This section contains the usual provisions for the short title of the Bill and for its construction and collective citation with the Social Welfare Acts.
Social Welfare Bill, 1993: Committee Stage.
Question proposed: "That section 1 stand part of the Bill."
Question put and agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
This section provides for the definitions necessary for the purposes of the Bill. The first two sections are routine.
Question put and agreed to.
NEW SECTION.
I move amendment No. 1:
1. In page 6, before section 3, but in Part II, to insert the following new section:
"3.—(1) The recommendation of the Commission on Social Welfare in relation to a common basic payment or minimally adequate payment shall be recognised as the Official Poverty Line.
(2) The Official Poverty Line rate shall be established at:
(a) for a single adult, £50.00 per week in 1985 prices,
(b) for a married couple, 1.6 times the weekly rate for a single person in 1985 prices,
(c) for each child under the age of 18 years, £10.00 per week in 1985 prices.
(3) The Official Poverty Line rate shall be indexed annually in line with the Consumer Price Index.".
The whole thrust of Social Welfare Bills each year should be to attempt to create a system which ensures relief for people who are in poverty. I realise the Bill on its own, or even to a significant extent, will not be able to achieve that end. I made the point on Second Stage that there is a need to examine the tax and social welfare systems to seek ways of eliminating poverty traps and to try to ensure that the rates at which people pay tax and at which people receive assistance, through the social welfare system, are such that people have an adequate income to live on. Bearing in mind that we are dealing with the Social Welfare Bill and not the Finance Bill one approach would be to establish a basic level of payment below which no one would be paid any less. One simple way of doing that would be to establish an official poverty line. There is much debate about what precisely constitutes poverty. That debate is one which rages not only here but in other European countries. The European Community has established a definition which is generally acceptable but it is not comprehensive in its operation or how it might be applied.
I propose that the recommendation of the Commission on Social Welfare on a common basic payment, or minimal adequate payment, be recognised as the official poverty line. I would point out that in 1985 terms for a single person that would be £50, for a married couple 1.6 times the weekly rate for a single person and for each child under the age of 18 years, £10 per week. Clearly, those rates would be higher now. I urge that the official poverty line rate be indexed annually in line with the consumer price index. If we take the single adult rate of £50 at 1985 prices and index it in line with today's prices, we are talking about £65 or £66.
The establishment of an official poverty line would extricate the debate about poverty from the academic exercise of trying to decide whether one should take the 40 per cent line, that is 40 per cent of the average household income in any one year, or the 50 per cent line which some people would take or the 60 per cent line. The NESC published Report No. 89, in October 1989. That report attempted in some detail to distinguish what these lines were, how they might affect income and how many people would be included or excluded from the category. If one takes the 40 per cent line as the poverty line — I cannot recall the figures precisely — one is talking about something in the region of 20 per cent of the population. If we take the 50 per cent line we are talking about 25 per cent of the population and if we take the 60 per cent line we are talking about 32 per cent to 33 per cent of the population. Regardless of which line is adopted — and people will presumably dispute it — the fact is that the 60 per cent line is still below the figure recommended by the Commission on Social Welfare in 1985-86.
If we establish an official poverty line we will at least have a base from which to work and we will know what we are talking about when we look at statistics. When the Minister gives us the numbers living in poverty we will have a gauge against which to measure what is being done. I strongly argue in favour of this amendment and urge the House to adopt it. Its adoption would not cost the State one penny. It is simply a matter of policy and it would be well worth going down this road.
Before I deal with this amendment I seek clarification on the arrangements for dealing with Committee Stage. I understand we are taking sections 1 to 13 up to midday. Shall we discuss sections 1 to 13 together or shall we take them one by one.
One by one.
That does not prevent a Deputy raising points which are relevant but which may also be relevant to another section. However, the Deputy may not repeat those points later.
I support the concept of Deputy De Rossa's amendment, conscious of the growing poverty here at present. Poverty in Ireland is reaching appalling proportions. We have only to look at what is happening in our cities and towns, and the alienation of so many of our people from the authorities, to realise that it is the cause of crime and other social problems. I support any measure which will reduce the level of poverty and its impacts.
I wish to refer to the Minister's attempts to grapple with this appalling problem. The Minister seems to be very quick to introduce cuts — he has done this in many forms in recent months. I am referring, for example, to the circular letters issued to community welfare officers, which we in this House never see, and regulations. Whenever the Minister brings forward so-called improvements, inadequate as they may be, they are deferred until July and September. Some of the circular letters issued to community welfare officers have had the effect of driving people even deeper into poverty. Occasions which should lead to great rejoicing, for example, Confirmation, First Communion and Christmas, are turning into nightmares for families. These occasions are turning into times of great stress for families where the breadwinner is unemployed or some of the members are affected by illness. Such families cannot provide for their most basic needs at these important times in their lives. As I said, this is leading to an increase in the number of loan sharks and illegal moneylenders. The measures introduced by the Minister in recent times have had the effect of increasing this type of illegal activity.
The Minister has made some token gestures. Yet the Government has not taken the most essential step, that is, introduce a credit control Bill. Some of the provisions in the Bill will come into effect in July while others will come into effect in late August-September. I have tabled amendments which deal with this issue. I wish to refer to a phone conversation I had with an old age pensioner from Dublin this morning. She phoned me regarding the Minister's announcement of free colour television licences for old age pensioners. This woman's licence is due to expire next week but she has been told that she will not be able to get a free television licence until next year as the scheme will not be introduced until later this year.
The Minister announced improvements of approximately £2 per week for old age pensioners with effect from July. However, days after the Minister's announcement local authorities introduced increases of between 80p-£1 in the rents for old age pensioners. This meant that half the increase announced by the Minister was immediately wiped out by the increase in rents. Instead of introducing a Social Welfare Bill every year, I ask the Government to introduce an overall social policy which will meet the needs of the old, the sick and the unemployed. What is happening is that an increase of £2.60-£2.80 is being given with one hand and half of it is being taken away with the other. Old people and people who are marginalised regard the whole thing as a con job, a shifting around of figures and benefits so that there is no real improvement for those who are dependent on social welfare. I have tabled a number of amendments which deal with the issue in a different way from that proposed by Deputy De Rossa. Nevertheless, I believe our amendments would have the same effect.
There is no use in the Minister shedding crocodile tears about the evils of moneylenders and poverty without doing something realistic and positive to tackle these problems. Many of the provisions in these sections are anti-people and anti-family. I challenge the Labour Party to support some of the amendments I have tabled, which propose to reverse many of the "dirty dozen" measures, on which many Labour Party Deputies made their name, and which were introduced by the previous Government. If a vote is called at 12 o'clock I hope the Labour Party Deputies will support our amendments because by so doing they will reverse many of those "dirty dozen" measures and fulfil many of the promises they made to the public when they ran for election in November. If they do not do this they will be seen as reneging on the goodwill and trust the people put in them.
I support this amendment. As Deputy De Rossa rightly said, we need to set a line below which we cannot expect people to live today. The priority rates set by the Commission on Social Welfare have not been reached this year. This is unfortunate. Those rates were set at £65-£78 for a single person and £104-£124 for a married couple. I do not believe these rates are too much to expect in a modern Irish society. Some of the measures proposed by the Minister in this legislation are to be welcomed. Our role in Opposition is to bring the best out in the Government, and not to knock the good measures proposed in the legislation. I welcome the increases in the rates of child benefit and the reversal of some of the rather harsh measures which were introduced in 1992.
With regard to the Commission on Social Welfare generally and the intellectual investment in it, if we do not implement the recommendations and adopt a reform approach, as recommended by the commission, we will be wasting time and denying all the good work done by the commission. For that reason, I am disappointed that the priority rates have not been reached this year, as recommended by the commission. It is the only commitment on incomes in the Programme for Economic and Social Progress which has not been honoured. We have to compare the growth in incomes for those in the public sector with the growth in incomes for those on social welfare. The difference is that the incomes of those in the public sector have increased six times more than the income of those on social welfare. This is unjustifiable. We have to start making the correct choices. Even though these choices may be challenged, it is a time for leadership. I believe there would be cross-party support for the Minister if he moved towards achieving the priority rate set by the Commission on Social Welfare.
One of the myths abroad is that our social welfare bill is getting our of control and is unsustainable. Of course, the figures will show that the percentage of GNP being spent on social welfare has fallen even though the number of people claiming social welfare increased dramatically between 1986 and 1992. It is important that we move beyond the notion of throwing percentages at the social welfare payments every year and start to tackle the question of exclusion and the non-income related aspects of poverty. If we continue to adopt a relief approach, as we have been doing for the past number of years, by giving percentage increases in social welfare which match the rate of inflation, we will not tackle the background, very serious and related problems of poverty — depression, disfunctioning families, alienation and alcoholism, problems which flow from exclusion rather than low incomes.
I support this amendment. I welcome some of the measures which have been brought forward and the Minister's reassurance yesterday that he will look at the carer's allowance in consultation with the Minister for Health. This is a very good scheme. Perhaps it is the scheme with most potential in terms of supporting the care of the sick in their homes. There would be massive public support for the expansion of that scheme. Generally I support this amendment.
I support the concept of Deputy De Rossa's amendment. It is a step in the right direction in that it imposes on us the responsibility to face up to the poverty problem. If we refuse to recognise the scale of the problem we will not put in place the requisite policies. Poverty is possibly our only growth industry. Every family is affected in some way.
Deputy De Rossa's proposal represents a move towards a basic income. That whole question has been addressed by many economic scholars, notably by the former Taoiseach, Dr. FitzGerald. While we have not progressed as far as some would like, the question needs to be addressed now. Suggestions are made that the poverty trap can cause people to remain dependent on social welfare rather than take up employment. There is another side to that equation. A basic income of some kind could help resolve the problem. People in receipt of social welfare are unwilling to take up offers of short term employment because at the end of it they will face administrative chaos in returning to the social welfare system. Some kind of basic income structure would guarantee that people would automatically receive a reasonable level of social welfare support. This would help rather than hinder the transfer of people from social welfare to employment and it would give an assurance to people who might wish to take a short term job.
The official poverty line, as defined by Deputy De Rossa, is £50 a week per adult at 1985 prices. That cannot be regarded as excessive. Claims are made that social welfare rates are such that they are a disincentive to leaving the system. Anybody who is misfortunate enough to have to depend on social welfare is not living a life of luxury. I welcome the increases in rates but they are not to come into effect for some time. They will simply allow people to tick over. There is no possibility of other than a basic lifestyle.
I support the concept of the amendment, which demands that we face up to the huge poverty problem which needs to be tackled in a constructive way. We must first admit the scale of the problem and then put policies in place to rectify it.
I agree with the thrust of this amendment and with the comments made by Deputies Allen, Bradford and O'Donnell. This Bill is another in a long line of fairly anodyne Social Welfare Bills. It does not do anything basically to change the system. The increases provided for are useful but they will barely keep pace with inflation, if that. They will make no fundamental difference in real terms to the situation of people directly concerned.
The Minister has promised a consolidation Bill later this year. Part VI of this Bill, which deals with pre-consolidation amendments, does not give me hope that we will see anything creative in that Bill. Everything we see here about consolidation is repressive and restrictive. It is a pity to deal with these Bills in this way. Perhaps the Minister will give us his thoughts on how he might go about rectifying the position we are complaining about. I realise that the making of these points is more ceremonial than anything else because the Government has a majority of 37 and, in spite of the row about the "dirty dozen" before the election, the Labour Party will vote against this and other amendments. It is not very satisfactory.
The Minister might reflect on what he has heard and suggest a way in which between now and next year's Social Welfare Bill this House might give some sustained and direct attention to the problems at the root of Deputy De Rossa's amendment. Nobody would suggest that the Commission on Social Welfare which reported some years ago has all the wisdom that needs to be applied to this matter. Nobody would suggest that there is any one answer, but it is evident that in the way our system is structured there are enormous obstacles which prevent people who are receiving various forms of benefit and assistance from exercising their initiative to get out of that situation. I am not saying this requires a fundamental shake-up in the whole philosophy of the social welfare system, but at least it requires a look to see which parts of the system are slowing down our response to basic problems and the changes which are necessary.
Changes of the kind proposed by Deputy De Rossa and of the kind I have in mind would cost more money but there are parts of the system where there is an inbuilt pressure on the State to spend more money than is necessary. I give just one example. Young people seeking unemployment assistance are driven out of home by the system and the State spends money as a result. If we change the system to avoid that kind of nonsense, we can liberate some of that money to be used in a more constructive and beneficial way in other parts of the system.
