Dáil Éireann díospóireacht -
Wednesday, 13 Mar 1996

Vol. 463 No. 1

Social Welfare Bill, 1996: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time".

Mr. Connor

Medical referees often declare fit for work people who are clearly not fit. The appeals office subsequently has to deal with these cases. In sporting parlance, referees are there to ensure fair play but it is clear that medical referees appointed by the Department often do not ensure such play.

Currency fluctuations affect means tested pensions. Thousands of people here are in receipt of UK pensions. The rate of these pensions is not as much as the maximum rate of Irish non-contributory pensions and thousands of pensioners receive top-ups because of this. Currency fluctuations often change from day to day but at present we are operating as if the Irish pound is worth approximately 92p or 93p sterling whereas IR£1.03 or IR£1.04 is needed to buy one Irish pound. People are being put at a huge disadvantage because of this. This has been the situation for several months. Parity was reached in 1995. Currency fluctuations are addressed in November but this does not take into account the reality of today. British pensioners living here are at a serious disadvantage.

The Minister should urgently look at this and put in place a new system which will be more responsive to currency fluctuations between the Irish pound and sterling. People who watch the money markets say that the value of the Irish pound will stay ahead of sterling for the foreseeable future due to economic performance and confidence. The Department should pay pensions on the basis of the Irish pound's present value against sterling, which will probably remain the same for a long time.

The Minister introduced a new system of disregards under unemployment assistance which provides an incentive for people to return to work. Since 1972 or 1973 there has been a disregard system for old age pensioners and this has not been changed since. The first £7 of income is disregarded before the means test applies. That disregard figure should be increased to take account of the cost of living increases in the interim since its introduction. The Minister might consider giving pensioners on a non-contributory old age pension an increase of perhaps £5 per week. I acknowledge that we must be aware of the cost implication but there have not been any increases in old age pensions above the cost of living increase in recent years. It would be a gesture to pensioners if we were to seriously examine the question of the disregard. I said earlier that the disregard system now being introduced does not necessarily apply to small farmers in receipt of unemployment assistance or, as it is sometimes called, small farmers' assistance but what I am referring to now is distinctly different.

I do not wish my contribution to be a tissue of complaints but I am raising questions about the system which have been brought to my attention and which need to be addressed. Widows under the age of 66 whose husbands qualified for free electricity and telephone allowances before their deaths have had the allowance restored in some cases.

Widows under the age of 66 do not qualify for allowances such as the living alone allowance. A living alone allowance should be introduced for widows under 66 years of age. Perhaps we could start by stipulating that it would not be paid until the woman was, say, 56 years of age. The current supplement of £4 for old age pensioners is quite generous and justice demands that it be given to this category of widow who lives alone and who may find it extremely difficult to make ends meet on the fixed income of a widow's pension.

I ask the Minister and the Minister of State to take on board the points I made in relation to the problems I and other Deputies find in the system when doing our constituency work. It would not cost any money to address some of those problems and they should be addressed as quickly as possible.

Dr. O'Hanlon

I wish to share my time with Deputy Batt O'Keeffe.

An Leas-Cheann Comhairle

I am sure that is satisfactory and agreed.

Dr. O'Hanlon

I do not intend to go into detail on the principles of the Bill but I agree with what my colleague, Deputy Joe Walsh, said in that regard last night. I will examine the practical application of some items and refer to others that should be included.

Old age pensioners should be happy they were given a 0.5 per cent higher increase than that given last year. The 2.5 per cent increase for old age pensioners last year was the lowest in the history of the State with the exception of the occasion when a former constituency representative of mine, Ernest Blythe, reduced it by one shilling.

Mr. Durkan

We are getting a history lesson.

Dr. O'Hanlon

It is no harm to be reminded of that because no one knows what the Minister will do next year if he is still in office.

Mr. Durkan

There is no need to go back that far.

Dr. O'Hanlon

If I were the Minister I would not make too much of a virtue out of a 5.5 per cent increase in two years.

Mr. E. Byrne

Deputy McCreevy was one of the most famous Ministers for Social Welfare. He would not pay the women.

An Leas-Cheann Comhairle

Let us hear the Deputy without interruption.

Dr. O'Hanlon

Having listened to the Minister when he was in Opposition, we expected more radical reform and a greater emphasis on the work ethic.

The PRSI employers' contributions were reduced from 12.2 per cent to 12 per cent, that is £20 in every £10,000. We were then told by the Minister that we should be happy with the Bill for social welfare this year. Where is the radical reform we were promised? It would be much better to target the available money on some specific area rather than tinkering with the system.

I welcome the introduction of the disability allowance which was a long time in gestation. In his contribution last night the Minister referred to this as a major step forward but it is not. He is merely transferring the responsibility for disabled person's maintenance allowance from one Department to another, and that is not a major step forward.

Mr. Durkan

It is more than that.

Dr. O'Hanlon

Responsibility for administering this allowance should lie with the Department of Social Welfare; I recommended that when I was Minister for Health. It fits neatly into the social welfare system. Under the section dealing with disabled person's maintenance allowance, the State will not pay this allowance to people in institutions. Am I right in assuming that persons residing in an institution who are not supported by the State will be entitled to receive the allowance? That would have serious implications for many institutions such as convents, where there are elderly nuns. It is vitally important that they be entitled to this allowance if they are under the age of 66 and not receiving an old age pension or any other support from the State. I understand persons in nursing homes are treated similarly to those in any long stay institution. Section 16 deals with the commencement order. I would like to know when it is intended to introduce this allowance.

I welcome the new appeals system for supplementary welfare allowance. That system will only deal with rent allowances and other supplements and not cases of exceptional need, but appeals are frequently necessary in such cases. Decisions on supplementary welfare allowance often depend on the community welfare officer and there seems to be a lack of consistency in how that scheme is applied. Will the Minister ensure there is some mechanism whereby people who need money urgently and who have been refused it by the community welfare officer can gain quick access to a proper appeals system. It is necessary to expedite the appeals mechanism in regard to all claims.

I welcome the development of the household budget scheme initiated by Deputy Michael Woods. The scheme is working effectively and I compliment the Department and the officers who are implementing it. I also welcome the new provision for credits for homemakers to ensure that women particularly will be entitled to credits in assessing their claim to pensions.

We will have to read the small print to see how the new one-parent family allowance will work in practice. One of the difficulties — and the Minister identified it last night — is that women under 40 years of age who do not qualify for an allowance, because they have no children, would qualify at present for an allowance when they are over 40 years of age. Under the new arrangement that will not happen. The Minister is making provision for women between the ages of 38 and 40 so that they will benefit when the time comes. What will be the position of women between the ages of, say, 35 and 38 years of age who, presumably, will not benefit? It is a retrograde step to introduce a scheme that will disadvantage people who might otherwise have expected it to be to their advantage. The real issue in regard to the one-parent family allowance is the number of one-parent families. The women I see with two, three or four children who do not have a constant income — perhaps the court in a settlement allocates a maintenance allowance to them from their husband — are either paid the maintenance intermittently by the husband or he does not pay. The obligation appears to be on the lone parent to pursue the husband for that maintenance. It is totally unrealistic to ask a woman with two or three children, who has no income of her own — or even maintenance income — to pursue her husband for maintenance. The State must seriously address that issue.

I would like to see — I do not know how practical it may be — the Department of Social Welfare pay the one-parent family allowance to the woman and her children and pursue her husband. It is unrealistic to expect a woman with no income to go to court and pursue her husband. An issue that needs to be addressed is the unfortunate women with a number of children who does not have a regular weekly income.

I welcome the announcement of the 5 per cent increase in the carer's allowance. This excellent scheme, which recognises the role of carers of the elderly, was introduced by Deputy Woods when he was Minister for Social Welfare. Despite improvements over the years the scheme still has one major anomaly, that people who look after the heavily dependent are not eligible for the carer's allowance if they do not qualify under the means test. For people who are caring for persons in need of full-time care and attention, the means test should be examined with a view to a larger sum being disregarded. There are many instances where a wife, whose husband happens to earn a little more than the entitlement, does not qualify even though she may have to stay in the house 24 hours a day with, perhaps, a person who is bedridden, recovering from a stroke, while her neighbour, who is looking after an elderly person who is able to move around the house and look after himself or herself to a large extent, qualifies. The carer who is looking after the heavily dependent person is ruled out because of the means test. That issue should be addressed and a much larger sum should be disregarded depending on the dependency of the person being cared for. There is a precedent under the Health (Nursing Homes) Act where a larger allocation can be given to the nursing home depending on the degree of dependency of the person being looked after. There is a good case to be made for disregarding a large amount of money for people caring for the heavily dependent.

