Dáil Éireann díospóireacht -
Wednesday, 16 Dec 1987

Vol. 376 No. 10

Social Welfare (No. 2) Bill, 1987: Committee Stage (Resumed) and Final Stages.

SECTION 2.

Debate resumed on amendment No. 1:

In page 3, to delete lines 26 to 28, and substitute the following;

"(3) A person who fails to comply with this section or regulations made hereunder shall be guilty of an offence and shall be liable—

(a) on summary conviction to a fine not exceeding £1,000 or (at the discretion of the court) to imprisonment for a term not exceeding one year, or to both such a fine and such imprisonment, or

(b) on conviction on indictment, to a fine not exceeding £10,000 or (at the discretion of the court) to imprisonment for a term not exceeding three years, or to both such fine and such imprisonment.".

—(Deputy J. Mitchell)

Minister for Social Welfare (Dr. Woods)

Deputy McGahon raised some very relevant points in the course of his contribution on this section and, in particular, he questioned the extent of abuse. I think I have indicated as clearly as I could the nature and extent of fraudulent claiming, abuse and unwarranted claiming and tried to put them into context. He asked me very specifically what the position would be in relation to the special investigation unit. I can assure him that the activities of the unit will continue and be intensified and we will review their position in relation to the forthcoming budgetary figures and targets. The Estimates are prepared well in advance of the end of the year and published in October. Of course, that means that included in the Estimates are those figures which we could estimate at that time — at the latest in September. Obviously we have some further knowledge of the outcome of the various investigations and activities which we were engaged in towards the end of the year and they have turned out to be somewhat more productive than anticipated. For that reason we will look again, particularly in the context of the budget, at the activities of this unit and the possible returns from them. I take the point raised by Deputy McGahon that the special investigation unit have an important part to play. They will continue to operate and we will be looking at their intensification.

Deputy McGahon mentioned a figure in excess of £200 million in terms of potential savings from fraud and abuse. This is a complete misconception of the position. If one talks about a level of fraud of even 5 per cent, or whatever the percentage might be at the end of the day, one can only apply that to the work that is being done in relation to unemployment benefit, unemployment assistance and disability benefit. Any figures that might apply to other schemes such as old age pensions or widows' pensions would of course be very small by comparison. You cannot just take the total expenditure and apply a percentage such as that to it. The other matter one must take into consideration is the fact that these percentages apply to people who, at some stage of their claims, are guilty of an abuse of the system or of defrauding the system. It does not mean that each person has been defrauding the system for the whole year and therefore the amounts of money saved are consequently much less than one would think. Nevertheless they are substantial. They are greater this year than at any time previously as a result of the various activities and we will certainly be giving every attention to them.

Deputy Mitchell asked me a very interesting question, that of the continuing benefit of the savings for this year. I would have to let Deputy Mitchell meet with some of the economists in the Department of Finance to work that out between themselves.

Mr. J. Mitchell

I would love to do that.

Dr. Woods

He is right in the sense that there is a continuing benefit but how to quantify it is another matter. The continuing benefit is largely taken into consideration in the Estimates for 1988. I say "largely" because, as I have said, towards the end of the year it turned out that the savings were somewhat greater than estimated earlier but there would be an element of further consideration given the outcome at the end of the year. In other words you reach a new plane. Savings of approximately £1.25 million per week have accrued from the Jobsearch scheme and every additional week at this stage means an extra £1.24 million, £1.25 million or £1.26 million. At the end of the year we draw a line because that money related to this year's Estimat and activities. From 1 January we will start afresh. Obviously there is a Jobsearch programme planned for next year and the Estimates for 1988 include a figure of £8 million to £8.5 million for that programme. A greater emphasis will be placed on the savings that will accure from people availing of opportunities as a result of this scheme. The figures are taken into consideration in global terms. We will start the year on a different plane and will start calculating from the beginning of the year for spending for next year. There is some additional element to this matter to which we will give further consideration.

Various activities will take place next year including the external control unit. I am quite certain that the figures in the Estimates for next year for the external control unit can be increased. That became clear from the outcome of the activity of the external control unit as the year came to a close and particularly in the last quarter of the year.

As a result of this legislation we will be intensifying our activities in regard to employers. We expect to have greater savings from that area next year and we will be considering that matter in relation to the figures for the coming year. As the Deputy knows, the question of statutory sick pay and the effect it may have also arises. It will take some time before that scheme will come into operation because it is a very major undertaking. I think I have dealt with most of the questions that have been raised.

Mr. J. Mitchell

You certainly have.

Dr. Woods

The only one I have not dealt with is one from Deputy Higgins.

Mr. Bell

I think we are going to have difficulty in getting to sections 8 and 9.

Dr. Woods

Deputy Higgins said that the £200 million is ridiculous and I agree with him on that. I have dealt with most of the other matters he has raised. He emphasised in particular that there is no proposal in this Bill to get money back from employers. That is being dealt with separately through the surveys and the other activities I mentioned. Finally, he mentioned the question of the psychological effects and the effects on the health of people who are long term unemployed and who are anxious to be in employment. I agree entirely with him that that is a problem. I hope to do more next year in relation to the part time job allowance scheme, the educational opportunities scheme and the voluntary organisations schemes. I will be considering those matters during the short recess at Christmas to try to organise something in that regard for next year. I assure the Deputy I have quite an interest in that aspect and I will be pursuing it further. He also talked about the wider options in regard to prisons. I would agree with him on that. I have pleasure in accepting the amendment put forward by Deputy Mitchell to this section.

Mr. J. Mitchell

The Minister has given an extremely extensive reply and many points arise which are of considerable interest. The contributions from all sides of the House so far in this debate have been singularly in harmony, except for perhaps the prodding from the loony left to the loony right which Deputy Mc Gahan and Deputy Higgins engaged in. However, Deputy Higgins' contribution was an extremely lucid and valuable one.

The consensus which has emerged clearly in the House in relation to social welfare fraud is not something that was always evident in the House. In my experience, especially in Government — and I say this with respect for my former colleague, Deputy Barry Desmond — any proposals put forward in relation to tackling fraud were always open to the suggestion that really what we were tackling was the whole idea of social welfare. It is important to emphasise that the consensus in the House in relation to fraud is a consensus based on a united commitment to a good, progressive social welfare system, a system that above all else eliminates poverty in our midst. In attacking fraud I am motivated, and I am sure the same applies to everyone who has spoken, by the desire not to allow the social welfare system to fall into disrepute and to try to release resources so that more money can be given to the less well off. I will never tire of highlighting the fact that we ask, and expect, many thousands of people to live on £35 or £36 a week, particularly the long term unemployed living alone and single women over 58 years of age living alone.

The Minister may wish to play down the amount of savings made. He has admitted to saving £36 million this year as a result of the clampdown on fraud but when spread over a full year that amount will be much more than £36 million. This vindicates something that I have been pressing both in and out of Government for the last five years. I want to make a special plea to the Minister to ensure that at least half the resources saved are redirected towards the most needy groups in the area of social welfare so that we can make progress in achieving some of the objectives set out by the Commission on Social Welfare. The Minister told me yesterday in the Dáil that in a full year it would cost £60 million merely to increase unemployment assistance to a minimum of £45 a week. However, I expect that at least to happen in the forthcoming budget. Notwithstanding the constraints on the public finances no one could begrudge those in receipt of unemployment assistance that sort of increase and it would be only a first step. The social welfare commission suggested that the payment should be somewhere in the region of £50 to £60 a week but it is clear that such an increase would cost a huge amount of money.

Before the lunch break the Minister said that the additional weekly savings arising from Jobsearch is £1.25 million, that is, £65 million in a year. Even if this figure cannot be annualised and even if it is not £65 million, there is a substantial figure involved. The Minister told us in the debate yesterday and in the debate on the Supplementary Estimate last week about his success in reducing the numbers on disability benefit from 82,000 to 72,000, a reduction of 12½ per cent. The measures to make disability benefit payment by employers if introduced halfheartedly or in an ill-considered way would be prone to abuse and there could be collusion between employers and employees. If the measures are applied intelligently they could lead to further savings in the area of disability benefit. There is no doubt that at the moment many people feel bound to go out sick especially at this time of the year because they are going into the higher tax bands and they feel it is not worth their while to work for 40p in the pound. They go out sick and get tax rebates and disability benefit and they are better off. That situation will be resolved by the Minister's measure which will make employers pay disability benefit. This move is long overdue.