Debate on this part of the Bill must be concluded at mid-day and Report Stage this afternoon, which is an obscenity in terms of parliamentary procedure on a Bill like this. There will not be time in the course of this debate for that kind of review of the system. I invite the Minister to tell us if he has any sympathy with the idea that between now and next year's Social Welfare Bill this House might be given an opportunity to look at some of these concerns in more detail and an opportunity of doing something more fundamental about a system which we know to be defective, so that we can produce something more in tune with the needs of our times.
Deputy Dukes has illustrated the reality in relation to social welfare generally and the whole question of eliminating poverty, need, dependency and exclusion from society. It is not a simple matter of saying there is an official statistic and that is the end of it. There is no simple official line. There are a number of official lines to meet the different circumstances that exist. The commission itself have found that and was happy when we took up its report as our reference point.
One of the things I will do shortly is show just how much has been achieved since the commission's report first came out. Also much has changed since that time. People realise now that the most important thing to do for the long-term unemployed is to give them education and experience. If substantial money is put into "second chance" education then those people can get out of poverty, and the vast majority of them will do so. The idea of having a simple formula or official line that the party has to follow is too rigid and mechanical. I saw what happened when that kind of approach was adopted and it was not good for anybody. I know that is not what the Deputy has in mind but it is what we would move towards. I think this House is wise enough to make its own choices at budget time and consider the choices more during the year. I am prepared to give consideration to what Deputy Dukes has suggested. We will, of course, have the committee, but they will be dealing with legislation. I know that what Deputy Dukes is suggesting is a pre-legislation stage. I have no objection to that. I would be quite happy to discuss any of the elements but I will not tie myself down to rigid arrangements of any sort.
The notion of a poverty line suggests that one can pick a particular level of income and say that those with less than this are poor and those with more are not, but it is not as simple as that. This is an all or nothing approach that does not reflect the reality of the situation. There is a continuum from very poor to very rich. This problem has long been recognised by experts and researchers. One expert has likened the search for an objective or scientific poverty line to the quest for the Holy Grail. There are a number of different ways of setting a poverty line. One approach often used by researchers is to base poverty lines on income levels provided by the social welfare system. This is obviously inappropriate as a target for social welfare generally.
A second approach is to derive a poverty line based on the cost of a basket of goods and services considered to be the minimum necessary. There are major problems with this subsistence approach. First, it may not accord with the common perception of what constitutes poverty and, second, as social welfare support improves poverty will be seen to disappear which is again at variance with the common perception of poverty as being relative to the average level of wellbeing of society as a whole.
An alternative approach is to express the poverty line in terms of a proportion of average income adjusted for household size. The problem with this approach, besides the arbitrary nature of the line chosen, is that even where social welfare changes succeed in making those on the lowest incomes better off in real terms, this would not reduce measured poverty unless they were also made better off relative to the rest of the population.
The difficulty of choosing a single poverty line was acknowledged by the ERSI in its 1989 report on Poverty, Income and Welfare in Ireland. In that report the researchers referred to the arbitrary nature of setting a single poverty line and instead used five different lines to show the nature and incidence of relative poverty. By using a range of lines one can identify those households who are most at risk of poverty and this provides guidelines to the Government in deciding where our priorities should be. For example, the ERSI report identified that households with children where the head of household is long-term unemployed face a particular risk of poverty and since the publication of that finding the Government had been directing resources to that group both by "above inflation" general increases and improvements in child support. This is the way in which poverty lines should be used and not by setting arbitrary measures which do not reflect the complex reality. It would be entirely inappropriate to arbitrarily pick a level of income as a poverty line for inclusion in the Social Welfare Acts. Therefore, I do not intend to support this amendment.
Let me also refer to an extract from the ERSI report on Poverty, Income and Welfare in October 1982. They conclude that no entirely satisfactory and convincing method of drawing a unique poverty line was available. They also pointed to several different kinds of approaches to measuring poverty. I have probably said enough to indicate that there are a number of approaches and that each will have some relevance and some value but that there is no single approach which encapsulates all the different values.
In so far as Deputies have suggested that we are not making progress in relation to priority lines and the lines generally, I announced on Tuesday that free colour television licences would come in from the beginning of April — Deputy Allen raised this question. I know there are a lot of things happening at the one time, but let Deputies please give credit for the things that are being done. As I announced, some of the regulations will be coming into operation immediately. These include regulations which change and revoke decisions that were made last year.
What are they?
Deputies may say that there are some things which are not changed but some things have been changed.
Can we see the regulations?
They will be laid on the table of the House. I have to get this Bill through before I can finalise some of the regulations because this Bill gives me the necessary powers. Some regulations do not require this power and I am making those regulations now in any event.
In relation to reaching priority levels which several Deputies mentioned, the cost of going to priority levels is estimated at £354 million above the £180 million which is being provided here. Progress has been made. In relation to the social insurance payments, the priority rates recommended by the Commission on Social Welfare have already been achieved in the case of the old age contributory pension, the retirement pension, the invalidity pension, the widow's contributory pension schemes, the deserted wife's benefit and the long-term occupational injuries schemes.
The disability benefit and unemployment benefit schemes are the only social insurance payments which are not yet at the commission's priority rate in 1993 terms. About 67 per cent of the approximate 409,000 people in receipt of the various social insurance payments are receiving payment at a higher level than the priority rates of the commission. A considerable amount was achieved by the budget, and this Social Welfare Bill achieves more.
The priority rates recommended by the Commission on Social Welfare have been achieved for all long term social assistance payments: long term unemployment assistance, pre-retirement allowance, old age and blind pensions, widow's non-contributory pension, deserted wife's allowance, prisoners' wife's allowance and lone parent's allowance. The rates of short term unemployment assistance and supplementary welfare assistance are at present £2.70 per week less than the priority rates recommended by the commission. This year a major step has been taken in the direction of achieving priority rates, with an increase of almost 5 per cent, or £2.60, in the weekly rates of short term unemployment assistance and supplementary welfare allowance. The weekly rate of the carer's allowance has gone above the recommended priority rates — although I do not think the commission had a carer's allowance in mind. Of the more than 419,500 people in receipt of the various social assistance payments almost 83 per cent have a payment higher than the priority rate of the commission.
Taking into account both the social insurance schemes and the social assistance schemes, 75 per cent of the total of almost 830,000 social welfare recipients receive payments at a higher level than the priority rates recommended by the Commission on Social Welfare. While there is more to be done, the budget has taken steps in the right direction and a great deal has been achieved already. That reality often is not reflected in comments made outside the House, but those comments are made for a particular purpose at a particular time.
I do not agree that there should be an official line set out in legislation. It is my opinion that that is not the right approach and I do not consider that there is a simple, straightforward, single official line that should be set out officially. Adoption of that approach could lead to our legislation tying us into something that is disadvantageous to the people we want to serve. I therefore have to oppose the amendment.
What work is being done by the Minister and his Department to resolve the outstanding anomalies in relation to pensioners who have had mixed and intermittent pension contributions in the calculation based years back to the mid-fifties? Major problems are encountered by pensioners who have had mixed pension contributions and for those who went abroad to work for a few years and then came back. Some work has been done but there are still anomalies outstanding and I should like to know precisely what the Minister is doing to resolve those anomalies.
Do anti-discrimination laws and equality Directives from the EC point to the need for the provision of widower's pensions? How can widowers be treated differently from widows under the social welfare code, given the EC Directives on equality? What is being done to resolve that anomaly?
I ask the Minister to put on the record of the House his thoughts on the major difficulties experienced in the calculation of means and in qualification for unemployment assistance and benefit for share fishermen. Yesterday during Second Stage debate I spoke about the particular difficulty for that group. There are hundreds of families involved in this issue. Every time that share fishermen are precluded by the weather from fishing, especially in the winter, they face difficulty in establishing their entitlement to social welfare assistance of one kind or another, and hence their entitlement to medical cards, rent relief and all of the other fringe benefits that come with qualification to social welfare assistance. What are the Minister's views on the treatment of share fishermen under the social welfare code? I recognise that the Minister favoured an approach under which a company would be set up for each boat. The fishermen do not favour that approach and they have given their reasons for that. There are other options. Does the Minister insist on the establishment of a company structure? Will he allow full benefits for the 7.7 per cent class A employee contribution and allow those benefits to be regarded as part of the individual's taxable income? I understand that the Minister personally is not enthusiastic about that particular option. Would the Minister support the concept whereby an upper limit would be set for the period during which short term benefits could be claimed during the year — for example, a 12 to 16 week period? Would the Minister support the idea whereby a lower limit of benefit would be claimed without a time limit? Would the Minister support the introduction of a special fisherman's insurance contribution which would qualify the individual for full PRSI benefits when, through no fault of the fisherman, the individual is unable to be out at sea? That is my preferred option but it is only one of five or six options. Such a system is operated in other European countries, particularly in the United Kingdom.
From 1 April the United Kingdom is to operate a system under which, in return for the payment of £7.75 per week per fisherman, to be paid 13 weeks in arrears, fishermen will be entitled to full social security benefits while not fishing. Whatever option the Minister decides on, I appeal to him to resolve this difficulty within the next few months if provision cannot be made in this Social Welfare Bill. We cannot allow another winter go by during which fishermen's families in maritime counties go hungry and have their electricity cut off or have to depend on the Society of St. Vincent de Paul to keep them fed for ten or 12 weeks. I could give the Minister examples of that happening in my own constituency and my colleagues also have instances relating to other constituencies. The problem would not arise in every constituency, particularly not in inland constituencies, but for too long that group of people has been neglected. The Single Market places an emphasis on peripheral and remote communities. In this regard we are failing our peripheral communities in some of the more remote regions of Ireland. The fishing community is essential to some of the most remote points of our island. We must ensure that the fishermen are kept in those areas and that we do not have further mass migration or emigration from the remote ports and villages around our coastline. If the problem with the social welfare code is not resolved fishermen will not continue to go into their most important industry, an industry to which we look for further development of natural resources. I ask the Minister to give his views on this issue and to say what he is doing in his Department to resolve the dilemma of share fishermen under the social welfare code.
I shall not delay the debate unduly but I wish to respond to the Minister in relation to a number of points. On several occasions the Minister referred to the adoption of an arbitrary line and in some vague way tried to relate that to a rigid approach to the issue of poverty. If the Minister knows anything about my views on poverty and social welfare he will know that the last thing I adopt is a rigid approach to the issue.
I know that there has been a range of research documents produced by voluntary organisations and State agencies which have calculated, at various times, that a significant proportion of the population lives in poverty, no matter what way it is measured, whether by the priority rates which the Commission on Social Welfare indicated it felt were severe, by the adequate income level which it recommended, or by the ESRI poverty lines of 40 per cent, 50 per cent or 60 per cent of average income. No matter what way it is measured poverty exists and if you compare the statistics available — the only statistics I can find of a comprehensive nature were produced in 1987 — it is clear that there was a massive increase in the numbers of people living in poverty from 1973 to 1987. The increased percentage of population living in poverty up to 1987 was 12.8 per cent on the 40 per cent line, 22.9 per cent on the 50 per cent line and 33.5 per cent on the 60 per cent line. Given that we had an increase in population during that time the numbers of people living in poverty increased dramatically up to 1987.
The Combat Poverty Agency and others indicated that the circumstances which drive people into poverty are unemployment, low pay, lone parenthood and taxation policy. Clearly, unemployment has increased massively since 1987; lone parenthood has also increased dramatically in the last decade and the studies I have read in relation to taxation over the last few years indicate that there has been a massive, disproportionate advantage to those on higher incomes compared with the low paid.
There is no reason to believe that the number of people affected by poverty has declined and if we are to treat that as a serious problem it is necessary to recognise it as such. We have established a base line and we say that anyone receiving income below a certain level is poor; of course that does not mean that people marginally above that rate are not poor. Indeed there may also be rare circumstances where people marginally below that level may not, in the strict sense, be poor. As the Minister said, it depends on family circumstances. I am arguing for official recognition of poverty and I take as my model the study made by the Commission on Social Welfare. It is disingenuous of the Minister to imply that that is in some way an arbitrary line because the commission spent a considerable time studying the subject and produced a vast volume in relation to its conclusions. I am not arguing that incomes are the only measure of poverty; nobody argues that. I am simply asking the Minister to take on board the view that the Government should establish a line below which people are regarded as living in poverty. We should seek to rectify our system in regard to taxation, social welfare, unemployment and so on.