The Departments of Social Welfare, Health and the Environment should come together with a view to catering for the needs of the elderly in future. Because of the reduced number of births from over 74,000 in 1980 to 47,000 last year there will be a major increase in the number of elderly in society in the years to come. Now is the time to address how to care for them. Ideally people like to live in their own homes and, if not, they like to live in their own community. The three aforementioned Departments should come together because they have a key role to play. They do not always play their role in tandem. There is not the degree of coordination and co-operation one would like to see, for example, between the local authorities and the agencies of the Department of the Environment and the health boards, in regard to the care of the elderly. Through the carer's allowance the Department of Social Welfare has a key role to play.

The whole question of the assessment of applicants for non-contributory old age pension should be reviewed. I raised that matter here by means of parliamentary questions with the Minister on a number of occasions during the past year. There are a number of aspects to it. There is a notional assessment that money in savings yields 10 per cent of an income. Everyone in this House knows that is not so. The other aspect in which the Department should interest itself is the behaviour of the banks. If an elderly person sells a farm and lodges the money, invariably it will be put in a demand account and they will end up with less than 1 per cent interest.

I had an experience where a man who had £60,000 came to me with a view to appealing the refusal of an old age pension. He had been assessed by the Department of Social Welfare on its notional assessment as having £6,000. I accepted that he would not have £6,000 but suggested he might have £3,000 which would leave him somewhere near qualifying for the non-contributory old age pension. He told me he did not have that amount. I asked him to get a certificate of interest from the bank and this came to £345. The State and the Department of Social Welfare must interest themselves in that aspect of the income of the elderly, particularly when they apply for a non-contributory old age pension. It is usual for the banks to treat the elderly in that way, to put their money in a demand account, without discussing with them the benefit of putting it in a deposit account and earning higher interest. The Department must ascertain people's income rather than a notional assessment that perhaps rules them out for an income and leaves them below the breadline.

There was an announcement in the budget that there would be an £800 tax relief for old age pensioners who installed an alarm system. Interestingly, the only constituency I can think of where that might be of any benefit would be the Minister for Finance's constituency in Dublin 4. Certainly it would not have any application in Deputy Byrne's constituency or in mine.

Mr. Nealon

It would be no good in Knockballyroney, County Monaghan.

Dr. O'Hanlon

No. It would not have any application since the old age pensioners would not be paying tax in the part of the country from which Deputy Nealon and I come.

The Minister established a task force to examine the proposal regarding alarms for the elderly. I never heard anything as nonsensical as establishing such a task force. The people of rural Ireland are afraid for their lives because of the present level of crime and everybody knows what needs to be done. A former leader of the Fianna Fáil Party, Charles Haughey, introduced innovative schemes, both as Minister for Social Welfare and Minister for Finance, which have served the people well. For instance, free telephone rental, television licence, electricity and travel were introduced because the Minister had imagination, saw a need and addressed it. If he had set up a task force, it could be still sitting and the people would not have these services. Why was it necessary to set up this task force? The Minister should give people who live alone in the countryside a grant to install alarms. That would be beneficial.

I have raised a number of times with the Minister by way of parliamentary question the issue of the surprising discrimination against blind people who have spent their life working. I put a question down about a contributory pensioner who is recognised as blind both by the Department of Social Welfare and the health board since he has a blind allowance. When he sought a companion travel pass to travel to the hospital in Dublin, he could not be given one because he was a contributory pensioner. If he had been a non-contributory pensioner, an invalidity pensioner in a wheelchair or in receipt of disabled person's maintenance allowance, he would have been entitled to a companion pass but, since he spent his life working and is now blind, he is not entitled to it. It defies logic, as does a reply to a parliamentary question to the effect that the Minister would have to examine the cost involved.

Another change which I would like to have seen in the Bill relates to the death grant. Anybody who was insured after 1971 is entitled to a death grant when he or she or a dependant dies. The contribution for a death grant was introduced that year. However, anybody who retired from work or did not pay a contribution before 1971 is not entitled to this grant. The time has come to give a death grant to the few remaining people and their dependants who happened to retire before 1971. I do not think the cost to the Exchequer would be great but it would make a lot of difference to many old people who are mainly in their 90s.

I pay tribute to the Minister and his staff in the Department of Social Welfare, particularly those who work among the people. I find them extremely helpful. The Department has improved almost beyond recognition over the past ten or 20 years and it is an example of how high technology can be used to create a consumer friendly service. Great use has been made of information technology to solve the problems of people at local level.

Mr. Nealon

With the permission of the House, I want to share my time with Deputy Eric Byrne.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. Nealon

The primary purpose of this Bill is to give legislative effect to the improvements in the social welfare rates announced in the budget. My first duty, therefore, is to compliment the Minister on these improvements. It is well known how strenuously he fought at Cabinet to protect and improve the living standard of those not in the labour force, the people for whom he has a special responsibility. He is, in a way, their Minister. I also congratulate his Minister of State, Deputy Durkan, whose major input in fighting for the people for whom he is responsible is well known.

We all have an obligation to ensure that if things are going well within the economy, as they are undoubtedly at present with the exceptional rate of growth, all should share in these improvements. Many of the people who have reached old age have come through exceedingly difficult times and if we can afford improvements now, they should be the first to benefit. They do not have the luxury of time on their side.

The next budget, the first of two in 1997, will be in an election year. I ask the Minister and the Minister of State to ensure the emphasis will be on those who most need assistance and that the Government will not yield to the temptation, as too often happened in the past, to provide election sweeteners to what might be regarded as more influential groupings. That is the kind of thing that gives politicians a bad name.

During this brief contribution, I want to bring the attention of the Minister to a number of areas where further changes are urgently needed. I would like to see some of them introduced immediately, either through amendments to this Bill or by way of legislation. Take the question of savings which a non-contributory old age pensioner has and the manner in which these impinge on his or her pension entitlements. Let us consider a person with £5,000 in savings, a sum which was probably built up over a lifetime. The first £200 of this is disregarded entirely in assessing the amount of the pension and the next £375 is assessed at an interest rate of 5 per cent. The balance is then assessed on the assumption that the pensioner can avail of an interest rate of 10 per cent. The Government, through the Department of Social Welfare, is stating that the normal interest rate of which a pensioner can avail on savings of a few thousand pounds is 10 per cent at a time when interest rates have been at an exceptionally low level over a long period and are still falling.

The Government is exceptionally proud of the present low level of interest rates. We heard the Taoiseach speak of it at the Fine Gael Árd-Fheis when he made the point that a person with a £40,000 mortgage is now paying £130 less per month than he or she was paying a few years ago. We have heard the Minister for Finance speak of low interest rates and the likelihood that the situation will continue. It forms part of the State's plans to keep within the Maastricht guidelines for economic and monetary union. Bank and building society rates are still falling but what is the Government doing for the old age pensioner? Absolutely nothing. The Government is suggesting that it is possible for every non-contributory old age pensioner to get 10 per cent on every little scrap of saving above £575. If a person with such savings could get that kind of interest rates, he or she would not be on a pension — that person would be head-hunted by the financial institutions. The Minister should decide as a matter of urgency that changes should be made here. This should be done in all fairness and equity. I believe the Minister is a fair-minded man. He must accept the logic of what I am saying.

The Minister has commenced a process in this Bill to provide for a new method of assessing capital in the case of the new disability allowance, which will replace the disabled person's maintenance allowance administered currently by the health board, and the new one parent family payment. The Bill provides that the first £2,000 will be disregarded, the next £20,000 will be assessed at 7.5 per cent and capital in excess of £20,000 will be assessed at 15 per cent. I ask him to apply himself immediately to the non-contributory old age pension as the way in which it is handled at present is scandalous. When we know the best financial consultants cannot achieve anything near that figure, how is a pensioner expected to achieve that rate with a small sum?

The Minister should greatly increase the amount of money which is totally disregarded. This matter is also tied to the question of criminals who seek out elderly people living in isolated rural areas in the west, in particular, because they think the savings may be retained in pensioners' houses. Savings are retained in houses because of this excessive notional interest rate which is being computed and the low level of the amount to be disregarded. Is it right that these people, after working hard and living frugally all their lives, should be treated in this fashion? They are anxious to put away a certain amount of savings in case some unforeseen difficulty arises, such as an unexpected illness, accident or, as in most cases, so that they will not be a burden on anyone and will have a decent burial. It is all to give them some sense of independence. They should be allowed — I am being generous to the Minister here — a ceiling of at least £10,000 without it impinging on the way their pension rights are decided. It would not break the Exchequer.

The Minister for Finance gave a tax allowance for the purchase of house alarms by elderly people in rural areas. In an otherwise excellent budget, this was an aberration. I am glad the Minister for Social Welfare has set up a task force to consider what can be done for these people to help them combat criminal assaults and robbery. As a Deputy from County Sligo, where there have been horrific examples of the activity of these criminals, I welcome this decision and I have made a submission to the task force.