I have the greatest respect for Deputy Desmond who was Minister for Health and Social Welfare but he, like Deputy Woods and Deputy Haughey, apart from having responsibility for the Department of Health had responsibility for the Department of Social Welfare and, consequently, the Department of Social Welfare did not get the attention it deserved. These are two enormous spending Departments and until they were separated last year by Deputy FitzGerald the Department of Social Welfare did not get the attention it deserved as the Minister was always too busy. Dr. FitzGerald appointed Deputy Gemma Hussey as Minister for Social Welfare and now the benefits of having a separate Minister are beginning to show. It was Deputy Gemma Hussey who as Minister introduced the Jobsearch scheme which is being continued by the present Minister.

An Leas-Cheann Comhairle

Excuse me, Deputy, as far as the Chair is concerned there are intimations in respect of section 2 that the amendment in the name of Deputy Pearse Wyse is not being pressed and that the amendment in the name of Deputy Mitchell is being more or less agreed. I get the impression that certain progress has been made but so that we could show that, will the House agree that we deal with amendment No, 2 at least?

Mr. Bell

Agreed.

An Leas-Cheann Comhairle

I am just making that point.

Mr. J. Mitchell

I will be happy to finish quickly. I am addressing not only the amendment but the group of amendments and not only the section but the group of sections.

An Leas-Cheann Comhairle

The Deputy will appreciate that if later the question is proposed that section 2, as amended, be agreed, that section will be open for discussion again.

Mr. Wyse

The Minister has accepted the amendment, there is no point——

Mr. Bell

We are only wasting time.

Mr. J. Mitchell

I want to make a point because this is something about which I am very concerned and which makes me angry. We have not been able to find resources to give reasonably good basic payments to people and yet we have allowed extensive abuse to develop in the social welfare system. The appointment of a separate Minister for Social Welfare is only now showing results. Never again should two such big spending Departments be put together. It is too much for any Minister and it could have costly implications.

The Minister is obviously very careful not to quantify the amount of abuse suspected in the system. We have addressed the abuses in unemployment benefit and assistance and we have referred to abuses in the disability benefit system but we have not looked at other areas of abuse, for instance, in unmarried mother's allowance, deserted wife's benefit, free electricity, free telephone rental, free television licence and so on. Even that is not the end of it. Neither have we addressed areas in which we are directing resources towards people who are well off in greater proportion than we are to poorer people as, for instance, in child benefit and as in the case of the Christmas bonus where the bigger one's pension or benefit, the bigger the bonus. That must be changed.

I am grateful to the Minister for accepting this amendment. It was gracious of him to accept it. I thank the Deputies from the other parties, Deputy Wyse for withdrawing his amendment and for accepting mine, and Deputy Bell for agreeing to support it. I hope that these amendments will prove effective and will be applied with vigour by the Department.

Deputy Michael Higgins stressed the lack of reference to employers who fail to pay the money deducted from employees. Such employers are not dealt with in this Bill but are dealt with elsewhere in social welfare legislation. I agree with Deputy Higgins' point that in any review of legislation we should expect more effective proposals from the Minister in relation to employers who default in transmitting payments stopped from employees. There must be action in this area. I want to see a few Lester Piggotts in jail. A few high profile people in jail would stop these abuses, it would save the Minister a lot of hassle and the State a lot of money and it would release resources for the poor.

If this legislation now being agreed is to be implemented, all public representatives will have representations to prevent prosecutions. I am sorry I did not think of it on Committee Stage but in future social welfare legislation we might take a leaf out of the legislation setting up the Office of the Director of Public Prosecutions and indeed the Extradition Bill which forbade any representations by public representatives in relation to prosecutions and forbid all representations in relation to social welfare fraud. I can see the sort of pressure which Deputies and Ministers could come under if there were not that prohibition. It should be considered. I hope we have done a good day's work in agreeing these amendments and I am glad to have been the author of them.

Dr. Woods

I have noted what the Deputy has said about the priority areas for next year. I have to warn and advise him and others that savings which have been calculated for next year are already included in the Estimates. That is a limitation on me in relation to the further redirection of resources but further savings which we may be able to bring about are not included as yet.

Mr. J. Mitchell

The Minister might have a few bob to play around with.

Dr. Woods

We have so many matters to look after, the alleviating payments being just one area. I will bear in mind what the Deputy has said. Regarding the Jobsearch scheme I accept that the pilot study was carried out last year and then examined. Six hundred people had been involved in Letterkenny, Limerick and Tallaght. There were many debates about the indications coming from this pilot scheme. In March the incoming Government decided they would do something substantial on the basis of the pilot study. I set up a model based on 6,000 people and said that if we had the resources we could extend the project ten times over to cover 60,000 people. The Government then gave us the resources to cater for 150,000 people. The resources became available through the reallocations of people within the Civil Service generally. This involved a major redirection of resources towards the longterm unemployed. It was a huge undertaking for AnCO, Manpower and the Department of Social Welfare and I paid tribute to the work they put into it. We must look at other pilot studies and ask ourselves how far we can go with them. That is the kind of thing I will be trying to do.

The figures for fraud were based on surveys carried out in the Dublin area. The external control unit are convinced that the extent of the fraud is greater in rural areas, partly because of the availability of casual work of various kinds. Consequently we will have to give that matter more attention.

Mr. Wyse

I was hoping that we would expedite proceedings and try to tease out as many sections as possible before 6 p.m. We are covering the whole area of social welfare when we were specifically considering fines.

An Leas-Cheann Comhairle

I appreciate the Deputy's concern. There were quite a few amendments dealing with many sections. I hope it will not be necessary to discuss those amendments again.

Amendment agreed to.

Amendment No. 1a not moved.

Section 2, as amended, agreed to.

SECTION 3.

Mr. J. Mitchell

I move amendment No. 2:

In page 4, to delete lines 9 to 11, and substitute the following:

"(3) A person who fails to comply with this section or regulations made hereunder shall be guilty of an offence and shall be liable——

(a) on summary conviction to a fine not exceeding £1,000 or (at the discretion of the court) to imprisonment for a term not exceeding one year, or both such fine and such imprisonment, or

(b) on conviction on indictment, to a fine not exceeding £10,000 or (at the discretion of the court) to imprisonment for a term not exceeding three years, or to both such fine and such imprisonment.".

We have already spoken about this amendment. We have replicated sections, one dealing with assistance and another dealing with insurance.

Mr. Bell

On a point of order, this is getting to a ridiculous stage. It was agreed this morning that the first four amendments would be taken together. Having discussed each of them in the past two hours, we are now to have a further discussion. This is a deliberate filibuster.

An Leas-Cheann Comhairle

Deputy Bell should understand that the Chair is obliged to do the business in a formal way. I appreciate entirely that discussion has taken place but nevertheless the Chair is obliged to treat of the amendments as they appear. I hope it will not require a rehash. That would be repetition and the Chair would not allow it.

Mr. J. Mitchell

It is provided in section 3 that an employer "shall" furnish, whereas in section 2 it is stated that the Minister "may" require. This was raised earlier by another Deputy in the context of section 2. Perhaps the Minister would consider the possibility of making it mandatory for employers to notify him automatically when new people are employed. This would be a matter for a future Bill.

Dr. Woods

We agreed earlier to discuss the amendments together and they were to be taken in the sections as we came to them. We can look at Deputy Mitchell's suggestion in the future but I am inclined to think that it would be unduly restrictive. I believe it will be possible to achieve what we want without changing "may" to "shall" and making it mandatory. The reason is that so many employers co-operate very fully with the officials. People generally accept that we need the regulations in order to deal with the exceptions. Nevertheless, if it transpires that it is not feasible, I would not hesitate to come back to the House, as Deputy Mitchell has suggested.

Section 3 imposes an obligation on employers in respect of claimants who benefit to provide such particulars as may be required to enable a proper determination or review of a claim to be carried out. The section also provides that regulations may be made specifying the details which must be furnished and that employers who fail to furnish the required particulars shall be guilty of an offence. The Department regularly ask employers to confirm periods of absence from work for disability benefit purposes and periods of employment for unemployment payment purposes so as to permit claims to benefit to be verified. Most employers co-operate but some sanctions against those who fail consistently to assist the Department in these necessary investigations is required. The co-operation of employers is essential if abuse of the system is to be effectively dealt with. Random checks on claims to disability benefit, for instance, have proved to be extremely effective in detecting abuse. For example, 14,000 such inquiries initiated this year brought to light 1,100 cases of possible abuse from which overpayments of £460,000 have been detected to date. Following the success of these random checks a more effective system of follow-up was introduced this year involving the targeting of particular industries.

The best example of the effectiveness of these procedures is that of Arigna collieries. In that case 117 of 180 employees were found to have lodged fraudulent claims to disability benefit involving over payments in the region of £90,000. Proceeding are pending in nine cases, court action is planned in a further 92 cases, making 101 in total.