The reason we must deal with it on a monetary basis is that we are dealing with the Social Welfare Bill which is primarily concerned with the rates and conditions under which income is paid through the social welfare system. The Social Welfare Bill, in the normal course of the Social Welfare Acts in general, does not provide a policy. We do that and it would make sense for Social Welfare Acts to incorporate an official line below which people are regarded as living in poverty.
Nobody denies that the Minister has made improvements in the system in raising certain levels of income payments, etc., to a particular level. He has also ironed out some of the anomalies in the system. I very much appreciate the fact that the Minister has moved some way in reversing the cuts made last year. However, it is not right to pretend that the system is gradually moving towards a more progressive distribution of income because that is not the case as long as we allow a situation to continue whereby the social welfare and tax systems exist virtually independent of each other.
The family income supplement is not being addressed in the Bill and many other areas need calm and considered discussion with a view to change. This Bill — and this kind of debate — is not necessarily the best way of doing it. I urge the Minister to consider my remarks.
My amendment is similar to a proposal made in 1991 on the Social Welfare Bill of that year by the present Minister of State, Deputy Stagg. I must assume that if the argument was valid in 1991 for one third of the present Government it must have validity today. I am not satisfied that the Minister is approaching this issue in the spirit in which it is proposed. It is not an attempt to create rigidity, it provides that the level of income would be indexed annually in line with the consumer price index. I would appreciate a more positive response from the Minister and, if it is not forthcoming, I will press my amendment.
Like many other Deputies I am frustrated at the short time we have to debate the large number of amendments to the Bill. We are still debating the first amendment at 11.50 a.m. That indicates the priority being afforded by this Government to the overall question of social welfare, that a Bill can be introduced affecting the standard of living of over one million people over the next 12 months, and taxpayers who fund the system, while spending part of two days debating Second Stage — effectively we began at 4 o'clock on Tuesday and finished at 7 p.m., three hours only, and some part of yesterday. Today on Committee Stage we are endeavouring to deal with fairly complex issues while constantly looking at the clock. The amount of time given to its discussion by the Government is an indication of its commitment and priorities in relation to the overall question of social welfare, tackling poverty and the growing under-class.
Then we enter into a semi-academic debate about arbitrary lines. This prompts a comment I should like to make, which is that poverty and social welfare appear to be the most researched issues here; reports are written and produced on every aspect of both but very little follow-through action. Like Deputy De Rossa, I give the Minister some credit in that some improvements have been effected. But the question of priority rates under the Programme for Economic and Social Progress is being reneged on in this Bill, in that the carpet is being pulled from beneath our poor, by the Minister issuing these circulars, the McCreevy dirty dozen, which have been rowed back somewhat.
The Minister spoke of regulations that will be introduced in the House almost immediately. In relation to the 12 issues raised by Deputy Stagg, now a Minister of State, I ask the Minister to spell out specifically how those cutbacks are being dealt with or revised by way of regulation, that he place on the record how he is drawing back on issues relating to, for example, maternity benefit, disability benefit, injury benefit, redundancy, part-time workers, deserted wives, equality, transitional payments, health board payments, disqualification and pay related benefits. Will the Minister please deal specifically with these issues and inform the House how he is rowing back on the savage cutbacks effected last year objected to so strenuously by his partners in Government?
I contend there is a dangerous complacency in relation to the issue of poverty. A frightening statistic is that there is £5.4 million alone owed in rents to Dublin Corporation. While recognising that some people may place the payment of rent fairly low on their order of priorities that scale of debt owed to Dublin Corporation by some tenants clearly demonstrates the level of poverty. What does the Minister do in response to such a problem? By way of his circular to health boards with regard to exceptional needs he cuts the provisions under which such people can be helped.
My colleague, Deputy Doyle, dealt with the question of widowers' pensions. In replying to Second Stage debate the Minister said that widowers are accommodated to some extent by the lone parent's allowance. He said also that a widower's pension would cost the State £50 million annually. I find it difficult to relate that assertion to a reply to a parliamentary question given by his predecessor in this House last year in relation to the same problem when he said that, on the publication of the National Pensions Board's report, the matter would be dealt with and would cost £25 million in any one year. We have been promised a report. I know of people who have written to Ministers, now in Government, who have received letters of sympathy and condolence, when what these people want is justice, recognition of their plight and responsibilities. This discriminatory position must be eliminated since there are at present 40,000 widowers nationwide. In an age when we talk constantly about justice, clearly the position discriminates against them at present — 40,000 men and their dependants are directly affected. I ask the Minister to give them some commitment, some sign of hope.
We do not have time today to deal with the issue of the carer's allowance, the crock of gold promised to carers, the most committed people in our society who were dealt the coolest, confidence trick ever, a mere 4,000 people availing of that allowance because of its restrictive means-testing requirements. I ask the Minister to row back on the very rigid income limits in regard to eligibility for that allowance.
It is extraordinary to have to endeavour to debate so many important issues affecting so many of the less well off sectors of our community within such a short space of time.
I fully support the arguments advanced by Deputy Doyle in support of the position obtaining in respect of crews of fishing trawlers. I ask the Minister to do something for them, if at all possible under the provisions of this Bill, by providing a fisherman's stamp giving them full entitlement to PRSI benefits.
The other point I should like the Minister to deal with in replying is the anomalous position obtaining in relation to islanders, some thousands of whom live off-shore in my constituency. I remind the Minister that the cost of living on these islands is approximately 15 to 20 per cent higher than that for people living on the mainland. Yet the Department of Social Welfare, in deciding on the levels of payment of social welfare, relates the increase each year to the national cost of living which does not relate at all to the reality on the ground for islanders who must have all their food and other commodities transported at substantial cost, on which the State imposes the further burden of VAT. Therefore, the increases that the Minister claims are in line with the cost of living increases, or even slightly ahead, do not apply in the case of such islanders. Social welfare recipients on certain designated offshore islands will have to be given a higher rate than that obtaining on the mainland.
Can we agree that the Minister replies before the question is put, an all-party agreement, for the sake of a few minutes?
Briefly, by way of reply, I should say in regard to the questions posed by Deputy Doyle in regard to mixed and intermittent pensions, indeed the overall problem of the pensions area, I introduced specific arrangements for the payment of pro rata pensions to people who had suffered gaps in their insurance records in 1988; that was one step with its attendant cost which overcame some of the problems. Subsequently, in 1991, I addressed the position of people with mixed insurance records, that is the full and modified rates. Regulations were introduced in November 1991 to deal with them, another portion of the problem. It becomes more complex thereafter. The National Pensions Board has been studying the overall question and I expect their report fairly soon, certainly by the summer. That major report will deal with many of the issues Members have raised in relation to pensions in the future which will, of course, have many attendant costs. The whole question can be considered at that point.
I have much sympathy with the points raised by Deputy Doyle in regard to widowers. Deputy Allen mentioned the cost of £50 million annually. We must remember that there are deserted husbands and wives and, when one talks about equality, we must ensure there is equality in everything which makes the cost £50 million in total. The European Community has been examining this aspect of equality for a long time. The reason is its cost and implications right across the Community. Nobody is saying so but obviously that is the main reason. We are pressing it to resolve that overall issue. In the meantime, I have introduced the lone parent's allowance giving widowers an assistance-based pension applicable right across the board. The other issue, an insurance fund, is of major importance. Therefore, it is a matter for the contributors to the fund — employers, employees and the Government — to decide on the amount that they wish to contribute. I accept that this is a problem and I will certainly consider it.
Like Deputy Molloy, the Deputy also raised the question of share fishermen. When I was Minister for the Marine I tried to sort out this issue but there were legal challenges, with the result that there was chaos. In the meantime we required the self-employed to pay PRSI and this has proved very beneficial in that they are now covered for widow's and long term pensions. Furthermore, I am now considering the question of whether special arrangements should be made for them. In this regard the Deputy mentioned the question of a special stamp. However, there is always the danger that there would be a legal challenge and this is a matter we will have to look at. I appreciate that it is important they have proper cover and when I was Minister for the Marine I pushed this issue. I can assure the Deputy that we will pursue it as a matter of urgency. I also noted what the Deputy had to say about the islanders and perhaps I should visit them to see what the situation is and to see what can be done.
Tá sé ag teacht.
Both Deputy De Rossa and Deputy Allen referred to the general situation but we must remember that, between 1987 and 1993, the personal rate of long-term unemployment assistance had been increased by 56.6 per cent. If we take inflation into account this still represents an increase of 30.05 per cent in real terms. The respective increases for a married couple are 45 per cent and 20 per cent. Indeed, the rates in relation to the short term personal rates of unemployment assistance and supplementary welfare allowance are 63 per cent, 55 per cent and 53 per cent and in real terms 35 per cent, 28 per cent and 27 per cent. Therefore, as a result of the discussions that we have had in the House leading up to the budget and in the pre-budget forum and so on, we have been allocating money to fund increases in this area.
I accept that we are very tight on time but this is not my fault as these increases have to be approved before the beginning of April. Both the budget and the Estimates were late this year as a result of the election. Yesterday I was asked if I would agree to a time schedule being drawn up by the Whips for today and I replied that I would agree to take the Bill in whatever way they wanted.
Let me say in response to Deputy De Rossa that the way in which we are approaching the issue is the better one and I would not be in favour of inserting an arbitrary line. The Deputy maintains that it is the only arbitrary line but there are others.
I must now put the question.
On a point of order——
Acting Chairman
I am sorry, Deputy, but an order was made in the House this morning.
It is a genuine point of order.
Acting Chairman
I agreed to Deputy Doyle's suggestion that the Minister be allowed a couple of extra minutes to respond. I should have put the question at 12 p.m.
It is a genuine point of order and I will be brief. I tabled an amendment to section 5 but it was ruled out of order. It related to the issue of age-grading and it read as follows "The Minister shall, as soon as possible after the commencement of this Act, review the scheme of child benefit with a view to the introduction of age-grading". That was a conceptual amendment but was ruled out of order on the grounds that it involved a charge on the Exchequer. I object and, if time allowed, I would take this up with the Minister.
I also asked the Minister to respond to the question of the "dirty dozen" cuts.
I will be happy to do so.
Acting Chairman
I am now required to put the following question in accordance with the order of the Dáil made this day: "That each of the sections 1 to 13, inclusive, which is not disposed of is hereby agreed to."
Question put.
The Committee divided: Tá, 70; Níl, 43.
Tá
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Ahern, Noel.
- Aylward, Liam.
- Bree, Declan.
- Briscoe, Ben.
- Broughan, Tommy.
- Browne, John (Wexford).
- Burton, Joan.
- Byrne, Hugh.
- Callely, Ivor.
- Costello, Joe.
- Coughlan, Mary.
- Cowen, Brian.
- Davern, Noel.
- Dempsey, Noel.
- de Valera, Síle.
- Ellis, John.
- Ferris, Michael.
- Fitzgerald, Brian.
- Fitzgerald, Liam.
- Flood, Chris.
- Gallagher, Pat the Cope.
- Gallagher, Pat.
- Haughey, Seán.
- Higgins, Michael D.
- Hilliard, Colm M.
- Hughes, Séamus.
- Hyland, Liam.
- Jacob, Joe.
- Kavanagh, Liam.
- Kenny, Seán.
- Killeen, Tony.
- Walsh, Eamon.
- Walsh, Joe.
- Kirk, Séamus.
- Lenihan, Brian.
- Leonard, Jimmy.
- McDowell, Derek.
- Moffat, Tom.
- Morley, P.J.
- Moynihan, Donal.
- Moynihan-Cronin, Breeda.
- Nolan, M.J.
- Noonan, Michael.
- (Limerick West).
- Ó Cuiv, Éamon.
- O'Dea, Willie.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Leary, John.
- O'Shea, Brian.
- O'Sullivan, Gerry.
- Pattison, Séamus.
- Penrose, William.
- Quinn, Ruairí.
- Reynolds, Albert.
- Ryan, Eoin.
- Ryan, John.
- Ryan, Seán.
- Shortall, Róisín.
- Smith, Brendan.
- Spring, Dick.
- Taylor, Mervyn.