The alert system should first be based on neighbours rather than gardaí in a town ten miles away who have no knowledge of the terrain. I suggest the installation of a simple push button panel to trigger the alert system — using number or codes would be too complicated — and an alarm transmitted first to their immediate neighbours, preferably those with a telephone who could then alert the Garda and take action in safety. It would not be beyond the capabilities of modern technology to produce such an alert system for £70 a unit, for example, that would carry a signal up to half a mile. This at least would ensure that no one would be left tied up or injured for too long. It would also ensure there would be a good chance of getting a description of the vehicle used by the criminals, which may force the attackers to leave on foot across fields. All of this would make the task of the Garda for a successful apprehension of the criminals as they made their getaway, that much easier.

Those who know the kind of terrain and isolation of the areas where the most vulnerable of the elderly live — nobody knows this better than the Minister of State, who originally hailed from Kilsallagh should see the need for the involvement of people who know the terrain and how to block off a road. This is where the neighbours can help. I hope the Minister's task force will examine this suggestion and that he might consider subsidising the cost of whatever alarm system is recommended so that every pensioner at risk would have some protection and sense of security as they go to bed at night.

I again refer to the outrageous notional 10 per cent interest to pensioners; something should be done about it. No one can gainsay the logic that it is not reasonable for pensioners. Perhaps the Minister or the Minister of State — they seem to be the only members of the Cabinet who will be around this weekend — could change it.

Mr. E. Byrne

I welcome what has been agreed by all Members to be a consumer friendly Bill designed to streamline the social welfare provisions and eliminate some of the anomalies which have bedevilled the system in the past. I especially welcome the decision to allow people disqualified from receiving unemployment payments, because they happened to be involved in an industrial or trade dispute, to appeal immediately to the social welfare tribunal, that is a very progressive step.

I make no apology for the fact that my contribution to this debate will be partisan. My party leader, the Minister for Social Welfare, has introduced what I believe is radical and reforming legislation which will make a substantial difference to the way our social welfare system is both administered and perceived. The Minister dealt comprehensively yesterday with the range of specific changes in the Bill and I intend today to highlight some of the issues which have not received the public attention they deserve.

Developments in our social welfare system have, in the past, lagged behind social changes. In this regard, I especially welcome the decision to introduce a new one parent family payment, replacing what was known as the lone parent allowance and the deserted wive's benefit. In the past, many women have been forced to prove desertion. The onus of proof and the stigma which accompanied it reflected prevailing social attitudes regarding the position of women. By doing away with the whole concept of desertion, this Bill reinforces the individual dignity of women. I hope it will ensure they will no longer be regarded, certainly by the social welfare system at least, as second class citizens wholly dependent on their husbands for both financial support and social status. In removing this obligation. Women have a lot to be thankful for in this Bill.

However, this most progressive legislation is of little use unless citizens can have unbureaucratic access to information and, where necessary, redress. The Government has made a concerted effort in many areas to redress the past imbalance between the role of the State and the needs of the citizen.

The Bill introduces two very important reforms in this area. First, it provides for an independent appeals system for those whose claims for supplementary welfare allowance have been turned down and, second, it provides for unemployed people to have access to the social welfare tribunal at an earlier stage in trade disputes. The latter change is especially significant. It arises principally from the experience with the Irish Press dispute last year when the Minister gave a commitment to review the procedures; he has lived up to that commitment. Section 33 provides that people who are disqualified from receiving unemployment payments because of their involvement in a trade dispute will be able to appeal immediately to the social welfare tribunal without first having to appeal the deciding officer's decision to the chief appeals officer. That problem was very highlighted during the Irish Press dispute and many complaints were made about having to take that long route.

This is a significant change and in recent years, the rights of workers involved in trade disputes have been eroded, most notably on foot of the Industrial Relations Act. I would welcome a review of that Act with a view to ensuring that our industrial relations procedures do not militate against workers. In the meantime, I am delighted the Minister for Social Welfare has decided to provide workers who find themselves in trade disputes with a quick and unbureaucratic means of sorting out their entitlements. The changes in appeals system, together with the streamilining of various provisions, will help make our social welfare system more consumer friendly.

As we head towards the 21st century, there is a realisation that our welfare system does not, or at least should not, provide charity to supplicants but a service to citizens, to which they are entitled, and we should develop that concept. Sadly, unemployment, especially long-term unemployment, is the single greatest challenge facing the Government and society as a whole. I do not believe that poverty and unemployment are unavoidable or that unemployment can be tackled by market forces alone. The experience in Ireland and throughout the European Union demonstrates conclusively that markets forces alone cannot address the area of long-term unemployment. Therefore, a new strategy involving targeted intervention measures is required if we are to ensure that the fruits of economic growth do not bypass the marginalised communities.

Earlier in the year the Government introduced a work-friendly budget and I believe that the provisions in the Social Welfare Bill go some way towards eliminating many of the remaining poverty traps. They also ensure that those who wish to take up work are not dissuaded from doing so by our welfare system. In the past, the tradition of moving from the dole to the workplace was made almost impossible by the myriad poverty traps confronting job seekers. People coming off the live register to enter employment lost a range of benefits, particularly those taking up low paid employment. Much of the work available to those previously unemployed is, sadly, low paid. These people often found themselves significantly out of pocket. In effect they were penalised, not rewarded, for entering employment.

In the past this was the only point on which I found myself in agreement with the Progressive Democrats. Fortunately that small piece of common ground between Democratic Left and the Progressive Democrats has been swept away by the Government. For the first time a concerted effort has been made to ensure that those taking up employment will not lose out by doing so. In future the long-term unemployed will retain their child dependent allowances for 13 weeks after taking up employment. That provision, in addition to the retention of the medical card, will make a substantial difference to those making the transition from the dole to employment. It will ensure that people are not deterred from taking up employment for merely financial considerations.

It is not good enough to simply provide work. People in employment must be guaranteed an income sufficient to maintain an acceptable standard of living. Democratic Left believes that the only way to ensure this in the long-term is through the introduction of a statutory minimum wage. However, in the short-term, the Social Welfare Bill provides significant improvements which will impact on families in particular. Family income supplement, a scheme designed for the lower paid, has been improved and this year's budget included another significant increase in child benefit. During the past two years child benefit increased by 45 per cent in respect of the first two children and by 36 per cent in respect of other children. This represents an unprecedented increase and is further evidence of the Government's commitment to ensure that support for families is improved. This Government is determined to be pro-family and the proof of this is in the Social Welfare Bill.

I fear the Social Welfare Bill will not receive the attention it deserves from the media and other commentators. Sadly, many people will view it as another technical Bill, which it is not. The legislation will have far-reaching consequences for those dependent on social welfare. The Minister is to be congratulated on the changes and improvements he introduced.

The Minister of State, Deputy Durkan, and the Minister for Social Welfare, Deputy De Rossa, should carefully consider the final report of the National Pensions Board which is entitled "Developing the National Pensions System". This report made a large number of recommendations for changes to the pensions system. In relation to the survivor's pension it recommends the introduction of a wider range of pro rata pensions related to the average number of contributions paid during an insured's lifetime. The formula outlined by the National Pensions Board requires that a person will qualify for maximum pension if their average contributions per year number between 45 and 52. This is followed by a a pro rata, structured pensions scheme, which would cater for people down to those with an average number of yearly contributions numbering between ten and 14 who would qualify for 30 per cent of the pension.

I understand that the Department of Social Welfare is considering this report and its recommendations on an on going basis, in due course proposals will be brought forward on the issues addressed in it. I appeal to the Minister to look favourably on the report on the grounds that, at present, a very small number of people would be entitled to payment. The resultant costs to the State would be very small. The lives of the very elderly people involved would be tremendously enhanced by the receipt of 30 per cent of the maximum pension. I hope that the Minister will take this on board.

Mr. Browne

(Wexford): With the permission of the House I would like to share time with Deputy Wallace.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. Browne

(Wexford): I welcome the introduction of the Social Welfare Bill which provides Members with an opportunity to discuss aspects of the social welfare system which they might wish to see changed. They can also table amendments and discuss with the Minister the issue of social welfare on Committee Stage.

The social welfare system has worked reasonably well in the past. Different Governments have made changes which improved the lives of those claiming social welfare benefits. However, many of the changes over the past number of years, particularly those in this year's budget and in the Bill, merely tinker with the system. As Deputy Joe Walsh stated yesterday, over £4 billion will be spent on the social welfare system. Much of this money is paid to those who require it, but we must consider how different aspects of social welfare payments might be improved.