Cases of fraud were also detected in two other mines in the same region, in one case involving 22 of the 25 employees and 35 out of the 40 in the other. Fortyseven of these cases have already been referred for proceedings. These cases indicate the importance of the co-operation we receive from employers in relation to inquiries we initiate. I might add that the amounts of money in these cases are substantial. In some cases the amounts range from £6,900 plus to £3,486, £3,280, £2,662 to £2,486. Obviously cases like the first one I mentioned — involving £6,900 — necessitated investigation over quite a long period. It appears that after some time more people became involved and, later still, even more. There were quite a number of cases involving overpayments in the region of £900, £600, £500, £400, a whole range of different amounts. That indicates that it had been allowed run on, becoming something of a habit, some people having led the way earlier on. They are included in the larger amounts I have mentioned.

There is another company in the northeast in respect of which further investigations of a fairly extensive nature were carried out between the months of July and September 1987. Out of a total workforce of 130 some 106 persons were identified as claiming for periods varying from a few days to 230 days. The evidence in these cases is being assembled. It is expected that they will be referred to the Chief State Solicitor's office as early as possible in the New Year. Again, this was an example of the response to our inquiries of employers. In one case in which there was a response to our inquiries it became clear — in the mines case — that the individual concerned was not out on disability benefit at that time but was claiming disability benefit and working at the same time. Under the new approach we adopted, what was done was——

An Leas-Cheann Comhairle

It does not seem to me that there is anything contentious in section 3, that there is general agreement on it. Bearing in mind the time constraints perhaps the Minister could summarise somewhat.

Dr. Woods

Following that inquiry and co-operation on the part of the employer concerned, a team went in and that is when all the other cases were uncovered. That constituted a change in approach to these cases this year. I should add that I am talking on the section rather than on the amendment. I am accepting that the amendment is accepted.

An Leas-Cheann Comhairle

We do not know what is in the mind of the Minister. The Chair must first treat it as an amendment.

Dr. Woods

I took it that we would discuss the amendments together and that they would then be put together. That was the agreement we reached earlier, that we would not be discussing the amendments again. I will say no more for the moment.

Mr. McGahon

Is the Minister aware of abuses in the construction and fishing industries? He identified a certain mine in the mining area.

Dr. Woods

We are aware of certain abuses in these areas which will be receiving our attention.

Amendment agreed to.

Amendment No. 2a not moved.

Question proposed: "That section 3, as amended, stand part of the Bill."

Mr. Abbott

I apologise for my absence earlier. I was aware that the House was debating the imposition of further sanctions on persons who do not comply with the provisions of sections 2, 3 and 4 in relation to the keeping of records. I understand that generally there is consensus in relation to the imposition of such sanctions.

An Leas-Cheann Comhairle

Is this on section 3?

Mr. Abbott

That is right.

Mr. J. Mitchell

We are on section 4 now.

An Leas-Cheann Comhairle

No, we have not gone to section 4.

Dr. Woods

We are on the section, as amended.

Mr. Abbott

I understand that there is not any great degree of controversy in relation to the imposition of sanctions for failing to keep records.

Mr. Bell

We cannot hear Deputy Abbott here.

Mr. Abbott

If there are to be sanctions imposed on people in order to give these provisions more teeth — as would be required by Deputy Mitchell, the reasons for which he set out yesterday and with which he dealt again today — I should like to draw the attention of the Minister and the House to the kind advice given to the Minister for Finance last week by Deputy Crotty in relation to the noncriminalisation of employers through the arbitrary imposition of heavy sanctions. When dealing with the implementation of the provisions of these sections I would implore the Minister that whatever sanctions would be available to him be imposed only after a thorough investigation of the tendency of the particular sector to abuse the regulations. I understand that to be the case, that the Minister is contemplating sanctions in respect of particular sections of employment. The Opposition are quite right to tease out the possibilities there.

Even when the regulations in respect of the provision of sanctions are applied to a particular sector I should like to think that they would be applied by the Department on a consensus basis, in consultation with the sector concerned, so that the accusation often laid against officialdom — when dealing with the bureaucracy attached to the taking of people into employment — is not labelled as a criminalisation of employers. There is a nice balance to be struck between the head-down prosecution of people who break the rules technically and the prosecution of people who cannot be got to adhere to the rules under any circumstances. In the first instance I hope the Department will pursue those who go ahead heedless of the rules, who are determined not to keep them, who abuse their position as employers and gain really competitive advantage over other employers who pay their proper PRSI contributions, employ properly unionised labour and adhere to all the industrial relations rules and employment regulations in other areas. I say that in the knowledge that there are many in the twilight zone between sheer rogues and thoroughly responsible employers who very often are in a position where they could benefit from a bit of advice from Department officials. I say this because many of my constituents come to me from time to time and complain that employers have been criminalised in the past, that there are all sorts of incentives, grants, encouragement, exhortations to set up in business, that young people especially are subjected to these, but that as soon as they set up in business the tax man is there.

Mr. Bell

On a point of order, I want to move the motion that the question be now put.

Mr. Abbott

I would not propose to delay the House but I wanted to make a point.

Mr. Bell

That is exactly what the Deputy is doing.

Dr. Woods

Deputy Bell cannot prevent the Deputy from speaking. The Deputy has every right to speak.

An Leas Cheann Comhairle

The Chair is of the opinion that the question on section 3, as amended, should now be put.

Mr. Abbott

I would defer to the Leas-Cheann Comhairle's ruling. I am obliged to him for allowing me in to say my piece which I have waited the whole day to do.

Dr. Woods

I will certainly make no apologies for a new Deputy coming into this House and making a fair and reasonable point. He has stressed the need for balance in the implementation of these measures. I certainly accept what the Deputy has said because our intention is to pursue unscrupulous employers and not to criminalise employers generally. This is a point I am glad to hear made by the Deputy. It is perhaps his own experience on the side of the law that brings him to say that, but nevertheless I have noted what he has to say and I accept it.

Mr. J. Mitchell

While I think the contribution by Deputy Abbott is an interesting one, I would not like to let it go abroad that this House is already getting lukewarm about applying this. It is not this House that will criminalise employers. It is the employers who will criminalise themselves if they break the law. The law should be applied. Deputy Abbott is a distinguished barrister and he will know more than most that the people who end up in gaol in the courts of this land are rarely other than working class people. There is this nice respectable family syndrome and people will say "do not put him in gaol". He should be put in gaol if he is breaking the law.

Question put and agreed to.

SECTION 4.

An Leas-Cheann Comhairle

On section 4, amendment No. 3 in the name of Deputy Mitchell. It has already been discussed.

Mr. J. Mitchell

I move amendment No. 3:

In page 4, to delete lines 23 to 25, and substitute the following:

"(3) A person who fails to comply with this section or regulations made hereunder shall be guilty of an offence and shall be liable—

(a) on summary conviction to a fine not exceeding £1,000 or (at the discretion of the court) to imprisonment for a term not exceeding one year, or to both such fine and such imprisonment, or

(b) on conviction on indictment, to a fine not exceeding £10,000 or (at the discretion of the court) to imprisonment for a term not exceeding three years, or to both such fine and such imprisonment.".

Amendment agreed to.

Amendment No. 3a not moved.

Question proposed: "That section 4, as amended, stand part of the Bill."

Mr. J. Mitchell

I want to ask one other thing that I meant to ask earlier. If the information required by the Minister is apparently supplied but turns out to be false information — and the Minister did make some reference to this this morning — what is the effect? If an employer supplies false or incomplete information, would that be an offence?

Mr. M. Ahern

I will not delay the House. I would just like to ask the Minister a question in relation to the last number of sections.

An Leas-Cheann Comhairle

The Deputy cannot go back to the last section.

Mr. M. Ahern

It is in relation to this and indeed the other ones as well. It is something that Deputy Abbott brushed on, the implementation of the sanctions.

I wonder is there any provision in the legislation. I do not see it in this legislation.

An Leas-Cheann Comhairle

Deputy Ahern, you cannot encourage the Minister to go outside Standing Orders. Any question you put to him now must refer to the section being discussed.

Mr. M. Ahern

It is just a point I would like to make in relation to this section. The fact is there does not seem to be any power on the part of the Minister to mitigate the more onerous sanction of imprisonment, or even the very large maximum fine that can be imposed under this legislation. I would just like to make the point that there is no mitigation and it should be looked at.

Mr. J. Mitchell

The point here is that the courts have a maximum of £10,000 on indictment. It is not a large sum. The employers contribution on one employed person on the average industrial wage for a year is about £1,200, so £10,000 would only cover seven or eight employees on the average wage. Second, in relation to mitigating prison sentences, the Minister for Justice already has extensive powers in that regard.

Mr. McGahon

Nevertheless there are many small business people who are not in a position to employ seven or eight, and some of these measures and proposals to send people to gaol in that respect are draconian.

