.

I propose to take Questions Nos. 53 and 91 together. A Roadmap for Pensions Reform 2018-2023, published last year, commits the Government to examine and develop proposals to set a formal benchmark target of 34% of earnings for the State pension (contributory) and to institute a process whereby future changes in pension rates of payment are explicitly linked to changes in consumer prices and average wages. The Department is currently considering options to implement this commitment, having examined previous studies on benchmarking and indexation, international experiences and examination of a range of potential benchmarks and indices. It is worthy of note that the current rates of payment already closely mirror the benchmark-linked process in previous reports including those proposed by the Social Welfare Benchmarking and Indexation Group in 2001 which is usually relied on by advocacy and other groups.

I acknowledge Dr. Seán Healy, the European Anti Poverty Network, EAPN, the National Childhood Network and the Children's Rights Alliance. They are all genuinely in favour of pursuing the conversation on this and trying to come up with an algorithm of what we can agree that benchmarking should be against.

In terms of the wider application of the indexation of social welfare payments generally, section 19 of the Social Welfare, Pensions and Civil Registration Act 2018 provides that I, as Minister, will arrange to consult with stakeholders on examining ways in which social welfare rates are increased with the aim of ensuring in law the adequacy for all recipients. I am doing that. I met with them last week and we arranged to sit down in the next few weeks to start that consultative process. It is really important because if we decide to do something collectively, as a House, with regard to benchmarking, I cannot do it without the collective will of the people in the organisations that represent the people of most need in this country. We all have to agree on the algorithm and that it is going to be sustainable. We also have to ensure there will not be cuts in the future, such as those inflicted on this Department in recent years.

The Minister said before that there would be no drastic increases or decreases but looking at the record of the consumer price index, CPI, there were effectively deflationary years and years when there seemed to be very little increase in the CPI. Will the Department do any kind of impact assessments? When the Minister responded to my Sinn Féin colleague, Deputy Brady, on this subject she gave global figures but no indication of what it would be if it was not a €5 increase across the board.

This morning the Think-tank for Action on Social Change, TASC, published a report entitled Inequality in Ireland and Europe - Cherishing all Equally 2019 which once again highlighted that the lower four quartiles of the population get slightly over 20% of the national income and the key importance of social transfers, especially for lone parent families and many of our senior citizens. This is an area where the general proposal could be welcome but we need to be very careful about how we would implement it, especially given the fact that parts of the social welfare system, for example, the Christmas bonus, do not appear anywhere in the basic accounts. They are last minute decisions and in the past two years the Minister had to go back to the Minister for Finance to get €50 million more, I think, for the disability allowance budget to make sure there was enough money for the year. When will the Department publish something in this area?

I will bring in Deputy O'Dea whose Question No. 91 is grouped with this question.

What question are we on?

Would the Minister agree with me that insofar as many of the social welfare rates are somewhat below the poverty line indexing those to inflation would lock those people permanently into poverty? We have to reach a benchmark to bring people above the poverty line before we decide on what form of indexation we need to pursue.

I will bring in Deputy Brady as well.

The Minister would be aware that in the pre-budget forum discussions last year index-linking the payments to adequacy was one of the top priorities and that I, on behalf of Sinn Féin, introduced the Social Welfare Commission Bill 2018 which would have done exactly what the Minister is talking about and would have been very much in line with the work of the Low Pay Commission, essentially taking it out of the hands of Government and putting it into the hands of a commission. I have been corresponding with the officials in the Department, trying to arrange a meeting to discuss that and bring forward the proposals contained in that Bill. Has the Minister read the Bill and does she think there is merit in it? Generally, I think we are talking about the same thing but it should not be linked solely to the CPI. It needs to be linked to adequacy and that is the key point in all this.

Deputy Broughan was right to talk about the Supplementary Estimate we have most years for one scheme or another because they are demand led and if there is a higher demand, there is a higher need. The cost of disability tender will, I hope, go out by the end of this month. That body of work will inform all disability payments in the future arising from the special cost of living, over and above a jobseeker's or a pensioner's allowance. It will probably take 12 months. I have asked for preliminary results if I can get them before this year's budget. It may not be possible but my intentions are clear: I need to reflect people's lived experience of disability which is not the same as another jobseeker's experience.