At present, unemployment is the largest problem with which the country is faced. In the region of 70 per cent of people living in some housing estates in our cities and smaller towns are unemployed. This very high rate of unemployment is prevalent in areas where people depend on the social welfare system to help them to survive. The Government made many statements about action for the unemployed but the chances of people living in such housing estates obtaining employment are very slim.

Quangos seem to be operating throughout the country. The IDA, Forbairt, the county enterprise boards, the partnership programmes and the Leader programmes all have their own offices and staff and are building their own little empires. In my county there are ten different offices which are supposed to provide opportunities for people to obtain employment. Those people would need to earn £100 per week to cover the expense of buying petrol, renting a car or travelling by train or bus to visit the offices in question. I do not blame this Government any more than the previous one, but these agencies were established with different responsibilities and I question whether they are achieving much with regard to the creation of employment or helping people to obtain jobs. It is time to consider amalgamating some of these agencies. There should be one-stop shops in major towns, and some of the smaller ones, where people can obtain the information or help they require. People should not have to go to the enterprise board to be informed that they should have consulted the partnership programme which in turn informs them that they should visit the offices of the Leader programme. Much confusion is caused and many people will not seek employment possibilities as a result. The Government should seriously consider amalgamating these agencies. They should be encouraged to help people create jobs rather than looking after their own interests and creating well paid jobs for their employees.

The Minister outlined many of the proposed changes to the social welfare system. I welcome some of them including the new disability allowance, which will be administered by the Department. This replaces the old disabled person's maintenance allowance. I hope the Minister will be more flexible than were the health boards in the payment of disability allowance. The health boards operated a very strict means test which did nothing to help families increase their standards of living. If a wife or husband was on a small income of £20, £30 or £40 per week, the person claiming the disabled person's maintenance allowance only got the difference between that and the disabled person's maintenance allowance. The means testing was very strict and did not work in the interest of the family. I hope the Minister will ensure it will be operated on a flexible basis.

I welcome the new one parent family payment which will amalgamate the existing lone parent's allowance and the deserted wife's allowance. Many social welfare payments, made under different headings and names, could be amalgamated rather than have them confuse people. I would welcome such a development.

I am disappointed the Minister did not consider improving other areas. Will he examine the free fuel system for next winter? Free fuel payments have remainted static for many years although the cost of fuel has increased. The time has come to look seriously at the system, how it operates and the payments made. There is certainly a need for a substantial increase in them.

I raised a related issue with the Minister on a number of occasions during the winter months. A severe, cold winter spell puts pressure on old age pensioners and the sick to provide adequate heating. If the temperature drops to a certain level during a cold spell, it should trigger an increase in the free fuel allowance. People are afraid to use their units or their free gas allowances in case the fuel runs out too soon. Many of them do not get out of bed during cold spells. I ask the Minister to look seriously at that area.

I am critical of the alarm system proposal. The idea behind the provision of alarms is good but it baffles me that the vast number of people employed in the Departments of Social Welfare and Finance as well as the 14 members of Cabinet agreed this system without one person saying it would not work. A tax relief of up to £800 at the standard rate of income tax for persons aged 65 and over living alone to purchase alarms would benefit very few old age pensioners most of whom do not pay tax. This would be of no benefit to them.

Setting up a task force usually represents delaying tactics. We have enough task forces to take on the Chinese army. Most task force reports lie on shelves in Ministers' or Departments' offices gathering dust. I hope the Minister of State will ensure that, as soon as this task force reports, we will implement a policy to provide some type of alarm system for old age pensioners. As Deputy Nealon said, many of them particularly in rural areas are living in fear. As the Minister is aware, a number of systems operate in different parts of the country. Some of the best systems available should be taken on board and introduced immediately. A once off allowance or an allowance payable over two years should be available through the social welfare system to enable people to purchase an alarm system. The tax allowance proposed by the Minister will not benefit many people.

I welcome the appeals system for supplementary welfare allowance. The supplementary welfare allowance seems to operate differently in each health board area. Even the supplementary welfare officers in any given county do not operate on the same basis. It is time we had a proper supplementary welfare appeals office where people will get a fair decision. Up to now, the appeal was to those who made the original decision which was neither fair nor workable. I welcome the change and ask the Minister to ensure that supplementary welfare officers will be fairer and more equitable in their dealings with people. It is difficult to fathom how they reach some of their decisions which are unfair and unwieldy.

Mr. D. Wallace

I thank Deputy Browne for sharing his time with me. The Social Welfare Bill is probably the single most important set of Government proposals to come before the House each year since it represents the most genuine indicator of the State's commitment to those who are most economically dependent in our society. It allows the Government of the day to express its understanding of a variety of social situations. These affect the short and long-term unemployed, deserted spouses, single parents, people with significant illness or disability, widows and widowers, the elderly and their carers and orphans. On a daily basis each of these sectors faces the depressing challenge of surviving on the lowest possible level of weekly income.

I will refer to one simple social welfare scheme to put in context the current level of our support to our most disadvantaged citizens. The weekly personal rate of unemployment benefit is just £62.50. What standard of living does this sum provide to the unemployed single man or woman? In many cases this sum must pay for accommodation, heating and electricity before one even considers the basic essentials of food and clothing. It does not take a financial genius to establish that little or nothing is left for luxuries. In this social welfare category, I note the Minister is proposing a weekly increase of £2. If such an annual increase is maintained in future it could take until the year 2010 or so before a single unemployed person can obtain the princely sum of £100 per week. For people who complain that our social welfare system is far too generous, I draw their attention to that simple stark fact.

Can anyone with any degree of decency or compassion begrudge a level of State support that only offers a single unemployed adult the possibility of a basic weekly income of £100 within the next 15 years? I have no doubt the majority of single adults today would be horrified at the prospect of having to survive on such a level of weekly income. As a representative of the constituency of Cork North Central which has suffered more than most from the curse of growing unemployment, I believe it is time to put an end to any notion that our social welfare system is over generous to those who are most in need. The example I outlined shows clearly that the level of social welfare support is, in real terms, quite modest.

This does not mean the system of social welfare is not abused. On the contrary the most recent statistics on fraud indicate a relatively high level of illegal claims. It is vital that the elimination of such activity be a priority within the Department since it is damaging on two fronts. First, it deprives the system of much needed resources and consequently reduces the amount available for the vast majority of beneficiaries entitled to State support. Second, abuse of the system can lead to a certain degree of blame being attached to everyone dependent on the social welfare system. This is totally unacceptable.

Two facts are generally agreed in relation to the context in which the Minister has prepared his proposals. Last year's Social Welfare Bill was a major disappointment for the vast majority of recipients despite some positive aspects such as the increase in child benefit payments. The basic increases provided by the Minister were seen as minimal and were mainly concerned with matching inflation. It was felt, therefore, that the Minister would more than compensate this year for his miserly 1995 Bill.

The second factor was that a number of financial indicators suggested that the national economy had recovered from the disaster created by the 1983-87 coalition Government. While this vital recovery was led by successive Fianna Fáil Governments, the current rainbow Administration has not been shy in highlighting the rosy nature of the State's finances. It has been happy to claim credit for a situation it inherited at the end of 1994. There is no doubt the time has come to tackle the problems of the most deprived sections of our society in a systematic, determined and generous manner.

It is against this background that the Minister's proposals must be assessed and I am amazed at what he has produced. At a time when many film makers attempt to build on one successful movie by bringing out second and third versions, there is little evidence that a similar strategy is adopted when dealing with productions which are a failure at the box office. This simple but sensible practice seems to have been totally ignored by the Minister. While his 1995 Bill could be described as a lost opportunity, this Bill could be described as the second lost opportunity.

The Minister had a unique opportunity to give real meaning to his often expressed commitment to the poor and socially deprived sectors of our society. However, he has delivered a mixed bag of minor adjustments and changes to the status quo. Could anyone suggest that the Minister could have given less than the 3 per cent increase in social welfare payments, which will not come into effect until June? The Minister has stuck like a limpet to the lowest possible levels of increases in a number of key social welfare schemes, such as unemployment benefit, retirement pensions, deserted spouse benefit and survivor's pensions.

It would be unfair to suggest that the Bill does not contain some positive proposals. I welcome, for example, the increase in the grants payable to mothers of twins at birth and at the commencement of primary and secondary school education. Approximately one in every 80 pregnancies results in twins. I have no doubt that these happy mothers will benefit from the proposed increases. While the minor changes in threshold levels for family income supplement and a number of other measures are welcome, it must be stressed that the vast majority of changes are either minor or involve fine tuning the administration rather than representing real reform.