Mr. J. Mitchell

They are not draconian. They are only draconian to those who think only working class people should be put in prison.

Dr. Woods

I take it we are talking on the section as amended.

An Leas-Cheann Comhairle

That is right. The amendment is accepted.

Dr. Woods

Deputy Mitchell asked about people giving false information. That is already covered in section 115 of the Consolidation Act which says that anyone who makes any false statement or false representation or knowingly conceals any material or fact shall be guilty of an offence. That at present carries, on indictment, a two-year prison sentence. Deputy Mitchell is right in relation to the power to mitigate resting with the Minister for Justice in relation to fines in particular.

There is a question of balance. Where small amounts are involved, it is not the custom of the Department to press for a prosecution. That is one of the elements of decisions taken by officials at that level because in some cases there may be an amount of £56 and one cannot say "£56 is £56 and it is an offence and that is it". Those matters are taken into consideration at the first level in relation to the frequency of the offence and at the next level by the Chief State Solicitor's office in considering the cases which they would decide to proceed with in any event.

Mr. Abbott

I wish to speak on amendment No. 3 in relation to the option to be convicted on indictment. As I see it here, although I have not had that much time to consider it, there seems to be an option on the part of every person who is being prosecuted to go forward on indictment. This type of provision has been put into the legislation affecting joyriders. Formerly the unlawful taking of a motor vehicle was a summary offence punishable summarily in the District Court and a few years ago in one of the Criminal Justice Acts the type of option to be convicted on indictment was given in respect of these offences. At the time that legislation was proposed allowing for the indictable aspect of the offence I had reservations on it and I think these reservations have been borne out by the experience of the long suffering public in relation to joyriding. I do not want to divert into joyriding for any considerable period of time but I am just instancing it as a parallel involving the same type of legislation. The incidence of joyriding has not declined one bit since making the offence of unlawful taking of a motor vehicle a more serious offence punishable on indictment.

All the indications tend to show that by giving to the person accused of such offence and, indeed, to one accused of an offence under section 4, that option of going before the Circuit Court for a jury trial on indictment one gives a very advantageous time-buying opportunity to that person. The experience in the joyriding area is that very often while persons are awaiting trial before the Circuit Court similar offences are committed. I can see situations where, in the absence of any tighter company legislation being passed, unscrupulous operators of limited companies would buy the time available through opting for a Circuit Court trial to go on to commit further offences. They would thus avoid a heavy penalty and possible detection by trading their company out of assets and possibly running from the jurisdiction by the time the company are left without assets.

While I would bow to the Minister's overall view of the amendment, I would voice my personal misgivings and warnings in relation to the section as it might be amended by the proposed amendment No. 3, in so far as it gives that option to the unscrupulous, unco-operative person in a commercial context who is already guilty and has no intention of contrition but, on the contrary, intends to go on to commit these offences, to defraud the Department of Social Welfare and the Revenue Commissioners of revenue by availing of this device of the court which necessarily involves a delay through awaiting trial on an indictable offence. The proliferation of indictable offences created both by this House in the last few years, especially in the joyriding area, and through the increase of crime, has left the criminal courts, especially in the Dublin area, very much choc-a-bloc. Those involved have had fairly long delays before trial in recent years. The option in subsection 3 (b) of the proposed amendment gives a loophole to the very persons whom it is intended to block by Deputy Mitchell's amendment, to evade the justice which Deputy Mitchell would seek to impose on them. That must be of concern to us.

An Leas-Cheann Comhairle

That is a very interesting legalistic speech, but might I suggest, bearing in mind the time constraint upon us, that the Minister has already indicated that he is accepting in its totality the amendment of Deputy Mitchell? I am wondering about the real benefits to us and to the legislation before us if at this stage the Deputy seems to be encouraging the Minister to another defence of what he has already done by accepting the amendment. Are we going to have another debate on that matter?

Mr. Abbott

I said that I would defer to the Minister's view in relation to the matter and certainly would not encourage him to come out of his box at this stage.

An Leas-Cheann Comhairle

He has been out of it for some time.

Mr. Bell

A Cheann Comhairle, I suggest that what has been said all day could have been said in one minute. This is filibustering.

Mr. Abbott

I take offence at that remark.

An Leas-Cheann Comhairle

The Chair is endeavouring to remind the House that we must have completed all that is in the legislation by 6 p.m. and that if we could have a share-out of the remaining time so that everybody would have an opportunity, that would be fair.

Mr. J. Mitchell

That is fair enough.

Mr. Abbott

I would co-operate.

Mr. J. Mitchell

There is no validity whatsoever in what Deputy Abbott has said. If you draw his argument to a logical conclusion, there would be no right of appearance before judge and jury, which is a basic right. In any event, anybody who is found guilty in the District court would have the right of appeal.

Mr. Abbott

But not before judge and jury.

Dr. Woods

I appreciate the reservations which Deputy Abbott has. I said before he came in that we would be discussing the penalties more generally in the New Year when we intend to increase them across the board. The practice is that these cases are dealt with summarily and that there is a one year prison sentence included in the summary conviction. In all normal circumstances that would be used in practice.

Question put and agreed to.

SECTION 5.

Mr. J. Mitchell

I move amendment No. 4:

In page 4, to delete lines 32 to 36, and substitute the following:

"(2) A person who fails to comply with subsection (1) as soon as may be following the issue of a written demand sent by registered post to him at his registered address or his principal place of business shall be guilty of an offence and shall be liable——

(a) on summary conviction to a fine not exceeding £1,000 or (at the discretion of the court) to imprisonment for a term not exceeding one year, or to both such fine and such imprisonment, or

(b) on conviction on indictment, to a fine not exceeding £10,000 or (at the discretion of the court) to imprisonment for a term not exceeding three years, or to both such fine and such imprisonment."

Amendment agreed to.

Question proposed: "That section 5, as amended, stand part of the Bill."

Dr. Woods

For the purpose of the record, what we are doing is this. Under the existing provisions in section 114 (3) of the Social Welfare (Consolidation) Act of 1981 employers may be required to furnish all such information and produce all such documents as the social welfare inspector may reasonably require. Section 5 provides that such records as may be required by social welfare inspectors for the purpose of investigating such welfare claims must be produced by employers at their registered address or principal place of business. It also gives the powers to impose the amended sanctions that we have mentioned and that have been approved by the House. Sometimes it happens that employers delay inspectors in the examination of the required records by claiming that they are held by their agents who, in turn, may say that they only hold a portion of them. Section 5 is designed to counter these evasive actions. The provision will be particularly effective in the campaign against fraud and abuse as it is only by examination of employers' records that cases of non-compliance can be detected.

Mr. Abbott

I am obliged for the Minister's explanation as to why he accepts the amendment. He is entitled to put on the record of the House why he does so. It would be quite surprising if matters were agreed in this House without a formal record as to the reasons for doing so on the part of Government. I shall not repeat what I said in relation to the previous amendment on conviction on indictment. I am glad to hear that the Minister will be dealing with the situation early next year with regard to penalties generally. I take this opportunity to ask him to bear in mind my submissions in relation to the last amendment. It would not be fair or reasonable to put the Minsiter or members of the Opposition on the spot in that regard. I would ask them to look at the experience in relation to joyriders on the imposition of trial on indictment. It is the trial on indictment which is the connecting factor and no other but it is a matter which should be considered by all Members of this House, just to see if they are doing right or just putting into the record of the House and into legislation a gallant and fine sounding provision which mentions conviction on indictment but actually takes from the effectiveness of the legislation.

Mr. D. Ahern

In relation to inspection of records at the registered office, this is something about which I have slight misgivings. There is no limit in this section as to the time when these records are to be made available. It can happen that the records are not readily available. I appreciate that the inspector will go to great lengths before he recommends that this section be implemented against the defaulting employer. I do not know whether we could consider it at this late stage but the fact that there is no time limit provided for is slightly disquieting. I would like to hear the Minister's views on that.

Dr. Woods

That matter is covered by the fact that an inspector may require a person to produce records within a reasonable time. One may ask what does "reasonable time" mean but at least we have a "reasonable place" now which will either be the registered office or the place of business. That nails that matter down. There is no time limit outlined in the Bill but a person will be required to produce records within a reasonable time. That has worked reasonably well in regard to the other sections in the Consolidation Acts which apply to these matters. I am happy enough with that for the present.

Question put and agreed to.

SECTION 6.

Mr. J. Mitchell

I move amendment No. 5:

In page 4, to delete lines 44 to 46, and substitute the following:

"(8) A person who fails to comply with subsection (7) shall be guilty of an offence and shall be liable—

(a) on summary conviction to a fine not exceeding £1,000 or (at the discretion of the court) to imprisonment for a term not exceeding one year, or to both such fine and such imprisonment, or

(b) on conviction on indictment, to a fine not exceeding £10,000 or (at the discretion of the court) to imprisonment for a term not exceeding three years, or to both such fine and such imprisonment.".