- Treacy, Noel.
- Wallace, Dan.
- Wallace, Mary.
- Woods, Michael.
Níl
- Ahearn, Theresa.
- Allen, Bernard.
- Barry, Peter.
- Boylan, Andrew.
- Bradford, Paul.
- Browne, John (Carlow-Kilkenny).
- Bruton, Richard.
- Carey, Donal.
- Clohessy, Peadar.
- Connor, John.
- Cox, Pat.
- Crawford, Seymour.
- Creed, Michael.
- Cullen, Martin.
- Currie, Austin.
- Deenihan, Jimmy.
- De Rossa, Proinsias.
- Doyle, Avril.
- Dukes, Alan M.
- Finucane, Michael.
- Fitzgerald, Frances.
- Flaherty, Mary.
- Flanagan, Charles.
- Gilmore, Eamon.
- Harte, Paddy.
- Higgins, Jim.
- Hogan, Philip.
- Kenny, Enda.
- Keogh, Helen.
- Lowry, Michael.
- McGinley, Dinny.
- McGrath, Paul.
- McManus, Liz.
- Mitchell, Jim.
- Molloy, Robert.
- Noonan, Michael.
- (Limerick East).
- O'Donnell, Liz.
- O'Malley, Desmond J.
- Owen, Nora.
- Quill, Máirín.
- Rabbitte, Pat.
- Shatter, Alan.
- Yates, Ivan.
Tellers: Tá, Deputies Dempsey and Ferris; Níl, Deputies E. Kenny and Rabbitte.
Question declared carried.
SECTION 14.
Amendment No. 35 not moved.
I move amendment No. 36:
In page 10, subsection (1), lines 14 and 15, to delete "terms of vacations" and substitute "term vacations".
This is a simple technical amendment which is being made on the advice of the parliamentary draftsman. It replaces the words "terms of vacations" with "term vacations". I propose that this be accepted.
Question put and declared carried.
SECTION 14.
Question proposed: "That section 14 stand part of the Bill."
We dealt with this matter on Second Stage, but I would like to repeat my party's opposition to what I consider one of the most hare-brained decisions ever made by a Minister for Social Welfare in this House. This decision was not fully thought out and I do not understand how the Minister intends to operate the so-called work schemes he proposes to introduce. Basically, he is cutting unemployment assistance for third level students. There will be no jobs available to them, except in cases of extreme hardship. Will the Minister spell out how he proposes to administer this scheme? At a time when we are attempting to simplify the social welfare code he will create more bureaucracy as a result of which students who apply for unemployment assistance, following their examinations in June, will have to be assessed, a process which will take two to four weeks. If the assessment reveals they are experiencing hardship they will then be put on work schemes. How does the Minister intend to implement those schemes? The voluntary groups I have spoken to do not want any hand, act or part in this hare-brained idea because they do not have the resources to employ a student for three to six weeks. The people operating the present schemes which are supportive of the voluntary and community groups are anxious that they be extended for longer than the present 12-month period. This scheme will be impossible to administer and will place a further burden on voluntary and community groups.
The Minister stated that local authorities and health boards will be asked to participate in the schemes. This will create a huge administrative problem for public bodies. Therefore, I ask the Minister to delete this section from the Bill.
Is the Minister accusing our students of widespread fraud in this area and, if so, will he spell out where he believes such fraud is taking place? If there is a low level of fraud — I would not even concede to that — the Minister should deal with it in ways other than cutting assistance to students, especially at a time when there are no outlets to Great Britain, the United States or the other countries to which students travelled in search of work in previous years. There are no work outlets for students at home at present and if the Minister believes that 12,000 jobs are available he should make them available to the long term unemployed who are crying out for jobs and who are totally demoralised. The Minister stated that 12,000 jobs will be available and gave a fictitious figure of £60 million for the scheme. Later he said it would cost £90 million. The true figure is between £6 million and £8 million. This is money well spent because it assists students of middle and low income families, many of whom do not have the support of the higher education grants scheme which exists at present but has major restrictions.
This is a cost cutting exercise and is the second attack on students by a Fianna Fáil Government. The ESF and maintenance grants were withdrawn last year and there is much evidence that this caused widespread hardship to students and their families. This is the second attack on students in the past 12 months and it will create a greater divide among our population. Access to education is a huge problem and this scheme will create a greater problem for middle and low income families.
This proposal is akin to one of the kicks of the Thatcherite Government in Great Britain in 1989. It is regrettable that this proposal is being supported by the Labour Party who are usually very supportive of students. It is a total undermining of the position of our students. A survey by the National Union of Students in the United Kingdom following the 1989 cutbacks there to students states:
There was a dramatic increase in levels of students debts.
The economic recession also contributed to a worsening of the financial situation of students. The survey revealed that even students who had found vacation employment during the summer did not earn enough to keep themselves throughout the vacation period.
The recession also contributed to the high rate of non-payment of parental contributions. During a time of increasing redundancies and rising unemployment it becomes increasingly difficult to maintain contributions.
The number of applicants for hardship loans increased dramatically.
The most serious conclusion which can be drawn from the survey is that the combined effects of the social welfare changes and the worsening recession will force present students to abandon their courses as well as acting as a disincentive to those wishing to enter or return to further or higher education.
Many of the adverse effects experienced by students in Britain as a result of the last kick of a Thatcher Administration will be experienced here in the months and years ahead. Students are under tremendous pressure at present because of forthcoming examinations. The Minister is introducing this measure in a sneaky way, at a time when students cannot take to the streets in protest. My party will be opposing this section.
It is normal for the Mini-base ster to introduce the section so, perhaps, I should do so at this stage.
Section 14 provides that people in full-time education will not be entitled to unemployment assistance other than in such circumstances and subject to such conditions and for such periods as may be prescribed. It also provides for a three-month disqualification period immediately following the completion of the leaving certificate examination at second level and at the same time extends the definition of "qualified child". For the purposes of those on social welfare, the child dependent allowance will continue even though the children may be over 18 years. That extends the definition of "qualified child" to enable increases for dependent children over the age of 18 to be paid in respect of the three-month period of disqualification.
It is evident that people in full-time education cannot be available for full-time employment. They are in a position to take up short term work for the holiday period only. I propose to make it possible for students to work with community, voluntary and other groups or organisations who could benefit enormously from their skills, enthusiasm and talents.
Deputy Allen raised the position of British students. It is true that one cannot claim unemployment assistance during a holiday period in Great Britain, Northern Ireland or in many countries throughout Europe. This provision will bring us into line with other countries in Europe, but this scheme will provide an alternative for the students to whom Deputy Allen referred.
On that point, will the Minister outline in detail the schemes he proposes to introduce, what organisations he has been in touch with and if they are willing to participate in the scheme?
I will come to that. I propose to introduce a summer works scheme for students which would allow them do community work, voluntary work or work provided by public sector bodies and receive a wage approximating to their unemployment payments. Therefore they will get the same money for that period. I envisage the scheme operating for a fixed period during the summer holidays, with the student working a certain number of hours or days in return for the payment he or she receives — students receive different levels of payment depending on their family circumstances.
I intend to use the resources of the regional management structure of my Department to bring together people in full-time education looking for short term work with the various organisations operating in their areas who are in a position to provide them with such work. There are many short term employment opportunities available such as working with voluntary organisations, community groups, summer projects, local authorities and tourist related work. Participants will be offered work for the number of hours or days necessary to earn the equivalent of their unemployment assistance entitlement and the wage costs involved will be met by my Department.
I am sure many voluntary organisations working in the community would welcome the opportunity to utilise the skills and expertise of third level students for a number of weeks during the summer holiday period. Similarly, local authorities, health boards and other public sector bodies could avail of that expertise for work that needs to be done in their respective areas. This is a very innovative scheme which operates for the benefit of people in full-time education and of the many voluntary and community groups who provide a valuable service to their communities. My Department is working on the details of the proposed new scheme at present and I will be consulting the organisations concerned in this regard. The new scheme will be introduced in time for the 1993 summer vacation period.
I emphasise that the purpose of this scheme is to provide for students a means of earning the same wage as they receive. Quite a number of students will work with voluntary organisations in any event and this scheme will provide for that. Deputy Allen asked why we have not all the details of the scheme. The answer is very simple. If the Deputy wished me to follow the practice in other EC countries we would have no scheme. I am introducing a scheme and that is an innovative move.
Will there be 12,000 jobs available?
There are more than 12,000 jobs available in voluntary and community work and in summer projects.
Will the Minister provide 12,000 jobs?
Many students will be very happy to participate in this work.
Will the jobs be available to the long term unemployed?
How does the Minister know that?
I know many students.
It is a stupid and shortsighted idea.
Is the Deputy suggesting that students will not want to participate in the scheme?
They should be consulted.
The Deputy should be realistic.
It is a disgrace.
The scheme should be voluntary.
I will point out the difficulty that arises in the system. Increasingly each year students are claiming the dole. The year before last, 10,000 students claimed——
That is because poverty is increasing.
——and last year the numbers claiming was 12,000.
That is because poverty and unemployment is increasing.
Will the Deputy listen to me? These students are also increasingly claiming rent supplements for staying away from home.
Because the Minister is driving them out of home.
If all students make those claims as they are all entitled——
The Minister is forcing them to do so.
That is not so. Many of these students come from the middle and higher income groups to which the Deputy referred earlier.
The Minister is time-wasting.
I spoke about middle and lower income groups.
Students move out of home and then make a claim. Assuming that all of them do that——
What about the means test?
Deputy Allen should allow the Minister to speak.
If the Deputy lets me finish I will let him in.
The Minister is talking utter rubbish.
The Deputy raised the question of the difference between the £60 million and the £90 million. If all students left home and claimed supplementary welfare allowance it would cost £90 million.
Not all of them claim.
No, but the number is increasing all the time. We are bringing the system into line with that in the rest of Europe and are offering at the same time an opportunity for those who need to earn money during the summer. The scheme is a novel and good one and students will be very happy to take part in it if they are interested in working.
It must be voluntary.
By joining the scheme they are saying they want to work at something, and I know the vast majority of students want to work. I ask the House to support this novel, innovative scheme and to look forward. Deputies talk about change; let us have real change. Let some of the real skill, intelligence and ability be used in the community where it is most needed. Why oppose that? Why not support communities that need it. We are talking about students who are getting the best education in the world, and the State and taxpayers are paying for that.
Their parents are paying for it.
Students are coming to us and saying they want money for the summer and that they want to work. We are not going to do what was done in England——
That is what the Minister is doing.
——we are not going to cut them off and leave them with nothing. We will give them something to do.
That applies only to hardship cases.
We are giving the Opposition an opportunity to put forward their ideas about the scheme.
When?
Between now and the summer. The scheme will be introduced shortly.
Will it be brought before the House?
If I came in here and said the scheme has been set up, without any consultation with Members that would not be a good open system. I am giving Deputies the opportunity to put forward their views.
The Minister is a bluffer.
I am calling Deputy Dan Wallace.
On a point of order, I had been called to speak but gave way to the Minister. Therefore, in fairness I should be called now.
I accept that.
I should have been called before the Minister.
I am calling Deputy Gilmore.
The Minister is attempting to cloak a fundamentally Thatcherite policy in pious, dishonest nonsense about community work. The Minister's comments on community work and voluntary organisations would have some degree of credibility if it was not the case that voluntary organisations who are trying to get additional people on the existing social employment schemes were being turned down because of cutbacks enforced by the Minister's colleagues and that renewal applications of people on those schemes are being refused. What we have here is a policy idea which incidentally was one of the first initiatives taken by the Thatcher Government in 1979. When they came to power one of their first moves was to stop unemployment assistance payments to third level students. There might have been some case for this in the United Kingdom where the level of student grants bears some relationship to the real cost of staying in college but to introduce the measure here adds an additional financial burden to the existing difficulties in that the level of student support is not adequate to maintain students throughout the 30 weeks of the normal college year.
The Minister has painted the same picture that is painted when similar proposals are introduced, that of the well-heeled student from the highly paid professional background opting out of home and taking a flat in order to effectively defraud the social welfare system by some legalistic loophole. However, the reality is much different. The sons and daughters of the well-heeled will not be affected by this proposal. The people who will be affected are those on the margins, the people who are finding it increasingly difficult to put themselves through courses of third level studies.