We will also follow up on the commitment to consult, which I expect to happen before, on and during the pre-budget forum that we hold every July. I will engage with the social partners many times between now and July because I would like to be able to finalise the algorithm.

I have read Deputy Brady's Bill and I very much hope he will continue to process his thoughts and views in the conversation that we will have with the social partners. The index we use is not just as simple as lining it up against one or the other. We need to come up with an amalgamation of an algorithm of what we decide is going to provide adequacy in pensionable or working age for a person with a disability. That needs to be defined and agreed by all of us, otherwise it will not pass in this House and I will be wasting my time.

I think I differ from Deputy O'Dea in that all our payments are above the 30% index rate but he was right that if we decide it is 30% and people are below that, they have to be brought up to whatever it is we agree before we introduce indexing and allow it to move on thereafter. It is not like the Low Pay Commission. If we had a minimum wage people would have to be brought up to that before we could allow the Low Pay Commission do its work on an annual basis, and we all expect and respect the report that comes from it. This has to be the same. We all have to agree that the starting bar is X, and then we have to agree on the algorithm or the indexing calculation to get us to a Y recommendation every year from the equivalent of the Low Pay Commission or whatever body we decide we can trust with it but there has to be a baseline, an algorithm and a calculation that we all agree.

Does the Minister expect that she will be able to publish something following her consultation that we could all read and see how it relates to the poverty levels and so on? The survey on income and living conditions, SILC, published by the Central Statistics Office, CSO, in 2017 showed that one in five households with children was living below the poverty line. The Government committed to trying to take 100,000 children out of poverty. That is intimately related to the transfer payments and if we went down the index-linked route having a benchmark of adequacy is the key requirement. The Parliamentary Budget Office, PBO, has been very critical of the ad hoc way we have done the Christmas bonus and increases over the years, rather than planning the expenditure and saying we will do this indefinitely. The Minister might have seen a report at the weekend by Professor Jan Rigby of Maynooth University, stating that the increase in life expectancy rates had fallen during the austerity years which is a damning reflection on our social protection system.

I am trying to get in another question but we are running out of time.

Is it my question?

It is the Deputy's question as well. Does he want to speak?

My question is on auto-enrolment.

It can be taken with this one, if the Deputy wants.

I have to respond.

The Minister is going to respond.

Auto-enrolment is a separate issue.

Auto-enrolment is a separate question.

It is a separate question.

It is not. It is the same question.

I would like an answer if the Minister is willing to give me one.

The consultations that I have with the partners will not be a secret and none of them is shy about telling anybody what we talk about. This will only work if we all want the same thing, which is to provide adequacy in our income levels for our pensioners, people who have disabilities, or varying levels of ability and our jobseekers. That is the aim we will have. I would like to have it concluded and agreed on by July - I know that would be a bit of a miracle - so that it can feed into next year's budgetary process. That is the aim.

What about Question No. 54?

We cannot go back to that one. I will do this job if that is all right with the Deputy.

I am looking for fairness.

Does Deputy Mattie McGrath want to have 30 seconds and use the remaining time? His Question No. 54 is next.

All I want is fair play.

The Deputy is getting fair play.

The Acting Chairman was talking about Question No. 91.

I am sorry; the Deputy is wrong.

I beg to differ.

I am not out of order. I am neither wrong nor out of order. I will not take any lectures from-----

Hold on. If you want to continue that argument, you can-----

Wind down the clock.

-----but you are running out of time.

The Acting Chairman is a blunderbuss now. He is blundering. Will he please let me ask the question? He is blundering now because he is afraid I might say something to upset the-----

You are abusive and objectionable.

I am not abusive.

Can I please ask the question?

You may, if you ask it politely.

Of course I will ask it politely. I am always polite. The Minister should know that. I have worked with her on the Business Committee and we never had any difficulties.

The Deputy should concentrate on the question.