Amendment agreed to.

Question proposed: "That section 6, as amended, stand part of the Bill."

Dr. Woods

Under the existing provisions contained in section 15 (5) of the Social Welfare (Consolidation) Act, 1981 employers may be required by regulations to keep such records as may be prescribed in relation to the earnings and periods of employment of their employees. Section 6, as now amended, requires that details of earnings and the periods to which they refer be recorded by employers at or before the time of payment of wages. Most reputable employers keep their records updated but others fail to maintain any records or perhaps do so long after the event. This makes it impossible to determine the true position in relation to such matters as the number of persons employed, the period of employment, whether correct deductions of social welfare insurance have been made and whether any other aspects of the social insurance scheme are being neglected or abused by the employer or any of his employees.

It also serves to prevent detection of cases of employees who may also be concurrently signing for unemployement payments. Failure to record the prescribed particulars on time also means that if and when the records are eventually compiled they may not reflect the true position. This can be done for a variety of reasons such as to thwart an inquiry, to lessen the employer's liability or to cloak irregularities either by the employer or his employees.

Mr. J. Mitchell

In the draft of the Bill before the House the Minister will see in the margin a heading "payment of contributions and keeping of records". I understood a point which was made by, I think, Deputy Higgins this morning in regard to the contributions paid by employees but not passed on alluded to that heading. Does section 15 of the Principal Act deal with this matter or is the heading contained in the margin of the Bill midleading?

Mr. Abbott

All I ask of the Minister in the implementation of this section is to try to ensure that the format of the tax card of each individual which is kept by the employer for PAYE and PRSI deductions be adhered to as much as possible and avoid duplication as much as possible and in so far as is feasible, in the keeping of records. While I accept that the Minister must adhere to the special requirements of the Department of Social Welfare, we should not miss an opportunity in this House to ask him to be mindful of the cost implications of too many forms and book entries having to be kept, particularly by small employers. Many small employers rely very often on an untrained or inexperienced member of the staff to acquire the skill of keeping tax cards and making the deductions. To impose on such employers a necessity to train staff to do that work would amount to a great imposition on them. There would be the question of the amount of time involved, for instance. Matters should be kept as simple as possible. The trade union movement and the employers' side have often complained in the past about the multiplicity of documentation involved. In the customs area great efforts have been made to simplify documentation. In the implementation of this legislation the Department should not lose sight of the need to keep costs and complications at a minimum.

Dr. Woods

Deputy Mitchell referred to contributions not being passed on but that matter is covered separately in section 15 of the Social Welfare (Consolidation) Act, 1981.

Mr. J. Mitchell

We are now amending section 15 of that Act. It is the relevant section.

Dr. Woods

It is the relevant section and regulations may be made under it in regard to the collection of contributions. That is the work the inspection branch and the joint social welfare and revenue unit will pursue.

Mr. J. Mitchell

Deputy Higgins raised that point this morning, that the question in regard to contributions not being passed on by employers is dealt with here. The same penalties are going to apply to all the offences contained in all the previous subsections of that section in the Principal Act.

Dr. Woods

These penalties will apply only in regard to the section we are dealing with here. In all other cases the existing penalties will apply but as I have said we will have to look at these later.

Mr. J. Mitchell

What are the existing penalties?

Dr. Woods

The existing penalties are two years imprisonment and a fine of £3,000 on indictment. I could not say offhand what all of the penalties contained in the Act are.

Mr. J. Mitchell

Are you going to review them in the next Bill?

Dr. Woods

We will have to review them in the light of the decisions taken here.

Question put and agreed to.

An Leas-Cheann Comhairle

I might indicate to the House, now that we have left the omnibus discussion behind us, that the Chair will be insisting for the remainder of the debate that we confine ourselves specifically to what is in the amendments and in the sections. I hope I will get the co-operation of the House in this regard.

NEW SECTION.

Mr. J. Mitchell

I move amendment No. 6:

In page 5, before section 7, to insert the following new section:——

"7.—Where an offence under section 2, 3, 4, 5 and 6 of this Act is committed by a body corporate or an officer of the body corporate, every person who, at the time of the commission of the offence was a director, manager, secretary or other officer of the body corporate, or was purporting to act in any such capacity, shall also be guilty of that offence.".

First, I would like to say that the wording of the amendment before us is borrowed directly from section 17 (b) of the Social Welfare Act, 1983. The purpose of the amendment is to ensure that where a company is found guilty of any offence under the Bill — I accept that it will not be possible to jail a company although it is possible to impose a fine — the term of imprisonment will apply to the personnel responsible in that company. Is it possible to extend the remit of the amendment throughout the social welfare code?

Proinsias De Rossa

I have some worries about the amendment in that it seems to be very wide-ranging. I will be interested to hear the Minister's response to it. Where companies are found guilty of offences the personnel responsible should be brought before a court but it is draconian to make everybody in the company, at managerial, secretarial or director level, guilty of the same offence. Will the Minister indicate how the powers in section 7 will be effected? The section states that the premises and places liable to inspection are any premises or places where an inspector has reasonable grounds for believing that any persons are or have been employed or self-employed and any premises or places where an inspector has reasonable grounds for believing that any documents relating to employed persons or to self-employed persons are kept.

That is a wide-ranging provision and I should like to know what rights an inspector will have to enter a premises. Will a court order be required if access is refused or will an inspector have a right to enter without a court order? Regardless of what we think of the offences, and the offenders, we have to maintain the rights of individuals to privacy, particularly in their own homes. That section may be applied if an inspector believes that a director, a manager or some other employee, has taken records from a business premises and brought them home. It appears that in such a case an inspector has a right to visit the home of that employee.

An Leas-Cheann Comhairle

I hesitate to interrupt the debate but I must remind the House that we are discussing the amendment and that that amendment refers to a new section. Therefore, debate is confined to what is in the amendment.

Proinsias De Rossa

I want to facilitate the House by compressing my contribution.

An Leas-Cheann Comhairle

That has caused frustration to other Deputies. We are dealing with the amendment.

Dr. Woods

I hope we will be permitted to discuss section 7 later.

An Leas-Cheann Comhairle

The House will debate the section later.

Mr. J. Mitchell

I agree, to a certain extent, with the description by Deputy De Rossa of the wide-ranging nature of the amendment. I was surprised to see that section 17 (b) of the 1983 Act was so extensive. I would have thought that the legislation would have specified an officer, or particular officers, rather than every officer. I do not want to render the amendments we have agreed so far nonoperative in relation to companies by not being able to jail the directors, senior managers or those responsible in a company. I took advice on this from the Bills Office and they referred me to section 17 of the 1983 Act.

Dr. Woods

The Deputy is proposing that where offences are committed by a body corporate the directors and other officers such as the secretary and other responsible personnel shall be guilty of the offence. That provision already exists in the legislation—section 115 for social insurance benefits and section 144, as amended by section 19 of the 1983 Act, for unemployment assistance. Those sections will apply to the new offences being provided for in the Bill and, therefore, the amendment is not necessary.

Mr. J. Mitchell

I would be very unhappy if the amendments we have agreed were rendered invalid. I accept the Minister's assurance and I will withdraw my amendment.

Amendment, by leave, withdrawn.

SECTION 7.

Amendment No. 7 not moved.

Mr. J. Mitchell

I am sorry that amendment No. 7 has been ruled out of order, because moneylending is a very pressing problem.

An Leas-Cheann Comhairle

It is not regarded as relevant to the Bill and there is no point in the Deputy pursuing it.

Question proposed: "That section 7 stand part of the Bill."

Dr. Woods

In deference to what Deputy Mitchell said on Second Stage about moneylenders I am asking the Combat Poverty Agency, in relation to my functions, to look at the question of the impact of moneylenders on the people who are affected by them. I am asking them to carry out some research in that area. When that has been completed we will see what can be done. The Deputy will be aware that the question is one for the Minister for justice.

Mr. J. Mitchell

I am grateful to the Minister. I must point out that I tabled that amendment as a means of having this urgent problem discussed in the House. I have been endeavouring to raise the matter on the Adjournment for several weeks without success. Moneylending affects almost exclusively the worse off people in our society who are forced to seek loans on which they must pay huge interest rates. Many of those people are afraid to disclose the extent of those loans to their husbands or anybody else. They do not want people to know that they are involved with moneylenders. Many people have been threatened by moneylenders that if they disclose the name they will not get any further loans.