We had fine words from the Minister for Education about promoting equity and greater educational opportunity. Has the Minister any idea of the difficulties that families and young people face in order to get into third level college in the first place? To even finish their second level courses they have run an obstacle course. Sometimes people undergo peer pressure to opt out of school and there is a difficulty with regard to the loss of potential earnings by continuing in school or in third level education. Families have to face difficulties in making up the balance between the cost of being in third level education and the inadequate student grants. Now we have this proposal that says that if a person cannot get work, we will not give them unemployment assistance or that if people finish their courses they will be required to spend three months without any assistance. If one finishes one's leaving cert in June 1993 it will effectively be November, between the waiting period and the three months, before one gets any pay. Who is being penalised here? The young people being penalised here are the young people who have the initiative to continue studying. It is amazing that a 20 year old who does nothing will get unemployment assistance for the entire year, but a 20 year old who has the initiative to continue in college will be penalised by inadequate income during the school year and then by the loss of unemployment assistance during the holiday. These young people do not require any kind of stick to beat them into voluntary work——
They will not lose the money.
——as the Minister suggested.
Let us be honest. There will be no jobs there for them.
Young people generally need no encouragement to participate in voluntary work. The Minister is creating a two-tier system with regard to voluntary work for young people. We will now have young people doing voluntary work because if they do not do it they will not get their unemployment assistance. Where does that leave the young people who wish to work on a voluntary basis as they have always done? Where does it leave the voluntary organisations who may in other circumstances have opted to take somebody on a social employment scheme to do the same kind of work? We are creating an impossible situation for the voluntary organisations and imposing a penalty on young people who decide to continue in courses of study.
This proposal is not designed to impose some kind of penalty on the well heeled. It is a further obstacle to those people on the margins who find it difficult enough as it is to continue in third level education. This will make even worse our disgraceful statistics on participation rates in third level education which show that the richer one is the more likely one is to participate in third level education. If one is in the middle bracket on a bus-driver's wage or on a postal worker's wage with a little bit of overtime, one does not qualify for the higher education grant at all. This proposal on top of all that will ensure that the sons and daughters of those people will effectively be squeezed out of third level education under the grandiose pretence that this Minister wants more people doing voluntary work.
This is a very interesting scheme which should be given an opportunity to work. I congratulate Deputy Allen on his appointment as Fine Gael front bench spokesman on social welfare. Deputy Allen will agree that this scheme will be interesting in Cork in relation to the summer recreational schemes organised by Ogradh Corcaigh which run for two months in the year. This scheme was started by VSI, Voluntary Students International, who came to Ireland with assistance from their own countries. Deputy Allen knows as well as I how successful these schemes are, that they get financial assistance from Cork Corporation and that a great many local people are involved. This scheme could benefit from the availability of students who no doubt will take up places on these schemes.
This Minister has been very innovative. He has listened to suggestions and has removed anomalies and obstacles in the social welfare system during his term. The Minister's approach will help many communities. People have been asking for some way whereby unemployed people could become more involved in local communities in, for instance, helping the elderly to paint their homes and so on. There is potential here for involving people in those areas under the auspices of the local community associations. We have repeatedly paid tribute to our many voluntary agencies for their contribution to society.
I do not agree with Deputy Gilmore about an overlap in this area. We will always have people who will give a contribution on a voluntary basis. This scheme will not conflict with their continued involvement. We should give this scheme an opportunity. It has the potential to play a part and give many students an opportunity to work in their communities in the summer months. I would like the Minister's assurance that the less well off in our community who are attending third level institutions will have an opportunity to participate in these schemes and will, if possible, be given priority in them. The Minister is to be complimented on his initiative in bringing this scheme forward. I see great potential for it in my locality.
I spoke at length yesterday on my party's opposition to this section. We do not oppose the notion of integrating the voluntary sector and the community development sector as an anti-poverty strategy, and linking that with the unemployed. That is a good idea but it must be voluntary. The way the Minister has introduced this notion into the House has diminished the notion. It is introduced in a negative way on the coat tails of an arbitrary and discriminatory provision which in a blanket way excludes all students from welfare entitlements. The Minister will live to regret this provision in what is otherwise quite a good Bill. I do not know how any Labour Party Deputy worth his or her salt can defend this provision, and I did not hear any of them defending it.
They are not here. They are ashamed to come into the House.
They are not here at the moment, but they had every opportunity yesterday to defend it. This goes to the very heart of the welfare system. The principle of adequacy and meeting a demand based on need has been one of the fundamental principles upheld by the Labour Party since its formation. This is the beginning of the end for the Labour Party. If they can defend this measure they are setting the pace for the loss of the next election. They will not survive the next election.
The Minister has a good reputation in relation to social welfare but he will be remembered as the Minister who introduced compulsory workfare. The concept of voluntary workfare and integrating the needs of the community and voluntary work with the needs of the unemployed is a good idea. If the Minister brought the scheme back to this House by way of a well thought out comprehensive strategy my party would support it but it would have to be on a voluntary basis rather than students being forced to comply with such a scheme. In relation to leaving certificate students, it will introduce discrimination on the basis of higher academic achievement. Students will be told that if they stay in school until they are 18 years of age and do their leaving certificate they will be disadvantaged compared with people who do not remain at school until they were 18. It is an arbitrary and discriminatory scheme. Students are a very easy target. The Minister is probably reckoning that students have a very short memory and by the time of the next election——
The Deputy keeps thinking in terms of elections.
The Minister is not thinking of too many people.
I am thinking of those people and next summer.
Why is the Minister getting all excited?
The Deputy is entitled to speak uninterrupted.
Instead of topping the poll the Deputy is at the bottom.
Deputy Seán Haughey put manners on Deputy Callely.
Obviously the Minister is on a very sticky wicket on this. The Minister is preventing students from receiving social welfare payments and to soften the blow he has introduced a knee jerk reaction that he will give them all jobs. This scheme has not been thought through. If he was really serious about this scheme he could have consulted a whole range of community development groups and student representatives, a very organised and local group of people. There was no consultation with students or with the Department of Education. I find it difficult to believe that the Department of Education, under a Labour Minister, could have agreed to this scheme. How can the Minister for Education justify this, given her commitment to students? I wonder whether the unions have been consulted in relation to this scheme. The SES schemes throughout the country are held up because of disagreements with unions. Has the Minister considered public liability insurance for students working on the scheme? The whole scheme is an administrative nightmare. It will cost far more to implement this work scheme than the Minister is hoping to save. He said it costs £8 million each summer to pay students but he had no figures in relation to alleged fraud. He has not presented a prima facie case to this House to show that the system is being abused by students. If the Minister had come forward with a comprehensive and well structured scheme we would have supported it. What he has introduced is a half-baked scheme which does not wash with anybody whereby a number of students will be excluded.
The Labour Party will live to regret that they have been part of this proposal. The first time I ever met a Labour Deputy — Deputy Quinn — was at a students union rally outside the House. The Labour Party have always supported students and I just cannot believe what they are doing to themselves. I know one has to compromise in Government but to let this scheme through is the end of the Labour Party.
He is not even here.
Do you not want the scheme at all?
I will be brief as I recognise that other people wish to speak. Without being too repetitive I wish to support what has been said by my colleagues on the Opposition benches. I wonder whether the Social Welfare Bill, 1993, which is an attack on the student population, is actually a forerunner to a work-for-dole programme which we may witness in 1994. Are we trying out on the student population in the summer of 1993 something which the Department may wish to spread throughout the social welfare system in the coming years? This scheme is ill-thought out. In his contribution on Second Stage when the Minister said he was bringing this country into line with the system in operation in continental Europe he was not comparing like with like. In continental Europe there is a reasonably adequate level of grant-aid for third level education but, more importantly, those students in Europe who wish to work in their own country have a much better chance of finding a job than students in this country where we have over twice the EC rate of unemployment.
There is no doubt that the vast majority of the student population wish to work and only those who are unable to find work claim social welfare. It is unfair to paint the picture, as this proposal does, that the majority of students are claiming dole during the summer months in an almost fraudulent fashion. That is incorrect. In most cases people who want work in this country during the summer months cannot find it. We will further penalise people who are not well off. Those claiming unemployment assistance are means-tested and the weekly value of their annual student maintenance fee is taken into account. Let us be blunt about it, this is simply an attack on a weak section of the community. Students from the better-off sections of society will not be disadvantaged by this proposal — the majority of those people find work here or abroad. Those who will be affected are those who can least afford this attack. As Deputy Allen has said, if 12,000 jobs are available those jobs should be given to the thousands of long term unemployed.
I welcome the part of Deputy Bradford's comments where he recognised that students wish to work. I am somewhat surprised at Deputy O'Donnell's implication that she does not wish students to have the opportunity to work.
Voluntary.
Misrepresentation.
May I say——
I do not see any Labour Deputy defending this.
This is an innovative idea——
Very innovative.
It is a clawback.
——and we should stand back and give a fair chance to the idea and the suggestion. I am big enough — maybe not in physical height — to come back into this Chamber in October or November next and assess the summer season of 1993 and see the benefits or any negative aspects of the proposal. I am a firm believer in giving a matter such as this a fair chance.
Defer it.
May I express caution? It is rather like a squeaky axle which gets a lot of grease but on other occasions it can be thrown out. The Opposition on this occasion are being a little too squeaky about a very innovative idea. All I am asking is that this idea be given a fair chance. As a public representative — and I am sure every Member of this House has had the same experience — I have come across concerned parents and others who ask what the Government are encouraging students to do during summer holidays or when they graduate. Some claim that the Government should encourage them to sign on and get paid. Is that the correct attitude for students to adopt at the start of college vacation or when they intend to enter the workplace?
Come off it.
They will not get a job this time either.
Seriously, is it correct that we should have only one option for them which is to sign on for the dole, obtain payment and do no work? Surely we must recognise that there are people out there who do want to work.
Yes, there are 300,000 of them.
I did not interrupt Deputy Allen.
The Deputy is massaging the unemployment figures.
That is as clear as day.
I am sorry to interrupt the Deputy, but as it is now 1 p.m. I am required, in accordance with an Order of the Dáil of today, to put the following question: "That section 14, as amended, is hereby agreed to".
The Committee divided: Tá, 66; Níl, 37.
Tá
- Ahern, Dermot.
- Ahern, Michael.
- Ahern, Noel.
- Aylward, Liam.
- Bree, Declan.
- Briscoe, Ben.
- Broughan, Tommy.
- Browne, John (Wexford).
- Burton, Joan.
- Byrne, Hugh.
- Callely, Ivor.
- Costello, Joe.
- Coughlan, Mary.
- Cowen, Brian.
- Dempsey, Noel.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Ferris, Michael.
- Fitzgerald, Brian.
- Fitzgerald, Eithne.
- Fitzgerald, Liam.
- Flood, Chris.
- Gallagher, Pat the Cope.
- Gallagher, Pat.
- Haughey, Seán.
- Higgins, Michael D.
- Hilliard, Colm M.
- Hyland, Liam.
- Jacob, Joe.
- Kavanagh, Liam.
- Kenny, Seán.
- Killeen, Tony.
- Kirk, Séamus.
- Lenihan, Brian.
- Leonard, Jimmy.
- McDowell, Derek.
- Moffat, Tom.
- Morley, P.J.
- Moynihan, Donal.
- Moynihan-Cronin, Breeda.
- Nolan, M.J.
- Noonan, Michael.
- (Limerick West).
- Ó Cuiv, Éamon.
- O'Dea, Willie.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Shea, Brian.
- O'Sullivan, Gerry.
- Pattison, Séamus.
- Penrose, William.
- Quinn, Ruairí.
- Reynolds, Albert.
- Ryan, John.
- Ryan, Seán.
- Shortall, Róisín.
- Smith, Brendan.
- Taylor, Mervyn.
- Treacy, Noel.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Eamon.
- Walsh, Joe.
- Woods, Michael.
Níl
- Ahearn, Theresa.
- Allen, Bernard.
- Barry, Peter.
- Boylan, Andrew.
- Bradford, Paul.
- Browne, John (Carlow-Kilkenny).
- Carey, Donal.
- Clohessy, Peadar.
- Connor, John.
- Cox, Pat.
- Crawford, Seymour.
- Creed, Michael.
- Cullen, Martin.
- Currie, Austin.
- De Rossa, Proinsias.
- Doyle, Avril.
- Dukes, Alan M.
- Flaherty, Mary.
- Gilmore, Eamon.