It gives me no pleasure to express my disappointment at the Minister's proposals. As a public representative, I seek to possess an acute awareness of the extent and nature of social deprivation, injustice and poverty in certain sections of society. However, the Minister's work in the Department of Social Welfare has been a major let down. It would be generous to concede that no change has taken place in the proportion of people living below the poverty line since January 1995. The Minister's performance is not good enough at a time of growing national wealth. Our most vulnerable people must have their case heard at the Cabinet table. That this has not happened is evident in the 1995 or 1996 Bills. Responsibility for this failure does not rest solely on the shoulders of the Minister for Social Welfare. His Cabinet colleagues are also to blame for the appalling shortcomings of the Government in dealing with inequality in our society.

I am disappointed at the Minister's proposals. There is little doubt that the challenge of fighting inequality in our society must await a change of Government. It is reassuring that our social welfare spokesman, Deputy Joe Walsh, is currently involved in an intensive programme of policy development with the overall objective of addressing social inequality and injustice in our society as we approach the next decade.

Proinsias De Rossa

The Deputy did not mean a word of it.

Mr. D. Wallace

I was generous to the Minister.

Mr. Pattison

I wish to share my time with Deputy Eamon Walsh.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. Pattison

I compliment the Minister on introducing this Bill. It is difficult to understand how a social welfare system which was regarded as perfect has in the past 15 months become an instrument of poverty. This Bill helps to correct many anomalies, particularly in the area of unemployment, which created poverty traps and were a disincentive to work. This Bill will help to reduce unemployment.

Social welfare has changed over the years. In the past the only social welfare benefit people expected was the old age pension. That is no longer the case. Social welfare should be everyone's concern. Existing schemes start at birth and continue until people leave school which could be, under the provisions of this Bill, 23 years of age. They could then be in employment for 30 or 35 years before they retire. Social welfare is available during the lifespan of a person. This is a big change from the days when unemployment exchanges were regarded as temporary buildings which, like rural schools and post offices, would be phased out in time.

The improvement in the economy has not brought the type of employment prospects for which we had hoped. This country is not unusual in that. The number of years people spend working will decrease while years of retirement and of education will increase. Consequently, dependence on social welfare will increase because it is now accepted, in even the most progressive economies, that years of employment will be much shorter than heretofore.

It is incumbent on us as legislators to ensure proper systems are in place for all eventualities. There are gaps in the system. I agree with the previous speaker that it is a severe hardship for a single person who is unemployed or out of work through illness to survive on £62.50 per week but that did not begin in the 15 months reign of this Minister. Some years ago help was available for such a person through pay related benefit but that was done away with. There has rightly been an emphasis on the family in the past few years, through an increase in children's allowance and other benefits. Perhaps the next budget will pay more attention to single people who are expected to live on a low income. Many of them live alone and pay the same rent or mortgage as a family would.

I will refer to some points made earlier. Perhaps this is a matter for the Minister for Finance but it should be possible for the £800 tax relief for alarm systems to be claimed by a relative of the elderly person. Most pensioners living alone do not have taxable incomes but if a relative were to pay for the installation of an alarm, he or she should get the relief provided. That would go some way to easing the position.

I could go through the various schemes but I am conscious of the time and that my colleague wants to contribute. Information is extremely important in all these matters and the regionalisation of the social welfare administration has been a tremendous success. It has helped in getting quicker results, obtaining information and dealing with cases. I include information centres in that. We should also compliment the local print media, which provide weekly question and answer columns and local radio stations, which provide information slots. This has helped to make people aware of various schemes.

I referred in the past to the many elderly people who cannot avail of free travel. There should be a way for them to barter the free travel for another scheme they might need more, such as free fuel or electricity. Free travel is of no value to a number of people. There should be closer co-operation with health boards in the operation of the mobility allowance — it should be tied into social welfare. The £100 death grant was mentioned; it is now so insignificant in terms of funeral costs that it should be seriously examined. Perhaps it should be abolished for administrative reasons and instead two to three weeks' extra payments should be made after the death of a social welfare recipient, on top of the current six payments.

I compliment the Minister for the changes in qualification for the long-term unemployed, changes relating to part-time and casual work, the introduction of the new appeal system and the alterations of the disabled person's maintenance allowance. These all constitute progress.

Mr. E. Walsh

I congratulate the Minister on his excellent Bill, which contains many new concepts and introduces changes whch were urgently needed. I also pay tribute to the Minister of State, Deputy Durkan, for his work during the year. The annual Social Welfare Bill is important. Many employed people probably do not realise that other people are totally dependent on it. For many it is the difference between being warm or cold, homeless or housed, healthy or unhealthy, even between being hungry or fed — it is as stark as that. The Bill makes a basic difference to people's lives and its significance cannot be over stated. Many items have been progressed in the Bill and there have been welcome improvements in the way the Department of Social Welfare deals with those dependent on it.

Since 1986 progress has been made towards bringing social welfare payments in line with the recommendation of the Commission on Social Welfare. Some payments now exceed the minimum recommended by the Commission and others come close. An extra effort should now be made to bring the remaining payments up to par. A previous speaker said that social welfare payments in this country are relatively generous. For example, in many cases we have closed the perceived gap between levels of payment in Britain and here and in cases like unemployment benefit and old age pensions our payments exceed those in Britain. We should be proud of this achievement and the proposed increases this year of 3 per cent for general payments should improve the position even further. It was often said in the 1960s and 1970s that one of the main obstacles to reuniting Ireland was the difference between social welfare payments here and in the North and that we would never see the day when payments were on a par. This is a step in the right direction, not just for the people who receive them.

A number of areas merit special attention. Child benefit has been transformed into a substantial payment to bring families out of the poverty area. Since 1992, the base payment has risen by over 80 per cent. I welcome the further £2 increase promised by the Minister for this year and hope further progress can be made in this area next year. This comes on top of last year's substantial increase in child benefit.

The relaxation of rules on employment, concerning disregarding unemployment assistance, are also welcome. As the Minister said, the existing system is complicated and I am pleased he has been able to make some changes aimed at simplifying it.

Part-time work has become a fact of life and for many unemployment assistance has become an income supplement. This is not what it was intended or designed for but the Minister has taken the right decision. He could have tightened the rules governing the system but he has chosen to make it more flexible, thereby preventing people falling completely on the resources of the State. The Minister has taken the right course of action in this regard.

The Departments of Social Welfare and Health have been operating the disabled person's maintenance allowance. The new disability allowance transfers the responsibility for the disabled person's maintenance allowance from the Department of Health to the Department of Social Welfare, a significant development which will be of great benefit to many. There is an overwhelming case for transferring the remaining welfare functions of the health boards to the Department of Social Welfare. It has been well made by the Minister in transferring disabled person's maintenance allowance.

The establishment of the one parent family allowance is also a step towards further simplification of the system. In recent years giving advice on welfare problems has become an industry in itself and that should not be the case. I support the Minister's proposal for further increases in the income threshold for family income supplement. This scheme is important for the many who live on the margin between employment and unemployment. Once people take advantage of the benefits available their lifestyle can be improved. There is insufficient information available on the scheme and the take-up is not as great as it should be. Hopefully, further advertising of the scheme will improve its take-up.

One of the six major unemployment blackspots is in my constituency, Dublin South West and a substantial number of one parent families live in local authority housing in a part of it. Many of those families make the best out of the means available to them. However, because of the intimidation, violence and antisocial behaviour rampant in many areas the security of those families is endangered. In many cases, in order to ensure the safety and protection of the family, the mother brings a male into the household.

The unmarried mothers usually have no other means of securing their families and property, but taking this course of action may endanger their lone parent's allowance. They can also be obliged to declare the arrangement for rent purposes. In many cases these families need some form of protection urgently and they take this course of action although in fear of being found out. The Minister should examine this matter sensitively. Although it is a difficult problem to which there is no simple answer, perhaps some action can be taken to assist those involved.

Social Welfare Bills are technical instruments but the business they transact is humane. It is often the difference between people having the means to sustain themselves. The amount of technical information contained in the many information leaflets issued has been simplified. The language used in those leaflets should be as basic as possible because many of the most vulnerable are the least able to get access to the system.

Many of the drug addicts who try to break the heroin habit do so in community based programmes. They often spend some of their meagre resources on going to their doctor for a prescription of methadone and may then have to pay for the methadone. They do this voluntarily in the knowledge that it is the only way to improve their lives through ending their addiction to heroin. Perhaps they could be compensated in some way, with food vouchers for example, for the money they spent in trying to improve their lives.

In the light of new developments taking place in the community in this regard will the Minister consider taking some such action? Many drug addicts find when they try to come off drugs they are short of the means to sustain themselves and to give themselves a quality of life which will enable them to form a positive attitude to deal with their drug problem.

I compliment the Minister and the Department on progressing social welfare. I look forward to the next budget which I expect will contain further improvements.