I have come across cases where the position was so bad that community welfare officers took the initiative and approached the moneylenders—I commend them for that initiative—and asked them to ease off and cut the interest in half. Those officers undertook to pay the outstanding amount and, in most cases, reached an agreement with the moneylenders. The person involved was expected to pay back that reduced amount to the community welfare officer. However, when the community welfare officers sought sanction for that from the Department it was refused on the basis that such an arrangement was not covered by law. I am not advocating that as a general panacea but it is an acceptable fire brigade action to help people who are in desperate need, people who are drowning under the weight of worry about money borrowed from moneylenders at huge interest rates. In some cases the annualised interest rate is 50 per cent and more. I am grateful to the Minister. I would be grateful also if he would consider doing something with the community welfare service to see if they could help out to relieve this awful problem which is at its most acute at Christmas time.

Dr. Woods

To deal with the section in general, Deputy De Rossa asked how the powers would be affected under it. In effect, the section is extending to this area, provisions that are already there in relation to employers generally. These provisions would entitle the inspectors to enter premises at reasonable times to see the records or whatever. They do not apply in the area of sub-contractors and in relation to the self-employed. There is nothing draconian about them. Again it is a loophole we propose to fill in through the section.

Under the existing provisions in section 143A (7) of the Social Welfare (Consolidation) Act, 1981 as amended by the Social Welfare Acts, 1985 and 1986, social welfare inspectors are empowered for unemployment assistance purposes to enter premises where there are kept records relating to persons, including self-employed people who are or have been employed, or were engaged in occupations and to make such investigations and inquiries as provided for in legislation. Section 7 of the Bill extends the powers of the social welfare inspectors for unemployment benefit purposes to enter premises where self-employed persons are or were engaged in their occupations. This brings the provisions for unemployment benefit into line with those for unemployment assistance. Unemployment assistance already has that power extended to cover those areas, but not unemployment benefit.

Existing provisions refer only to premises where records relating to persons in insurable employment are kept. In recent years, there has been a significant move towards contracting out work which up to now was performed by employees. This section is designed to help counter abuses such as employees being represented as subcontractors so as to avoid payment of social insurance contributions and concurrent working and signing by subcontractors. A similar amendment was introduced in the case of employment assistance by way of the 1986 Social Welfare Bill. The purpose of the section is just to extend the powers to the inspectors in relation particularly to the area of subcontractors.

Proinsias De Rossa

As is probably clear, I have no wish to prevent the enactment of this section or the closing of a loophole in this matter. The section states: "... and any premises or places where an inspector has reasonable grounds for believing that any documents relating to employed persons or self-employed persons are kept." Is that a straight lift from previous legislation? Does it apply to other benefits already referred to by the Minister? A self-employed person may take records home with him. Does that apply to the home of that self-employed person? If that is the case, in what way is that power exercised? We put an obligation on the Garda to get a search warrant if a garda wants to search someone's home and that is reasonable because more people than the employer would be living in the house. His wife, children and so forth would reside there. I have no wish to enable a person who wants to prevent social welfare people examining records taking those records home and thereby preventing a social welfare officer from seeing them, but here a social welfare inspector would appear to have the right to walk into a home and search it. That is not the kind of power we should be giving to social welfare inspectors.

Dr. Woods

It is in line with other provisions the Deputy asked about. I accept that once you bring self-employed and subcontractors into it, their homes can become involved, but the part of the home concerned is normally designated as the office part, even for tax purposes. If you look at tax records, you will find that those parts of those homes are defined as parts for tax purposes because there are tax allowances for them, apart from anything else. There might be a side office or whatever which is used in such cases. I appreciate the point the Deputy is making. It would not be normal to enter homes in the normal sense, but once you get into the area of the self-employed, then quite often a part which from the outside one might regard as the home is classed as the office and is tax allowable as the office. It might be an extension, a room, or whatever. I presume it would be a normal procedure in any event to meet the person and examine the records.

Proinsias De Rossa

Time is very short. What the Minister is saying does not really allay my concern in this matter. Obviously where part of a home is designated as an office, I have no great problem, but if the social welfare officer wants to enter a normal home which is not designated as an office or in any obvious way involved with the business that is being investigated, how will that officer pursue that inquiry or search? Will he or she need an order of the court to enter the home? What powers will that inspector have when he enters the home to search or for questioning or whatever? Perhaps it can be covered by regulations which the Minister may bring in. Despite the fact that it already exists in law, the Minister said it is now being applied to an area it was not previously applied to, that of the self-employed. It is a loophole. We are trying to close loopholes but at the same time we should be careful about infringing on people's privacy and civil rights.

Dr. Woods

There seems to be no great problem with this in practice. The Deputy is becoming, not alarmed, but concerned unnecessarily. Section 264 (6) and (7) of the 1981 Act is the reference to the authority which is used. The inspector produces his or her authority showing that he or she has authority to come into the office if the office happens to be an office at home. Otherwise under these provisions we are making the inspector can be asked to produce the authority at the registered office or place of business, whichever it is. The main thing is that there must be some place where inspectors have to produce the authority. The difficulty is that people keep going around in circles and the Deputy will appreciate that. This will provide the necessary powers in relation to the self-employed and subcontractors. It is just making all the arrangements comprehensive.

Mr. J. Mitchell

Nonetheless, Deputy De Rossa made a point. Should some consideration not be given to more protection, especially to a person's home? Would the Minister like to reflect on possible protection that might be built into the legislation, perhaps in the next Bill, to meet the point raised by Deputy De Rossa which I think reasonable?

Dr. Woods

Section 114 (5) of the Principal Act covers that. The one I referred to covers only a subsection of it.

Mr. D. Ahern

Like Deputy De Rossa and Deputy Mitchell I had misgivings about this section but having looked at the relevant section in the Consolidation Act which sets out exactly what powers they have—to enter at all reasonable times but having to produce a certificate —I am happy with the section. I know a number of self-employed people take their records home at night or over the weekend and it would be unreasonable to expect that they could be visited by social welfare inspectors and asked for those records at those times. As I said, the section sets out exactly the powers of the inspectors.

Mr. Abbott

As regards inspectors observing the inviolability of the home, like Deputy de Rossa I agree with the principle and trust the inspectors would behave with restraint when moving into people's homes. The Minister should watch very carefully to ensure that no abuses occur in that area. I am a little dismayed about the possible effectiveness of the proposed substituted subsection. Section 264 (6) of the Consolidation Act of 1981 relates to the powers of inspectors and provides that no one shall be required under this section to answer any question or give any evidence tending to incriminate himself. Section 264 (4) provides that any employed person shall furnish to an inspector all records, books, etc. as the inspector may reasonably require.

What happens if the records are inaccurate or constitute evidence which might tend to incriminate the holders of those books and records? This might be too simplistic, but nevertheless the point should be made. Could it be a defence that anyone who had kept books inaccurately or fraudulently had not allowed the inspector in because of fear of incrimination? Surely that would leave them open to more serious charges at a later stage.

Courts being courts and lawyers being lawyers, these technical defences very often allow people, at the last minute, to get off summonses before the courts or to delay people being brought before the justice of the courts, and almost to scandalise the law. When considering the working of this amendment, I ask the Minister to consider the effect of section 6 in relation to an ingenious and fraudulent holder of records, and to work out the relationship of subsection (6) which it is proposed will substitute section 114 (6) and section 264 (6) of the Consolidation Act, 1981.

Dr. Woods

The section requires the individual to produce the records but as regards statements which might incriminate the holder, we will have to keep the barristers away from this until we get the records straightened out. Nevertheless, this means the person must produce the records although the holder might be reluctant to incriminate himself in other ways.

Question put and agreed to.

SECTION 8.

Acting Chairman (Mr. Griffin)

The amendment in the name of Deputy Bell is out of order as it involves a potential charge on the revenue.

Mr. Bell

While I accept your ruling, I am most disappointed and want to protest very strongly. I am not sure I agree with the ruling, but I have to accept it.

Acting Chairman

I am informed you can deal with the substance of your amendment on the section, but you cannot move it.

Mr. M. Higgins

Obviously neither Deputy Bell nor anyone else on this side of the House can question your ruling on the specific amendment, but I want to give notice that it leaves us with no choice but to discuss the substantive matter on the section and then to oppose the section.

Acting Chairman

You are perfectly in order in doing that.

Amendment No. 8 not moved.

Question proposed: "That section 8 stand part of the Bill."

Dr. Woods

Section 8 provides for an increase in the number of paid contributions required for extended duration of disability benefit, that is, beyond 12 months. The increase is from 208 contribution weeks, four years, to 260 contributions, five years. It is, in fact, a more realistic contribution requirement for entitlement to a benefit which can last for over 40 years. This proposal was included in the 1987 budget proposals of the previous Government.