- Harte, Paddy.
- Higgins, Jim.
- Hogan, Philip.
- Kenny, Enda.
- Keogh, Helen.
- Lowry, Michael.
- McGinley, Dinny.
- McGrath, Paul.
- McManus, Liz.
- Mitchell, Jim.
- Molloy, Robert.
- Nealon, Ted.
- Noonan, Michael.
- (Limerick East).
- O'Donnell, Liz.
- O'Malley, Desmond J.
- Quill, Máirín.
- Rabbitte, Pat.
- Shatter, Alan.
Tellers: Tá, Deputies Dempsey and Ferris; Níl, Deputies E. Kenny and Keogh.
Question declared carried.
SECTION 15.
Question proposed: "That section 15 stand part of the Bill."
Under the existing arrangements where one of a couple is getting unemployment assistance and the other spouse or partner is in receipt of a social insurance payment or old age pension, the couple are limited to the appropriate married rate of payment. The limitation is also applied where both are in receipt of unemployment assistance. Section 15 extends these provisions to the pre-retirement allowance scheme. The legislative provisions for the pre-retirement allowance scheme require that any long term payment being received by the spouse or partner of a claimant for pre-retirement allowance be assessed against the claimant as means.
This is not done in practice because of the harsh effect on claimants. It would leave the claimant with less than the rate of the adult dependant allowance. Instead the provisions limiting the entitlement of couples in the unemployment assistance scheme are applied, since these are more favourable to the claimant. Section 15 is designed to bring the legislative provisions into line with this administrative practice.
Question put and agreed to.
SECTION 16.
Question proposed: "That section 16 stand part of the Bill."
This section provides for an increase in the ceiling up to which PRSI contributions are payable by employees and employers, with effect from 6 April 1993. Paragraph (a) of subsection (1) increases the ceiling in the case of contributions payable by employers to £21,300, while paragraph (b) increases the ceiling in the case of contributions payable by employees to £20,000.
These are the normal increases which take place each year to keep the levels in line with changes in wages generally. They take into account inflation and they keep the fund in a position to meet the requirements placed on it during the year.
I cannot understand the Minister's reasoning. He says this is to keep the rates in line with increases in salaries and wages, but the increases are well over 5 per cent at a time when inflation——
It is not related solely to inflation. It is a standard formula which takes account of increases in overall income.
Have wage increases in the past 12 months been in excess of 5 per cent?
Six per cent.
This is a tax on jobs at a time when 300,000 people are unemployed and the Government are endeavouring to get more people back to work by encouraging job creation. This tax on jobs is well above the rate of inflation and I am opposing the imposition of a further tax on job creation. It is ill advised and it underlines the Government's hypocrisy on the jobs question.
There is need for a detailed debate on the effect of PRSI on employment and on the contribution made by the working population to taxation in general. I realise that PRSI is not regarded as taxation. It has been argued in one of the NESC reports that PRSI should be evaluated as taxation although not taken into the tax net. I am taken by the notion that rather than lifting the ceiling each year, the ceiling should be removed entirely and that all income should be subject to PRSI whether that income is derived from salaried employment, income from shares etc. That would open up a series of options, for instance, the option of reducing the rate across the board. There would also be an option to provide for the current £60 exemption limit to be available to all concerned.
We should not have the current situation whereby a person who earns £59.99 does not pay PRSI and the person who earns £60.01 pays PRSI on the whole £60 which is regressive. I am not in any way decrying the advance that the £60 exemption is for low paid workers. I do not want the Minister to get annoyed and feel that we are somehow denying his good works. I am not in any way doing that, but I do think it is an area that requires comprehensive attention; it needs to be looked at in the context of the general taxation code and indeed the earlier debate on the effect that incomes have on the levels of poverty and on how we judge poverty.
There is no doubt that PRSI does create poverty traps. It is something that needs to be addressed, not in the long distant future but as a matter of some priority if we are to seriously address the whole question of equity in the system of social insurance.
The final point I want to make is that it is essential that we retain a social insurance system and that we do not allow it to be chipped away by various bits and pieces of changes here and there. One of my main concerns with the 1992 Bill was that it seemed to be undermining the whole concept of the social insurance system whereby people were paying for benefits and, having paid for them, the Minister would then come in with a Social Welfare Bill and wipe out some of those benefits or, in some cases, all those benefits. As far as I know, the only pay related benefit now payable is unemployment benefit. The benefits are being chipped away and we need to be careful about that. I ask the Minister, briefly on this occasion, to address the general issue of PRSI and perhaps at a later stage he could give us the opportunity of debating it at more length.
To follow from the point being made by Deputy De Rossa, is PRSI a social insurance scheme or a tax? Many people wonder because there has been a tendency over the last while to change the conditions of what is essentially a contract between the people who pay PRSI and the Department of Social Welfare to cover unemployment, illness or similar contingencies. There has been a tendency to whittle away entitlements under the PRSI scheme and the various measures introduced last year were an example. There is a feeling of disquiet among those people who willingly pay PRSI as social insurance that it is becoming more of a tax on income. If it is a tax on income, let us call it a tax on income.
It is unfair that the various conditions of eligibility for social insurance payments are being gradually whittled away. For example, a woman telephoned me yesterday saying that she had taken a career break last year in order to look after her child with whom she was having particular difficulties. She was a public servant and had paid PRSI contributions for 14 years. When she inquired about her maternity rights she found that she was no longer covered for maternity benefit this coming November because of the changes introduced last year in the general maternity scheme. Because she did not have sufficient contributions arising from the career break she was no longer entitled to maternity benefit although she had paid for 14 years into a system. She had no idea that this was the case, she was horrified and said that this must be relevant to many women.
Generally speaking, there is a feeling of concern among the public, people who are willing to pay PRSI, as to whether it is a social insurance scheme. It is not good enough that benefits will be whittled away in dribs and drabs and conditions changed unilaterally by the Government. Compare it with car insurance. It is very unlikely that unilateral changes in the conditions would be introduced and if they were the policyholder would have a right in contract. If the terms are being changed all the time that diminishes the whole system. There is a need for a general debate on the PRSI system.
I am a little surprised to hear the Fine Gael spokesperson attack the Minister in regard to the protection of the pay related social insurance fund. The Minister is actually giving the protection that is necessary. Deputy De Rossa alluded to that as well; we do not want the benefits that would accrue from such a fund to be eroded in any way.
We have all been made very forcibly aware of regulations made by the previous Minister for Social Welfare who debarred a number of people who, hitherto, benefited under this type of fund. I want to refer to the Minister's comments in relation to the regulations relating to disability benefit where 13 PRSI contributions were required. The Minister made other changes in relation to dental and optical benefit so that 140,000 people can now avail of this benefit. We should recognise that various benefits have been restored. There is only so much the Minister can do. Certain language was used in relation to the regulations made by the previous Minister. The present Minister has a proven record in relation to social welfare but we cannot expect him to alter these regulations bringing these benefits to a huge number of people and also protect the fund. It is important to recognise the necessity of protecting this social insurance fund.
I agree with Deputy De Rossa's remarks. We certainly need to protect our social insurance schemes. However, we must ask ourselves if the scheme adds to the problem rather than solving it. At present PRSI is seen by most people as simply another tax on labour. At a time when unemployment is at record levels we must be careful about adding further to the cost of job creation. We are dealing with sections 16 and 17, but section 18, which deals with the PRSI exemption scheme, is probably nullified by the increases brought about under sections 16 and 17. Admittedly this is basically a continuation of what we have done heretofore. It continues to keep the cost of labour provision at an all time high. The cost of employment here is much too great; taxation is much too high and we are creating a vicious circle of high taxation, high unemployment, high PRSI rates, etc. When will we break this circle? We have to keep a social insurance scheme in place for the tens of thousands of people who are dependent on it but perhaps we are attacking the problem from the wrong end of the spectrum. It would be a better approach if we tried to get our costs down and encouraged job creation. Sadly, however, the penal rates of both PRSI and PAYE make it almost impossible for most employers to take on extra employees. The good work being done through schemes such as the PRSI exemption scheme will amount to very little because the overall cost of labour, inclusive of taxes and PRSI, is much too high. Until that central problem is addressed problems of unemployment and high taxes and other difficulties will continue.
Deputy De Rossa said that this is an issue deserving of wide debate. The Deputy put forward some of his own views and suggested that all income should be subject to PRSI contributions. Various other measures to help reduce the burden on the individual employee or employer, or on the Government at the end of the day, could be suggested. That is, of course, a wider debate and a very important debate. It is important that the issue be debated and agreed.
I have felt for a long time that the social insurance fund is a particularly important form of security for the worker. Anyone who does not recognise that would soon change his or her mind after talking to a widow whose late husband was not involved in the PRSI system or did not have sufficient contributions, meaning that the widow does not qualify for a contributory widow's pension. Of course, mention was made earlier in the debate about the lack of help for widowers, and that is the other side of the coin. In the case of a widow who is not eligible for a contributory widow's pension there is the non-contributory pension scheme, which is subject to means testing. The social insurance fund has been very much a political issue over the years and it is an issue on which I hold a very strong personal view. I am committed to the social insurance fund. I believe in the fund very strongly and I am a strong supporter of it. I believe in the fund's importance for pensioners, invalids, widows and all its other beneficiaries.
I do not object to suggestions for enhancing or improving the fund, so long as the intention behind such suggestions is not to undermine the fund. Very often when suggestions are made to improve the fund I am reminded of the wolf in sheep's clothing — people might say that there should be a different method for doing one thing or another but usually they really mean that beneficiaries should be means tested. The adoption of means testing for beneficiaries would be particularly bad for workers. I have stood by the fund very strongly and I contend that it must be protected and it must be assured.
The Irish rate for employers compares very favourably with those of the rest of Europe. Only one other European state, the United Kingdom, has a lower rate for employers. The Irish rate of 12.2 per cent compares with the United Kingdom rate of 10 per cent, but the United Kingdom rate is taken from total income, which means that in fact more money is taken.
I shall not take issue with Deputy O'Donnell, who is new to the House, but Progressive Democrats Deputies have in the past argued strongly in favour of doing away with the scheme, which they say is a tax. One could say that everything one has to pay is a tax of some sort. Arguments in favour of the abolition of the scheme are usually put forward by those who have not suffered a bereavement or an occupational injury and have not needed assistance from the fund.
It has to be recognised that both employers and younger people in work have to be pushed to make contributions. The Government is all for employers and gives them every support, they provide employment and, generally speaking, they are excellent, but the Government has to make a push to ensure that employees have full, proper and reasonable protection. Of course, that is a requirement encountered in the Community as a whole. The EC has brought in various directives to ensure that measures of this kind are complied with.
It is particularly important to give an assurance that the fund is there now and will be maintained. Ideas about ways in which the fund could be better used are fine but at this stage all we are doing is keeping in line with normal changes, which are not inflationary changes but are changes and take into consideration payments such as overtime payments. The changes being made will not bring the resources of the fund up to the level necessary to meet the expenditure that will fall on it this year; the Government has to make up the difference and will do so.
In general, I have been happy with the comments made about the fund in this debate. It will be possible to discuss the exemption scheme at a later stage. The arrangement is for a short term initial exemption. Deputy De Rossa mentioned the £60 exemption limit. It would obviously be preferable to have that exemption across the board; once again the question of cost comes into the equation in that the exemption would apply to everyone involved. Those are issues that should be taken into consideration and further consideration will have to be given them.
My suggestion was a point for discussion, I am not offering it as a panacea.
No, I understand that the Deputy's suggestion is just one of the possibilities. There are different ways of approaching that problem and I hope the House will have an opportunity for a discussion on that.
Under the fund there are 92,600 old age contributory pensions and 76,700 retirement pensions, giving a total number of beneficiaries in the old age and retirement area of just under 295,000. Those people are not in a position to earn any more and they have a pension from the fund as a solid foundation. There are 190,000 people depending on the fund for disability and invalidity pensions. It is the need to take advantage of disability and invalidity pensions that cannot be predicted. Someone who is now saying that the fund represents just another tax might in six months or a year be thankful that the fund was not abolished. The fund has 99,000 contributory widow's pensions. Those in receipt of deserted wife's benefit amount to 34,000. The total number dependent on the fund for unemployment benefit is 161,000. At present 645,000 people depend on the social insurance fund. The Government has an obligation to ensure that those people are looked after. That is what is being done at this stage. The Government is keeping the fund in line and is making sure that its resources do not fall behind.