Mr. Foley

The social welfare system is a tremendous achievement. It is designed to provide support and assistance for the weakest and most disadvantaged members of society. The social welfare system accounts for one third of Government spending and in 1996 more than £4 billion will be spent on it. Approximately 1.5 million people benefit from social welfare payments at present, almost 1.5 million workers are insured under the social insurance scheme and almost 500,000 families receive child benefit for more than one millon children.

The ESRI has predicted rapid economic growth over the next decade. The major challenge facing us is to turn this growth into employment and to reduce the present unacceptable levels of unemployment. Major policy changes are called for and if they are not made unemployment will decline only slightly from its current levels by the end of the century.

One of the major problems facing the social welfare system is the ageing of the population. We are informed that 11 per cent of our population is over the age of 65; this will increase to 13 per cent by 2011 and to more than 20 per cent by 2036. This will lead to additional expenditure on old age pensions and related services.

With the present excessive levels of unemployment every Government Department, in particular the Department of Social Welfare, has a political and moral responsibility to do everything in its power to help people into employment. The cancer of long-term unemployment cannot be allowed to continue. If it does politicians will have failed.

We live in a society which has brought about different changes for an increasing population, in particular the elderly. Average life expectancy continues to increase, mainly as a result of improved health care facilities. It is a deeply satisfying pattern since much of the progress in Irish society since the 1950s is due to people who are now categorised as elderly. In this regard a serious situation exists in rural areas whereby many elderly people cannot get health care beds, especially long stay beds. The Minister should consider introducing a subsidy for genuine cases. He has shown himself to be caring.

Ensuring equality for women, people with disabilities and other disadvantaged groups must also be a key policy objective. The importance of equality was emphasised in a report published a few weeks ago by the National Economic and Social Forum, which set out a range of sensible measures to ensure equality for women.

Does the Bill measure up to the objective of tackling unemployment? To be fair, the Minister has cut PRSI payments, a worth-while development which will be welcomed by employers. He has also proposed a change to the way those on unemployment assistance will be means tested if they take up part-time work. The details have to be announced but it is expected to be an improvement on the existing situation, which is also to be welcomed.

However, these measures do not amount to the radical overhaul of the social welfare system which is required to facilitate people in getting back to work. The Government's overall response to the unemployment crisis is disappointing. Three different bodies, the Department of Social Welfare, FÁS and the local employment schemes, are supposed to provide information, advice and assistance to those looking for work. These are in addition to the range of other bodies involved in this area, including the IDA, Forfás, Forbairt and the county enterprise boards. How can an employer, or a person seeking work to find a way around this situation avoid getting confused? Instead of adopting a coherent plan to tackle unemployment, the Government is relying on old structures that are in need of modification.

How does the Bill respond to the recommendations of the most recent task force report on employment? It recommended that a range of schemes operated by the Department of Social Welfare, including the back to work allowance and the part-time job incentive scheme should be examined in the context of other income support measures for those on low pay, such as family income supplement and PRSI exemptions. The report stated that there is considerable complexity in the range of income support measures for those in low paid employment. It considers that the role and objectives of specific measures need to be clarified and streamlined to ensure that they complement one another. The Bill makes no response to these recommendations.

A range of simple measures for the elderly should have been introduced. Instead, the Government made an inadequate proposal in the budget on tax relief for security measures applicable only to those aged 65 years or older who live alone and pay tax. What about those who do not pay tax? They need some assistance, again by way of subsidy, especially in rural areas.

The response to the Government's proposal from a wide range of bodies indicated the need for a much wider level of support for elderly people. Indeed, the Minister set up a task force to look at this issue. The solution to the problem is clear. There should be a social welfare payment to assist elderly people to secure their homes. How long does the Minister need to study the problem to see this?

At a time when interest rates are at their lowest in living memory, the Department of Social Welfare uses rates of up to 10 per cent in estimating the means of elderly pensioners. Not satisfied with this, the Minister introduced in the Bill rates of up to 15 per cent for some claimants. I appeal to him to re-examine this. Perhaps he will inform us if he intends to expand this to include old age pensioners. Does he not realise this is counter-productive as people are afraid to put money into local credit unions or financial institutions? Now is the time to reduce the rate of interest to reflect the kind of interest available, not to increase it to even more penal levels.

Many self-employed persons of 56 years of age or older in April 1988, when the PRSI system was extended to them, are excluded from the old age contributory pension despite the requirement on them to pay PRSI up to 66 years of age. The disqualification criteria is inflexible and penalises many thousands of self-employed people. Surely the Minister could have seen a way to introduce flexibility to the scheme to enable those affected, for example, to be allowed to make contributions to the State pension scheme or to continue to pay contributions beyond 66 years of age to meet the existing qualification requirements, or to provide a pro rata pension based on the amount of contribution paid by the person on reaching retirement age?

The Bill has not addressed the position of women. The report of the Second Commission on the Status of Women recommended that the term "qualified partner" should be substituted for the term "dependent". It also recommended that social welfare payments should be divided between the recipient and the qualified partner, the dependent spouse, that qualified partners should be issued with their own allowance book and that the Government should work towards establishing a system of individual rights and payments in the social insurance and social welfare systems by 1997.

These recommendations are not addressed in the Bill. The Minister will point to the introduction of a one parent family benefit for lone parents. Why is the benefit to be means tested when, on 19 February, he announced that there would be no means test? In introducing this scheme he has abolished the deserted wife's benefit scheme and the deserted wife's allowance. People who had paid into the social insurance system on the basis that they would be able to qualify for deserted wife's benefit will not have to apply for a means tested scheme and many will not qualify. The Minister has even cut the maximum earning level in respect of deserted wife's benefit, currently at £14,000 to £12,000 in respect of the new one parent family payment.

The abolition of the deserted wife's allowance will mean that deserted wives in their 40s, who have raised their children and no longer have a dependent child living with them, will not qualify for any specific payment. Will these women have to sign on at the local employment exchange and queue each week in the health centres to get supplementary welfare?

The petty measures contained in the disability allowance scheme have not been changed. I welcome the principle that disabled person's maintenance allowance should be transferred to the Department of Social Welfare. However, the Minister has not taken the opportunity to remove some of the most objectionable features of the disabled person's maintenance allowance scheme.

The Bill provides that people with disabilities in residential institutions will not receive any payment. I appeal to the Minister to re-examine this situation. How does it fit into the Government's commitment to equality? The measure will result in many such people having to live on a pittance each week. This has been heavily criticised by the Ombudsman and it is time the measure was dropped.

It is disappointing that the Minister and the Government failed to address the challenge to seriously develop and restructure the overall social welfare system. Fianna Fáil is involved in a detailed evaluation of the current situation. I appeal to the Minister to ensure that there is prudent management of the resources available to him. He should take advantage of the favourable economic climate to ensure that the maximum number in the weaker sections of our community will benefit.

Dr. Upton

I wish to share my time with Deputy Bell.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Dr. Upton

I compliment the Minister on this Bill. His is a difficult ministry. Across Europe the issue of social welfare is coming under increasing debate. It is partly motivated by concern that the European model of co-operation between workers, employers and the State, cemented by high level of welfare provision, renders European industry uncompetitive in the new global economy.

While many of the fears currently being expressed are largely alarmist, and in part motivated by the political right and employers seeking to increase profits without passing them on to workers, there is a broad agreement that the European welfare system no longer caters properly for new systems of production. We are more than familiar with these problems.

While the issue of welfare dependency was first raised by the new right, the left has begun to accept that its traditional solutions to problems caused by unemployment and pensions provision are in need of revision. I use the term "new right" advisedly. It has always struck me that the new right bore more resemblance to Victorian laissez-faire liberalism than to any 20th century phenomenon. The concerns of the left are fundamentally different from those of the right. The right is motivated by its need to free business of constraints imposed on it by the welfare and taxation systems. Over the past few years this Government and its predecessors have begun to address this issue. I accept that we have difficulties in this regard and I will support any moves to facilitate enterprise in our economy and in that of Europe. However, some of the changes taking place in Britain in the last few days illustrate clearly that what one man regards as red tape radically affects another person's livelihood.

The left's concerns are similar but motivated by other reasons. The left, whose political base is more concentrated in working class areas, has seen at close hand the disintegration of many of these communities. This disintegration has manifested itself in rising unemployment, the breakdown of the traditional family unit and increasing alienation from society. All this has taken place despite increased levels of welfare payment and other schemes, such as disadvantaged status schemes, operating within our Department of Education.