The first contribution condition for receipt of disability benefit is that a person must have 39 contributions paid since entry into insurance. The second contribution condition requires a claimant to have at least 39 weeks of contributions paid or credited in the governing contribution year. Both of these contribution requirements were increased from 26 to 39 under section 8 (1) of the Social Welfare Act, 1987, with effect from 6 April 1987. Under existing legislation 208 paid contributions are required for extended duration disability benefit which entitles a claimant to the benefit for as long as he remains incapable of work and under 66 years. This requirement was increased from 156 to 208 paid contributions from 6 April 1987 and is now being increased further to 260 paid contributions with effect from 4 January 1988.

The general principle in the section is that the change in the contribution conditions should apply to new cases. Section 8 (2) provides, therefore, that anybody who on 4 January 1988 is already on extended duration disability benefit will not be affected by the change. Otherwise you might have the situation where people on extended disability benefit at present but who have less than 260 contributions paid would lose their entitlements.

This is an important saver clause. However, it is intended for people who are on extended disability benefit already and who remain on benefit. Where people go off benefit and come back again the revised contribution conditions should apply. Subsection (2) provides that existing recipients are protected. Under that subsection even if such a person goes off disability benefit after 4 January 1988 and comes back again within 13 weeks he would still be in the same period of entitlement and would still be able to qualify on the basis of the 208 contributions. For practical purposes, however, it is necessary to put some limit on the degree to which people could be going off and coming back on and still qualifying on the basis of the 208 contributions. Subsection (3), therefore, provides that anyone who commences a fresh period of entitlement to disability benefit after 4 July 1988, even if they were on disability benefit within the previous 13 weeks, will have to satisfy the new contribution conditions. This is a reasonable provision. We have ensured that the people who need to be protected by the saver clause, i.e., those who are on long-term disability benefit already and will remain so, are being protected.

The number of persons on extended duration disability benefit at 31 December, 1986 and who will, therefore, be continuing totals 21,450 males and 23,390 females, a total of 44,840. Of those, 15,000 have been on benefit for five years or more, 5,690 are males and 9,480 are females. It is not usual to pay disability benefit for the length of time that we pay it, our scheme goes on for a very long time and, consequently, there should be a reasonable contribution requirement for that benefit. It applies only to extended disability benefit beyond the period of 12 months.

Mr. J. Mitchell

The Minister is not tackling the basic problem. His reference to the length of payment of disability benefit is correct. For instance, in the UK disability benefit lasts for 28 weeks but the difference is that people can then apply for invalidity benefit as it is called there.

The Minister said that the minimum contribution record will be required but if someone is genuinely disabled there is a very strong case for ensuring that they should have some access to social welfare payments or the equivalent to the United Kingdom's invalidity benefit. It is absurd that people with less than a few years contributions can — and do — claim disability benefit for many years which gives rise to anomalies and abuses.

The Minister did not cite statistics in relation to the extent of disability claims here compared to other countries and he did not give relative figures for men and women, single persons and married persons. The claim rate among married women is six times or thereabouts what it is among single women and men so there is evident abuse of disability benefit. However, many of those people are not fit for work and have been genuinely ill for a long time. They should not be totally excluded from an invalidity-sickness type payment. In that context and looking ahead to the provisions for next year, the Minister should consider further reform in the disability-invalidity area because people will still be able to claim for ten, 20, 30 and 40 years in respect of disability benefit whereas in other countries the period is six months or perhaps one year. Thereafter, a long-term payment becomes available, such as the invalidity pension.

I do not think that anybody should claim disability benefit for much more than one year because if they are sick that long they should be thinking in terms of the invalidity pension. I know that at present a person who is on disability benefit for one year may apply for an invalidity pension but, of course, they may not get it. This is an area which deserves more reform than that proposed here today. It will remove some anomalies but it will also create unfairness towards the genuinely long-term sick who are not able to work. Will the Minister give a commitment that in looking ahead to next year's social welfare legislation he will consider the point I made?

Mr. Bell

I will make a few brief points as other Members wish to contribute. I strongly protest at the length of time made available to discuss this very important Bill and the manner in which the whole debate has taken place. It is very clear from the Minister's figures that the Bill is about reducing the numbers on social welfare benefits. This will have a very severe effect on invalidity and disability benefits and in many cases it will affect young people who will find it more difficult to qualify to benefit. It is obvious that the figure of 9,000 women on disability benefit out of a total of 15,000 over five years is an attempt to get at women. This applies to other sections in the Bill, particularly sections 9, 11 and 16, which we have not had time to discuss.

While many people will suffer as a result of this, one must take into consideration that people do exist on long-term disability benefit and have never been transferred to invalidity benefit. In some cases, this has gone on for as long as 20 years and many Deputies come across cases like this quite regularly simply because these people are not advised of their entitlements. Instead of putting this draconian measure into the Bill, there should be a section which makes it easier for people to automatically transfer from disability benefit to invalidity pension when they have been claiming for five years. The minimum qualification period is 12 months but effectively from January there will be two different periods for qualification and two different sets of rules governing the same benefit. This will create bigger problems than it will solve. The main objective of this sections is to simply cut back further under this heading. I want to again place on the record that this is not the first cutback under this heading; it is the second in one year.

Mr. Pattison

I, too, would like to voice my objection to this section. The Minister has told us that this Bill has two main purposes. The first purpose, which we debated up to section 8, deals mainly with the strengthening of provisions to prevent fraud and to prevent the people who are not entitled to benefit from getting benefit. Under this section the Minister wants to take unto himself powers to prevent people who are entitled to benefit from getting that benefit. He wants to prevent people who fulfill all the medical and health conditions from getting benefit. He cannot deprive them of benefit other than by changing the law and making it impossible for them to get benefit, irrespective of their state of invalidity or health.

The fraud of the State in taking benefits from people who are entitled to them is a greater fraud then the fraud that has been discussed in the social welfare context on this Bill. It brings the social welfare code into disrepute when the State can take powers by changing the rules. The Minister admits that people can be on benefit for up to 40 years. These are people who are unable to work and who have been adjudicated to be incapable of working by possibly up to 100 medical referees' examinations; because the Minister thinks this is wrong, not alone has he taken away their medical cards, free medicine and hospital beds but he is now going to take their benefit. This section should be totally opposed because it makes a joke of the insurance welfare system. Thousands of workers have been paying into the insurance fund for 40 years and have never drawn a penny out of it. Yet this section seeks to be designed to take benefit from the people who are condemned to a life of misery and bad health. This section is an attack on those people. It is the biggest social welfare fraud of the lot for the Minister, by way of legalised fraud, as it were, to take benefit from people who are entitled to it as the law stands.

Young people cannot get the required level of contribution because there is so much unemployment it will be more difficult for people to accumulate five years' contributions. They may well be 30 or 40 years of age before they have five years contributions. The Minister should think again about this. I do not condone the kind of fraud that has come to light but the fraud that is contained in this section and the following section which prevents people from getting an invalidity pension, irrespective of their state of health, is a further attack on that section of the community. We are talking about people who are very sick and who will be permanently sick. We are not talking about people who will be better this year or the year after but people who, the Minister said, will be sick for the next 40 years. They are the ones who are targeted in this section from getting their entitlements.

Mr. D. Ahern

Deputy Pattison referred to this section as a fraud on the Minister's part. I hope the Deputy is not equating that alleged fraud with the fraud in relation to the sanctions against employers we were discussing before he came into the House.

I would like to take up a point that was made by Deputy Mitchell in relation to the area between disability benefit and invalidity benefit. I am aware of a number of cases where relatively young people have applied for invalidity benefit. They had genuine reasons for applying for it, having been on disability benefit for over 12 months. Even though there may be reasonable grounds for giving them an invalidity pension for the rest of their lives, because they are under 50, the Department officials seem to be reluctant to give invalidity benefit to them on the basis that they are young and may appear healthy and strong. People over 60 years of age are frequently granted invalidity benefit but there is a reluctance to give such benefit to people under, say, 55 years. I agreed with Deputy Mitchell and other speakers when they said that people can remain on disability benefit for extensive periods. Obviously that is not what disability benefit was first intended for; it was intended as a short term benefit for people who are genuinely sick.

I do not think it is unreasonable to expect that people who apply for disability benefit have a reasonable history of contributions during the previous period. Obviously, to get disability benefit people have to have a strong attachment to the workforce.

Mr. M. Higgins

We are now almost spilling over into the matters raised in section 9. One cannot dispose of the objections that have been made already by Deputies Bell and Pattison against section 8 by shifting the concentration from disability benefit to invalidity benefit. The plain fact of the matter is that there will be a longer period for qualification, that people will be required to have five years' continuous work at a time when five years' continuous work is disappearing as a reality. This will affect younger workers more than most.