I should like to add to the comments I made earlier. In relation to the increase in contributions, it appears that people will be paying more and getting less. In the area of qualifying conditions for treatments, would the Minister confirm that 12,000 claims are affected by changes recently brought about by his predecessor? Would he also confirm that £80 million to £90 million will be taken out of the system as a result of the proposals to tax short term benefits? I ask the Minister to comment on the 1991 report of the ESRI, which shows that the yield from the taxation of short term social welfare payments, based on 1987 figures, should amount to about £88 million. It is suggested that the figure of £88 million is a conservative estimate of the likely revenue return. Would the Minister therefore agree that he is asking more and more from workers and is giving less and less? How does the Minister reconcile the plan to redistribute the moneys that will be taken from recipients as a result of the decision made in recent weeks to tax the disability benefit and the announcement made by the Minister on the same day that he plans in the near future to introduce taxation on unemployment benefit?
That is a much wider question of the integration of the tax and social welfare systems which has been recommended by various commissions. However, I do not deal with taxation and the Deputy should raise the matter with the appropriate Department. I know that the figure mentioned for the taxation of disability benefit is £10 million.
Will the effect of the proposal to tax unemployment and disability benefits cost just under £100 million?
The taxation of disability benefit was dealt with by the Minister for Finance in the House but I know that the figure is £10 million. However, section 16 deals with the increase to keep the ceiling for contributions in line with the needs of the fund.
The Minister is asking for more from workers and giving less. Will he agree that it is time to set up a national advisory group on social welfare? At present the Minister may make decisions by way of regulations and circulars which are not brought to the attention of the Members or laid before the House. This is most unsatisfactory because the goal posts are being changed almost daily, people do not know where they stand. Even new spokespersons in the House are confused about regulations and circulars which are never brought to their attention. A national advisory group could lay down a firm policy and guidelines for those affected. Such a group could also advise on policy in regard to social welfare and taxation.
There is more opportunity than ever to receive information from the Department. Family centres and voluntary organisations are able to impart information to people, particularly to those on social welfare. There is widespread information available and all Members regularly receive circulars detailing changes in benefits and so on. It is important to say that, particularly in the light of Deputy Allen's contribution. It is well known that information from the Department of Social Welfare is widely available and it would be very wrong to give any other impression. I wish to pay tribute to the Minister and his officials over the past five or six years for their efforts to ensure that people know their entitlements.
Most of us may well have that information but the queues at my clinic every week — and at those of Deputy Wallace and other Members — asking for information and expressing amazement and puzzlement at decisions shows that there is a serious lack of communication between the Department and the public. I give credit to the Minister for making improvements in the system but we should not be complacent. I tabled a question today about people's entitlement under the equality Act. Many of them have to go to solicitors to get their rights and, indeed, solicitors advertise their services on television in regard to rights under the Social Welfare Acts. That is not acceptable. The lines of communication are most unsatisfactory and I ask the Minister to react specifically in this regard. He did not do so in relation to points made on Second Stage regarding the many thousands of people who are still trying to ascertain their entitlements. I have heard that when people go to solicitors to find out their entitlements under the equality Act they are asked for 10 per cent of whatever sum is awarded to them by the Department. That is an outrageous, stupid, unfair and unjust situation and the Minister has a responsibility to rectify it. The complacency exhibited by him today is unacceptable.
Equal treatment was supposed to have been implemented in December 1984 when Deputy Allen's party was in Government. However, the measure was not introduced then, perhaps it was regarded as too expensive and the fact that they did not introduce it has created enormous complications and legal challenges. Eventually, the measure was introduced in two parts, in May and December 1986. Alleviating payments were also brought in for a period of one year in 1986. I took office in the latter part of 1987 and I considered that the alleviating payments could not be phased out instantly. I argued with my Government to have those payments phased out over a period. Members were pleased with my decision. However, certain organisations and individuals felt that they wanted to challenge what had happened in the period between 1984 and 1986, when we were not in Government. That is where all the trouble stems from.
Many cases were heard in this regard and there were varying decisions. As a result people made claims which were turned down here, in some instances by our courts on the grounds that it would result in double enrichment, what is called "unjust enrichment", which meant a person being paid twice for a dependent spouse. It did not seem to make sense because it was an illegal use of the directive at the time which led to a much wider situation and vastly increased charges on the taxpayer here. It meant that families would be paid twice. In other words, where the husband had been paid for his wife as a dependant she is entitled to be paid for him as a dependant even though he was at work. That certainly baffled the courts and legal people generally. Certainly, it baffled the taxpayer, the ordinary man in the street.
Therefore, Deputies should not come along and say this is a simple situation, we should just write a cheque and sort it all out.
Nobody said that. We wanted information.
The legal arguments have not been finalised. It is not a simple situation.
I wanted information.
Information has been broadcast and made available to everybody. Certain people went to solicitors and took cases to go beyond what was thought to be the solution. Some cases, somewhat surprising perhaps, succeeded. That was in respect of the case that was judged to be unjust enrichment here but was not regarded as such in Europe. The taxpayer here was told that, as a penalty for what happened between 1984 and 1986, the same family had to be paid twice; that happened. At the end of the day it is the Minister for Finance who must provide the money and the only place from where he can get the money is from the taxes about which we all complain. That money was provided last year, is being provided this year and will be next year. Anybody who is entitled to any amount will be paid.
There are solicitors who contend that as they brought so many cases to the courts claimants should engage them and they will get the money for them. Everybody is free to do as they wish. This is a classical example of people engaging solicitors to fight different aspects and angles of their cases. The Department pays out the money as quickly as possible and I reiterate that it will be paid out between this year and next year. Therefore, nobody need worry about not getting their money, their entitlement, as they might regard it. They will receive their money and there is no question about that.
What has happened recently — some members have told me about this — is that when a person receives a sum of money another person on the same road asks: why did I not get mine? Obviously, the person who received the money was involved in one legal case taken. The other people will get their money. It may be the subject of a parliamentary question later but everybody will get their money. I ask Members, as public representatives, to cool it; the money will be paid to everybody involved, spread over last year, this year and next year. The moneys promised last year were paid and money has been allocated in the budget this year with the final portion to be paid next year. It was an unfortunate, sorry development. Some people will use what most practical people would regard as very theoretical legal arguments to carry this matter somewhat further. Members must decide whether they want to fan that flame, encourage and stimulate it, thereby encourging the legal people to engage in such exercises. That is their option. The reality is that the Department of Social Welfare are paying in accordance with the decisions taken.
I reject totally the Minister's assertion that anybody is fanning the flames. The flaming has been exacerbated by the Minister's and the Department's reluctance and failure to provide adequate information to people on this very complex issue.
I welcome the Minister's latest statement that people do not have to engage solicitors to obtain their legal rights under the Acts, that everybody will be paid their due entitlement. Nonetheless, the Minister should designate officials in our large towns and cities to give people information on their entitlements and legal rights rather than forcing them into engaging solicitors to obtain their entitlements. Irrespective of the historic position as to who is right or wrong, a serious position obtains. However, I welcome the Minister's attempt to clarify it. The Minister should follow up his statement with adequate lines of communication, in large towns and cities, so that people will know and understand the position and their legal rights.
In a short debate it is unfortunate that we have been diverted down this road. The Minister seemed to imply that social welfare recipients were in some way to be more criticised for pursuing their legal rights. Whatever is in the law is their legal entitlement. If this House chooses to change the law, so be it but, so long as the law remains as drafted, any citizen who can benefit therefrom is entitled so to do. That argument has been advanced in the House on numerous occasions in relation to our tax system.
Nobody disagrees with that.
The Minister seems to be implying a criticism of people who use the law to obtain their legal rights in relation to social welfare.
No, I was explaining how delays occurred, how the problems developed and became so complex.
That is fine, if the Minister is making it clear that there is no criticism, implied or otherwise, of social welfare beneficiaries who seek their rights.
The Minister used the words "fanning the flames".
It is still very difficult to understand the question of unjust enrichment.
It is very difficult to understand the manner in which our tax system is used to enrich a small number of people in this State at a cost to other taxpayers. There is no criticism of that kind of activity in this House.
On the point raised by Deputy Allen, I have to acknowledge it caused much confusion and anger in Cork city because it appeared that people merely had to engage a solicitor, allow that person make their case in order to receive priority attention in regard to this equal treatment directive. I am glad the Minister has now clarified the position, which will be helpful. I know of approximately six cases in which legal action was threatened. Indeed, I believe there was a list of approximately 600 or 700 names, added to that number.
One thousand five hundred.
All of them were treated in the same manner as if they took legal action, which has caused much resentment, certainly in Cork. It has led to people believing they would have received their money faster had they taken similar action. Some will have to await payment until later this year, or even next year, something we all acknowledge they are entitled to.
I welcome the Minister's clarification and assurance today — I am sure it will be welcomed by most people — that it will not be necessary for them to engage members of the legal profession in order to obtain their due entitlements from the State.
With regard to the equality directive, and the amount outstanding to many married women, will the Minister confirm that £57 million is outstanding overall? There appears to be a lower level of consideration given to married women in this case. If that amount of money was owed to any other group of people, there would be blue murder about it. There appears to be a sort of acceptance that it is all right to ask married women, who are legally entitled to this payment, to hold on, be complacent, sit tight, implying that in some way they do not have the same right as men. If this money was owed to men in similar circumstances there would be blue murder about it.
Some of them are men. We must remember that this is an equal treatment directive which is dependent on the claimant. This complex issue is actually still before the courts. Perhaps it would be better to allow the matter be decided in court, without Deputies getting further involved in it.
In regard to what the Department has done, the Department identified 111,000 married women from departmental records; that was some task. More than 50 people have been working on this full-time. That work will continue for some time. Resources have been made available and the issue is being tackled. As I said, people have been identified from the records. A circular was issued to each of these people — one cannot get any closer to them than that. In addition, advertisements were placed in the newspapers to cover those who have not been identified. The process of deciding and establishing the facts——
They only received part of their legal entitlements, with the result that there was confusion. Last year, for example, payments were made by the Minister but this was an inadequate response to their requirements.
Those cases have been completed. As the Deputy said, the total amount of money involved is £57 million, a large proportion of which has been paid. The remainder is due to be paid this year and next year. We have to ask people where they were and what they were doing and for their RSI number as this money cannot be paid without first establishing the facts. In addition, a substantial number of cases is involved. As I said, it is an ongoing process and people can be assured that they will receive their payment. The budget stated what would be done this year and the figures were included. We must make it clear that the amounts determined by the courts are being used as the basis for the settlements made.
Will the Minister ensure that payments are made to the persons concerned rather than to the legal firms? I should also make the comment that while married women will receive their legal entitlements many legal firms will make massive fortunes as they will receive 10 per cent.
There is a difficulty in that if people come to us through a solicitor we will have to pay the solicitor. If people come to us directly they will be paid directly. The settlements, however, will be determined on the same basis.
These people do not even see their cheque; a 10 per cent deduction is made. It is outrageous.
That is the arrangement entered into. This is understandable as these people decided to come to us through a solicitor. As a result the Department dealt with them through their solicitor. In all other cases the person concerned will be paid the gross amount directly.
As it is now 2 p.m. I am required to put the following question in accordance with an order of the Dáil of this day: "That each of the sections 15 to 21, inclusive, which is not disposed of is hereby agreed to."
Question put and declared carried.
SECTION 22.
Amendments Nos. 39 to 42, inclusive, not moved.
Question proposed: "That section 22 stand part of the Bill."
Section 22 provides that people found to be fraudulently claiming a social welfare payment may be disqualified from receiving any social welfare payment other than child benefit for a period of up to nine weeks. This provision will not prevent the person concerned from claiming supplementary welfare allowance in respect of dependants.
This is an extraordinary and extremely harsh measure. It seeks to avoid the necessity for the Department of Social Welfare to prove fraud by taking people to court and having a case proven or disproven. It would be interesting to know — I do not have the figures — how many cases of fraud have been taken by the Department and how many have been successful. I strongly argue that this is tantamount to the Department of Social Welfare taking on itself the rights of judge and jury.
No provision is made for the right of appeal nor does the Bill make any allowance for the fact that the Department of Social Welfare makes mistakes. A number of constituents of mine had payments deducted incorrectly on the basis of what is euphemistically called an "overpayment". It was subsequently found that the Department was wrong to reclaim this money.
