Aréir bhí mé ag caint i dtaobh na social employment schemes a bhfuil muintir an iarthair ag baint an oiread sin leasa astu. Last night I referred to the social employment schemes which have been so successful in the west. These schemes give a good indication of people's willingness to work provided work is available. I have always believed that at times we have a rather Victorian attitude towards our social welfare system — this goes back a long way. We tell people who receive social welfare that they must be available for work and we tell people who work as a self-employed that very strict penalties will be imposed on them if they try to evade paying tax. I know that the Minister has made great strides in this area and is endeavouring to deal with the anomalies which exist. I should like to see the introduction of a family income supplement scheme for the self-employed. This supplement could be based on the previous year's tax declaration and paid to the self-employed so long as they did not enter the PAYE system. This issue needs to be addressed in view of changing work patterns and the availability of work.
In regard to the question of making work available for people when they require it, the position of third level students has to be taken into account. I have been surprised by some of the remarks made by people in regard to this issue. Their comments clearly show a lack of understanding as to who was gaining under the present regulations. In my experience the situation was as follows. I will refer first to the position of a third level student from Galway who was receiving a grant and whose parents were on social welfare. If he applied for social welfare benefit during the summer months he was means tested and, depending on his parents' income, he would receive a maximum of £27 per week. Second, I wish to refer to the position of a student who did not come from a university town and whose parents were well off. If that person stayed in the university town during the summer months — in other words, did not reside with his parents — and his parents' income made him ineligible to receive a third level grant, he could receive full unemployment assistance and in some cases a supplementary allowance for rent. Surely the purpose of our social welfare system is to direct resources to those people who are in greatest need. It is a total contradiction in this scenario that those people who are least well off are at more of a disadvantage than those who are better off. Therefore, the system had to be changed to ensure that our resources are directed to those in greatest need.
Reference is often made to the futility of making payments, particularly to young people, without giving them the opportunity to work. The Minister has stated clearly that if no work is available the payments will be made, but that it is his intention to make work available for young people. When I was in college there was a movement among students to do voluntary work during the summer months. I believe most young people would grasp the opportunity to get involved in community work during the summer months as long as they received payment for it. The notion of making community work available is a positive step in the right direction, and I hope the Minister, in drawing up the scheme, will make it attractive to students. This concept has much to offer. I am disappointed that instead of putting forward proposals on how the resources can be directed towards those in greatest need and ensure that useful work is carried out, the Opposition are criticising the proposals in this respect. I am convinced that the vast bulk of young people and communities at large regard this as a good idea which needs much development and ironing out and which has much to recommend it.
I wish to refer briefly to our tax and social welfare systems. A question has to be raised regarding the overlapping of our tax and social welfare codes. The overlapping of the income limits for family income supplement and the thresholds or exemption limits for tax is anomalous. This overlapping means that a person could receive family income supplement during the same week as he pays tax. This anomaly has to be addressed. I know it is basically a tax issue, but in view of the overlap I hope this nettle will be grasped by the Minister for Social Welfare during the next few years. It means that as income goes up there is no increase in take home pay.
Another matter which has to be sorted out between the Department of Social Welfare and Revenue is the criteria used in deciding certain cases. In the Social Welfare code cohabiting couples are treated as if they were married, whereas under the tax code a couple must be legally married before they get the benefit of the tax free allowance. In the case of a cohabiting couple where one is working, the other is not entitled to claim social welfare benefits because the income of the working partner will be taken into account. On the other hand, the working partner cannot claim a tax free allowance in respect of the partner who is not working. That kind of anomaly must be dealt with.
I recently came across a sad case involving a grandparent who had looked after a young child from birth. The child is now aged ten or 12. The grandparent was in receipt of a widow's pension and of a child dependant allowance from the Department of Social Welfare. There was also a small income of £400 or £500 a year from self-employment. The Department of Social Welfare had no problem in paying the child dependant allowance to the grandparent, but the tax authorities would not recognise, for tax exemption purposes, the child as being dependent on the grandparent without legal custody. As a consequence, because of the very low exemption limit for widows, the income was taxable and a small amount of tax had to be paid. That is a crazy anomaly which should be eliminated. In such circumstances it is wrong that tax should have to be paid.
In certain cases people have to wait up to three months for a means test and the final decision regarding eligibility for unemployment assistance. The Minister might consider carrying out a preliminary examination based on self-declaration of income and on documentary evidence such as the P. 45. An applicant for unemployment assistance who passed such a test should be paid immediately, pending verification of entitlement in a full means test. Such a system would not cost anything. Where people are waiting a long time for a decision on their application for unemployment assistance, they are generally paid by the community welfare officer. It would be simpler to make conditional payments of unemployment assistance by the means I suggest, with provision for recoupment of any overpayment following the decision. This would be better than the current system.
I welcome the change in the carer's allowance. To the outsider it looks as if the rate has increased slightly. It is much more significant because the allowance has moved from the short term to the long term rate. This will make a great difference in many cases, particularly in rural areas. Pensioners often lost their free electricity allowance and free television licence because there was a son or daughter living at home in receipt of unemployment assistance. These sons and daughters were also acting effectively as carers, but if they transferred from unemployment assistance to the carer's allowance the rate of payment dropped by more than the value of the free electricity allowance and the free television licence. They could not declare themselves as carers because of the consequent loss. That anomaly has been removed. Such people will be able to transfer to the carer's allowance and will not have to declare themselves as available for work. The old people will be able to retain their entitlement to free electricity and free television licence, which is so important. That is a small but very significant change which I welcome.
Some years ago the Minister introduced a provision whereby the lump sum received by a pensioner from the sale of a place of residence would not be means tested. That provision was widely welcomed. It meant that if a nest egg was put away by somebody moving to a smaller house or into a home, it would not be means tested for social welfare purposes. The Minister should do something similar in regard to redundancy lump sum payments. Many people who are made redundant do not get alternative employment during the 15 months when they are in receipt of unemployment benefit. Then they are means tested for unemployment assistance. Those who have used the lump sum wisely by putting it into the bank are penalised at the rate of 10 per cent on the capital sum. That rate is usually higher than will be paid by the bank for the money on deposit. I suggest that this is encouraging people not to save this money but to spend it. The exemption of redundancy payments from means testing would encourage people to hold onto the money and to use it as a nest egg. Currently people feel they would be penalised if they do not spend the money.
I refer to the need for a direct debit payment scheme in respect of essential services. I should like to see a voluntary scheme of this kind introduced as quickly as possible. It would mean that people would not have to worry about putting money aside for council rents or electricity bills. Obviously this would be the choice of the client, but it is important that the service should be available.
There is a long delay in dealing with appeals. The Minister should consider devising a system for dealing in a summary way with appeals which will obviously not be successful. The client would get a quick answer. There should be a preliminary examination of appeals and where it is decided that there is no case the client should be informed, without having to wait three or four months. I accept that in other cases a more thorough examination has to take place.
Molaim go leor atá sa Bhille seo. Tá plé le déanamh fós faoi agus bheadh súil agam le hathbhreithniú iomlán ar an gcóras leasa shóisialaigh le linn na trí nó ceithre bliana a bheas an Rialtas seo i gcumhacht.