There is another underlying trend which I find particularly objectionable. It relates to the notion that workers would have to demonstrate a period of time in the workforce before their disability benefit would take effect. I have not seen any legislation coming before this House which would shift employers liability, for example, which would make an employer liable, if the State is not liable, in the early stages of disability. That would be very interesting. This is not contained in the Bill. There is another side to this. If there is, as I detected, an underlying suggestion that some people are qualifying for disability who are not really disabled why is the concentrated attention not addressed to the medical profession? Why should it be addressed to the workers? Why does the Minister's Department not turn to the medical profession if he feels that the figures are inflated? It is there that the attention should be directed. If the Minister looks at the statistics produced by his own Department — for example, table 51 which shows the different categories in which people are drawing disability benefit — he will see some frightening figures. In relation to women, for example, 19.92 per cent qualified for this benefit under nervous disorders, 5.34 per cent under heart conditions and so on. Are these figures real or not? Is there not an obligation to turn to the medical profession and ask them do they stand by their diagnoses and their recommendations? Instead we are witnessing a rather cheap administrative ploy by the Government in thinking that they can expand the conditions for qualification and in that way save money irrespective of the health of the workers involved. I strongly support what Deputy Bell and Deputy Pattison have been saying. The Government's approach is particularly damaging to young workers who have declining prospects of getting the continuous employment that is required to qualify for those benefits.

Proinsias De Rossa

I put my views on this matter on the record last night during Second Stage debate but I wish to make one or two points which may have a bearing on this discussion. Reference has been made to the fact that people remain on disability benefit for long periods of time and that is true. Quite a number of people whom I have come across have done so even though they could have transferred to invalidity pension. I understand if they were to go on to invalidity benefit their income could fall because of other income coming into the house and it would be taken into account for tax purposes and so on.

There is a more significant point in relation to disability benefit which may diffuse the notion that there are thousands of people claiming disability who should not be doing so. In the statistical information on social welfare services for 1986, table 50 very clearly shows that of the 212,000 claims which were terminated during 1986 only 8 per cent, or about 16,000 were for more than a year. Clearly there has not been a massive abuse of the system.

Amendment No. 8 and other amendments in relation to maternity benefit and so on are introduced as a sneaky clawback of benefits which people have built up over the years, at a time when perhaps the trade union movement was a little stronger than it is now and when we were able to fight a little better for our rights and for our share of the resources from the State. It is unfortunate that the Minister, who had a reasonably good record in the Department of Social Welfare in previous times, should be engaged in this kind of exercise. It is on that basis that I oppose the section and will be opposing the Bill when it goes to a vote today.

Mr. Wyse

In the Minister's reply last night he said that approximately 2,000 people out of a total of 220,000 would be affected by the provision of this section. Can the Minister say how this figure is arrived at? Were all the records examined? For example, do the Department know how many people have more than 260 contributions or how many have less than 260 contributions? I would like to have this information?

Dr. Woods

This is done by sampling and it is a very accurate system. We talked about the need for chartered accountants and I accept what Deputy Mitchell has said about that matter. We should recognise that the Department of Social Welfare are particularly accurate in their estimations and I think people on both sides of the House will accept that from their experience. While we talk about the number of people affected in the year as being in the order of 2,000, we must remember that is out of a total number of 1.2 million contributors. The number the Deputy referred to is the number of claimants for disability benefit on an ongoing basis.

I wish to refer very briefly to a number of points that have been made. Deputy De Rossa raised a question similar to that raised by Deputy Mitchell and I will refer to it later. Deputy Higgins raised the question of the 19.92 per cent of women who are out of work because of nervous disorders. The medical profession decide when people should stay away from work. I recognise that this matter is out of our hands but people have different attitudes towards it. It might be better for some people to go to work and they might get over their nervous problem but that is a medical decision. We will certainly be asking questions of the medical personnel, of the doctors involved in the Arigna area where a number of people have been out of work for quite some time. We intend to examine the certificates that were given to those people and the basis on which they were given to establish what precautions were taken and what the medical understanding was at the time. The broader case the Deputy speaks about is in the hands of the medical profession.

Deputy Mitchell raised a very relevant and interesting point. Deputy Pattison— whether he picked up the wrong end of the stick I do not know—was presenting the wrong end of the stick because basically the benefits remain, but the qualifying conditions to get those benefits are greater. Deputy Mitchell has raised a more fundamental point in relation to the situation generally, that in other countries people do not receive disability benefit after 12 months. That is a quite common practice and we have to be realistic about this matter.

Mr. J. Mitchell

The Minister should take Deputy Bell's point of view on board.

Mr. M. Higgins

Those people should be automatically transferred to another category. The people should be informed of their rights——

Dr. Woods

I agree with the Deputy.

Mr. M. Higgins

——rather than telling young workers they have no right to get sick for five years.

Dr. Woods

A person has the right to get sick for a week, a month, six months or whatever and if he has the established contribution conditions he has a right to claim benefit for a long period thereafter. Deputy Mitchell's point is a very relevant one. We need to reconsider the whole arrangement of disability and invalidity benefits and how they are operated. It is probably true to say that it is somewhat more difficult to transfer to invalidity benefit here than it is in other countries and that is something we might consider. There could also be a gap between the two benefits. Perhaps there is a need for disability assistance which applies in other countries where people who have not reached the contribution conditions come within the full benefit which continues thereafter irrespective of income. That is a matter to which I will give consideration. It highlights the fact that we need to look at our systems generally, to review them and to ensure that we can maintain their operation.

I would remind Deputies that the fund we are talking about this year is £401 million short, even taking account of the moneys that we are saving on fraud in the current year. We have to be realistic about what we can do with the money from that fund. Because we are short of money we are not able to do some of the things suggested by Deputy Mitchell. The most poverty-stricken categories need to be supported and I will certainly do what I can in that regard. We are short £401 million and that means going back to the taxpayers and looking for another £401 million this year.

That is the reality. We have to be realistic. If a marginal change for approximately 2,000 people will help us to maintain the benefits we have, then it is a relatively small sacrifice to make to maintain those benefits. I will certainly look very closely at the questions raised by Deputy Mitchell because we will have to address ourselves to that area, but I find myself as Minister faced with a panoply of systems which have developed over the years and which are now in difficulties because we cannot continue to maintain them in the same way and some of the people who need them most are not getting the benefit. This is something to which we can all turn our minds in the not too distant future.

Acting Chairman

As it is now six o'clock, I am required to put the following Question in accordance with the Resolution of the Dáil of this day: "That the Bill, as amended, is hereby agreed to in Committee and, as amended, is reported to the House; and Fourth Stage is hereby completed and the Bill is hereby passed".

Question put.

The Dáil divided: Tá, 74; Nil 17.

Tá

• Abbott, Henry.
• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Andrews, David.
• Aylward, Liam.
• Barrett, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Matthew.
• Briscoe, Ben.
• Browne, John.
• Burke, Ray.
• Byrne, Hugh.
• Calleary, Seán.
• Conaghan, Hugh.
• Connolly, Ger.
• Coughlan, Mary T.
• Cowen, Brian.
• Daly, Brendan.
• Davern, Noel.
• Dempsey, Noel.
• Dennehy, John.
• de Valera, Síle.
• Doherty, Seán.
• Ellis, John.
• Fahey, Frank.
• Fahey, Jackie.
• Fitzgerald, Liam.
• Flood, Chris.
• Flynn, Pádraig.
• Foley, Denis.
• Gallagher, Denis.
• Gallagher, Pat the Cope.
• Haughey, Charles J.
• Hilliard, Colm Michael.
• Hyland, Liam.
• Jacob, Joe.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Lynch, Michael.
• Lyons, Denis.
• McCarthy, Seán.
• McCreevy, Charlie.
• MacSharry, Ray.
• Mooney, Mary.
• Morley, P.J.
• Moynihan, Donal.
• Nolan, M.J.
• Noonan, Michael J. (Limerick West).
• O'Dea, William Gerard.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Batt.
• O'Keeffe, Ned.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Rourke, Mary.
• Power, Paddy.
• Reynolds, Albert.
• Roche, Dick.
• Smith, Michael.
• Stafford, John.
• Swift, Brian.
• Treacy, Noel.
• Tunney, Jim.
• Walsh, Joe.
• Walsh, Seán.
• Woods, Michael.
• Wright, G.V.

Níl

• Bell, Michael.
• De Rossa, Proinsias.
• Desmond, Barry.
• Gregory, Tony.
• Higgins, Michael D.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• McCartan, Pat.
• Mac Giolla, Tomás.
• O'Sullivan, Toddy.
• Pattison, Séamus.
• Quinn, Ruairí.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.

Tellers: Tá, Deputies V. Brady and Browne; Níl, Deputies Bell and Howlin.

Question declared carried.