A later section also impinges on the rights of the social welfare recipients. Where a person is overpaid the Department of Social Welfare claims the right to reclaim the overpayment regardless of the legal rights of the individual. As I understand it, the legal position is that where the Department overpays a recipient of social welfare where the person can show that it was not his fault and he had taken reasonable steps to ensure that there would be no overpayment — the Department is not entitled to reclaim the overpayment.
In the course of events for someone like myself it would be no great pain — if I am overpaid in my monthly salary — to repay the overpayment over a period of 12 months but for a person on social welfare, say, on an income of £50-£60 a week or £120-£130 for a couple with a child and with normal outgoings it would be a severe imposition to repay such an amount. In many, but not all cases, the amount demanded can be quite steep. I am aware of cases where social welfare officers have been generous and sympathetic. I am not attacking the Department of Social Welfare or the welfare officers of the Department but I am objecting to the fact that the Department and the Minister are taking to themselves rights in relation to social welfare recipients which they are not entitled. They are narrowing the range of rights of poor people.
I am particularly concerned about section 22 as it automatically deprives a person of his benefit for up to nine weeks and, as I read it, for his dependants as well. It is also stated that he will be deprived of the right to receive supplementary welfare allowance for himself but not for an adult dependant and, presumably, his child dependants.
At present I am dealing with the case of a man who has been refused unemployment benefit for a particular reason under the current regime and who has also been refused supplementary welfare allowance by the community welfare officer. In addition he has been refused a supplementary welfare allowance for his spouse and children. This provision states that it may not be refused but this does not mean that it will not be refused in the case of dependants.
It goes without saying that no one is advocating fraud but, in tackling the problem of fraud, we must bear in mind that all citizens must be treated alike, regardless of their status. I appeal to the Minister to withdraw this section and examine it again to see if he can find a better way of dealing with the problem.
On a point of clarification, I tabled an amendment to this section and I believe it should be dealt with before we deal with the section.
Acting Chairman
Amendment No. 39 is ruled out of order.
Are we entitled to discuss it?
There was a plunder of the amendments today; I do not think anything survived. I also had amendments down to section 22 as there are various aspects of it that need clarification. I think there is a conflict between this section and section 204 (4) of the Principal Act, particularly in relation to the supplementary welfare allowance.
This section sets out the penalties for people found to be fraudulently claiming welfare benefits. It gives the deciding officer the power to disqualify for up to nine weeks a person found to be fraudulently claiming a social welfare payment. This is quite a severe penalty, given that people who are signing on are generally in need. I am concerned because there appears to be scant regard for due process. Will the Minister clarify whether a person can be penalised on the word of a deciding officer? If that is the case, I think there is scant regard for the due process and it is dubious from that point of view.
No party is more in favour of tackling abuses of the system than my party and I welcome any efforts by the Department to tackle them. In tackling abuse, however, we have to be very careful that we do not go overboard and in the process infringe civil liberties. More importantly, this section seeks to stretch the hand of the deciding officer in the Department of Social Welfare into the territory of the health boards who have responsibility for administering the supplementary welfare allowance scheme. Under section 204 (4) of the Principal Act any assessment or decision in relation to supplementary welfare lies solely at the discretion of the chief executive officer of the health board. This section seems to introduce a conflict between the decision of the deciding officer to disqualify a person from receiving benefit for nine weeks and the discretionary payment of a supplementary welfare allowance by the chief executive officer of the health board to meet the person's needs. The supplementary welfare allowance system is the final safety net. I think we have to leave it to the discretion of the chief executive officer whether to pay that allowance. I do not think it is appropriate that the deciding officer can reach into the health board's responsibility, as given in the Principal Act.
I think the Minister will agree that this section seems to introduce a conflict as between the power of a deciding officer in the Department of Social Welfare and the chief executive officer of the health board.
On the question of disallowing supplementary welfare allowance, it seems to me that a single man without adult or child dependants would get absolutely nothing if the provisions of this section applied. The penalty should fit the offence and it would be better to send the man to jail, where at least he would be fed, than to impose this penalty. Are we saying to a single man found guilty of this offence on the word of the deciding officer, which is dubious in its own right: "You are not going to get a penny from the Irish social welfare system for nine weeks". I think that is very harsh and in some circumstances it would mean that a single person without dependants could be totally destitute. Will the Minister clarify the situation because I believe there is a conflict?
I tabled an amendment to the section to repeal the means testing of deserted wife's benefit. I know we are running out of time and what I have to say will be a duplication of what I intend to say on amendment No. 40. However, the supplementary welfare regime is so restrictive as a result of the interpretation of circulars by community welfare officers that people are being denied unemployment assistance on the grounds of inadequate information. In one case that has been brought to my attention, a married man with three children has been asked to provide his father's bank book but because his father refuses to do so, his son is being denied unemployment assistance. As a result of this he is also being denied supplementary welfare allowance. He is now destitute, although the circumstances are outside his control. That is happening in the Southern Health Board area.
The supplementary welfare allowance is a scheme of last resort for those who are almost destitute and would be destitute without the scheme being in operation. The new restrictions being proposed by the Minister will mean that people will have no payments whatsoever and will go hungry. I ask the Minister to accept the amendment I tabled.
In my contribution yesterday I referred specifically to fraud. I was talking of those who commit fraud and as a result deprive others in the community of much needed financial assistance. We cannot close our eyes to the fraud that is taking place but at the same time we must ensure that in implementing the provisions of this section we are not defeating the purpose for which it is being inserted. I am dealing with a case at present where an overpayment in excess of £6,000 was made because the individual was working and claiming at the same time. I have very little sympathy for that individual because I feel he is depriving those in need of financial assistance.
Deputies have raised points about the sensitivity of the system but in my dealings in relation to overpayments, as Deputy De Rossa mentioned, I have always found the staff very helpful in arranging refunds to the Department. When we talk about fraud we would want to clearly define that we are talking about people who have deliberately abused the system. This is going on and we all know that it is happening. It is not easy to detect people commiting fraud but when they are detected we must have a deterrent. We have to decide whether the Minister's proposal is the proper way to deal with the problem or if it is too severe. We must have deterrents. Repeatedly we are told that so and so is in receipt of social welfare and working at the same time. I am not suggesting that a man who is endeavouring to rear his family should not go out and earn a few bob but we know there are well-heeled people in the community who are abusing the system and we must endeavour to stop that.
They will not be caught by that.
In my contribution I asked the Minister to elucidate on a point raised by Deputy O'Donnell. Section 204 of the Social Welfare (Consolidation) Act, 1981, states specifically that it is the function of a chief executive officer of a health board to determine entitlement to supplementary welfare allowance. Any member of a health board will be aware that chief executive officers, by and large, have derogated their responsibility to the superintendents of community care. Is there a contradiction between the role of the superintendent of community care, the chief executive officer and the deciding officer of the Department of Social Welfare? Section 22 states that where people are found defrauding the system they will not be entitled to supplementary welfare benefit for a nine week period except where an adult or child dependant is involved. Am I correct in stating that a deciding officer of the Department of Social Welfare may be usurping the powers conferred on the chief executive officer of a health board? Is this legal under the Social Welfare (Consolidation) Act, 1981? For example, what would happen if the chief executive officer of a health board legitimately stated that in his or her view an exceptional circumstance had arisen and that he or she had the power to authorise a supplementary welfare payment to a person in this category? The chief executive officer would certainly contend that he or she has every right to do so. Like Deputy O'Donnell, I would cite the case of a single person who will receive no payment for nine weeks if he or she is found guilty of fraud. If we were to apply the full rigours of the law and impose a prison sentence on a person found defrauding the system, that person would be fed and would receive an allowance. Therefore, this provision seems particularly harsh. In view of the circumstances and contradictions in this section, I would like the Minister to clarify the position.
In relation to Deputy O'Keeffe's point, technically there is no conflict because section 200 of Chapter 6 of the Social Welfare (Consolidation) Act, 1981 states:
Subject to this Chapter, every person in the State whose means are insufficient to meet his needs and the needs of any adult or child dependant of his shall be entitled to supplementary welfare allowance.
In this regard there is not a technical conflict, but there is a practical difficulty. In effect, we are trying to reduce the burden on the Department to take the person to court in every case. Where there is a clear case of fraud, the Department would not have to take the person to court. If a person is taken to court and found guilty of fraud, these provisions will apply. They also apply in other situations, but when the person is not taken to court the provisions do not apply. The provision we are dealing with is out of line with the other provisions. Deputies may say that the other provisions are harsh, but this provision is out of line and we are trying to make it consistent with the other provisions. It would mean that we would not have to take people to court when it has been established that fraud has taken place.
Is this right, can we do that?
It is quite clear we can do that when fraud has been established.
Does it not have to be proven?
We can say that everything has to be proven and take every case to court, the Deputy's legal friends will tell her that that is the course we should be following. Every social welfare matter can be decided in court but at the end of the day it will cost everybody a great deal of money and expose the people involved. A person may admit to fraud but he or she will not want to go to court. In that case, we would have to take them to court.
Surely a person who is not guilty of fraud will be as reluctant as the guilty person to go to court and will, therefore, do a deal? This view that the Department knows when fraud is established is not accurate.
There are two appeal systems for those who disagree with the decision. People can make representations to their local representatives and representations can be made to Ministers about such cases. A formal appeals arrangement also exists. The decision does not end with the deciding officer. If people are not happy with a decision they can appeal it to the independent appeals office and go to court if they wish. If they are not happy with that, the Department may take them to court——
The penalty is not imposed until the matter is finalised.
No, not until it is finalised.
I disagree with the Minister.
The difference between the courts and the legal profession and what happens in practice is that people will admit to fraud. I have had numerous cases of constituents——
I disagree with the Minister. If the Department considers that a recipient is fraudulently claiming, it stops payments immediately. The person then appeals the decision and goes to the supplementary welfare office to get a top-up payment in order to survive. This section will deprive people of getting any money for themselves or their children.
They can take a case to court if they wish.
Who will take their case?
The penalty is implemented immediately following the report of the deciding officer, that is the crux of the problem.
They have a right to appeal.
They still do not get their money.
If an appeal is being heard, they continue to get their money until the outcome is decided.
They do not. The Minister is ill-advised.
We are talking about this section and a specific type of case, we are not talking about other cases. In this case they will get their money until the outcome of the appeal is decided. The nine week period will commence following the appeal. In the case we are talking about at present they do not lose payment for the nine weeks.
A man in my constituency has not got benefits or supplementary welfare allowance since last October.
I know of similar cases.
That is a different question. This relates to when the decision is made. For instance, if a court decides that a person has defrauded the system, the nine week disqualification period will apply.
It is an academic difference.
If such a decision is reached in this case, the nine week disqualification can only be applied.
The Minister will have to come back here again to deal with this matter.
What about the supplementary welfare allowance?
The position in regard to supplementary welfare allowance is that in the case of fraud, only a person's spouse and dependants are covered.
Is there any payment?
No, not in the case of fraud. That is the law at the moment.
Where it is proven.
It can be accepted, a person may admit that he has committed fraud.
What about alleged fraud?
That is before the deciding officer becomes involved and before an appeal takes place. We are talking about the position when all those procedures are finalised.
In those circumstances a person is better off being found guilty than accused of committing fraud. Those who are accused do not get any money, but if they are found guilty, they do.
That is a separate case.
Amendments Nos. 45 and 46 relate to section 300 (g) inserted by section 31 of the Bill before us, which provides for regulatory powers for the introduction of a code of practice for dealing with overpayments. The effect of these amendments would be to enable an officer of a health board to apply the provisions of the code of practice in relation to over-payments of supplementary welfare allowance. I agree with this approach and I propose therefore to accept Deputy Allen's amendments. If I had not said that before 2.30 p.m. the amendments would have been lost.
In view of that we will not chase the Minister through the lobbies.
As it is now 2.30 p.m. I am required to put the following question in accordance with the Order of the Dáil of this day: "That the amendments set down by the Minister for Social Welfare to sections 22 to 52, inclusive, and not disposed of, together with amendments 45 and 46, are hereby made to the Bill and that in respect of each of the sections undisposed of, that the section or, as appropriate, the section as amended, is hereby agreed to and that Schedules A, B, C and D and the Title are hereby agreed to."
Question put and agreed to.
Progress reported; Committee to sit again.