In Britain the debate about reform of the welfare state among those on the left has moved on to concentrating on the concept of the hand up rather than the hand out. I welcome such a debate and advocate its extension to Ireland. However, the underlying premise of such a debate can only be that people's basic human rights are not undermined and that any of the reforms proposed as a result of the debate are aimed at improving their quality of life, not undermining it in an effort to get them to work longer and harder for less money; that would be totally unacceptable. The Bill represents a reasonable step in this direction. It continues the Government's policy of addressing employment and poverty traps which force people to remain dependent on welfare when they would otherwise return to work. This area is crucial in an age when there is a growing cynicism about politics and the differences between the respective political parties.

There are substantial differences in the manner in which the political left and right have dealt with this issue. In the aftermath of the budget, Davy stockbrokers pointed out that in the area of tax reform there were substantial differences between the approach adopted by the 1989-92 Fianna Fáil-Progressive Democrats Government and the approach adopted by post-1992 Governments in which Labour has been prime player. Davy's pointed out that between 1989 and 1992 tax reform was directed at groups paying tax at marginal rates and that subsequent to 1992 while progress continued at the marginal level, primary focus of tax reform was on the less well off.

This year's budget announced the continuation of this policy and this Bill gives effect to many of the budget's proposals. They include further reductions in employers' and employees' PRSI payments, increased provision of employment schemes to encourage people back into the labour market, the provision whereby the long-term unemployed are allowed to retain secondary benefits such as child dependant allowance and medical cards taking up work, further increases in the exemption levels from the health and youth training levies, and increases in the amount of weekly income disregarded for PRSI purposes. All this has been achieved without any reduction in the basic social welfare payment. In fact, the 3 per cent projected increase in payments this year is in excess of the rate of inflation. Child benefit has also been increased and this payment is rightly identified as a means of addressing family poverty without creating further poverty and employment traps.

In his speech the Minister mentioned the expert report on the integration of the tax and social welfare system which is due to be published in the near future. I look forward to that report and I am not at all surprised that it has taken a long time to produce because of the complexities of the issues being considered.

There has been much discussion lately about the most appropriate measure of unemployment. People have spoken about the relative merits of the live register against the labour force survey. I am clear in my mind that the labour force survey is by far a more appropriate measure of modern employment trends. For many people, unemployment assistance acts as a form of income support and I have no difficulty with that. It is far better that people and the State should be involved in working and that they should obtain some of their income from work rather than be totally dependent on welfare. It is very important that the system encourages them to work. Some important steps have been taken in this budget in relation to this matter.

I am pleased that considerable progress is being made in relation to the need to simplify the welfare system. The transfer of disabled person's maintenance allowance payments from health boards to the Department of Social Welfare is an important change and I hope that in the near future the payment of all supplementary welfare allowances will be transferred to the Department of Social Welfare. Much of my thinking on this question is conditioned by the views of the British Labour MP, Mr. Frank Field, who has spoken in terms of the difficulties which social welfare has created over the years. Essentially it creates two difficulties. On the one hand if people follow the system to the letter it tends to militate greatly against initiative and enterprise. The other alternative is for people to become involved in breaking the law. Neither of those is desirable and I am very pleased to see considerable changes being made in this regard.

In the last analysis, social welfare is about social cohesion, an essential factor in developing economies. That is the way forward and some very significant progress has been made in this Bill. I am sure that further progress will be made when the various reports are published.

Mr. Bell

I thank Deputy Upton for sharing his time with me. I agree with him in relation to tax and social welfare. The Minister had very strong views on that subject when he was party spokesman on Social Welfare, as had I when I had that brief. I hope something positive can be done. The idea that somebody who has been in receipt of social welfare for six months finds the social welfare bill for the previous six months unloaded on him on his return to work is ludicrous to say the least. That element of the system should be taken into account and I hope the Minister will do so.

I welcome the proposals introduced in this Social Welfare Bill. I have been a Member of this House for 14 years and this is possibly the best package of social welfare proposals I have seen. People tend to look at the headlines in the budget in relation to social welfare but this Bill shows that there is much more to the social welfare package on this occasion than ever before. This is reforming legislation and it meets many of the points that both I and the Minister when in Opposition highlighted for many years. I welcome that.

There is not enough time to go into every section but I will refer to the provision for widows. There should be a widow's charter in the social welfare code because this category of social welfare recipient has been least well cared for over all the years. A widow can be left with young children and a mortgage and her husband's total income, whether from work or social welfare, disappears overnight. It is impossible to bridge that gap.

As legislators we have not cared well enough for widows. This area should be examined in depth. Several previous Ministers, when I was party spokesman for Social Welfare, indicated their sympathy in this area but nothing positive was done. Widows could be assisted in a whole range of areas rather than have their income drop from several hundred pounds per week to an amount provided by widow's and orphan's allowance. I appeal to the Minister to take that on board and, perhaps in the next budget, to bring forward a charter for widows under the social welfare code.

Lowering the qualifying age for the old age pension to 65 is long overdue but it is difficult to encourage men and women to retire and make way for younger people if they do not qualify for subsidiary benefits until they are 66 years of age. A range of benefits apply at age 65, but the subsidiary benefits do not apply at that stage. It is difficult to explain the position to people who have reached the age of 65 and who paid contributions throughout their working lives over 40 to 50 years.

Another reforming measure should be considered with regard to a matter which causes total confusion among workers and others. It is difficult for public representatives to explain why the tax year starts and finishes on 5 April each year while the social welfare year starts on 1 January and ends on 31 December. Both areas are related; one influences the other regarding the period of qualification and many other aspects of the social welfare code. I do not understand why the social welfare year and the tax year cannot run from 1 January to 31 December. This would greatly reduce the amount of administration and confusion, not only among the public, but also in the Department. However, great changes have taken place in the Department. The level of efficiency in terms of the service provided to public representatives had increased dramatically since I first raised the issue of social welfare in the House.

I welcome the provision on the social welfare appeals tribunal regarding industrial disputes. This is long overdue as it was a most cumbersome system. It was impossible to explain to the families of striking workers, who were often forced on to the street — as were the Irish Press people — why they had to wait months before tribunal hearings took place.

I also welcome the increased payment for twins. It is a pity the Minister did not make this retrospective as I would have qualified for it. Nevertheless, I am pleased that those who come after me and my good wife will benefit from it. I am aware of the difficulties in starting off married life with two children in the first year. It can cause problems, particularly for those on low incomes.

I welcome the provisions of sections 8, 9, 10 and 11 in relation to PRSI. The means testing provision in section 37 is also welcome. There should be a standard means testing mechanism so that people could be tested once a year and it would not be necessary for them to be tested again to qualify for various benefits. The system could be revised annually. It would save an enormous amount of time in the Departments of Social Welfare and Health.

I particularly welcome the transfer of responsibility for the disabled person's maintenance allowance and the creation of the long awaited new disability allowance. It was ridiculous that social welfare recipients had to go from a social welfare officer to a community welfare officer and then back to the social welfare officer. Perhaps this is the start of integrating the two services so that both can be dealt with under the same roof. I hope the Minister will move in that direction.

The incentive to part-time workers is also welcome. People who moved from social welfare to take up part-time jobs were, effectively, penalised. As a result people worked part-time unofficially or illegally. They can now openly take part in FÁS schemes for 20 hours a week and work for the remainder of the week, or work on a week on week off basis. This incentive should be extended and social provisions should be the same as those governing FÁS schemes. The Bill is a good package in terms of social welfare reforms. I congratulate the Minister for Social Welfare, the Minister for Finance and the Government for a job well done.

Minister for Social Welfare (Proinsias De Rossa)

Ba mhaith liom mo bhuíochas a ghabháil ar dtús leis na Teachtaí go léir a ghlac páirt sa díospóireacht. Deireann an Fhreasúra nach bhfuil an Bille seo ró-mhaith. B'fhéidir go mbeadh sé níos fearr dá mbeadh athstructúr á dhéanamh ar an gcóras uilig.

Sílim áfach nach gcreideann éinne sa Teach seo — fiú amháin sa bhFreasúra — gur féidir an córas ath-structúriú go luath. Is structúr an-chasta agus anmhór é. Tá sé ann le fada agus d'fhás sé thar leath-chéad bhliain anuas. Ní féidir an athstructúriú a dhéanamh in aon Bhille amháin.

The system is large and complex. It has developed on an ad hoc basis over many years and it will take time to reform and streamline it and to integrate it with other social services. All social services need to be integrated and co-ordinated and this will take time.

I look forward to debating the policies on which I understand Deputy Ivor Callelly is working with the Fianna Fáil spokesperson on social welfare. Since I became Minister for Social Welfare, there has been an absence of any serious critique of the social welfare system by that party. I received much criticism about various elements and rates, but there was no serious critique as to what might be done to improve the system. I look forward to that debate.

Apart from the reforms in this year's Bill I introduced a range of reforms last year. In addition, a major national anti poverty strategy is being prepared involving a range of Govenment Departments. A commission on the family has been established and is examining how families can be supported to a greater and better extent and how we can ensure that our tax and social welfare system supports families given their important role in society.

A range of other measures are also under way. A discussion document on social insurance and the PRSI system will be published soon. The task force report on the elderly will also be published soon. We expect that the integration group on tax and social welfare, established by the last Administration under the care of the Minister of State, Deputy Burton, and for which the Minister of State, Deputy Durkan, is currently responsible, will publish its findings by the middle of this year. This will be a major step in terms of examining how the tax and social welfare systems can be restructured. In addition, we have initiated a review of the basic minimum rates which the Commission on Social Welfare recommended ten years ago. The ESRI is currently looking at those rates to determine an updated version of a minimum adequate income level for the 1990s.

This reforming work is going ahead and cannot all be encapsulated in the annual Social Welfare Bill. However, I would argue strongly that this is a very good Bill. It is the product not only of my thinking but that of the Government as a whole. It had the input of Labour and Fine Gael in addition to that of Democratic Left.

The Bill is not perfect and choices had to be made in relation to the spending of resources. Nevertheless, we introduced a one parent family payment; we reformed dramatically the assessment of unemployment assistance for part-time workers; we are continuing with the back to work allowance scheme, which is currently availed of by in excess of 10,000 people; we improved the family income supplement; we provided for the retention of medical cards for three years by people who take up work and we are enabling people to retain child dependant allowances for 13 weeks when they take up work. We are also continuing to provide the third level allowance schemes and are providing for the retention of child dependent allowances for certain categories of social welfare recipients with children in college. We extended the age limit for that to 22 years last year and this year we extended it to 23 years or the end of the academic year, whichever comes later, in order to assist people to remain in education.

All of these measures are important and it is wrong of the Opposition simply to ignore their existence. They are indicative of a very specific direction in reforming the social welfare system, which is to make it more work and worker friendly and to help people to take up and make work. We have also made improvements in the last two budgets in child benefit — it is clearly also a family friendly Bill and system.

I was struck by the fact that a number of Fianna Fáil Deputies called for fairly extensive expenditure increases, despite the fact that late last year, when the Government was preparing the Estimates, we had calls from the leader of the Fianna Fáil Party, Deputy Bertie Ahern, for a reduction in social welfare expenditure. Fianna Fáil Deputies said today that not enough is spent on social welfare. In case there is any question about whether I am misleading the House in relation to this matter, I draw the House's attention to an article by Tom MacEneany in The Irish Times, dated 8 December 1995, which stated:

Ireland should be spending less on social welfare, according to the Fianna Fáil leader, Mr. Bertie Ahern. "At a time when the economy and jobs are growing strongly [It is nice to see him praising the growth in jobs] social welfare expenditure ought to be in decline", he said. Speaking to the Institute of Directors yesterday, Mr. Ahern said he was mystified as to why, given the current economic conditions, there should be any question of exceeding agreed budget guidelines on social welfare.

That is a matter of record and I would expect some consistency on the part of Fianna Fáil speakers who come into this House to declaim that not enough money is being spent on social welfare. More money than ever is being spent on social welfare, but it is being spent in an effective way, not as a result of cutting back on some schemes but as a result of a general increase in the available resources.

I want to deal with a number of queries raised by Deputies during the debate. I do not expect to be able to deal with them all, but we can deal with any I do not reach on Committee Stage.

Deputy Walsh and Deputy Quill welcomed the changes in PRSI provided for in the Bill but suggested they did not go far enough. The cost of the improvements I am introducing this year is £121 million which, together with the changes made last year, gives rise to an overall cost of £270 million. In contrast, the cost of improvements introduced in 1994, when Fianna Fáil was in Government, was just £63 million.

As far as the rates of PRSI and employment creation are concerned, studies conducted by the EU and OECD have concluded the cost of employers' social insurance is passed on to employees because it is taken into account when wage rates are settled. Irish employers' PRSI rates are not high by international standards. For example, only four EU states have lower rates of employer social insurance contributions — the UK, the Netherlands, Denmark and Finland.

While it is natural that attention should focus on the rate of employers' PRSI contributions, other aspects are also important when comparing the social insurance systems in operation in different countries. For example, there is no earnings ceiling for employers' social insurance contributions in the UK, where the rate of employees' social insurance is 10 per cent. Taking employee and employer PRSI together, the total rate of PRSI is lower than the UK equivalent where wages are higher than £110 per week, when the measures provided for in this Social Welfare Bill are enacted.

There is no clear evidence that reductions in employer PRSI lead to additional employment creation or job maintenance. Any assessment of possible positive employment effects must take account of the effect of the tax increases necessary to pay for such reductions in PRSI. PRSI pays for social insurance benefits and pensions. The current rates of PRSI cover most, but not all, of these costs. It is important to be clear that calls for reductions in PRSI contributions mean either higher taxes or reductions in social welfare rates of payment. There can be no question of reducing the rates of social welfare payments and there is no support in this House or the country for such a policy.

When Deputy Quill raised the question of the one parent family payment, she asked why I was doing away with a social insurance benefit, that is, the deserted wife's benefit. She made out that she was a defender of the social welfare system. I find this rather odd because the Progressive Democrats launched a policy document just before the budget which proposed the abolition of the social insurance system. They did not tell the public at that time that if they were to proceed with that, assuming they would want to maintain old age pensions, unemployment assistance and so on at their current levels, the net effect would be that the 27 per cent rate of income tax would have to rise to 33 per cent and the 48 per cent rate to 62 per cent. I wonder if the Progressive Democrats will present that in their election manifesto at the end of next year when they propose to end the social insurance system.

I will publish in the near future a discussion document on the social insurance system. I look forward to a debate on it in the House, or the Select Committee on Social Affairs, at some point in the not too distant future.

Deputy Quill raised a number of issues with regard to the one parent family payment. Contrary to what she suggested about savings, the combined effect of the changes I am introducing will cost an additional £10 million in a full year. These changes will mean that about 4,200 lone parents currently on a reduced rate of lone parent's allowance will qualify for the maximum rate of payment and a further 900 lone parents will receive a higher rate of payment under the new one parent family payment. In addition, a further 2,000 one parent families will qualify for this payment.

Deputy Quill also suggested that the one parent family payment represented an attack on the social insurance system. If she looks closely at the detail of my proposals, she will realise that they represent a considerable improvement in the income supports for one parent families. What has often been seen as a degrading requirement on women to prove desertion will be removed from the code and men and women will be entitled to the payment on the same basis.

An initial disregard of £6,000 per year will be applied. The first £2,000 of capital will also be disregarded and a proportion of maintenance payments may be retained towards housing costs.

As far as the Deputy's comments on the insurance system are concerned, it is interesting to note the views of the Commission on Social Welfare on this issue. It stated that in the event of marital breakdown or desertion by her husband, a woman is likely to experience long-term income needs. The question arises as to the most appropriate way in which these needs should be met. While the case for income support may be clear-cut, it is not clear that this support should be provided by an insurance scheme. The assessment of maintenance being paid in assessing eligibility for deserted wife's benefit, which was introduced by the Finna Fáil-Progressive Democrats Government, dilutes the insurance concept itself. While we are not convinced that desertion can be regarded as an insurable contingency, we recognise that any attempt to make alternative income maintenance provision must take account of the acquired rights and entitlements of those currently in receipt of deserted wife's benefit. My proposals for a new one parent family payment not only address fully the issues raised by the commission in this area but provide for a comprehensive, unified payment for all one parent families which contains significant incentives for parents to return to the labour force.

There has been an allegation that I made an incorrect and misleading statement last year on the one parent family payment. Fianna Fáil spokespeople quote selectively, as usual, from a statement of mine on this payment when they allege I said there would be no means test. What I said was that the new payment, instead of being means tested, will be earnings related. It may be difficult for them to comprehend the difference. When I have more time I will explain it to them.

Deputy Joe Walsh criticised the notional rates used for the assessment of capital for social assistance purposes, in particular, the 10 per cent rate applied in certain payments. I have already made known in the House that I intend to standardise the provisions used for assessment across the different payments and I have taken the opportunity of the introduction of the one parent family payment and disability allowance to begin this process. The provisions to be applied for these payments are that the first £2,000 of capital will be disregarded. The next £20,000 will be assessed at 7.5 per cent and capital in excess of £22,000 will be assessed at 15 per cent. The substantially improved disregard of £2,000 significantly reduces the effect of interest rates for most recipients. There is a difference between the practical reality that most lone parents do not have capital stashed away and the theory that if one has in excess of £22,000 one will receive a reduced one parent family payment.

I thank Deputies for their contributions and I look forward to Committee Stage.

Question put and agreed to.